AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT
10.8
AMENDED
AND RESTATED
THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (the “Agreement”), made and entered into as of the 22nd day of
June 2009, by and between:
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(i)
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XXXXXXX X. XXXXX, an
individual of Pembroke Pines, Florida (the “Employee”)
and
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(ii)
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21ST CENTURY HOLDING
COMPANY, a Florida corporation with offices and place of business
in Lauderdale Lakes, Florida (the
“Company”).
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All
capitalized terms which are not defined herein shall have the same meaning as
defined terms in Appendix A, which is attached hereto and incorporated herein as
reference.
PRELIMINARY
STATEMENT
WHEREAS, the
Company is engaged in the insurance business and desires to employ Employee and
to secure for the Company the benefit of Employee’s experience, efforts and
abilities in connection with the business of the Company, all as provided
herein; and
WHEREAS, the Company has and
will continue to expend substantial resources in connection with the
aforementioned endeavors; and
WHEREAS, Employee
and Company are parties to that certain employment agreement dated July 1, 2008
("Prior Employment Agreement"), setting forth the terms and conditions of
Employee's service to the Company as Chief Executive Officer, among other
services, and the Company's compensation of Employee in connection therewith;
and
WHEREAS, the Company and
Employee desire to amend and restate the Prior Employment Agreement to include
the additional terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of
the premises and mutual covenants herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Employment. The Company and the Employee entered into the Prior
Employment Agreement, effective as of July 1, 2008, and wish to amend and
restate the Prior Employment Agreement on the terms and conditions set
forth herein. The Employee agrees that
the Prior Employment Agreement is terminated and all terms of his employment
with the Company are stated in this Agreement, except as set forth in the
Non-Compete Agreement (as defined in Section 6)
2. Term of
Employment. The Employee shall serve as the Company's Chief
Executive Officer and be employed for a period of three years from June 22, 2009
through July 1, 2012 (this period of employment may be referred to as the “Term
of this Agreement”).
3. Duties of
Employee. So long as employed hereunder, Employee agrees to
devote Employee’s full business time and energy to the business and affairs of
the Company, to perform Employee’s duties hereunder effectively, diligently and
to the best of Employee’s ability and to use Employee’s best efforts, skill and
abilities to promote the Company’s interests. Employee’s duties shall
include, but are not limited to executive management functions for the Company
in any positions to which he is appointed by the Board, as well as providing any
other reasonable services as may be determined by the Company from time to time
in the Company’s reasonable discretion, provided such services do not violate
any applicable laws or regulations.
4.
Compensation. For all services to be rendered by Employee to
the Company during the Term of this Agreement, the Company agrees to compensate
Employee and Employee agrees to accept from Employer, the following
compensation:
(a) Base
Salary. The Company agrees to pay Employee (i) an annual
salary of Two Hundred Fourteen Thousand Dollars ($214,000) per year, payable
biweekly, subject to applicable withholding and other taxes (which annual salary
may be increased by the Compensation Committee, in its sole discretion at any
time during the Term of this Agreement) and (ii) any additional compensation, as
determined by the Compensation Committee in its sole discretion.
(b) Medical
Insurance. So long as Employee is employed by the Company, the
Company agrees to provide medical insurance coverage at no cost for the Employee
(plus family) commensurate with the coverage provided by the Company for other
similarly situated employees.
(c) Automobile
Allowance. Throughout the Term of this Agreement, the Company
will pay Employee an automobile allowance in a minimum amount of $500 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.
(d) Vacation/Personal
Time. Employee shall be entitled to reasonable vacations
and/or personal time off during each year of the Term of this
Agreement.
5. Termination of
Employment.
(a) Termination by the Company
for Cause. If Employee’s employment with the Company is terminated for
Cause, the Employee shall be entitled to Employee’s base weekly salary (as
provided in Section 4(a) above) prorated only through the date of the
termination of employment.
(b) Termination by the Company
without Cause. If during the Term of this Agreement the
Employee’s employment is terminated by the Company without Cause, the Company
will make a lump sum payment, no later than 10 days following such termination,
to the Employee in an amount equal two years' base salary (the "Termination
Severance"). Additionally, the Company will accelerate all unvested
stock options and any other equity awards held by the Employee at the time of
termination and Employee shall have no less than 90 days to exercise any
outstanding options; provided, however, in no event shall an option be
exercisable beyond its stated term.
(c) Death. In
the event of the Employee's death, this Agreement shall automatically terminate
as of the date of such death without notice to either party.
(d) Disability. In
the event that the Employee shall be unable to perform his duties hereunder by
virtue of illness or physical or mental disability (from any cause or causes
whatsoever) in substantially the manner and to the extent required of him
hereunder prior to the commencement of such disability and the Employee shall
fail to perform such duties for a period of thirty (30) or more days,
whether or not continuous, in any continuous one hundred and twenty (120) day
period, then the Company shall have the right to terminate this Agreement and
the Employee's employment with the Company as of the end of any calendar month
during the continuance of such disability upon at least fifteen (15) days' prior
written notice to the Employee. Notwithstanding the foregoing, in the
event that the Company maintains a long-term disability policy for the benefit
of the Employee (regardless of who pays the premium) the Company shall have the
right to terminate this agreement pursuant to this Section 5(d) only if the
Employee is determined to be disabled for purposes of collecting disability
benefits under such long term disability policy.
(e) Change of
Control. If Employee is employed with the Company on the date
on which a Change of Control occurs (the “Change of Control Date”), and if
during the remaining Term of this Agreement after the Change of Control Date
Employee’s employment is terminated by the Company (or any successor or
subsidiary) without Cause or by the Employee for Good Reason, the Company will
make a lump sum payment to the Employee in an amount equal to two times the sum
of the Employee's base salary in effect immediately prior to the Change of
Control plus the actual bonus earned by the Employee in the fiscal year
immediately preceding the Change of Control (the "Change of Control
Severance"). This payment shall be made to the Employee within five
(5) days following such termination of employment. Additionally, the
Company will accelerate all unvested stock options and any other equity awards
held by the Employee at the time of such termination and Employee shall have no
less than 90 days to exercise any outstanding options; provided, however, in no
event shall an option be exercisable beyond its stated term. In
addition, the Company shall continue to provide Employee (and his Family) with
medical insurance (as described in Section 4(b) hereof) for a period of two
years after the date of such termination of employment at no cost to the
Executive and on the same terms and conditions as in effect on the date on which
such termination of employment occurs (the "Extended Medical
Coverage"). Following such Extended Medical Coverage, Employee (and
his Family) shall be entitled to extended coverage under the terms of
COBRA. All obligation of the Company following a Change of
Control shall be assumed by the acquirer or successor entity of the
Company.
(f) Termination Within Six
Months Prior to a Change of Control. In the event that
Employee is terminated by the Company without Cause prior to a Change of Control
and a Change of Control occurs within six months following such termination,
then in addition to the Termination Severance made to Employee pursuant to
Section 5(b) of this Agreement, the Employee shall be entitled to an additional
lump sum payment in an amount equal to (i) the Change of Control Severance, less
(ii) the Termination Severance. Such additional payment shall be made
by the acquirer or successor entity of the Company within five (5) days
following the Change of Control. In addition, the acquirer or
successor entity of the Company shall provide the Employee (and his family) the
Extended Medical Coverage described in Section 5(e) beginning on the date of the
Change of Control. Employee (and his Family) shall be entitled to
extended coverage under the terms of COBRA following the Extended Medical
Coverage.
(g) Resignation. If
the Employee voluntarily resigns his employment with the Company with less than
2 weeks advanced notice, the Employee’s compensation shall be reduced one day
for each day the advanced notice is less than two weeks. Also, the
Employee agrees to reimburse the Company, if necessary to comply with this
provision.
6. Non-Solicitation of Company
Employees Agreement. Employee acknowledges and agrees that his
covenants and obligations contained in his Non-Compete Agreement with the
Company dated December 19, 2005 (the "Non-Compete Agreement") are in full force
and effect and will continue to apply. Employee agrees that for the
period that Employee is employed by the Company and for a period of two (2)
years if Employee resigns or is terminated from the Company, Employee will not,
for any reason, solicit or hire, whether for himself or on behalf of another
company, any of the Company’s current employees. Employees of the
Company will be considered “current” for the period of their employment with the
Company and for a period of six (6) months after their resignation or
termination from the Company. For avoidance of doubt it is understood that the
payments described in Section 5(b) and (e) are made, to the extent reasonable,
in consideration for Employee's execution and continuous compliance with
the Non-Compete Agreement.
7. Confidentiality
Agreement. The Employee recognizes, acknowledges and agrees
that the documents, lists, files, records, data and other information developed
and acquired by the Company, including all information developed and acquired by
the Employee in the course of Employee’s employment with the Company as it may
exist from time to time, are considered confidential, and include, but are not
limited to, all information relating to the Company’s projects, proposed
projects or applications (the “Confidential Information”).
(a) Prohibited
Acts. The Employee understands and agrees that all such
Confidential Information is to be preserved and protected, is not to be
disclosed or made available, directly or indirectly, to third persons for
purposes unrelated to the objectives of the Company, without prior authorization
of an executive officer of the Company, and is not to be used, directly or
indirectly, for any purpose unrelated to the objectives of the Company without
prior written authorization of an executive officer of the Company.
(b) Continuing
Obligations. The Employee understands and agrees that
Employee’s obligations under this Agreement, specifically including the
obligations to preserve and protect and not to disclose (or make available to
third persons) or use for purposes unrelated to the objectives of the Company,
without prior written authorization of an executive officer of the Company,
Confidential Information, continue indefinitely and do not, under any
circumstances or for any reason (specifically including wrongful discharge),
cease upon termination of employment; and that, in the event of termination of
the Employee’s employment for any reason (specifically including wrongful
discharge), such Confidential Information shall remain the sole property of the
Company and shall be left in its entirety in the undisputed possession and
control of the Company after such termination.
8. Enforcement of
Covenants. In addition to all other remedies available at law
or in equity, the covenants contained in Sections 6 and 7 hereof shall be
enforceable by decree of specific performance and/or injunctive relief and shall
be construed as separate covenants covering competition in the geographical
territory set forth, and if any court shall finally determine that the
restraints provided for therein are too broad as to the area, activity or time
covered, then the area, activity or time covered, as the case may be, may be
reduced by such court to whatever extent the court deems reasonable and such
covenants shall be enforced as to such reduced area, activity or
time.
9. Notices. All
notices, demands and other communications which may or are required to be given
to or made by either party to the other in connection with this Agreement shall
be in writing, shall be given by hand delivery or by United States Certified or
Registered mail, return receipt requested, postage prepaid, and shall be deemed
to have been given or made when received by the addressee, addressed to the
respective parties as follows:
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If
to Employee:
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XXXXXXX
X. XXXXX
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00000
X.X. 0xx Xxxxxx
Xxxxxxxx
Xxxxx, XX 00000
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If
to Company:
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0000 Xxxx
Xxxxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxxxxx
Xxxxx, Xxxxxxx 00000
Attn:
Corporate Secretary
10. Miscellaneous.
(a) This
Agreement has been executed in and shall be governed and construed in accordance
with the laws of the State of Florida.
(b) Unless
otherwise provided herein, all rights, powers, and privileges conferred
hereunder upon the parties shall be cumulative and not restrictive of those
given by law.
(c) No
failure of any party hereto to exercise any power given such party hereunder or
to insist upon strict compliance by the other party with its obligations
hereunder, and no customary practice of the parties at variance with the terms
hereof, shall constitute a waiver of a party’s right to demand exact compliance
with the terms hereof.
(d) Time
is of the essence in complying with the terms, conditions and provisions of this
Agreement.
(e) This
Agreement and the Non-Compete Agreement contains the entire agreement of the
parties hereto pertaining to the subject matter hereof, and no representation,
inducements, promises or agreements between the parties not contained herein
shall be of any force or effect.
(f) This
Agreement is binding upon and shall inure to the benefit of the Company, its
successors and assigns and the Employee and his respective heirs, personal
representatives, successors and assigns.
(g) Any
amendment to this Agreement shall not be binding upon the parties to this
Agreement unless such amendment is in writing and due executed by all the
parties hereto.
(h) In
the event any litigation or controversy arises out of or in connection with this
Agreement between the parties hereto, the prevailing party in such litigation or
controversy shall be entitled to recover from the other party or parties all
reasonable attorney’s fees, expenses and suit costs, including those associated
with any appellate or post-judgment collection proceeding.
11. Section 409A
Compliance.
(a) General. It
is the intention of both the Company and the Employee that the benefits and
rights to which the Employee is entitled pursuant to this Agreement comply with
Code Section 409A, to the extent that the requirements of Code Section 409A are
applicable thereto, and the provisions of this Agreement shall be construed in a
manner consistent with that intention. If the Employee or the Company
believes, at any time, that any such benefit or right that is subject to Code
Section 409A does not so comply, it shall promptly advise the other and shall
negotiate reasonably and in good faith to amend the terms of such benefits and
rights such that they comply with Code Section 409A (with the most limited
possible economic effect on the Employee and on the Company).
(b) Distributions On Account Of
Separation from Service. To the extent required to comply with
Code Section 409A, any payment or benefit required to be paid under this
Agreement on account of termination of the Employee’s service (or any other
similar term) shall be made only in connection with a "separation from service"
with respect to the Employee within the meaning of Code Section
409A.
(c) No Acceleration of
Payments. Neither the Company nor the Employee, individually
or in combination, may accelerate any payment or benefit that is subject to Code
Section 409A, except in compliance with Code Section 409A and the provisions of
this Agreement, and no amount that is subject to Code Section 409A shall be paid
prior to the earliest date on which it may be paid without violating Code
Section 409A.
(d) Six Month Delay for
Specified Employees, Establishment of Rabbi Trust. In the
event that the Employee is a “specified employee” (as described in Code Section
409A), and any payment or benefit payable pursuant to this Agreement constitutes
deferred compensation under Code Section 409A, then the Company and the Employee
shall cooperate in good faith to undertake any actions that would cause such
payment or benefit not to constitute deferred compensation under Code Section
409A. In the event that, following such efforts, the Company
determines (after consultation with its counsel) that such payment or benefit is
still subject to the six-month delay requirement described in Code Section
409A(2)(b) in order for such payment or benefit to comply with the requirements
of Code Section 409A, then no such payment or benefit shall be made before the
date that is six months after the Employee’s “separation from service” (as
described in Code Section 409A) (or, if earlier, the date of the Employee’s
death). Any payment or benefit delayed by reason of the prior sentence (the
Delayed Payment") shall be paid out or provided in a single lump sum at the end
of such required delay period in order to catch up to the original payment
schedule. Notwithstanding anything in this Agreement to the contrary, if a
Change of Control occurs prior to Employee receiving the Delayed Payment, the
Company shall establish and fund a "rabbi trust" in substantially the form
described in IRS Rev. Proc. 92-64 in an amount of money which is at all times at
least equal to the amount of any payment or benefit being
delayed. The Company shall be required to establish and fund such
"rabbi trust" within seven days following the later of (1) the date Executive
becomes entitled to the Delayed Payment or (2) the occurrence of such Change of
Control and such trust shall be established with a nationally recognized banking
institution with experience in serving as trustee for such matters and pursuant
to such documentation as recommended by outside counsel to the
Company.
(e) Treatment of Each
Installment as a Separate Payment. For purposes of applying
the provisions of Code Section 409A to this Agreement, each separately
identified amount to which the Employee is entitled under this Agreement shall
be treated as a separate payment. In addition, to the extent
permissible under Code Section 409A, any series of installment payments under
this Agreement shall be treated as a right to a series of separate
payments.
(f) Medical Insurance
Benefits. With respect to any medical insurance benefits provided herein
that do not comply with (or are not exempt from) Code Section 409A, to the
extent applicable, the Executive shall be deemed to receive from the Company a
monthly payment necessary for the Executive to purchase the benefit in
question.
12. Golden Parachute
Payments. In the event that any payment made to
Employee under this Agreement (the "Payment"), either alone or together
with other "parachute payments" (as defined in Section 280G(b)(2)(A) of the
Code), would constitute an "excess parachute payment" (as defined in Section
280G(b)(1) of the Code), such Payment shall be reduced to the largest
amount as will result in no portion of the Payment being subject to the
excise tax imposed by Section 4999 of the Code (the "Reduced Payment"), provided
however, no reduction to the Payment shall occur if the Payment, less any excise
tax which would be imposed on such payment pursuant to Sections 4999 of the
Code, would be greater than the Reduced Payment.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as of the day, month
and year first above written.
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/s/ Xxxxxxx X.
Xxxxx
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XXXXXXX X. XXXXX
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(the
“Employee”)
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a
Florida corporation
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By:
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/s/ Xxxxx X. Prygelski,
III
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Name:
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Xxxxx X. Prygelski, III
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Title:
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Chief Financial
Officer
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APPENDIX
A
DEFINITIONS
“Board” shall mean the Board of
Directors of 21st Century
Holding Company.
“Cause” shall mean
that:
(i)
there has been continued neglect on the part of the
Employee in the performance of Employee’s duties under this Agreement with
notice and an opportunity to cure;
(ii)
Employee shall have committed a material breach of any term or
condition of this Agreement;
(iii) Employee
continued to neglect Employee Handbook Policies and Procedures; or
(iv) Employee
is convicted during the Term of this Agreement of a felony involving moral
turpitude which is committed by Employee.
Prior to
terminating the Employee for Cause” under clauses (i) – (iii) above, the Company
shall provide the Employee with at least ten (10) days written notice of the
breach and an opportunity to cure the breach. If the Employee does
not cure the breach to the satisfaction of the Board, in its sole and absolute
discretion, during this period, the Company may terminate the Employee for
Cause. If the Employee is terminated under clause (iv) above, his
termination will be immediate upon the date of the conviction and no written
notice is required by the Company.
“Change of Control” shall be
deemed to have taken place if: (1) 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 30% 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 (2) 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. Notwithstanding the foregoing, a Change of Control shall
not be deemed to occur unless it constitutes a “change in control event” within
the meaning of Section 1.409A-3(i)(5) of the Treasury Regulations promulgated
under Section 409A.
"Code" shall mean the Internal
Revenue Code of 1986, as amended, and the regulations promulgated
thereunder.
"Code Section 409A" shall mean
Section 409A of the Code and its implementing regulations and
guidance.
"Good Reason" shall mean the
occurrence of one of the following conditions:
(1) a
material diminution in the Employee's base compensation;
(2) a
material diminution in the Employee's authority, duties, or
responsibilities;
(3) a
material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Employee is required to report, including a requirement
that the Employee report to a corporate officer or employee instead of reporting
directly to the Board;
(4) a
material diminution in the budget over which the Employee retains
authority;
(5) a
material change in the geographic location at which the Employee must perform
the services;
(6) any
other action or inaction that constitutes a material breach by the Company of
this Agreement; or
(7) a
Change of Control.
Notwithstanding
the foregoing, the Employee shall not be deemed to have terminated this
Agreement for Good Reason unless: (i) the Employee terminates this Agreement no
later than 2 years following the initial existence of one or more of the above
referenced conditions; and (ii) the Employee provides to the Company a written
notice of the existence of the above-referenced condition(s) within 90 days
following the initial existence of such condition(s) and (except for a Good
Reason event described in clause (7) above) the Company fails to remedy such
condition(s) within 30 days following the receipt of such notice.
