EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
1st day of September, 1998 by and between 21ST CENTURY HOLDING COMPANY, a
Florida corporation with its principal office at 0000 X.X. 0xx Xxxxxx,
Xxxxxxxxxx, Xxxxxxx 00000 (the "Company"), and XXXXXXX X. XXXXXX, whose
residence address is 00000 X.X. 0xx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000 (the
"Executive").
RECITALS
1. The Executive is currently a Director and Vice President-Operations-
Treasurer of the Company.
2. The Executive possesses intimate knowledge of the business and affairs
of the Company, its policies, methods and personnel.
3. The Board of Directors (the "Board") of the Company recognizes that the
Executive's contribution, as Chairman of the Board and Chief Executive Officer
of the Company, to the growth and success of the Company has been and will be
substantial and desires to assure the Company of the Executive's present and
continued employment in an executive capacity and to compensate her therefor.
4. The Board has determined that this Agreement will reinforce and
encourage the Executive's continued attention and dedication to the Company.
5. The Executive is willing to make her services available to the Company
on the terms and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties hereby agree as follows:
1. Employment.
1.1 EMPLOYMENT AND TERM. The Company shall continue to employ the
Executive and the Executive shall continue to serve the Company, on the terms
and conditions set forth herein, for the period (the "Term") effective as of
September 1, 1998 (the "Commencement Date") and expiring on the second
anniversary of the Commencement Date, unless sooner terminated as hereinafter
set forth; provided, however, that the Term of this Agreement shall
automatically be extended so that at all times, the balance of the Term shall
not be less than two years.
1.2 DUTIES OF EXECUTIVE. The Executive shall serve as a Director and
Vice President-Operations-Treasurer of the Company and shall perform the duties
of an executive commensurate with such position, shall diligently perform all
services as may be reasonably
designated by the Board and shall exercise such power and authority as is
necessary and customary to the performance of such duties and services. The
Executive shall devote such time as she deems necessary to the business and
affairs of the Company.
1.3 PLACE OF PERFORMANCE. In connection with her employment by the
Company, the Executive shall be based at the Company's principal executive
offices in Boca Raton, Florida except for required travel on the Company's
business to an extent substantially consistent with her present travel
obligations.
2. COMPENSATION.
2.1 BASE SALARY. During the Term, the Executive shall receive a base
salary at the annual rate of $78,000, subject to adjustment in accordance with
this Paragraph 2.1 (the "Base Salary"). The Base Salary shall be payable in
substantially equal installments consistent with the Company's normal payroll
schedule, subject to applicable withholding and other taxes. Commencing on the
first anniversary of the Commencement Date, and each anniversary of the
Commencement Date thereafter during the Term, the Base Salary shall be
increased, but shall not be decreased, by that percentage by which the Consumer
Price Index (All Items Less Shelter), Urban Wage Earners and Clerical Workers,
for the Miami, Florida area published by the United States Government (the
"Index") for the immediately preceding calendar year exceeds such index for the
next preceding calendar year. If publication of the Index is discontinued, the
parties hereto shall accept comparable statistics on the cost of living for the
Miami, Florida area as computed and published by an agency of the United States
government or, if no such agency computes and publishes such statistics, by any
regularly published national periodical that does compute and publish such
statistics.
2.2 ADDITIONAL CASH COMPENSATION. Executive shall also be entitled to
receive such increments in base salary and performance or merit bonuses
(collectively, "Bonus") as shall be determined from time to time during the term
by the Board.
3. EXPENSE REIMBURSEMENT AND OTHER BENEFITS.
3.1 EXPENSE REIMBURSEMENT. During the Term, the Company, upon the
submission of supporting documentation by the Executive, and in accordance with
Company policies for its executives, shall reimburse the Executive for all
expenses actually paid or incurred by the Executive in the course of and
pursuant to the business of the Company, including expenses for travel and
entertainment.
3.2 OTHER BENEFITS. The Company shall obtain or shall continue in force
comprehensive major medical and hospitalization insurance coverages, including
dental coverages, either group or individual, for the Executive and her
dependents, and shall obtain or shall continue in force disability and life
insurance for the Executive (collectively, the "Policies"), which Policies the
Company shall keep in effect at its sole expense throughout the Term. The
Policies to be provided by the Company shall be on terms as determined by the
Board. Within 30 days following any termination of this Agreement, at the
Executive's option, the Company shall assign to the executive all insurance
policies on the life of the Executive then owned by the Company in consideration
of the payment by the Executive of the cash surrender
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value, if any, and the Executive's agreement to assume the Company liability to
pay any premiums accruing thereon after the date of such termination.
3.3 WORKING FACILITIES. The Company shall furnish the Executive with an
office, a secretary and such other facilities and services suitable to his
position and adequate for the performance of her duties hereunder.
3.4 AUTOMOBILE ALLOWANCE. Throughout the Term of this Agreement, the
Company will pay Executive an automobile allowance in the amount of $300 per
month. Such automobile allowance shall be for no more than one automobile and
shall include all expenses related thereto, including, without limitation, lease
expenses, maintenance and insurance.
3.5 VACATION. Executive shall be entitled to reasonable vacations
during each year of the Term, the time and duration thereof to be determined by
mutual agreement between Executive and the Company.
4. TERMINATION.
4.1 TERMINATION FOR CAUSE. Notwithstanding anything contained in this
Agreement to the contrary, this Agreement may be terminated by the Company for
Cause. As used in this Agreement "Cause" shall only mean (i) subject to the
following sentences, any action or omission of the Executive which constitutes a
willful and material breach of this Agreement which is not cured or as to which
diligent attempts to cure have not commenced within 20 business days after
receipt by Executive of notice of same, (ii) fraud, embezzlement or
misappropriation as against the Company, or (iii) the conviction (from which no
appeal can be taken) of Executive for any criminal act which is a felony. Upon
any determination by the Company's Board of Directors that Cause exists under
clause (i) of the preceding sentence, the Company shall cause a special meeting
of the Board to be called and held at a time mutually convenient to the Board
and Executive, but in no event later than 10 business days after Executive's
receipt of the notice contemplated by clause (i). Executive shall have the right
to appear before such special meeting of the Board with legal counsel of his
choosing to refute any determination of Cause specified in such notice, and any
termination of Executive's employment by reason of such Cause determination
shall not be effective until Executive is afforded such opportunity to appear.
Any termination for Cause pursuant to clause (ii) or (iii) of this Paragraph 4.1
shall be made in writing to Executive, which notice shall set forth in detail
all acts or omissions upon which the Company is relying for such termination.
Upon any termination pursuant to this Paragraph 4.1, the Company shall pay to
the Executive any unpaid Base Salary accrued through the effective date of
termination specified in such notice. In addition, the Company shall pay any
benefits, if any, owed to Executive under any plan provided for Executive under
Paragraph 3 hereof in accordance with the terms of such plan as in effect on the
date of termination of employment under this Paragraph 4.1. Except as provided
above, 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 Paragraph 3.1 hereof).
4.2 DISABILITY. Notwithstanding anything to the contrary contained in
this Agreement if, during the term hereof the Executive suffers a disability (as
defined below) the Company shall, subject to the provisions of Paragraph 4.3
hereof continue to pay Executive the
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compensation provided in Paragraphs 2.1 and 2.2 hereof during the period of her
disability; provided, however, that, in the event Executive is disabled for a
period of more than 180 days in any 12 month period (the "Disability Period"),
the Company may, at its election, by a vote of 75% of the members of the Board
within 90 days from the end of the Disability Period, terminate this agreement.
In the event of such termination, (a) payment of the Executive's Base Salary at
the rate prevailing on the date of termination of the Executive and fringe
benefits (to the extent permissible by applicable law) shall be continued for a
period of 24 months after such termination and (b) Executive shall receive a
bonus, payable in two annual installments, equal to twice the amount of bonus
paid to the Executive during the 12 months preceding the date of termination of
the Executive. As used in this Agreement, the term "disability" shall mean the
complete inability of Executive to perform her duties under this Agreement as
determined by an independent physician selected with the approval of the Company
and the Executive. Except as provided above, 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 Paragraph 3.1 hereof).
4.3 DEATH. In the event of the death of Executive during the Term of
this Agreement, the Company shall pay to Executive's legal representative, any
unpaid Base Salary accrued through the date of her death, as well as a lump sum
payment equal to (a) 24 months' Base Salary at the rate prevailing on the date
of the death of the Executive and (b) a bonus in an amount equal to twice the
amount of bonus paid in the 12 months preceding the date of death of the
Executive. Except as provided above, the Company shall have no further liability
hereunder (other than for reimbursement for reasonable business expenses
incurred prior to the date of the Executive's death, subject, however to the
provisions of Paragraph 3.1 hereof).
5. FULL SETTLEMENT. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement.
6. CHANGE OF CONTROL.
(a) For the purposes of this Agreement, a "Change of Control" shall
be deemed to have taken place if: (i) any person, including a "group" as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes
the owner or beneficial owner of Company securities, after the date of this
Agreement, having 20% or more of the combined voting power of the then
outstanding securities of the Company that may be cast for the election of
directors of the Company (other than as a result of an issuance of securities
initiated by the Company, or open market purchases approved by the Board, as
long as the majority of the Board approving the purchases is the majority at the
time the purchases are made), or (ii) the persons who were directors of the
Company before such transactions shall cease to constitute a majority of the
Board, or any successor to the Company, as the direct or indirect result of or
in connection with, any cash tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any combination of the
foregoing transactions.
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(b) The Company and Executive hereby agree that, if Executive is
affiliated with the Company on the date on which a Change of Control occurs (the
"Change of Control Date"), the Company (or, if Executive is affiliated with a
subsidiary, the subsidiary) will continue to retain Executive and Executive will
remain affiliated with the Company (or subsidiary), for the period commencing on
the Change of Control Date and ending on the second anniversary of such date, to
exercise such authority and perform such executive duties as are commensurate
with the authority being exercised and duties being performed by the Executive
immediately prior to the Change of Control Date. If after a Change of Control
Executive is requested and, in her sole and absolute discretion, consents to
change her principal business location, the Company will reimburse the Executive
for his reasonable relocation expenses, including without limitation, moving
expenses, temporary living and travel expenses for a reasonable time while
arranging to move her residence to the changed location, closing costs, if any,
associated with the sale of her existing residence and the purchase of a
replacement residence at the changed location, plus an additional amount
representing a gross-up of any state or federal taxes payable by Executive as a
result of any such reimbursements. If the Executive shall not consent to change
her business location, the Executive may continue to provide the services
required of her hereunder from her then residence and/or business address, and
the Company shall continue to maintain an office for Executive at that location
commensurate with the Company's office prior to the Change of Control Date.
(c) During the remaining term hereof after the Change of Control
Date, the Company (or subsidiary) will (i) continue to pay Executive a salary at
not less than the level applicable to Executive on the Change of Control Date,
(ii) pay Executive bonuses in amounts not less in amount than those paid during
the 12 month period preceding the Change of Control Date, and (iii) continue
employee benefit programs as to Executive at levels in effect on the Change of
Control Date (but subject to such reductions as may be required to maintain such
plans in compliance with applicable federal law regulating employee benefit
programs).
(d) If during the remaining term hereof after the Change of Control
Date (i) Executive's employment is terminated by the Company (or subsidiary), or
(ii) there shall have occurred a material reduction in Executive's compensation
or employment related benefits, or a material change in Executive's status,
working conditions, management responsibilities or titles, and Executive
voluntarily terminates her relationship with the Company within 60 days of any
such occurrence, or the last in a series of occurrences, then Executive shall be
entitled to receive, subject to the provisions of subparagraphs (e) and (f)
below, a lump sum payment equal to 299% of Executive's "base period income" as
determined under (e) below. Such amount will be paid to Executive within 15
business days after her termination of affiliation with the Company.
(e) The Executive's "base period income" shall be her Base Salary
and Bonuses paid or payable to her during or with respect to the 12 month period
preceding the date of her termination of affiliation. If Executive has not been
affiliated for 12 months at the time of her termination of affiliation, her
"base period income" shall be her annualized base salary at the rate then in
effect and any annual incentive Bonus paid to Executive prior to the date of her
termination of affiliation or payable to Executive with respect to her period of
affiliation.
(f) The amounts payable to Executive under any other compensation
arrangement maintained by the Company (or a subsidiary) which became payable
after payment
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of the lump sum provided for in (d), upon or as a result of the exercise by
Executive of rights which are contingent on a Change of Control (and would be
considered a "parachute payment" under Internal Revenue Code Section 280G and
regulations thereunder), shall be increased by an additional amount representing
a gross-up of any federal income tax liability arising from an excess parachute
payment or otherwise. If Executive has not been affiliated with the Company (or
a subsidiary of the Company) during one or more calendar years immediately
preceding the Change of Control Date, this paragraph (f) shall not apply.
(g) In the event of a proposed Change in Control, the Company will
allow Executive to participate in all meetings and negotiations related thereto.
7. RESTRICTIVE COVENANTS.
7.1 NON-COMPETITION. During the Term and for a period of one year
following the termination (other than without Cause, as defined in Paragraph
4.1) of the Executive's employment by the Company, Executive shall not, directly
or indirectly engage in or have any interest in, directly or indirectly, any
sole proprietorship, partnership, corporation, business or any other person or
entity (whether as an employee, officer, director, partner, agent, security
holder, creditor, consultant or otherwise) that, directly or indirectly, engages
primarily in the development, marketing, distribution, underwriting or sale of
products and services competitive with the Company's and/or any subsidiary's
products and services in any and all states in which the Company and/or any
subsidiary conducts its business during the Term or at the time Executive's
employment with the Company is terminated (the "Territory"); provided, however,
that Executive may hold Company securities and/or acquire, solely as an
investment, shares of capital stock or other equity securities of any such
company, so long as Executive does not control acquire a controlling interest in
or become a member of a group which exercises direct or indirect control of,
more than five percent of any class of capital stock of such corporation.
7.2 NONDISCLOSURE. During the Term and following termination of the
Executive's employment with the Company, Executive shall not 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 (as
hereinafter defined) pertaining to the business of the Company. Any Confidential
Information or data now 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, technology,
customers, methods of doing business and marketing, distribution, underwriting
or sale of the Company's products and 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. For purposes of this Agreement "Confidential
Information" means information disclosed to the Executive or known by the
Executive as a consequence of or through his employment by the Company
(including information conceived, originated, discovered or developed by the
Executive) prior to or after the date hereof and not generally known or in the
public domain, about the Company or its business. Notwithstanding the foregoing,
nothing herein shall be deemed to restrict the Executive from disclosing
Confidential Information to the extent required by law.
7.3 NONSOLICITATION OF EMPLOYEES. During the Term and for a period of
one year following termination of the Executive's employment with the Company,
Executive shall
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not directly or indirectly, for herself or for any other person, firm,
corporation, partnership, association or other entity, attempt to employ or
enter into any contractual arrangement with any employee or former employee of
the Company, unless such employee or former employee has not been employed by
the Company for a period in excess of six months.
7.4 BOOKS AND RECORDS. All books, records, accounts and similar
repositories of Confidential Information of 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 this Agreement or on the Board's request at any time.
8. INJUNCTION. It is recognized and hereby acknowledged by the parties
hereto that a breach by the Executive of any of the covenants contained in
Paragraph 7 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 Paragraph 7 of this Agreement by the Executive or any of her 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.
9. CONSOLIDATION, MERGER OR SALE OF ASSETS. Nothing in this Agreement
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation
which assumes this Agreement, and all obligations of the Company hereunder, in
writing. Upon such consolidation, merger, or transfer of assets and assumption,
the term "the Company" as used herein, shall mean such other corporation and
this Agreement shall continue in full force and effect, subject to the
provisions of Paragraph 6 hereof.
10. BINDING EFFECT. Except as herein otherwise provided, this Agreement
shall inure to the benefit of and shall be binding upon the parties hereto,
their personal representatives, successors, heirs and assigns.
11. TERMINOLOGY. All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, shall include all other
genders; the singular shall include the plural and vice versa. Titles of
Paragraphs are for convenience only, and neither limit nor amplify the
provisions of the Agreement itself.
12. FURTHER ASSURANCES. At any time, and from time to time, each party
will take such action as may be reasonably requested by the other party to carry
out the intent and purposes of this Agreement.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof. It
supersedes all prior negotiations, letters and understandings relating to the
subject matter hereof.
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14. AMENDMENT. This Agreement may not be amended, supplemented or modified
in whole or in part except by an instrument in writing signed by the party or
parties against whom enforcement of any such amendment, supplement or
modification is sought.
15. ASSIGNMENT. This Agreement may not be assigned by any party hereto
without the prior written consent of the other party and except as provided in
Paragraph 9 hereof.
16. CHOICE OF LAW. This Agreement will be interpreted, construed and
enforced in accordance with the laws of the State of Florida, without giving
effect to the application of the principles pertaining to conflicts of laws.
17. EFFECT OF WAIVER. The failure of any party at any time or times to
require performance of any provision of this Agreement will in no manner affect
the right to enforce the same. The waiver by any party of any breach of any
provision of this Agreement will not be construed to be a waiver by any such
party of any succeeding breach of that provision or a waiver by such party of
any breach of any other provision.
18. CONSTRUCTION. The parties hereto and their respective legal counsel
participated in the preparation of this Agreement; therefore, this Agreement
shall be construed neither against nor in favor of any of the parties hereto,
but rather in accordance with the fair meaning thereof.
19. SEVERABILITY. The invalidity, illegality or unenforceability of any
provision or provisions of this Agreement will not affect any other provision of
this Agreement, which will remain in full force and effect, nor will the
invalidity, illegality or unenforceability of a portion of any provision of this
Agreement affect the balance of such provision. In the event that any one or
more of the provisions contained in this Agreement or any portion thereof shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
this Agreement shall be reformed, construed and enforced as if such invalid,
illegal or unenforceable provision had never been contained herein.
20. ENFORCEMENT. Should it become necessary for any party to institute
legal action to enforce the terms and conditions of this Agreement, the
successful party will be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs. Any suit, action or proceeding with
respect to this Agreement shall be brought in the courts of Broward County in
the State of Florida or in the U.S. District Court for the Southern District of
Florida. The parties hereto hereby accept the exclusive jurisdiction of those
courts for the purpose of any such suit, action or proceeding.
Venue for any such action, in addition to any other venue permitted by
statute, will be Broward County, Florida. The parties hereto hereby irrevocably
waive, to the fullest extent permitted by law, any objection that any of them
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any judgment entered
by any court in respect thereof brought in Broward County, Florida, and hereby
further irrevocably waive any claim that any suit, action or proceeding brought
in Broward County, Florida, has been brought in an inconvenient forum.
The parties hereto acknowledge and agree that any party's remedy at law
for a breach or threatened breach of any of the provisions of this Agreement
would be inadequate and such
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breach or threatened breach shall be per se deemed as causing irreparable harm
to such party. Therefore, in the event of such breach or threatened breach, the
parties hereto agree that, in addition to any available remedy at law, including
but not limited to monetary damages, an aggrieved party, without posting any
bond, shall be entitled to obtain, and the offending party agrees not to oppose
the aggrieved party's request for, equitable relief in the form of specific
enforcement, temporary restraining order, temporary or permanent injunction, or
any other equitable remedy that may then be available to the aggrieved party.
21. BINDING NATURE. This Agreement will be binding upon and will inure to
the benefit of any successor or successors of the parties hereto.
22. NO THIRD-PARTY BENEFICIARIES. No person shall be deemed to possess any
third-party beneficiary right pursuant to this Agreement. It is the intent of
the parties hereto that no direct benefit to any third party is intended or
implied by the execution of this Agreement.
23. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original.
24. NOTICE. Any notice required or permitted to be delivered hereunder
shall be deemed to be delivered when sent by facsimile with receipt confirmed or
when deposited in the United States mail, postage prepaid, registered or
certified mail, return receipt requested, or by overnight courier, addressed to
the parties at the addresses first stated herein, or to such other address as
either party hereto shall from time to time designate to the other party by
notice in writing as provided herein.
IN WITNESS WHEREOF, this Agreement has been duly signed by the parties
hereto on the day and year first above written.
21ST CENTURY HOLDING COMPANY
By:_____________________________
Name:________________________
Title:_______________________
________________________________
XXXXXXX X. XXXXXX
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