EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the
1st day of January, 2000, between KG Business Services, Inc., a Pennsylvania
corporation (the "Company") and wholly-owned subsidiary of Colonial Direct
Business Services, Inc. ("Colonial Direct"), a Delaware corporation and Xxxxxxx
Xxxxx, an individual ("Employee").
The Company is a corporation which is engaged in the financial services
consulting business from its principal office location at 000 Xxx Xxxx Xxxx,
Xxxxxxxxxx, XX 00000. The Company wishes to employ Employee to provide certain
services to the Company and Employee is willing to be employed by the Company to
render such services, all in accordance with the terms and conditions specified
below and in accordance with the all applicable federal and state statutes,
rules and regulations then in effect.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. Engagement. The Company does hereby employ and engage Employee as President
and Employee does hereby accept and agree to such employment and engagement and
to the dedication of such time and resources as are required to fulfill the
responsibilities and requirements commensurate herewith to the full satisfaction
of the Board of Directors of The Company.
2. Term. Except as otherwise provided herein, the term of this Agreement shall
be for a period of three (3) years (the "Initial Term"), and thereafter
automatically shall renew for a successive three year term, at the mutual
agreement of the Company and the Employee, unless earlier terminated as provided
for herein.
3. Compensation:
3.1 Base Salary. The Company shall pay Employee, and Employee agrees to
accept from the Company as payment in full for Employee's services
hereunder, a base salary of (i) $150,000 per year (the "Base Salary"),
payable in accordance with the regular payroll of the Company during the
term of this Agreement. The Base Salary shall be subject to modification
annually based on the annual net pre-tax profitability of the continuing
operations of the Company, as determined from and after the Closing Date, in
the Company's sole discretion, provided, however, that the Base Salary shall
not be reduced by more than ten (10%) percent annually, during the Initial
Term or any renewal term.
3.2 Bonus. In addition to such Base Salary, Employee shall be entitled to a
Bonus which shall be equal to a portion of a pool which shall be allocated
by and amongst Employee, Xxxx Xxxxxxx and Xxxxxxx Xxxxx and funded in an
amount equal to fifteen (15%) percent of the annual net pre-tax profits of
the continuing operations of Colonial Direct, as determined from
and after the Closine Date. Such Bonus shall be calculated and payable not
less than 90 days after the end of the Company's fiscal year.
3.3 Stock Options/Benefit Programs. Employee will be eligible for and be
entitled to participate in any stock option or other benefit program created
for the benefit of its employees, in such amount as is determined by the
Company's Board of Directors or such committee appointed thereby.
3.4 Expense Allowance. Employer shall pay the reasonable expenses of
Employee as are detailed on the attached Schedule A.
3.5 Forgivable Loan. Provided Employee is an employee in good standing on
and after April 1, 2001, the Company shall advance Employee the sum of
$120,000, such sum to be in the form of a forgivable loan for a term of five
(5) years in substantially the form of the Promissory Note attached hereto
as Exhibit A.
4. Vacation. Employee shall be entitled to a minimum of four (4) weeks vacation
per year, without loss of compensation. Vacation scheduling shall be coordinated
with the Company and in accordance with established Office procedures so as not
to disrupt the continuity of the business. Accrued vacation not taken at the end
of the year in which days have been accrued automatically will be forfeited.
5. Health Benefits. Employee shall be entitled to participate in such health
benefits and plans as are made available by the Company to its employees on a
usual and customary basis.
6. Confidential Information. Employee acknowledges and agrees that he will have
access to certain confidential information of the Company and that such
information constitutes valuable, special and unique property of the Company.
Employee farther acknowledges and agrees that Employee will not, at any time
during or after the term hereof, in any fashion, form, or manner, either
directly or indirectly, divulge, disclose or communicate to any person, firm, or
corporation, in any manner whatsoever, the terms and conditions of this
Agreement or any information of any kind, nature or description concerning any
matters affecting or relating to the business of the Company ("Confidential
Information").
7. Client Information. Employee agrees that (i) all client names, addresses,
telephone numbers, files, and records (collectively, "Ciient Records") are and
shall remain in the custody and control of the Company, and, except as necessary
and permitted for purposes directly related to the operation of the Company or
proper client service, or as authorized and required by law or client consent,
Employee shall not remove, copy, transfer, or transmit to any person, natural or
corporate, any Client Records at any time during the Initial Term or any renewal
term; and (ii) an actual or attempted violation of any provision of this Section
by Employee, either directly or indirectly, shall be grounds for immediate
termination of this Agreement.
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Employee recognizes and agrees that a violation of any of the
provisions contained in this Section may cause irreparable damage to the
Company, the exact amount of which may be impossible to ascertain, and that, for
such reason, among others, the Company shall be entitled to an injunction
without the necessity of posting bond therefor in order to restrain any further
violation of such provisions. Such right to an injunction shall be in addition
to, and not in limitation of, any other rights and remedies the Company may have
against Employee, including, but not limited to, the recovery of damages. The
terms and conditions of this Section shall survive termination of this
Agreement.
8. Non-Competition Agreement. Employee agrees that during the term of this
Agreement and for a period of three (3) years thereafter, Employee shall not
directly or indirectly compete with the accounting and consulting businesses of
the Company, or own, directly or indirectly, any part of or become the employee
of, or otherwise render services to, any enterprise which directly or indirectly
competes with the accounting and consulting businesses of the Company.
9. Covenant Not To Solicit. Employee agrees that, during the term of this
Agreement and for a period of three (3) years thereafter, Employee shall not (i)
solicit, encourage or advise clients serviced during the term of this Agreement
to obtain or seek services from any entity other than the Company, or (ii)
solicit, encourage or advise any employees of the Company to terminate
employment with the Company for any reason whatsoever. Employee recognizes and
agrees that the limitations set forth in this Section and Section 8 are
reasonable and necessary for the protection of the goodwill of the business of
the Company. Employee further recognizes and agrees that a violation of any of
the provisions contained in either section may cause irreparable damage to the
Company, the exact amount of which may be impossible to ascertain, and that, for
such reason, among others, the Company shall be entitled to an injunction
without the necessity of posting bond therefor in order to restrain any further
violation of such provisions. Such right to any injunction shall be in addition
to, and not in limitation of, any other rights and remedies the Company may have
against Employee, including, but not limited to, the recovery of damages. As
used herein, the term "client" shall include any and all clients serviced at any
office location at which the Company operates during the term of this Agreement.
The terms and conditions of this Section and Section 8 shall survive termination
of this Agreement.
10. Representations and Warranties. Employee represents and warrants that he (i)
is not subject to any restriction that would prohibit entering into this
Agreement, is fully able to perform each of the terms, conditions and covenants
hereof, and is not restricted or prohibited from entering into or performing any
of the terms or conditions hereof; and (ii) is able to execute and perform under
this Agreement without violating or breaching any agreement between Employee and
any other person or entity.
Employee acknowledges and agrees that the truth and accuracy of the
representations and warranties contained herein constitute a condition precedent
to the Company's obligation to provide compensation pursuant to the terms and
conditions of this Agreement.
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11. Indemnify. Except to the extent the foregoing is covered by insurance,
Employee hereby agrees to indemnify, defend and hold the Company harmless from
and against any and all costs. losses, claims, demands and liabilities,
including reasonable attorneys' fees and costs, which arise out of or relate to
any breach by Employee of any of the terms or conditions of this Agreement; any
negligent or intentional wrongful act of Employee; any act or omission of
Employee which constitutes negligence; or any other act of Employee not
authorized under the terms of this Agreement. If the Company or any of its
shareholders or affiliates is made a party to any litigation or obligation or
otherwise incurs any loss or expense as a result of Employee's activities
unconnected with the Company's business at the Office, Employee shall forthwith
upon demand reimburse the Company or such individuals for any and all expenses
incurred as a result thereof. The terms and conditions of this Section shall
survive termination of this Agreement.
12. Termination By The Company. The Company shall have the right to terminate
Employee's employment at any time, for any reason, with or without cause, on
thirty (30) days prior written notice. Cause shall be defined as (i) the death
or disability of Employee for a period of more than 30 consecutive days, (ii) a
material failure of Employee to discharge his employment obligations as
reasonably directed by the Company, which is not cured or corrected within
thirty (30) days after notice thereof, (iii) conduct by Employee which is
violative of law or which involves moral turpitude, or (iv) fraud, embezzlement
or theft by Employee of funds belonging to the Company or its subsidiaries or
affiliates. In addition, the Company may terminate Employee's employment
hereunder in the event of material nonperformance of Employee's duties as an
Employee, which is not cured or corrected within thirty (30) days after notice
thereof. The term "disability" shall mean for purposes of this Agreement, the
inability of Employee to perform full-time regular duties as contemplated
hereunder on account of a physical or mental condition for a period of 90
consecutive days, but shall exclude infrequent and temporary incapacity.
12.1 Termination Payments. In the event the Initial Term is not renewed, or
Employee is terminated for any reason other than cause, as defined herein,
Employee shall be paid his accrued but unpaid Bonus, plus fifty (50%)
percent of the Base Salary due Employee during the remaining balance of the
Initial Term or any renewal term. Such payment shall be made within thirty
(30) days after the Employee's termination. If, however, Employee voluntary
terminates this Aareement in accordance with Section 13, or is otherwise
terminated for cause, he shall receive no further payments. A termination
without cause, or if the Initial Term is not renewed, shall automatically
extinguish the provisions of Sections 7, 8 and 9, above and any similar
provision in any other documents between Employee and Employer bearing even
date herewith as such documents may be amended from time to time.
13. Termination By Employee. Employee may not terminate this Agreement prior to
the end of the Initial Term. Thereafter, Employee may terminate this Agreement
on thirty (30) days' prior written notice. Notwithstanding the foregoing, in the
event the Initial Term is not renewed, or in the event of a material breach of
any of the terms hereof by the Company, which breach is not cured within thirty
(30) days after written notice from Employee, Employee may terminate this
Agreement and the provisions of Sections 7, 8 and 9 shall be automatically
extinguished.
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14. Entire Agreement: Amendment. Except as otherwise stated herein, this
Agreement sets forth the entire agreement of the parties hereto with respect to
the employer-employee relationship between the Company and Employee, and
supersedes all prior and contemporaneous agreements, arrangements and
understandings. This Agreement may only be amended by the mutual written consent
of the Company and Employee.
15. Waiver. No waiver or modification of this Agreement or any covenant,
condition, or limitation herein shall be valid unless in writing and duly
executed by the parties hereto, and no evidence of any waiver or modification
shall affect this Agreement, or the rights or obligations of any parry
hereunder, unless such waiver or modification is in writing and duly executed by
the parries, hereto. The parties hereto further agree that the provisions of
this Section may not be waived except as herein set forth.
16. Assignment. Employee may not assign or delegate any rights, duties or
obligations established herein without the prior written consent of the Company,
which consent may be withheld in the Company's sole and absolute discretion. The
Company may assign this Agreement, in whole or in part, in its sole and absolute
discretion with the consent of Employee, which consent shall not be unreasonably
withheld or delayed.
17. Notices. All notices or other communications required or permitted hereunder
shall be sent in writing to the address as set forth herein.
18. Jurisdiction/Governing Law. The parties hereto submit to the jurisdiction of
the courts of the State of Florida for the purpose of resolution of any and all
disputes which arise out of, or are related to, this Agreement or an alleged
breach thereof This Agreement and performance hereunder shall be construed and
enforced, and all actions or proceedings arising out of or related hereto shall
be conducted in accordance with the laws of the State in which such services are
rendered.
19. Survival. The provisions set forth in Sections 6, 7, 8, 9, 10, and 11 of
this Agreement shall survive expiration or termination of this instrument.
[signature page to follow)
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IN WITNESS WHEREOF, the parties hereto have executed this instrument,
or caused its execution by a duly authorized officer, all as of the day and year
first above written.
"EMPLOYER"
KG BUSINESS SERVICES, INC.
By: /s/ Xxx Xxxxxxxxxxx
-----------------------------
Name: Xxx Xxxxxxxxxxx
Title: Vice President
Address: 0000 X. Xxxxxxxx
Xxxx Xxxxx, Xxxxxxx
"EMPLOYEE"
/s/ Xxxxxxx Xxxxx
--------------------------------
(Signature)
XXXXXXX XXXXX
Address: 000 Xxxxxx Xxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
SS#: ###-##-####
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