EXHIBIT 10.f
EMPLOYMENT AGREEMENT
AGREEMENT made effective as of the 18th day of October, 1999, by and
between Legal Club of America Corporation, with its principal offices in
Sunrise, Florida, (the "Company") and Xxxx Xxxxxxxxx, an individual residing at
0 Xxxxx Xxxxx Xxxxx, Xxxxx Vedra Bch., Florida (the "Executive").
PRELIMINARY STATEMENT
The Company has agreed to employ the Executive and the Executive has
agreed to accept such employment, all on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable considerations, the receipt and adequacy of
which are hereby conclusively acknowledged, the parties, intending to be legally
bound, agree as follows:
1. TERM. The Company hereby employs the Executive as the President and Chief
Operating Officer of the Company (as used herein, reference to the Company
includes its subsidiaries), and the Executive agrees to serve the Company as
such, upon the terms and conditions hereof. The term of employment hereunder
shall commence on the date hereof and continue for an initial term (the "Initial
Term") ending on the first anniversary of the date hereof. The Initial Term
shall renew for a period (the "Renewal Term") commencing at the end of the
Initial Term and continuing until the third anniversary of the date hereof,
unless either party gives notice to the other of an intention not to renew the
Initial Term. Such notice of non-renewal of the Initial Term may be given for
any reason or no reason, and shall be given at least 90 days before the end of
the Initial Term. The Initial Term and, if applicable, the Renewal Term are
collectively called the "Term". In any event, the Term is subject to early
termination in accordance with the provisions hereof.
2. DUTIES. (a) Executive shall serve as the Company's President and Chief
Operating Officer, and shall be responsible for the formulation, direction,
management and implementation of the Company's operations, subject only to the
direction and control of the Company's Chief Executive Officer ("CEO") and Board
of Directors. The Executive shall also discharge such duties and authority as
are generally incident to such position, or in such other senior management
position as the Company shall determine, provided that such other position shall
be comparable in authority and responsibility to the position specified above.
The Executive will report to the Company's CEO and its Board of Directors. The
Executive will hold such senior offices and/or such directorships in the Company
and/or any subsidiaries or affiliates of the Company to which, from time to
time, he may be elected or appointed, as agreed to by the Company and the
Executive.
(b) The Executive agrees that he will devote substantially all of his
business time and attention to the affairs of the Company and use his best
efforts to promote the business and interests of the Company and that he will
not engage, directly or indirectly, in any other occupation during the term of
employment. It is understood, however, that the foregoing will not
prohibit the Executive from engaging in personal investment activities for
himself and his family which do not interfere with the performance of his duties
hereunder.
3. COMPENSATION. The Company will pay the Executive for all services to be
rendered by the Executive hereunder (including, without limitation, all services
to be rendered by him as an officer and/or director of the Company and its
subsidiaries and affiliates):
(a) A salary ("Base Annual Pay") of $180,000, payable in installments
in accordance with customary payroll practices for senior executives of the
Company. Such installments, however, shall not exceed (4) four weeks between
payments.
(b) Bonus compensation for each fiscal year of the Company, based on
Executive's performance and the overall performance of the Company, either on an
"ad hoc" basis or pursuant to a bonus plan or arrangement as may be established
at the Company's discretion for senior executives of the Company.
Notwithstanding any conflicting or inconsistent provisions of this Agreement,
bonus compensation shall be payable in such amounts, if any, and at such times,
if any, as determined by the Company's Board of Directors or the Compensation
Committee thereof, in its sole and absolute discretion.
(c) Subject to the approval of the Company's Board of Directors, grants
of stock options to buy shares the Company's common stock at the per share price
provided in the Company's next sale of at least $1 million of its common stock
(the "Capital Raise") in accordance with the following schedule:
(1) 166,667 shares upon the consummation of the Capital Raise,
(2) 166,666 shares on the first anniversary of this Agreement,
and
(3) 166,666 shares on the second anniversary of this
Agreement.
The Executive will receive the stock option grants described in 2) and 3) above
only if the Company has consummated a Capital Raise, as stated above, the
Renewal Term comes into effect, and he remains employed by the Company on the
first and second anniversaries of the date of this Agreement, respectively.
These stock options will be subject to the terms of the Company's stock option
plan, and to stockholder approval to amend this plan to increase the number of
shares of the Company's common stock covered thereby. The Executive has
determined to enter into this Agreement and accept the foregoing share grants
based on his own independent investigation, and not in reliance upon any
representation, warranty or statement of the Company or any of its affiliates.
The Executive will enter into underwriter's hold back agreements on the same
terms as applicable to the Company's CEO. If the Company shall consummate any
stock splits, reverse splits or stock dividends before the first or second
anniversaries of the date of this Agreement, as the case may be, then the number
of stock options issued thereafter shall be appropriately and proportionally
adjusted. It is agreed that the Company shall seek its Board of Directors'
approval of the foregoing stock option grants within
one month of the execution of this Agreement, and any necessary stockholder
approval not later than the next annual meeting of the Company's stockholders.
It is further agreed that the terms of this Agreement are subject to the
approval of the Company's Board of Directors, which the Company shall also seek
within one month from the date hereof.
Nothing contained herein shall prohibit the Board of Directors of the Company,
in its sole discretion, from increasing the compensation payable to the
Executive pursuant to this Agreement. The Base Annual Pay shall be increased by
20% on the date that is six (6) months after the date of this Agreement, and on
the same date in each year thereafter during the Renewal Term, if applicable.
4. EXPENSES. The Executive shall be entitled to reimbursement by the Company, in
accordance with the Company's policies then applicable to senior executives at
the Executive's level, against appropriate vouchers or other receipts for
authorized travel, entertainment and other business expenses reasonably incurred
by him in the performance of his duties hereunder. Without limiting the
generality of the foregoing, the Company will pay or reimburse the Executive for
the use of a pager and for his business use of a cellular telephone.
5. EXECUTIVE BENEFITS. The Executive shall be entitled to participate in, and
receive benefits under, any pension, profit sharing, insurance, hospitalization,
medical, disability, stock purchase, stock option (as set forth in paragraph 3
(c)), stock ownership, vacation or other employee benefit plan, program or
policy of the Company which may be in effect at any time during the course of
his employment by the Company and which shall be generally available to senior
executives of the Company occupying positions of comparable status or
responsibility, subject to the terms of such plans, programs or policies.
Notwithstanding the foregoing, the Company may, in its discretion, at any time
and from time to time, change or revoke any of its employee benefits plans,
programs or policies and Executive shall not be deemed, by virtue of this
Agreement, to have any vested interest in any such plans, programs or policies.
The Executive shall also be entitled to three (3) weeks' paid vacation per year.
Without limiting the generality of the foregoing, upon the inception of this
agreement the Executive shall be entitled to receive Group Health and Dental
Insurance coverages for himself and his family at no charge to Executive.
6. WITHHOLDING. All payments required to be made by the Company hereunder to the
Executive shall be subject to the withholding of such amounts relating to taxes
and other governmental assessments as the Company may reasonably determine it
should withhold pursuant to any applicable law, rule or regulation.
7. DEATH; PERMANENT DISABILITY. Upon the death of the Executive during the term
of this Agreement, the term of this Agreement shall terminate. If during the
term of this Agreement the Executive fails because of illness or other
incapacity to perform the services required to be performed by him hereunder for
any consecutive period of more than 60 days, or for shorter periods aggregating
more than 60 days in any consecutive twelve-month period (any such illness or
incapacity being hereinafter referred to as "permanent disability"), then the
Company,
in its discretion, may at any time thereafter terminate the Term upon not less
than 10 days' written notice thereof to the Executive, and this Agreement shall
terminate and come to an end upon the date set forth in said notice as if said
date were the termination date of this Agreement; provided, however, that no
such termination shall be effective if prior to the date when such notice is
given, the Executive's illness or incapacity shall have terminated and he shall
be physically and mentally able to perform the services required hereunder and
shall have taken up and be performing such duties.
If the Executive's employment shall be terminated by reason of his death or
permanent disability, the Executive or his estate, as the case may be, shall be
entitled to receive (i) any earned and unpaid salary accrued through the date of
termination, (ii) a pro rata portion of any annual bonus which the Executive
would otherwise have been entitled to receive pursuant to any bonus plan or
arrangement for senior executives of the Company (such pro rata portion to be
payable at the time such annual bonus would otherwise have been payable to the
Executive) and (iii) subject to the terms thereof, any benefits which may be due
to the Executive on the date of termination under the provisions of any employee
benefit plan, program or policy.
8. TERMINATION
(a) FOR CAUSE. The Company may at any time during the term of this
Agreement, by written notice, terminate the employment of the Executive for
cause, the cause to be specified in the notice. For purposes of this Agreement,
"cause" shall mean (i) any gross negligence, self dealing or material willful
misconduct of the Executive in connection with the performance of any of his
duties hereunder, including without limitation misappropriation of funds or
property of the Company, securing or attempting to secure personally any profit
in connection with any transaction entered into on behalf of the Company or any
material willful and intentional act having the effect of injuring the
reputation, business or business relationships of the Company (ii) material
breach of any covenants contained in this Agreement; (iii) engaging in any
criminal enterprise involving moral turpitude, (iv) persistent failure of the
Executive to perform his responsibilities as contemplated hereby, or (v)
indictment or being held for trial in connection with misdemeanor involving
moral turpitude or any felony, provided, however, that (1) if the Executive is
defending against the charge in good faith and by appropriate proceedings, then
the Company shall suspend the Executive from office without compensation of any
type, pending the resolution of the matter; and (2) unless the Executive is
exonerated from the charges, he shall be terminated for cause effective upon the
date he was indicted or held for trial. Termination for cause shall be effective
upon the giving of such notice and the Executive shall be entitled to receive
(i) any earned and unpaid salary accrued through the date of termination and
(ii) subject to the terms thereof, any benefits which may be due to the
Executive on such date under the provisions of any employee benefit plan,
program or policy plus six months health, dental and disability benefits. The
Executive hereby disclaims any right to receive a pro rata portion of any annual
bonus with respect to the fiscal year in which such termination occurs, and any
stock option grants under Section 3 c that would have been issuable after such a
termination.
(b) WITHOUT CAUSE. A. The Company may terminate the Initial Term at any
time, upon at least 90 days' notice to Executive, without Cause, provided that
in such event that the Company shall pay the Executive One Hundred Thousand
Dollars ($100,000) as severance, in addition to (i) any additional earned and
unpaid compensation accrued hereunder through the date of termination, (ii)
subject to the terms thereof, any benefits which may be due to the Executive on
such date under the provisions of any employee benefit plan, program or policy.
B. The Company may terminate the Renewal Term, if applicable at any
time, upon at least 90 days' notice to the Executive, without Cause, provided
that in such event that the Company shall pay the Executive twelve months'
continuation of Base Annual Salary, as severance, in addition to (i) any
additional earned and unpaid compensation accrued hereunder through the date of
termination, (ii) subject to the terms thereof, any benefits which may be due to
the Executive on such date under the provisions of any employee benefit plan,
program or policy, (iii) continuation of health, dental and disability coverage
for 12 months following such termination, and (iv) a pro rata portion of any
annual bonus with respect to the fiscal year in which such termination occurs.
The Executive may also terminate the Term at any time, upon at least 90 days'
notice to the Company, with the same effects as if the Company terminated the
Term for Cause, as set forth above.
C. In the event of a Change in Control, as defined below, or any
material breach of this Agreement by the Company that remains uncured for 20
days after the Executive notifies the Company thereof, the Executive may, within
60 days of the effective date of such Change in Control or the uncured breach,
terminate the Term of this Agreement by giving 30 days' notice to the Company,
with the effects as provided herein for a termination of the Renewal Term by the
Company without Cause. As used herein, a "Change in Control" means the
occurrence of a change in the beneficial ownership of voting securities of the
Company (other than pursuant to transfers among present stockholders of the
Company, public offerings or debt or equity funding of the Company in which the
Company receives the proceeds of such sale; each, an "Exempt Share Purchase")
representing 50% or more of the combined voting power of the Company's
securities, or if a shareholder(s) of the Company (who does not presently have
such power and other than shareholders acquiring stock by an Exempt Share
Purchase) acquires the power to elect a majority of the Company's Board of
Directors.
9. INSURANCE. The Executive agrees that the Company may procure insurance on the
life of the Executive, in such amounts as the Company may in its discretion
determine, and with the Company named as the beneficiary under the policy or
policies. The Executive agrees that upon request from the Company he will submit
to a physical examination and will execute such applications and other documents
as may be required for the procurement of such insurance. The Company agrees
that such information will be held in the strictest confidence and will not be
disseminated without the Executive's written approval.
10. NON-COMPETITION; SOLICITATION.(a) The Executive acknowledges and recognizes
that the highly competitive nature of the Company's business and that the
goodwill and patronage of the Company's customers and network of attorneys
constitute a substantial asset of the
Company, having been acquired through considerable time, effort and money.
Accordingly, the Executive agrees that during his employment with the Company
and for a period of 12 months after Executive leaves the Company's employ for
any reason, he shall not, without the written consent of the Company, directly
or indirectly, either individually or as an employee, agent, partner,
shareholder, consultant, option holder, lender of money, guarantor or in any
other capacity other than passive investor of less than 5% of the equity,
participate in, engage in or have an active financial interest or management
position in any business, firm, company or other entity if it competes with any
material business operation conducted by the Company or its subsidiaries or
affiliates or any successor or assign thereof, nor will he solicit any other
person to engage in any of the foregoing activities, in each case within the
United States of America, its possessions and territories. The Executive
acknowledges that the Company's business includes a nationwide network of
attorneys and a national customer base, and therefore agrees that such the scope
of this restriction is appropriate and necessary to protect the Company's
legitimate business interests. Participation in the management of any business
operation other than in connection with the management of a business operation
which is in direct competition with the Company or its subsidiaries or
affiliates or any successor or assign thereof shall not be deemed to be a breach
of this Section 10(a). The foregoing provisions of this Section 10(a) shall not
prohibit the ownership by the Executive (as the result of open market purchase)
of 2% or less of any class of capital stock of a company which is regularly
traded on a national securities exchange or over-the-counter on the NASDAQ
System.
(b) The Executive will not at any time during his employment with the
Company and for a period of 12 months thereafter, solicit or assist or encourage
the solicitation of any employee of the Company or any of its subsidiaries or
affiliates to work for Executive or for any business, firm, Company or other
entity in which the Executive, directly or indirectly, in any capacity described
in Section 10(a) hereof, participates or engages (or expects to participate or
engage) or has (or expects to have) a financial interest or management position.
(c) The Executive shall not at any time during his employment and for a
period of 12 months thereafter, directly or indirectly compete with the Company
by soliciting, inducing or influencing any of the customers or attorneys of the
Company or its attorney network to discontinue or reduce the extent of such
relationship with the Company, or commence or expand any such relationship with
any competitor of the Company.
(d) If any of the covenants contained in this Section 10 or any part
thereof, is held by a court of competent jurisdiction to be unenforceable
because of the duration of such provision, the activity limited by or the
subject of such provision and/or the area covered thereby, then the court making
such determination shall construe such restriction so as to thereafter be
limited or reduced to be enforceable to the greatest extent permissible by
applicable law.
11. INVENTIONS, ETC. The Executive agrees that any and all systems,
work-in-progress, inventions, discoveries, improvements, processes, compounds,
formulae, patents, copyrights and trademarks, made, discovered or developed by
him, solely or jointly with others, or otherwise, during the term of his
employment by the Company, and which may be useful in or
relate to any business of the Company and/or any subsidiary or affiliate of the
Company shall be fully disclosed by the Executive to the Chief Executive Officer
of the Company, and shall be the sole and absolute property of the Company, and
the Company will be the sole and absolute owner thereof. The Executive agrees
that at all times, both during his employment and after the termination of his
employment, he will keep all of the same secret from everyone except the Company
and its duly authorized employees and will disclose the same to no one except as
required in good faith in the course of his employment with the Company, or by
law, or unless otherwise authorized in writing by the Chief Executive Officer of
the Company.
12. PATENTS. The Executive agrees, at the request of the Company, to make
application in due form for United States Letters Patent and foreign Letters
Patent on any of such systems, inventions, discoveries, improvements, processes,
compounds and formulae referred to in Section 11 hereof, and to assign to the
Company all of his right, title and interest in and to said inventions,
discoveries, improvements, processes, compounds, formulae and patent
applications therefor or patents thereon, and to execute at any and all times
any and all instruments, and to do any and all acts necessary, or which the
Company may deem desirable, in connection with such applications for Letters
Patent, in order to establish and perfect in the Company the entire right, title
and interest in and to said systems, inventions, discoveries, improvements,
processes, compounds, formulae and patent applications therefor, or in the
conduct of any proceedings or litigation in regard thereto. It is understood and
agreed that all costs and expenses, including but not limited to reasonable
attorneys' fees, incurred at the request of the Company in connection with any
action taken by an Executive pursuant to this Section 12, shall be borne by the
Company.
13. CONFIDENTIAL INFORMATION, ETC. The Executive agrees that he shall not,
during or after the termination of this Agreement for a period of at least 5
years after any such termination, divulge, furnish or make accessible to any
person, firm, Company or other business entity, any information, trade secrets,
technical data or know-how relating to the business, business practices,
methods, products, processes, equipment, clients' prices, lists of customers or
marketing agents of the Company, terms of marketing arrangements or the attorney
network list, or other confidential or secret aspect of the business of the
Company and/or any subsidiary or affiliate, except as may be required in good
faith in the course of his employment with the Company or (upon prior notice to
the Company) by law, without the prior written consent of the Company, unless
such information shall become public knowledge or becomes available from
independent sources, in each case other than by reason of Executive's breach of
the provisions hereof.
14. ACCEPTANCE BY PARTIES. Each of the Executive and the Company accepts all of
the terms and provisions of this Agreement and agrees to perform all of the
covenants on his or its part to be performed hereunder.
15. EQUITABLE REMEDIES. The Executive acknowledges that he has been employed for
his unique talents and that his leaving the employ of the Company would
seriously hamper the business of the Company and that the Company will suffer
irreparable damage if any provisions
of Sections 10, 11, 12, or 13 hereof are not performed strictly in accordance
with their terms or are otherwise breached. The Executive hereby expressly
agrees that the Company shall be entitled as a matter of right to injunctive or
other equitable relief, in addition to all other remedies permitted by law, to
prevent a breach or violation by the Executive and to secure enforcement of the
provisions of Sections 10,11, 12 or 13 hereof. Resort to such equitable relief,
however, shall not constitute a waiver or any other rights or remedies which the
Company may have.
16. INDEMNIFICATION. Company further agrees to maintain Directors and Officers
liability insurance in amounts commensurate with the business risk, and will
reimburse all legal and related expenses not so covered. Such indemnification
shall continue after the Executive leaves the Company for actions and duties
discharged while in the employ of the Company.
17. ENTIRE AGREEMENT. This Agreement memorializes, encompasses and supersedes
the parties understandings and agreement relative to the Executive's acceptance
of employment hereunder, and constitutes the entire agreement between the
parties hereto and there are no other terms other than those contained herein.
No variation or modification hereof shall be deemed valid unless in writing and
signed by the parties hereto and no discharge of the terms hereof shall be
deemed valid unless by full performance of the parties hereto or by writing
signed by the parties hereto. No waiver by the Company or any breach by the
Executive of any provision or condition of this Agreement by him to be performed
shall be deemed a waiver of a breach of a similar or dissimilar provision or
condition at the same time or any prior or subsequent time.
18. SEVERABILITY. In case any provision in this Agreement shall be declared
invalid, illegal or unenforceable by any court of competent jurisdiction, the
validity and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
19. NOTICES. All notices, requests, demands and other communications provided
for by this Agreement shall be in writing and shall be deemed to have been given
at the time when mailed in the United States enclosed in a registered or
certified post-paid envelope, return receipt requested, and addressed to the
addresses of the respective parties stated below or to such changed addresses as
such parties may fix by notice:
To the Company: Legal Club of America Corporation
0000 X. Xxxxxxxx Xxxxxxx
Xxxxx 000, Xxxxxxxx X
Xxxxxxx, XX 00000
To the Executive:
0 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxxx Xxx., Xxxxxxx 00000
provided, however, that any notice of change of address shall be effective only
upon receipt.
20. SUCCESSORS AND ASSIGNS. This Agreement is personal in its nature and neither
of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder (except for an
assignment or transfer by the Company to a successor as contemplated by the
following proviso); PROVIDED, HOWEVER, that the provisions hereof (including but
not limited to the non-compete and confidentiality provisions hereof) shall
inure to the benefit of, and be binding upon, any successor of the Company,
whether by merger, consolidation, transfer of all or substantially all of the
assets of the Company, or otherwise, and upon the Executive, his heirs,
executors, administrators and legal representatives.
21. GOVERNING LAW. This Agreement and its validity, construction and performance
shall be governed in all respects by the internal laws of the State of Florida,
without giving effect to any principles of conflict of laws.
22. HEADINGS. The headings in this Agreement are for convenience of reference
only and shall not control or affect the meaning or construction of this
Agreement.
23. ARBITRATION. Except as otherwise provided in this Agreement, any dispute
arising out of or in connection with this Agreement or the employment of the
Executive by the Company shall be resolved by binding arbitration in Miami,
Florida, in accordance with the American Arbitration Association's rules and
procedures then in effect and applicable to employment disputes. In any such
arbitration proceedings, the arbitrators shall have the right to order such
document production, exchange of exhibits, interviews of witnesses and other
discovery matters as they determine to be appropriate. The fees and expenses of
the arbitration, including but not limited to legal fees and arbitrator's fees,
shall be borne as the arbitrators may determine to be appropriate. A judgment on
the arbitration award may be entered in any court of competent subject matter
jurisdiction in Miami-Dade County. In the event that a party hereto seeks an
injunctive or equitable remedy, then a proceeding therefor may be commenced and
maintained in such a Court in Miami-Dade County. The parties consent and waive
all objections to such jurisdiction and venue.
IN WITNESS WHEREOF, the parties hereto have hereunder set their hands and seals
the day and year first above written.
LEGAL CLUB OF AMERICA CORPORATION
By: /S/ XXXXX XXXX
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Executive
/S/ XXXXXXX XXXXXXXXX
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