EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Agreement is made and entered into as of August 9,
1996 (the "EFFECTIVE DATE"), by and between X. XXXXX & SON,
INC., a Florida corporation (the "COMPANY"), and XXXXX X. XXXXX
(the "EXECUTIVE").
PRELIMINARY STATEMENTS:
A. The Company desires to retain the services of the Executive
pursuant to the terms and conditions of this Agreement.
B. The Executive is willing to make his services available to the
Company on the terms and subject to the conditions hereinafter set forth.
C. As of the Effective Date, Ocean Reef Cayman I, Ltd., a Cayman
Islands corporation, ("Cayman"), and Ocean Reef L.P., a Delaware limited
partnership ("Delaware" and together with Cayman, "Ocean Reef") purchased
1,320,105 shares (the "Ocean Reef Shares") of the Company's Class B common
stock, $.01 par value, which converted into the same number of shares of common
stock, $.01 par value (the "Common Stock"), of the Company upon such purchase.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties agree as follows:
1. EMPLOYMENT.
1.1 GENERAL. The Company hereby agrees to employ the Executive
as the President of the Company, and the Executive hereby agrees to provide
services to the Company, on the terms and subject to the conditions set forth
herein.
1.2 DUTIES OF EXECUTIVE. The Executive shall devote his full
business time and attention to the affairs of the Company, render services to
the best of his ability, and use his best efforts to promote the interests of
the Company. The Executive agrees to fulfill his fiduciary duties as an officer
and director of the Company. During the term of this Agreement, the Executive
shall serve as the President of the Company and shall perform such duties
assigned to him by the Chief Executive Officer and the Board of Directors (the
"Board") that are consistent with his title and position. The Executive shall
also be a member of the Board.
1.3 PLACE OF PERFORMANCE. In connection with the employment of
the Executive by the Company hereunder, the Executive shall perform his duties
and obligations hereunder primarily from the Company's offices located in Miami
Lakes, Florida, except for required travel on the Company's business.
2. TERM.
2.1 INITIAL TERM. The initial term of the employment
of the Executive hereunder shall be for a period commencing on
the Effective Date and expiring on the two-year anniversary date
of the Effective Date (the "Initial Term"), unless sooner terminated in
accordance with the terms and conditions hereof.
2.2 RENEWAL TERM. The employment of the Executive hereunder
may be renewed and extended for such period or periods as may be mutually agreed
to by the Company and the Executive in a written supplement to this Agreement
signed by the Executive and the Company (a "WRITTEN SUPPLEMENT"). If this
Agreement is not so renewed and extended prior to the expiration of the Initial
Term, the employment of the Executive hereunder shall automatically terminate
upon the expiration of the Initial Term.
3. COMPENSATION.
3.1 BASE SALARY. As compensation for all services rendered by
the Executive to the Company hereunder, the Executive shall receive a base
salary at an annual rate of $250,000 (the "BASE SALARY") during the term of his
employment hereunder, which shall be payable in installments consistent with the
Company's normal payroll schedule, subject to applicable withholding and other
taxes. If the term of this Agreement shall be renewed and extended as provided
in Section 2.2 hereof, then during such renewal term the Executive shall be paid
a base salary as set forth in the Written Supplement.
3.2 DISCRETIONARY BONUS. At the sole discretion of the Board,
the Executive shall be entitled to receive a discretionary bonus pursuant to any
bonus plan approved by the Board after the Effective Date.
4. EXPENSE REIMBURSEMENT AND OTHER BENEFITS.
4.1 REIMBURSABLE EXPENSES. During the term of the Executive's
employment hereunder, the Company, upon the submission of proper substantiation
by the Executive, shall reimburse the Executive for all reasonable expenses
actually and necessarily paid or incurred by him in the course of and pursuant
to the business of the Company.
4.2 OTHER BENEFITS. During the term of the Executive's
employment hereunder, the Executive shall be entitled to participate in all
medical, dental, hospitalization, disability, group life insurance, 401(k) plan
and any and all other fringe benefit plans as are hereinafter provided by the
Company to all of its officers on the same terms as those of such other officers
of the Company and, in addition to such benefits, the Company shall continue in
force and pay the premiums relating thereto on (i) health insurance policies for
the Executive, his spouse and dependents in amounts and on terms no less
favorable than provided to the Executive as of the Effective Date, and (ii) all
life insurance policies on the life of the Executive in force as of the
Effective Date. Notwithstanding the termination of the Executive's employment
with the Company for any reason prior to the expiration of the Initial Term,
including a resignation by the Executive, the
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Company shall (i) until the expiration of the Initial Term, provide the
Executive, his spouse and dependents with medical, dental and any other health
benefits and coverage in amounts and on terms no less favorable than provided
immediately prior to such termination of employment and, in all other respects,
shall use its reasonable efforts to cause the Executive to be treated in a
manner that will cause him to remain eligible for said coverage throughout such
period, at no cost to the Executive, and (ii) at the time of such termination or
resignation, transfer, at no cost to the Executive, the life insurance policies
on the Executive's life to the Executive, or his designee, including any cash
value thereon. The provisions of this Section 4.2 shall survive the termination
of this Agreement.
4.3 WORKING FACILITIES. During the term of the Executive's
employment hereunder, the Company shall furnish the Executive with an office and
secretarial help of his choice, and such other facilities adequate for the
performance of his duties hereunder at the Company's corporate headquarters
located in Miami Lakes, Florida.
4.4 STOCK OPTIONS. Subject to the terms and conditions of the
Company's 1996 Stock Option Plan (the "Plan"), the Company grants to the
Executive, effective as of the Effective Date, a 10-year option (the "Option")
to purchase 100,000 shares of the Company's Common Stock at an exercise price
equal to the closing price of the Common Stock on the first business day
preceding the Effective Date. The Option shall become exercisable with respect
to 50,000 shares of Common Stock on the date of grant and the remaining 50,000
shares of Common Stock on the one-year anniversary date from the date of grant;
provided that, notwithstanding the provisions set forth in the Stock Option
Plan, (i) in the event the Executive's employment is terminated by the Company
for any reason prior to such one-year anniversary date, all shares of Common
Stock subject to the Option shall become immediately exercisable; and (ii) the
Option will expire in all events on the 10-year anniversary date of the date of
grant, notwithstanding the termination of the Executive's employment with the
Company for any reason, including resignation by the Executive. The terms of
this Section 4.4 shall survive the termination of this Agreement.
5. TERMINATION.
5.1 TERMINATION FOR CAUSE. The Company shall at all times have
the right, upon written notice to the Executive, to terminate the Executive's
employment hereunder, for cause. For purposes of this Agreement, the term
"cause" shall mean solely (a) a willful breach by the Executive of any of the
material terms or provisions of this Agreement which is not cured within ten
(10) days after receipt by the Executive of written notice of same, (b) the
Executive's conviction of a felony involving moral turpitude, or (c) commission
by the Executive of an act or acts involving fraud, embezzlement,
misappropriation or theft against the Company. Upon any termination pursuant to
this Section 5.1, the Executive shall be entitled to be paid his Base Salary and
any accrued but unpaid bonus to the date of termination and, subject to the
provisions of Sections 4.2 and 4.4, the Company shall have no further liability
hereunder (other than for reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however to the provisions of
Section 4.1).
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5.2 CHANGE OF CONTROL. The Executive may terminate his
employment under this Agreement upon a Change of Control. For purposes of this
Section 5.2, "Change of Control" shall mean the failure of Applicable Directors
(defined below) to constitute a majority of the Board. "Applicable Directors"
shall mean those five individuals who were appointed at the direction of Ocean
Reef at the Effective Date and any new director whose election to the Board or
nomination for election to the Board was approved (prior to any vote thereon by
the shareholders) by a vote of at least a majority of the directors then still
in office who either were directors appointed by Ocean Reef as of the Effective
Date or whose election or nomination for election was previously approved as
provided in this sentence. To terminate his employment under this Agreement upon
a Change of Control, the Executive shall give the Company a written termination
notice. The termination date shall be the date specified in such notice, which
date may not be earlier than 30 days nor later than 90 days from the Company's
receipt of such notice. If this Agreement is terminated by the Executive
pursuant to this Section 5.2, or if the Company terminates this Agreement upon a
Change of Control, or within six months from the date of a Change of Control,
then, as long as the Executive is not a member of the "control group" (within
the meaning of the rules and regulations of the Securities and Exchange
Commission) of the entity causing the Change of Control, in addition to the
provisions of Sections 4.2 and 4.4, the Executive will be entitled to be paid a
lump sum payment equal to the sum of (x) the Base Salary that the Executive
would otherwise have been entitled to receive through the end of the Initial
Term, plus (y) a severance payment equal to $250,000.
5.3 TERMINATION WITHOUT CAUSE; DEATH; OR DISABILITY. At any
time the Company shall have the right to terminate the Executive's employment
hereunder (i) by written notice to the Executive, (ii) if the Executive, as a
result of mental or physical incapacity, illness or disability, fails to perform
his duties and responsibilities provided for herein for more than 90 days in any
365-day period, or (iii) upon the death of the Executive. In the event of any
termination pursuant to this Section 5.3, then, in addition to the provisions of
Sections 4.2 and 4.4, the Executive (or his estate) shall be entitled to be paid
his Base Salary and any accrued but unpaid bonus to the date of termination and
receive reimbursements for reasonable business expenses incurred prior to such
date of termination (subject, however, to the provisions of Section 4.1), and to
be paid the following severance payments: (a) if the termination occurs on or
prior to the one-year anniversary date of the Effective Date, the Company shall
pay the Executive (or his estate) a lump sum payment equal to the Base Salary
that the Executive would otherwise have been entitled to receive through the end
of the Initial Term, and (b) if the termination occurs after the one-year
anniversary date of the Effective Date, but prior to the expiration of the
Initial Term, the Company shall pay the Executive (or his estate) a lump sum
payment equal to the sum of (x) the Base Salary that the Executive would
otherwise have been entitled to receive through the end of the Initial Term,
plus (y) $250,000.
5.4 TERMINATION BY EXECUTIVE. The Executive may terminate his
employment under this Agreement for Good Reason (defined below). "Good Reason"
shall mean (A) that the Company (through its Board or otherwise) has (i)
assigned the Executive duties other than those contemplated by Section 1.2 above
without the Executive's consent, (ii) named a new President of the Company,
(iii) limited the powers of the Executive in any
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manner, or (iv) breached any of its other covenants and obligations hereunder;
or (B) the inability of the Executive to perform his duties hereunder. A
purported termination of this Agreement by the Company pursuant to any provision
of this Section 5 which is disputed and which is finally determined not to have
been proper shall be deemed a breach by the Company of this Agreement. To
terminate his employment under this Agreement for Good Reason, the Executive
shall give the Company written notice of the Executive's intent to terminate his
employment with the Company pursuant to this Section 5.4, which notice shall
specify the Executive's reasons therefor in detail. The Company shall have 30
days from its receipt of such notice to attempt to cure any such condition
giving rise to Good Reason hereunder. If such cure is acceptable to the
Executive, the Executive may accept such cure and continue this Agreement in
full force and effect as if the initial notice of termination under this Section
5.4 had not been given by the Executive; provided, however, that acceptance of
such cure and the continuation of the Executive's employment shall not act as a
waiver of any rights of the Executive with respect to such actions or inactions
of the Company and/or limit the Executive's right to terminate this Agreement
for the same or similar action or inaction by the Company following such cure.
If the Executive does not accept such cure, the termination date of this
Agreement shall be the 30th day after the Company's receipt of the Executive's
termination notice. Upon any termination of this Agreement pursuant to this
Section 5.4, then, in addition to the provisions of Sections 4.2 and 4.4, the
Executive shall be entitled to receive his Base Salary and any accrued but
unpaid bonus through the end of the Initial Term, in installments consistent
with the Company's normal payroll practices, and reimbursement for reasonable
business expenses incurred prior to the date of termination, subject, however,
to the provisions of Section 4.1.
5.5 NON-RENEWAL. In the event that this Agreement is not
renewed beyond the Initial Term as provided in Section 2.1 hereof, then this
Agreement shall terminate at the end of such Initial Term of this Agreement. The
last day of the Initial Term shall be the termination date for a termination
pursuant to this Section 5.5. If the Executive is employed by the Company at the
end of the Initial Term, then, upon any termination of this Agreement pursuant
to this Section 5.5, the Executive shall be entitled to receive a lump-sum
payment of $250,000.
5.6 MITIGATION. The Executive shall not be required to
mitigate the amount of any payment provided for in this Section 5 by seeking
other employment or otherwise, nor shall the amount of any payment provided for
in this Section 5 be reduced by any compensation earned by the Executive as the
result of employment by another employer after the termination date.
6. RESTRICTIVE COVENANTS.
6.1 NON-COMPETITION. During the Non-competition Period (as
hereinafter defined), the Executive shall not, directly or indirectly, engage in
or have any interest in any sole proprietorship, partnership, corporation or
business or any other person or entity that directly or indirectly is engaged in
the jewelry or gift retail business primarily in Florida; PROVIDED, HOWEVER,
that (i) nothing herein shall be deemed to prevent the Executive from owning an
interest in the equity or debt securities of the Company or any of its direct or
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indirect subsidiaries, and (ii) nothing herein shall be deemed to prevent the
Executive from acquiring through market purchases and owning, solely as an
investment, less than five percent of the equity securities of any class of any
issuer whose shares are registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended, and are listed or admitted for
trading on any United States national securities exchange or are quoted on the
National Association of Securities Dealers Automated Quotations System, or any
similar system of automated dissemination of quotations of securities prices in
common use, so long as the Executive is not a member of any "control group"
(within the meaning of the rules and regulations of the United States Securities
and Exchange Commission) of any such issuer. For purposes of this Section 6.1,
the term "NON-COMPETITION PERIOD" shall mean (i) at all times while the
Executive is employed by the Company, and (ii) at all times while the Executive
is receiving Base Salary payments from the Company, but in no event more than
six months from the date the Executive is no longer employed by the Company.
6.2 NONDISCLOSURE. Except as expressly permitted by the
Company or in connection with the performance of his duties hereunder, the
Executive shall not, unless otherwise required by law, divulge, communicate, use
to the detriment of the Company or for the benefit of any other person or
persons, or misuse in any way, any confidential information pertaining to the
business of the Company. Any confidential information or data heretofore or
hereafter acquired by the Executive with respect to the business of the Company
(which shall include, but not be limited to, information concerning the
Company's financial condition, prospects, customers, suppliers, sources of
leads, methods of doing business, importation, marketing and distribution of
the Company's services) shall be deemed a valuable, special and unique asset of
the Company that is received by the Executive in confidence and as a fiduciary,
and the Executive shall remain a fiduciary to the Company with respect to all of
such information. Notwithstanding any provision hereof which may be to the
contrary, confidential information shall not include (a) information that is or
becomes generally available to the public other than as a result of a disclosure
by the Executive, or (b) information lawfully acquired by the Executive from
sources other than the Company or its affiliates who are not bound by any
agreement of confidentiality.
6.3 NONSOLICITATION OF EMPLOYEES. While employed by the
Company and for a period of one year following the date his employment is
terminated hereunder, the Executive shall not, directly or indirectly, for
himself or for any other person, firm, corporation, partnership, association or
other entity, solicit any employee of the Company.
6.4 BOOKS AND RECORDS. All books, records, and accounts
relating in any manner to the Company, whether prepared by the Executive or
otherwise coming into the Executive's possession, shall be the exclusive
property of the Company and shall be returned immediately to the Company on
termination of the Executive's employment hereunder or on the Company's request
at any time. The Executive shall not retain copies, extracts or compilations of
any such books, records or accounts.
6.5 COMPANY INCLUDES SUBSIDIARIES. For purposes of this
Section 6 and Section 7 hereof, the term "Company" shall be deemed to include
the Company and any of its direct or indirect subsidiaries.
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6.6 SURVIVAL. The terms of this Section 6 shall survive the
termination of this Agreement.
7. INJUNCTION. It is recognized and hereby acknowledged by the parties
hereto that a breach by the Executive of any of the covenants contained in
Section 6 of this Agreement will cause irreparable harm and damage to the
Company, the monetary amount of which may be virtually impossible to ascertain.
As a result, the Executive recognizes and hereby acknowledges that the Company
shall be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants contained
in Section 6 of this Agreement by the Executive or any of his affiliates,
associates, partners or agents, either directly or indirectly, and that such
right to injunction shall be cumulative and in addition to whatever other
remedies the Company may possess.
8. INDEMNIFICATION. The Executive shall be entitled to be indemnified
and defended as provided to other officers and directors of the Company in
accordance with the Company's charter documents and Florida law.
9. ASSIGNMENT. Subject to the provisions of Section 5.2 hereof, the
Executive agrees that any or all of the rights and interests of the Company
hereunder (i) may be assigned to any purchaser of substantially all of the
assets of the Company, and (ii) may be assigned as a matter of law to the
surviving entity in any merger of the Company. The Executive shall not delegate
his employment obligations hereunder, or any portion thereof, to any other
person.
10. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida.
11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, understandings and arrangements, both oral and
written, between the parties hereto with respect to such subject matter. This
Agreement may not be modified in any way unless by a written instrument signed
by each of the parties hereto.
12. NOTICES. Any notice required or permitted to be given hereunder
shall be in writing and shall be given by personal delivery, facsimile
transmission, Federal Express (or other equivalent courier service) or by
registered or certified mail, postage prepaid, return receipt requested (a) if
to the Company, 0000 Xxxxx Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxx 00000, Attention:
Chief Executive Officer, and (b) if to the Executive, to his address as
reflected on the payroll records of the Company, or to such other addresses as
either party hereto may from time to time give notice of to the other. Notice by
registered or certified mail will be effective three days after deposit in the
United States mail. Notice by any other permitted means will be effective upon
receipt.
13. BENEFITS; BINDING EFFECT. This Agreement shall be for the benefit
of and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where applicable,
assigns, including, without limitation, any
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successor to the Company, whether by merger, consolidation, sale of stock, sale
of assets or otherwise.
14. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted. If such invalidity is caused by length of time or size of
area, or both, the otherwise invalid provision will be considered to be reduced
to a period or area which would cure such invalidity.
15. WAIVERS. The waiver by either party hereto of a breach or
violation of any term or provision of this Agreement shall not operate nor be
construed as a waiver of any subsequent breach or violation.
16. DAMAGES. Nothing contained herein shall be construed to prevent any
party hereto from seeking and recovering from the other damages sustained by
either or both of them as a result of its or his breach of any term or provision
of this Agreement. In the event that either party hereto brings suit for the
collection of any damages resulting from, or for the injunction of any action
constituting, a breach of any of the terms or provisions of this Agreement, then
the prevailing party shall pay all reasonable costs, fees (including reasonable
attorneys' fees) and expenses of the non-prevailing party.
17. SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
18. NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
other than the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and assigns, any rights or
remedies under or by reason of this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
X. XXXXX & SON, INC.
By:/s/Xxxxxxx Xxxxxx
------------------------
Name: Xxxxxxx Xxxxxx
Title: Chairman of the Board
/s/Xxxxx X. Xxxxx
------------------------
XXXXX X. XXXXX
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