EMPLOYMENT AGREEMENT
AGREEMENT made as of the 28th day of March, 1996, by and between Xxxx
Xxxxxxxx (hereinafter referred to as the "EXECUTIVE" and LMI Acquisition
Corporation, a Delaware corporation, which principle executive offices located
at 000 Xxxx Xxxxxx, Xxxxx #000, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000-0000.
W I T N E S S E T H:
WHEREAS, the Company is engaged inter alia in the business of financing
insurance premiums; and
WHEREAS, the Company desires to retain and employ the Executive for the
purpose of securing to the Company the experience, ability and services of the
Executive; and
WHEREAS, the Executive desires to be employed by the Company.
NOW, THEREFORE, it is mutually agreed by and between the parties hereto
as follows:
ARTICLE I
EMPLOYMENT
The Company hereby employs the Executive as Chief Operating Officer and
Director of the Company. The Executive hereby accepts such employment and agrees
to serve on a full-time basis as an executive officer of the Company, subject to
and upon the terms and conditions set forth in this Agreement.
ARTICLE II
DUTIES
(A) The Executive shall, during the term of his employment with the
Company and subject to the direction and control of the Company's Board of
Directors, perform such executive duties and functions as he may be called upon
to perform, consistent with his employment hereunder as Chief Operating Officer.
(B) The Executive agrees to devote his full time and best efforts to
the performance of his duties for the Company; render such executive services
for any subsidiary or affiliated business of the Company; participate in the
direction of the Company's business and financial interests, and promote the
Company's relationships with its employees, customers, and others in the
business community.
ARTICLE III
COMPENSATION
(A) The Company shall pay to the Executive for all services to be
rendered pursuant to the terms of this Agreement, a base salary at the rate of
$7,833 per month during the term of this Agreement, payable in equal weekly
payments in accordance with the Company's normal payroll procedures.
(B) Commencing on the 60th day after the Company has obtained
additional bank financing, in the sum of at least $15,000,000, the Executive's
base salary shall increase to the rate of $9,500 per month.
(C) As a cost of living adjustment, commencing on each anniversary date
of Executive's employment hereunder, the base salary then in effect shall be
increased by 5%.
(D) Executive shall be entitled to receive stock options to purchase
shares of the Company's common stock as a bonus (the "Bonus Option Shares") as
follows: He shall receive 5,000 Bonus Option Shares for every $1,000,000 of
Pre-Tax Net Operating Income (as hereinafter defined) above $2,900,000 of
Pre-Tax Net Operating Income in each of the Company's fiscal years during the
term of this Agreement, commencing with the 1996 fiscal year. In the event
Pre-Tax Net Operating Income exceeds $2,900,000, but the excess is less than
$1,000,000, then the number of Bonus Option Shares shall be reduced
proportionately. Pre-Tax Net Operating Income shall be the Company's net
operating income before taxes, and shall include, as expenses, interest charges
associated with financing operations, but not interest charges related to debt
incurred in making acquisitions at a premium to book value, and will not include
other acquisition related expenses, such as professional fees. The Bonus Option
Shares shall be exercisable at a price of $4.00 per share over a term of 5 years
commencing on the date of grant and be immediately exercisable.
(E) Executive shall also be entitled to bonus shares ("Bonus Shares")
during the term of this Agreement pursuant to the following formula: For every
$100,000 of Pre-Tax Net Operating Income over the $3,496,000, he shall be
entitled to 250 Bonus Shares. Bonus Shares shall be issued to him on an annual
basis.
(F) In addition, Executive shall be granted options to purchase 100,000
shares of common stock ("Option Shares") at the average bid price of the
Company's stock for the first 60 days of public trading. This option shall last
for 5 years, commencing on the 61st day of public trading of the Company's stock
and be immediately exercisable.
(G) Executive may not sell any of the Bonus Option Shares, the Option
Shares or the Bonus Shares in the public market without the company's consent
for a period of two years from the date public trading in the Company's common
stock commences. Upon expiration of this two year period, the Company will use
its best efforts, at its expense, to register the Bonus Option Shares, the
Option Shares and the Bonus Shares and keep effective a Registration Statement
covering these shares to enable Executive to sell the shares in the public
market at such time or times as he desires.
WORKING CONDITIONS AND BENEFITS
(A) Executive shall receive four weeks of vacation with full pay for
each 12 month period during the term of this Agreement.
(B) The Executive shall be employed by the Company at executive offices
maintained by the Company. The Executive shall travel on the Company's behalf to
the extent reasonably necessary. The Company shall reimburse Executive at the
rate of $.27/mile for every commuting mile driven by Executive excess of 40
miles round trip per day. Company shall pay Executive's auto insurance not to
exceed $1,200 per year.
(C) The Company shall provide to the Executive to the full extent
provided for under the laws of the Company's state of incorporation and the
Company's By-laws, indemnification for any claim or lawsuit which may be
asserted against the Executive when acting in such capacity for the Company,
provided that said indemnification is not in violation of any of the following:
(a) Federal or state law or (b) rule or regulation of the Securities and
Exchange Commission.
(D) The Executive shall be reimbursed for all travel, entertainment,
seminars, trade conferences and all other expenses incurred by Executive in
performing his duties under this Agreement and in promoting the interest of the
Company.
(E) The Company shall use its best effort to cause the Executive to be
nominated for election to the Company's Board of Directors each year during the
term of this Agreement.
ARTICLE V
TERM
The term of this Agreement shall be for a term of three (3) years form
the date hereof with three on year options exercisable solely be Executive so
long as the Company's pre-tax income in the most current four quarter period is
at least 10% higher than it had been in the four quarters immediately preceding.
ARTICLE VI
TERMINATION
(A) The Company may terminate this agreement upon written notice to
Xxxxxxxx, if Xxxxxxxx becomes disabled, and as a result of such disability is
substantially unable to perform his duties hereunder for a period of three (3)
consecutive months; such notice shall be forwarded to Xxxxxxxx by the Company
upon and after a notification.
(B) The Company may terminate this agreement upon written notice from
the Company to Xxxxxxxx, if Xxxxxxxx has materially violated the terms of this
Agreement or committed acts of willful and material misconduct in the
performance of his duties, which have a material adverse effect on the business
of the Company. Such notice shall be forwarded to Xxxxxxxx by the Company's
Board of Directors authorizing such notification.
ARTICLE VII
CONFIDENTIALITY AND NON-COMPETITION
(A) All advertising, sales, marketing and other materials or articles
of information, including without limitation customer sales analyses, invoices,
price lists or information, samples or any other materials or data of any kind
furnished to Xxxxxxxx by Company or developed by Xxxxxxxx or otherwise in
connection with Xxxxxxxx' services hereunder, are and shall remain the sole and
confidential property of the Company. If Company requests the return of such
materials at any time during or at or after the termination of Xxxxxxxx'
agreement, Xxxxxxxx shall immediately deliver the same to the Company.
(B) During the term of this Agreement and two (2) years after the
termination of same for any reason whatsoever, Xxxxxxxx shall not directly or
indirectly induce or attempt to influence any employee of Company to terminate
his employment with Company and shall not engage in (as a principal, partner,
director, officer, agent, employee, consultant or otherwise) or be financially
interested in any business that is primarily involved in automobile financing or
insurance premium financing. However, nothing contained in this paragraph shall
prevent Xxxxxxxx from holding for investment no more than five (5%) percent of
any class of equity securities of a company whose securities are traded on a
national securities exchange.
(C) During the term of this Agreement and at all times thereafter,
Xxxxxxxx shall not use for his personal benefit, or disclose, communicate or
divulge to, or use for the direct or indirect benefit of any person, firm,
association or company other than the Company, any material referred to in
paragraph (A) above or any information regarding the business methods, business
policies, procedures, techniques, research or processes used or developed by the
Company or any names and addresses of customers or clients or any other
confidential information relating to or dealing with business operation or
activities of Company, made known to Xxxxxxxx or learned or acquired by Xxxxxxxx
and/or while performing services on behalf of the Company.
ARTICLE VIII
SEVERABILITY
If any provision of this Agreement shall be held invalid or
unenforceable, the remainder of the agreement shall remain in full force and
effect. If any provision is held invalid or unenforceable with respect to
particular circumstances, it shall remain in full force and effect in all other
circumstances.
ARTICLE IX
ARBITRATION
Any controversy, claim or dispute arising out of the terms of this
agreement, or the breach thereof, shall be settled by arbitration in Broward
County, State of Florida, under the rules of the American Arbitration
Association and the award rendered thereof shall be final, binding and
conclusive as to all parties and may be entered in any court of competent
jurisdiction.
ARTICLE X
NOTICE
All notices required to be given under the terms of this agreement
shall be in writing and shall be deemed to have been duly given if delivered to
the addressee in person or mailed by certified mail, return receipt requested,
as follows:
If to the Company, addressed to:
Xxxxxx Xxxxx
LMI Acquisition Corporation
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000-0000
If to Xxxxxxxx, addressed to:
Mr. Xxxx Xxxxxxxx
Gold Coast Finance, Inc.
00000 X.X. 0xx Xxxxxx
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
or to any other address as the party to receive the notice shall advise by due
notice given in accordance with this paragraph.
ARTICLE XI
BENEFIT
This Agreement shall inure to and shall be binding upon the parties
hereto, the successors and assigns of the Company and the heirs and personal
representatives of Xxxxxxxx.
ARTICLE XII
WAIVER
The waiver by either party of any breach or violation of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
ARTICLE XIII
GOVERNING LAW
This Agreement has been negotiated and executed in the State of Florida
and Florida law shall govern its construction and validity.
ARTICLE XIV
ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties
hereto; no change or amendment shall be made hereto except by written agreement
signed by the parties hereto. This Agreement supersedes all prior agreements and
understandings.
IN WITNESS WHEREOF, the parties hereto have executed this agreement and
affixed their hands and seal the day and year first above written.
/s/ XXXX XXXXXXXX
-----------------------------
Xxxx Xxxxxxxx
L.M.I. ACQUISITION CORPORATION
By: /s/ XXXXXX XXXXX
--------------------------
Xxxxxx Xxxxx, President
ATTEST:
/s/______________________________
