EXHIBIT 10.7
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
October 26, 2000 (the "Effective Date"), by and between Xxxxxxxxx Mobile
Fueling, Inc., a Florida corporation (the "Company"), and Xxxxxxx X. Xxxxxxxxx
(the "Employee").
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The Company desires to obtain the personal services of the Employee as
President and Chief Executive Officer of the Company, and the Employee is
willing to make his services available to the Company, on the terms and
conditions hereinafter set forth;
Agreement
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NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties agree as follows:
1. Employment.
1.1 Employment and Term. The Company hereby agrees to employ the Employee
and the Employee hereby agrees to serve the Company, on the terms and conditions
set forth herein, for the period commencing on the Effective Date and continuing
through October 31, 2003, unless sooner terminated in accordance with the terms
and conditions hereof (the "Term"). The Term may be renewed only by mutual
written agreement of the Employee and the Company.
1.2 Duties of Employee. The Employee shall serve as the President and
Chief Executive Officer of the Company, shall have and exercise general
responsibility for the business of the Company and shall have powers and
authority superior to any other officer or employee of the Company or of any
subsidiary of the Company. The Employee shall also have such other powers and
duties as may from time to time be delegated to him by the Company's Board of
Directors (the "Board"), provided that such duties are consistent with his
position. The Employee shall report to the Board. The Employee shall devote
substantially all his working time and attention to the business and affairs of
the Company (excluding any vacation and sick leave to which the Employee is
entitled), render such services to the best of his ability, and use his best
efforts to promote the interests of the Company. So long as such activities do
not interfere with the performance of the Employee's responsibilities as an
employee of the Company in accordance with this Agreement, it shall not be a
violation of this Agreement for the Employee to (i) serve on corporate, civic or
charitable boards or committees, (ii) deliver lectures or fulfill speaking
engagements; (iii) manage personal investments; or (iv) participate in such
continuing legal education seminars or other activities required for the
Employee to maintain his license to practice law.
1.3 Place of Performance. In connection with his employment by the
Company, the Employee shall be based at the Company's offices in Fort
Lauderdale, Florida or another mutually agreed location, except for travel
necessary in connection with the Company's business.
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1.4 Directorship. It is the intention of the Board that the Employee serve
as a Director of the Company and that he be appointed or elected as a Director
as soon as practicable after the Effective Date. The Company agrees to take such
action (including, if necessary, calling a special meeting of shareholders to
increase the size of the Board) as may be necessary for such purpose.
2. Compensation.
2.1 Base Salary. Commencing on the Effective Date of this Agreement, the
Employee shall receive a base salary at the annual rate of Three Hundred
Thousand Dollars ($300,000) (the "Base Salary") during the Term, payable in
installments consistent with the Company's normal payroll schedule, subject to
applicable withholding and other taxes.
2.2 Incentive Compensation. The Employee shall be entitled to receive such
bonus payments or incentive compensation as may be determined at any time or
from time to time by the Board in its discretion. Without limiting the
generality of the foregoing, during the Term, the Employee shall be entitled to
participate in an annual management incentive bonus pool ("Bonus Pool") equal to
ten percent (10%) of Company's Pre-tax Earnings. For purposes of this Section,
the term "Pre-tax Earnings" means the Company's earnings before income taxes, as
determined in accordance with generally accepted accounting principles,
consistently applied with the Company's past practices, and as reflected in the
Company's audited financial statements for the relevant fiscal year. If the
Company does not achieve positive Pre-tax Earnings for any fiscal year, no Bonus
Pool shall be established for such fiscal year. The Bonus Pool shall be
allocated among Employee and such other officers of the Company as are
recommended by the Employee and approved by the Board. The Board of Directors,
in its sole discretion, shall determine the allocation of Bonus Pool funds among
the eligible participants; provided, that the entire balance of the Bonus Pool
shall be allocated each year. The portion of the Bonus Pool payable to the
Employee with respect to any fiscal year (net of any tax or other amount
properly withheld therefrom) shall be paid by the Company within ninety (90)
days after the end of the fiscal year. The amount payable pursuant to this
Section 2.2 for any fiscal year during which the Term expires or this Agreement
is terminated shall be prorated and payable only with respect to the portion of
the fiscal year during which the Employee was employed by the Company. No amount
shall be payable pursuant to this Section 2.2 with respect to any fiscal year
during which the Executive's employment is terminated by the Company for Cause,
or by the Employee as a result of his voluntarily resignation.
2.3 Stock Options.
(a) As soon as reasonably practical, Employee will receive a grant
of options to purchase 500,000 shares of the Company's common stock (the
"Options"), at an exercise price equal to the fair market value of the Company's
common stock as of the date of grant.
(b) The Options shall be granted pursuant to a stock option
agreement between the Company and the Employee (the "Stock Option Agreement")
which shall contain terms and conditions consistent with those applicable to
stock options heretofore granted under the Xxxxxxxxx Mobile Fueling, Inc. Stock
Option Plan; provided, however, that the Options: (i) shall
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have a term expiring on the tenth anniversary of the Effective Date (the "Option
Expiration Date"); (ii) subject to termination of the Options prior to vesting
as provided in clause (iii) below, the Options shall vest and become exercisable
(A) to the extent of 33.33% of the Options, on the Effective Date, (B) with
respect to an additional 33.33% of the Options, on October 25, 2002, and (C)
with respect to the remaining 33.34% of the Options, on October 25, 2003; (iii)
to the extent not previously vested and exercised pursuant to their terms, the
Options shall terminate upon the earlier to occur of: (A) twelve (12) months
after the termination of the Employee's employment hereunder pursuant to Section
4.2 by reason of the Employee's disability, or pursuant to Section 4.3 by reason
of his death, or following expiration of the Term (including any extensions
thereto or renewals thereof) or such other date as Employee ceases to render
services to the Company pursuant to an employment contract or other agreement
with the Company, (B) eighteen (18) months after the termination of the
Employee's employment hereunder pursuant to Section 4.4 by the Company without
Cause, (C) ninety (90) days after the date the Employee's employment hereunder
is terminated by the Employee pursuant to Section 4.5, (D) thirty (30) days
after the date the Employee's employment hereunder is terminated by the Company
for Cause pursuant to Section 4.1, and (E) the Option Expiration Date; (iv)
shall be incentive stock options to the extent allowed by applicable tax rules
and regulations; and (v) shall become fully vested and exercisable upon a
"change of control" of the Company. The Stock Option Agreement shall provide
that the Employee shall not sell, transfer or otherwise dispose of any shares of
the Company's common stock issued upon the exercise of any of the Options prior
to October 26, 2001.
3. Expense Reimbursement and Other Benefits.
3.1 Expense Reimbursement. During the Term, the Company, in accordance
with expense reimbursement policies and procedures in effect for the Company's
employees from time to time, shall reimburse the Employee for all documented
reasonable expenses actually paid or incurred by the Employee in the course of
and pursuant to the business of the Company. In addition, the Company shall
reimburse the Employee for all documented reasonable expenses actually paid or
incurred by the Employee for continuing legal education seminars or other
activities required for the Employee to maintain his license to practice law.
3.2 Other Benefits. During the Term, the Company shall make available to
the Employee such benefits and perquisites as are generally provided by the
Company to its senior management, including but not limited to participation in
any group life, medical, health, dental, disability or accident insurance,
pension plan, 401(k) savings and investment plan, profit-sharing plan, employee
stock purchase plan, incentive compensation plan or other such benefit plan or
policy, if any, which may presently be in effect or which may hereafter be
adopted by the Company for the benefit of its senior management or its employees
generally, in each case subject to and on a basis consistent with the terms,
conditions and overall administration of such plan or arrangement; provided,
however, that the Company shall waive any existing eligibility requirements for
participation in such plans or arrangements to the extent allowed by the
applicable rules and regulations governing the same.
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3.3 Vacation. During the Term, the Employee shall be entitled to paid
vacation in accordance with the policies, programs and practices of the Company
generally applicable to its senior management; provided, however, that Employee
shall be entitled to not less that three weeks of paid vacation per contract
year during the Term.
3.4 Relocation Expenses. The Company shall reimburse the Employee for all
documented reasonable and customary expenses actually paid or incurred by the
Employee in connection with his relocation to the Fort Lauderdale, Florida area,
including temporary housing and living expenses and expenses incurred to move
the personal belongings of the Employee and his family. Employee shall make all
reasonable efforts to relocate as soon as practical after the Effective Date.
The Company shall assume the tax liability, if any, of Employee associated with
such temporary and relocation expenses.
4. Termination.
4.1 Termination for Cause. Notwithstanding anything contained to the
contrary in this Agreement, this Agreement and the Employee's employment
hereunder may be terminated by the Company for Cause. As used in this Agreement,
"Cause" shall mean (i) subject to the following sentences, any action or
omission of the Employee which constitutes (A) a breach of any of the provisions
of Section 6. of this Agreement, (B) a breach by the Employee of his fiduciary
duties and obligations to the Company, or (C) the Employee's failure or refusal
to follow any lawful directive of the Board, in each case which act or omission
is not cured (if capable of being cured) within ten (10) days after written
notice of same from the Company to the Employee, or (ii) conduct constituting
fraud, embezzlement, misappropriation or gross dishonesty by the Employee in
connection with the performance of his duties under this Agreement, or a
conviction of the Employee of, a felony (other than a traffic violation) or, if
it shall damage or bring into disrepute the business, reputation or goodwill of
the Company or impair the Employee's ability to perform his duties with the
Company, any crime involving moral turpitude. The Employee shall be given a
written notice of termination for Cause specifying the details thereof. Upon any
termination pursuant to this Section 4.1, the Employee shall only be entitled to
his Base Salary through the date of termination, reimbursement for all expenses
described in Section 3.1 of this Agreement and incurred prior to the date of
termination, and any other compensation and benefits provided in accordance with
Section 3.2 hereof. Upon making such payments, the Company shall have no further
liability hereunder.
4.2 Disability. Notwithstanding anything contained in this Agreement to
the contrary, the Company, by written notice to the Employee, shall at all times
have the right to terminate this Agreement and the Employee's employment
hereunder if the Employee shall, as the result of mental or physical incapacity,
illness or disability, fail or be unable to perform his duties and
responsibilities provided for herein in all material respects for a period of
more than sixty (60) days in any 12-month period. Upon any termination pursuant
to this Section 4.2, (i) within thirty (30) days after the date of termination,
the Company shall pay the Employee any unpaid amounts of his Base Salary accrued
prior to the date of termination and shall reimburse Employee for all expenses
described in Section 3.1 of this Agreement and incurred prior to the date of
termination, and (ii) in lieu of any further Base Salary, incentive compensation
or other benefits or payments to the Employee for periods subsequent to the date
of termination the
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Company shall pay to the Employee the Severance Payments specified in Section
5.1. Upon making such payments, the Company shall have no further liability
hereunder; provided, that the Employee shall be entitled to receive any amounts
then payable pursuant to any employee benefit plan, life insurance policy or
other plan, program or policy then maintained or provided by the Company to the
Employee in accordance with Section 3.2 hereof and under the terms thereof.
4.3 Death. In the event of the death of the Employee during the term of
his employment hereunder, this Agreement shall terminate on the date of the
Employee's death. Upon any termination pursuant to this Section 4.3, (i) within
thirty (30) days after the date of termination, the Company shall pay to the
estate of the Employee any unpaid amounts of his Base Salary accrued prior to
the date of termination and reimbursement for all expenses described in Section
3.1 of this Agreement and incurred by Employee prior to his death, and (ii) in
lieu of any further Base Salary, incentive compensation or other benefits or
payments to the estate of the Employee for periods subsequent to the date of
termination the Company shall pay to the estate of the Employee the Severance
Payments specified in Section 5.1. Upon making such payments, the Company shall
have no further liability hereunder; provided, that the Employee's spouse,
beneficiaries or estate, as the case may be, shall be entitled to receive any
amounts then payable pursuant to any employee benefit plan, life insurance
policy or other plan, program or policy then maintained or provided by the
Company to the Employee in accordance with Section 3.2 hereof and under the
terms thereof.
4.4 Termination Without Cause. At any time the Company shall have the
right to terminate this Agreement and the Employee's employment hereunder by
written notice to the Employee. Upon any termination pursuant to this Section
4.4, (i) within thirty (30) days after the date of termination, the Company
shall pay the Employee any unpaid amounts of his Base Salary accrued prior to
the date of termination and shall reimburse Employee for all expenses described
in Section 3.1 of this Agreement and incurred prior to the date of termination,
and (ii) in lieu of any further Base Salary, incentive compensation or other
benefits or payments to the Employee for periods subsequent to the date of
termination the Company shall pay to the Employee the Severance Payments
specified in Section 5.1. There shall be no reduction in or offset to such
Severance Payments by the Company for any reason, and upon making such payments,
the Company shall have no further liability hereunder; provided, that the
Employee shall be entitled to receive any amounts then payable pursuant to any
employee benefit plan, life insurance policy or other plan, program or policy
then maintained or provided by the Company to the Employee in accordance with
Section 3.2 and under the terms thereof.
4.5 Voluntary Resignation. The Employee may, upon not less than thirty
(30) days' written notice to the Company, resign and terminate his employment
hereunder. In the event the Employee resigns as an employee of the Company, he
shall be entitled to receive only such payment(s) as he would have received had
he been terminated pursuant to Section 4.1 hereof. The Employee shall give the
Company not less than thirty (30) days prior written notice of his intention to
resign.
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5. Severance Payments.
5.1 Amount of Benefit. Upon any termination of this Agreement pursuant to
Section 4.4, the Company shall continue to pay the Employee (or shall pay his
estate, in the event of his death), until the later of (A) eighteen (18) months
following the date of termination, or (B) the end of the Term, an amount equal
to the installments of his Base Salary (at the rate in effect at the date of
termination) that would have been paid to the Employee had this Agreement and
his employment hereunder not been terminated (the "Severance Payments");
provided, that in the event of any termination of this Agreement pursuant to
Section 4.2 or 4.3, the Severance Payments shall be made for six (6) months
following the date of termination.
5.2 Lump Sum Payment. At the Company's option, the Severance Payments (or
any remaining installments thereof) may be discharged in full by delivering to
the Employee (or the estate of the Employee) a lump sum payment by bank or
cashiers cashier's check in an amount equal to the present value of the flow of
cash payments (or remaining installments thereof) that would otherwise be paid
to the Employee pursuant to Section 5.1. Such present value shall be determined
as of the date of delivery of the lump sum payment by the Company and shall be
based on a discount rate equal to the interest rate of 90-day U.S. Treasury
bills, as reported in The Wall Street Journal (or similar publication), on the
third business day prior to the delivery of the lump sum payment.
6. Restrictive Covenants.
6.1 Nondisclosure. (a) The Employee agrees that he 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 Employee 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 and marketing and promotion of the Company's services) shall be deemed
a valuable, special and unique asset of the Company that is received by the
Employee in confidence and as a fiduciary, and the Employee shall remain a
fiduciary to the Company with respect to all of such information. For purposes
of this Agreement, "Confidential Information" means information disclosed to the
Employee or known by the Employee as a consequence of or through his employment
by the Company (including information conceived, originated, discovered or
developed by the Employee), and not generally known or available, about the
Company or its business. Notwithstanding the foregoing, nothing herein shall be
deemed to restrict the Employee from disclosing Confidential Information to the
extent required by law.
(b) The Employee agrees to (i) return to the Company upon request, and in
any event, at the time of termination of employment for whatever reason, all
documents, equipment, notes, records, computer disks and tapes and other
tangible items in his possession or under his control which belong to the
Company or any of its affiliates or which contain or refer to any Confidential
Information relating to the Company or any of its affiliates and (ii) if so
requested by the Company, delete all Confidential Information relating to the
Company or any of its affiliates
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from any computer disks, tapes or other re-usable material in his possession or
under his control which contain or refer to any Confidential Information
relating to the Company or any of its affiliates.
6.2 Nonsolicitation of Employees. While employed by the Company and for a
period of twelve (12) months thereafter, Employee shall not directly or
indirectly, for himself 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 of
more than twelve (12) months or was an individual with whom Employee was a
co-worker of or otherwise associated with prior to being employed by the
Company.
6.3 Noncompetition. (a) Between the Effective Date and the last day of the
Term of this Agreement (the "Noncompete Period"), unless otherwise waived in
writing by the Company (such waiver to be in the Company's sole and absolute
discretion), the Employee shall not, directly or indirectly, engage in, operate,
manage, have any investment or interest or otherwise participate in any manner
(whether as employee, officer, director, partner, agent, security holder,
creditor, consultant or otherwise) in any sole proprietorship, partnership,
corporation or business or any other person or entity (each, a "Competitor")
that engages, directly, or indirectly in a Competing Business; provided, that
(A) the Employee may continue to hold securities of the Company and/or acquire,
solely as an investment, shares of capital stock or other equity securities of
any Competitor which are publicly traded, so long as the Employee 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 (5%) of any
class of equity securities of such Competitor; and (B) the Employee may be
employed by or consult with a Competitor whose primary business is not a
Competing Business, so long as the Employee does not have direct and day-to-day
supervisory responsibilities with respect to its Competing Business. For
purposes of this Agreement, the term "Competing Business" means mobile fleet
fueling.
(b) Notwithstanding anything in Section 6.3(a) to the contrary, if this
Agreement is terminated by the Company pursuant to Section 4.4, the Noncompete
Period shall continue and the provisions of Section 6.3(a) shall remain in
effect during the term of the Severance Payments made pursuant to Sections 4.4
and 5.1; provided, that if the Company pays to the Employee the Severance
Payments in a lump sum pursuant to Section 5.2, the provisions of Section 6.3(a)
shall remain in effect for the period during which the Severance Payments would
have otherwise been made.
6.4 Injunction. It is recognized and hereby acknowledged by the parties
hereto that a breach by the Employee of any of the covenants contained in
Section 6.1, 6.2 or 6.3 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 Employee recognizes and hereby acknowledges that the
Company shall be entitled to an injunction from any court of competent
jurisdiction enjoining and restraining any violation of any or all of the
covenants contained in Section 5 of this Agreement by the Employee or any of his
affiliates, associates, partners or
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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.
7. Entire Agreement; No Conflicts With Existing Arrangements. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement and this Agreement contains the entire
agreement, and supersedes any other agreement or understanding, between the
Company and the Employee relating to the Employee's employment and any
compensation or benefits in respect thereof. The Employee represents and
warrants to the Company that he has reviewed any existing employment or
non-competition covenants with his prior employer, and that his employment by
the Company hereunder does not and will not conflict with or constitute a breach
or default under any of the terms or provisions thereof.
8. Notices: All notices and other communications required or permitted
under this Agreement shall be in writing and will be either hand delivered in
person, sent by facsimile, sent by certified or registered first class mail,
postage pre-paid, or sent by nationally recognized express courier service. Such
notices and other communications will be effective upon receipt if hand
delivered or sent by facsimile, five (5) days after mailing if sent by mail, and
one (l) day after dispatch if sent by express courier, to the following
addresses, or such other addresses as any party may notify the other parties in
accordance with this Section:
If to the Company: 0000 XX 00xx Xxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Board of Directors
Facsimile: (000) 000-0000
If to the Employee: 0000 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
9. Successors and Assigns.
(a) This Agreement is personal to the Employee and without the
prior written consent of the Company shall not be assignable by the Employee
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Employee's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company and
any successor
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to its business and/or assets which assumes and agrees to perform this Agreement
by operation of law or otherwise.
10. Severability. The invalidity of any one or more of the words, phrases,
sentences, clauses or sections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part thereof,
all of which are inserted conditionally on their being valid in law, and, in the
event that any one or more of the words, phrases, sentences, clauses or sections
contained in this Agreement shall be declared invalid, this Agreement shall be
construed as if such invalid word or words, phrase or phrases, sentence or
sentences, clause or clauses, or section or sections had not been inserted. If
such invalidity is caused by length of time or size of area, or both, the
otherwise invalid provision will be considered to be reduced to a period or area
which would cure such invalidity.
11. Waivers. The waiver by either party hereto of a breach or violation of
any term or provision of this Agreement shall not operate nor be construed as a
waiver of any subsequent breach or violation.
12. Resolution of Disputes. With the exception of proceedings for
equitable relief brought pursuant to Section 6.4 of this Agreement or otherwise,
any disputes arising under or in connection with this Agreement, including,
without limitation, any assertion by any party hereto that the other party has
breached any provision of this Agreement, shall be resolved by arbitration, to
be held in Ft. Lauderdale, Florida, in accordance with the then current rules
and procedures of the American Arbitration Association. All costs, fees and
expenses, excluding attorney fees incurred by the Employee, of any arbitration
in connection with this Agreement, which arbitration results in any final
decision of the arbitrator(s) requiring the Company to make a payment to the
Employee, shall be borne by, and be the obligation of, the Company. Conversely,
should the arbitration result in a final decision of the arbitrator(s) in favor
of the Company and not require the Company to make payment to the Employee, then
the Employee, in addition to all other costs, fees and expenses, including
attorney fees incurred by the Employee in connection with such arbitration
proceedings, shall also be required to reimburse the Company for all costs, fees
and expenses, excluding attorney fees incurred by the Company in such
proceedings. The obligation of the Corporation under this Section 12. shall
survive the termination for any reason of the Term (whether such termination is
by the Company, by the Employee or upon the expiration of the Term). Pending the
outcome or resolution of any arbitration commenced or brought in good faith by
the Employee, the Company shall continue payment and provision of the Base
Salary and other compensation and the benefits provided for Employee in this
Agreement.
13. No Third Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
(other than the parties hereto and, in the case of Employee, his heirs, personal
representative(s) and/or legal representative) any rights or remedies under or
by reason of this Agreement.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without regard to principals
of conflict of laws.
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IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement as of the date first above written.
XXXXXXXXX MOBILE FUELING, INC.
By:__________________________________
Title:
/s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
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