1
EXHIBIT 10.11
EMPLOYMENT AGREEMENT
This Agreement shall be effective as of October 20, 1997 (the
"Effective Date") by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Executive") and ▇▇▇ ▇▇▇▇
Marketing, Inc. (the "Company").
WHEREAS, the Board of Directors of the Company recognizes the
Executive's contribution to the growth and success of the Company and desires to
assure the Company of the Executive's employment and to compensate Executive
therefore; and
WHEREAS, the Executive is desirous of being employed by the
Company and committing to serve the Company on the following terms;
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements, the parties agree as follows:
1. POSITION, RESPONSIBILITIES AND TERM OF EMPLOYMENT.
1.01 EMPLOYMENT AND DUTIES. Subject to the terms and
conditions of this Agreement, the Company employs the Executive to serve
initially as the Senior Vice President, Chief Merchandising Officer/Business
Development and the Executive accepts such employment and agrees to perform in a
diligent, careful and proper manner such reasonable responsibilities and duties
commensurate with such position as may be assigned to Executive by the CEO or
other designees of the Company. Such title and duties may be changed in a manner
deemed appropriate from time to time by the CEO or the Board of Directors so
long as such title and duties are consistent with Executive's employment level
and qualifications; provided, however, this sentence shall not be operative
after an Early Trigger or Change of Control as defined in Section 3.01.
Executive agrees to devote substantially all business time and efforts to and
give undivided loyalty to the Company.
1.02 TERM. Subject to the provisions of this Agreement, the
term of this Agreement shall be one year from the Effective Date and shall
automatically renew for successive one year periods unless either party gives
written notice to the other of its intention not to renew on or before 120 days
prior to the end of the then annual term.
2. COMPENSATION.
2.01 BASE SALARY. During the term of this Agreement, the
Company shall pay Executive a minimum base annual salary, before deducting all
applicable withholdings, of $200,000.00 per year, payable at all times and in
the manner dictated by the Company's standard payroll policies. The Executive
shall be eligible to receive annual base salary increases as determined at the
Company's discretion based upon Executive's performance.
2
2.02 INCENTIVE COMPENSATION. In addition to a base salary, the
Executive shall be eligible for an annual bonus for each fiscal year that ends
during the term of this Agreement. A target level (or levels) may be
established, which, if achieved, shall entitle the Executive to an established
percentage of base salary. Minimum and maximum levels may also be established,
which, if achieved, shall entitle the Executive to set percentages of base
salary, respectively. Achievement levels that fall between the established
levels shall entitle the Executive to an interpolated percentage of base salary.
Performance goals may be based on one or more than one factor that may be either
objective or subjective. To the extent that more than one factor is established,
each factor shall be assigned a weighted percentage to determine what portion of
the total bonus percentage shall be attributable to such factor. The entitlement
to any portion of a bonus award for a fiscal year that is based on objective
financial performance of the Company shall be determined based on the Company's
audited financial statements, and any bonus award payable for such year shall be
paid as soon as practicable after release of such statements. The criteria for
achieving the discretionary bonus shall be set annually by the Company after
consultation with Executive within the first quarter of each fiscal year.
2.03 PARTICIPATION IN BENEFIT PLANS. The Executive shall be
eligible to participate in, and receive benefits under, all the Company's
Executive benefit plans and arrangements in effect on the Effective Date for as
long as such plans and arrangements may remain in effect (including, but not
limited to, participation in any other pension, profit sharing, stock bonus plan
or stock option plan adopted by the Company, and all group life, health,
disability plans and other insurance) or any substitute or additional plans,
policies or arrangements made available in the future to similarly situated
Executives of the Company, subject to, and on a basis consistent with, the
terms, conditions and overall administration of such plans, policies and
arrangements. Family medical and dental coverage under the standard Company
plans will be paid by the Company. Nothing paid to the Executive under any plan,
policy or arrangement presently in effect or made available in the future shall
be deemed to be in lieu of other compensation to the Executive hereunder as
described in this Section 2.
2.04 VACATION DAYS. The Executive shall be entitled to four
weeks of vacation each year consistent with Company policy for senior Executive
officers. Executive shall accrue no vacation days nor receive any compensation
for unused vacation days.
2.05 EXPENSES. During the term of employment hereunder, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by Executive (in accordance with the policies and procedures
established by the Company or the Board for Executives of the Company) in
performing services hereunder, including a
2
3
car allowance of $600.00 each month plus insurance, repairs, gas and oil.
3. TERMINATION.
3.01 CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Cause" shall mean: (i) the willful and continued failure
by the Executive to substantially perform his duties for the Company (other than
any such failure resulting from the Executive's incapacity due to physical or
mental illness, or any such actual or anticipated failure after the Executive
announces his intention to resign for Good Reason), and such failure is not
cured by the Executive within fifteen days from the date the Company notifies
the Executive thereof in writing, (ii) the willful engaging by the Executive in
misconduct which is financially injurious to the Company, or (iii) the
Executive's conviction or a pleading of guilty or nolo contendre with respect to
the commission of a felony. No act, or failure to act, on the Executive's part
shall be considered "willful" unless done, or omitted to be done, by him not in
good faith and without reasonable belief that his action or omission was in the
best interest of the Company.
(b) "Change in Control" shall be deemed to have occurred upon:
(i) the date of the acquisition by any "person"
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act),
excluding the Company or any of its subsidiaries or affiliates or any Executive
benefit plan sponsored by any of the foregoing, of beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of 30% or more of either (x)
the then outstanding shares of common stock of the Company or (y) the then
outstanding voting securities entitled to vote generally in the election of
directors; or
(ii) the date the individuals who constitute the
Board as of the date of this Agreement (the "Incumbent Board") cease for any
reason to constitute at least a majority of the members of the Board, provided
that any individual becoming a director subsequent to the effective date of this
Agreement whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board (other than any individual whose nomination
for election to Board membership was not endorsed by the Company's management
prior to, or at the time of, such individual's initial nomination for election)
shall be, for purposes of this Agreement, considered as though such person were
a member of the Incumbent Board; or
(iii) the consummation of a merger, consolidation,
recapitalization, reorganization, sale or disposition of all or a substantial
portion of the Company's assets, a reverse stock split of
3
4
outstanding voting securities, the issuance of shares of stock of the Company in
connection with the acquisition of the stock or assets of another entity,
provided, however, that a Change in Control shall not occur under this clause
(iii) if consummation of the transaction would result in at least 70% of the
total voting power represented by the voting securities of the Company (or, if
not the Company, the entity that succeeds to all or substantially all of the
Company's business) outstanding immediately after such transaction being
beneficially owned (within the meaning of Rule 13d-3 promulgated pursuant to the
Exchange Act) by at least 75% of the holders of outstanding voting securities of
the Company immediately prior to the transaction, with the voting power of each
such continuing holder relative to other such continuing holders not
substantially altered in the transaction.
Notwithstanding the foregoing, a Change in Control shall not have occurred if,
following any event that would otherwise constitute a Change in Control, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ is beneficial owner (within the meaning of Rule 13d-3 promulgated
pursuant to the Exchange Act) of 20% or more of either (x) the then outstanding
shares of common stock of the Company or (y) the then outstanding voting
securities entitled to vote generally in the election of directors.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Disability" shall mean the Executive's inability to
perform his duties by reason of mental or physical disability for at least
ninety (90) consecutive days or any ninety (90) days (whether or not
consecutive) in any one-hundred eighty (180) consecutive day period. In the
event of a dispute as to whether the Executive is disabled within the meaning
hereof, either party may from time to time request a medical examination of the
Executive by a doctor appointed by the Chief of Staff of a hospital selected by
mutual agreement of the parties, or as the parties may otherwise agree, and the
written medical opinion of such doctor shall be conclusive and binding upon the
parties as to whether the Executive has become disabled and the date when such
disability arose. The cost of any such medical examination shall be borne by the
Company.
(e) "Early Trigger" shall mean:
(i) commencement (within the meaning of Rule 14d-2 as
promulgated under the Exchange Act) of a "tender offer" for stock of the Company
subject to Section 14(d)(2) of the Exchange Act; or
(ii) the execution by the Company of an agreement the
consummation of which would constitute a Change in Control; or
(iii) the solicitation of proxies for the election of
directors by anyone other than the Company; or
(iv) the approval by the Company's stockholders of
any transaction described in Section 3.01 (b)(iii).
4
5
(f) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time. References to any provision of the Exchange
Act shall be deemed to include rules thereunder and successor provisions and
rules thereto.
(g) "Good Reason" shall mean (i) the Company changes the
Executive's status, title or position as an officer of the Company and such
change represents a material reduction in such status, title or position
conferred hereunder, and/or (ii) the Company materially breaches any material
provision of this Agreement, and/or (iii) any attempted relocation of the
Executive's place of employment to a location more than 50 miles from the
location of such employment on the date of such attempted relocation, and such
change or breach is not cured by the Company within fifteen (15) days from the
date the Executive delivers a Notice of Termination for Good Reason. Such
"Notice of Termination for Good Reason" shall include the specific section of
this Agreement which was relied upon and the reason that the Company's act or
failure to act has given rise to his termination for Good Reason.
(h) "Vesting Percentage" shall mean: if termination of this
Agreement occurs prior to October 1 of any fiscal year, a fraction, expressed as
a percentage (not to exceed 100%), the numerator of which is the number of
shares subject to the Option that became vested based on satisfaction of
performance targets (without regard to any "catch-up" vesting attributable to a
prior fiscal year) as of the end of the immediately preceding fiscal year, and
the denominator of which is the number of shares that could have, for the first
time, become exercisable as of the end of such Fiscal year. Notwithstanding the
foregoing, with respect to any options designated as "service based options",
the vesting percentage shall be deemed to be 100%.
3.02 TERMINATION WITHOUT CAUSE, NON-RENEWAL OR RESIGNATION
WITH GOOD REASON.
(a) In the event of (i) the termination of the employment of
the Executive without Cause (for any reason other than by death or Disability)
or (ii) the non-renewal of this Agreement by the Company or (iii) the
resignation of the Executive from the Company within 30 days of an event
constituting Good Reason, the Company shall pay or provide to the Executive the
following:
(i) any earned and accrued but unpaid installment of
base salary through the date of the Executive's resignation or termination at
the rate in effect immediately prior to such resignation or termination (or, if
greater, immediately prior to the occurrence of an event that constitutes Good
Reason) all other unpaid amounts to which the Executive is entitled as of such
date under any compensation plan or program of the Company, such payments to be
made in a lump sum within 15 days following the date of resignation or
termination; and
5
6
(ii) in lieu of any further salary payments to the
Executive for periods subsequent to his date of resignation or termination, an
amount equal to the Executive's annual base salary in effect immediately prior
to the Executive's resignation or termination (or, if greater, immediately prior
to the occurrence of an event that constitutes Good Reason), such payment to be
made in a lump sum within 15 days following the date of the Executive's
resignation or termination; and
(iii) for a period of not less than one year
following the Executive's date of resignation or termination, the Company shall
reimburse the Executive for the reasonable expenses incurred by Executive in
seeking employment with another employer including the fees of a reputable
outplacement organization that provides placement services for positions
commensurate with the position the Executive held with the Company; and
(iv) the Company shall maintain in full force and
effect for one year following the date of the Executive's resignation or
termination, for the continued benefit of the Executive, health, life and
disability programs in which the Executive was entitled to participate either
immediately prior to the Executive's resignation or termination or immediately
prior to the occurrence of an event that constitutes Good Reason, provided that
the Executive's continued participation is possible under the general terms and
provisions of such plans and programs. In the event that the Executive's
participation in any such plan or program is barred, the Company shall, at its
sole cost and expense, arrange to provide the Executive with benefits
substantially similar to those which the Executive would otherwise have been
entitled to receive under such plans and programs from which his continued
participation is barred; and
(v) continued payment of the automobile allowance, or
continued provision of the Company-owned or leased vehicle, as the case may be,
that was paid or provided to the Executive immediately prior to his resignation
or termination (or, if more valuable to the Executive, immediately prior to the
occurrence of an event that constitutes Good Reason) on the same basis that it
was then paid or provided until the end of the one year period following the
date of resignation or termination; and
(vi) vesting of outstanding stock options held by the
Executive that could have, for the first time, become exercisable as of the end
of the Fiscal year in which such a resignation or termination occurs, multiplied
by the product of (i) the Vesting Percentage and (ii) one plus a fraction, the
numerator of which equals the number of days that have elapsed from the
beginning of such fiscal year to the termination date, and the denominator of
which equals 365. Any options that become vested by reason of this clause (vi)
shall remain exercisable for a period of three months following the date that
such vesting is communicated to the Executive.
(b) Notwithstanding the foregoing, in the event the aggregate
amount of all payments that the Executive would receive
6
7
pursuant to Section 3.02(a) plus payments to be made to the Executive outside
this Agreement would result in a "parachute payment" (as defined in Section
280G(b)(2) of the Code) but for this Section 3.02(b), as determined in good
faith by the Company, the aggregate amount of the payments required to be paid
to the Executive pursuant to this Section 3.02(a) shall be reduced to the
largest amount that would result in no portion of any payment to the Executive
being subject to the excise tax imposed by Section 4999 of the Code.
3.03 TERMINATION FOR CAUSE, DEATH OR DISABILITY OR RESIGNATION
WITHOUT GOOD REASON. In the event of the Executive's termination of employment
for Cause, death or Disability or his resignation without Good Reason, only the
amount set forth in clause (i) of Section 3.02(a) shall be payable to the
Executive.
3.04 TERMINATION, NON-RENEWAL OR RESIGNATION IN CONNECTION
WITH A CHANGE IN CONTROL.
(a) Notwithstanding the provisions of Section 3.02, in the
event of the resignation, termination or non-renewal of the employment of the
Executive for any reason specified in Section 3.02(a), and such resignation or
termination or non-renewal occurs within the two year period following a Change
in Control, then the Executive shall be entitled to receive the following
payments or benefits upon the date of the Executive's resignation or termination
or non-renewal of employment:
(i) the amount specified in Section 3.02(a)(i); and
(ii) two times the amount specified in Section
3.02(a)(ii); and
(iii) the benefits specified in clauses (iii), (iv)
and (v) of Section 3.02(a), except that, in lieu of one year, the period for
which such benefits are to be provided shall be for two years; and
(iv) an amount that, on an after-tax basis (including
federal income and excise taxes, and state and local income taxes) equals the
excise tax imposed by Section 4999 of the Code upon which the Executive by
reason of amounts payable under this Section 3.04(a) (including this clause
(iv)), as well as amounts payable outside of this Agreement by the Company that
are described in Section 280G(b)(2)(A)(i) of the Code. For purposes of this
clause (iv), the Executive shall be deemed to pay federal, state and local
income taxes at the highest marginal rate of taxation.
(b) In the case of a resignation or termination for a reason
specified in Section 3.02 which follows an Early Trigger, the Executive shall be
entitled to the payments and benefits specified in Section 3.02 at the times
specified therein, and if such Early Trigger ultimately results in a Change in
Control, the Executive shall be entitled to the payments and benefits specified
in Section 3.04(a) to be paid or commence upon the Change in Control, offset by
any payments
7
8
previously made or benefits previously provided pursuant to Section 3.02.
(c) Solely for purposes of this Section 3.04, other than in
the case of the Executive's conviction of a felony, the Executive shall not be
deemed to have been terminated for Cause by the Company hereunder without (i)
notice to the Executive setting forth the reasons for the Company's intention to
terminate the Executive for Cause, (ii) an opportunity for the Executive,
together with his counsel, to be heard before the Board, and (iii) delivery to
the Executive of written notice from the Board finding that in the reasonable
good faith opinion of the Board, the Executive was guilty of conduct set forth
in the definition of Cause in Section 3.01 hereof, and specifying the
particulars thereof in detail and (y) Good Reason shall include a change in the
Executive's status, title or position as an officer of the Company and such
change represents a material reduction in such status, title or position as in
effect immediately prior to a change in control.
3.05 WITHHOLDING. The Company shall have the right to deduct
from any amounts payable under this Agreement an amount necessary to satisfy its
obligation, under applicable laws, to withhold income or other taxes of the
Executive attributable to payments made hereunder.
3.06 NO OBLIGATION TO MITIGATE DAMAGES; NO EFFECT ON OTHER
CONTRACTUAL RIGHTS. The Executive shall not be required to mitigate damages or
the amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the date of resignation or
termination, or, with respect to amounts payable pursuant to Section 3.04, by
any set-off, counterclaim, recoupment, defense or other right which the Company
may have against the Executive. The provisions of this Agreement, and any
payment provided for hereunder, shall not reduce any amounts otherwise payable,
or in any way diminish the Executive's existing rights, or rights the Executive
may acquire in the future, under any Executive benefit plan, incentive plan,
employment agreement or other contract, plan or arrangement.
4. NONCOMPETITION/CONFIDENTIALITY
(a) The Executive agrees that during his employment with the
Company, and for the a one year period thereafter (and, as to clauses (iii) and
(iv) of this Section 4(a), at any time thereafter) he will not, directly or
indirectly, do or suffer any of the following:
(i) Own, manage, control or participate in the
ownership, management or control of, or be employed or engaged by or otherwise
affiliated or associated (collectively, "Employed") as a consultant, independent
contractor or otherwise with, any other
8
9
corporation, partnership, proprietorship, firm, association, or other business
entity, or otherwise engage in any business, which is engaged in any manner in,
or otherwise competes with, the business of the Company or any of its affiliates
(as conducted on the date the Executive ceases to be employed by the Company in
any capacity, including as a consultant) (a "Prohibited Business") in the United
States of America or any of the foreign countries in which the Company or any of
its affiliates is doing business (a "Competing Business") for so long as this
Section 4(a)(i) shall remain in effect, nor solicit any person or business that
was at the time of the Executive's termination of employment, or within one year
prior thereto, a customer or supplier of the Company or any of its affiliates;
provided, however, that, notwithstanding the foregoing, the Executive shall not
be deemed to be Employed by a Competing Business if the Board or a committee of
the Board determines that the Executive has established by clear and convincing
evidence all of the following: (A) such entity (including its affiliates in
aggregate) does not derive Material Revenues (as defined below) from the
aggregate of all Prohibited Businesses, (B) such entity (including its
affiliates in aggregate) is not a Competitor (as defined below) of the Company
and its affiliates and (C) Executive has no direct responsibility for or
otherwise with respect to any Prohibited Business; for purposes of this clause
(i), Material Revenues shall mean that 5% or more of the revenues of the entity
(including its affiliates in aggregate) are derived from the aggregate of all
Prohibited Businesses; an entity shall be deemed a Competitor of the Company and
its affiliates if the combined gross receipts of the entity (including its
affiliates in aggregate) from any Prohibited Business is more than 25% of the
gross receipts of the Company and its affiliates in such Prohibited Business;
and an "affiliate" of an entity is any entity controlled by, controlling or
under common control with the entity;
(ii) Employ, assist in employing, or otherwise
associate in business with any present Executive, officer or agent of the
Company or its affiliates;
(iii) Induce any person who is an Executive, officer
or agent of the Company, or any member of the Company or its affiliates, to
terminate said relationship; and
(iv) Disclose, divulge, discuss, copy or otherwise
use or suffer to be used in any manner, in competition with, or contrary to the
interests of, the Company, or any member of the Company or its affiliates, the
customer lists, manufacturing and marketing methods, product research or
engineering data, vendors, contractors, financial information, business plans
and methods or other trade secrets of the Company, or any member of the Company
or its affiliates, it being acknowledged by the Executive that all such
information regarding the business of the Company or its affiliates compiled or
obtained by, or furnished to, the Executive while the Executive shall have been
employed by or associated with the Company is confidential information and the
Company's exclusive property (it being understood, however, that information
publicly disclosed by the Company shall not be subject to this Section 4(a)(iv),
provided that
9
10
such information may not be used in connection with any of the activities
prohibited under clauses (i) and (ii) of this Section 4(a) for so long as such
clauses remain in effect);
provided, however, if the Executive's employment is terminated under
circumstances described in Section 3.04, then clauses (i) and (ii) of this
Section 4(a) shall terminate immediately.
(b) The Executive expressly agrees and understands that the
remedy at law for any breach by him of any of the provisions of this Section 4
will be inadequate and that damages flowing from such breach are not readily
susceptible to being measured in monetary terms. Accordingly, it is acknowledged
that upon adequate proof of the Executive's violation of any legally enforceable
provision of this Section 4, the Company shall be entitled to immediate
injunctive relief and may obtain a temporary order restraining any threatened or
further breach. Nothing in this Section 4 shall be deemed to limit the Company's
remedies at law or in equity for any breach by the Executive of any of the
provisions of this Section 4 which may be pursued or availed of by the Company.
(c) In the event the Executive shall violate any legally
enforceable provision of this Section 4 as to which there is a specific time
period during which he is prohibited from taking certain actions or from
engaging in certain activities, as set forth in such provision, then, such
violation shall toll the running of such time period from the date of such
violation until such violation shall cease; provided, however, the Company shall
seek appropriate remedies in a reasonably prompt manner after discovery of a
violation by the Executive.
(d) The Executive has carefully considered the nature and
extent of the restrictions upon him and the rights and remedies conferred upon
the Company under this Section 4, and hereby acknowledges and agrees that the
same are reasonable in time and territory, are designed to eliminate competition
which otherwise would be unfair to the Company, are designed to not stifle the
inherent skill and experience of the Executive, would not operate as a bar to
the Executive's sole means of support, are fully required to protect the
legitimate interests of the Company and do not confer a benefit upon the Company
disproportionate to the detriment to the Executive.
(e) If any decision maker determines that any of the covenants
contained in this Section 4 (the "Restrictive Covenants"), or any part thereof,
is unenforceable because of the duration or geographical scope of such
provision, the duration or scope of such provision, as the case may be, shall be
reduced so that such provision becomes enforceable and, in its reduced form,
such provision shall then be enforceable and shall be enforced.
(f) The Company and the Executive intend to and hereby confer
jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of the Restrictive Covenants. If the
courts of any one or more or such
10
11
jurisdictions hold the Restrictive Covenants wholly unenforceable by reason of
breadth of scope or otherwise, it is the intention of the Company and the
Executive that such determination not bar or in any way affect the Company's
right to the relief provided above in the courts of any other jurisdiction
within the geographical scope of such Restrictive Covenants as to breaches of
such Restrictive Covenants in such other respective jurisdictions, such
Restrictive Covenants as they relate to each jurisdictions being, for this
purpose, severable, diverse and independent covenants, subject, where
appropriate, to the doctrine of RES JUDICATA.
5. ASSIGNMENT. The rights and obligations of the parties under this
Agreement shall not be assignable by either the Company or the Executive,
provided that this Agreement is assignable by the Company t any affiliate of the
Company, to any successor in interest to the business of any of the Company, or
to a purchaser of all or substantially all of the assets of any of the Company.
The Company will require any successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance
satisfactory to the Executive, expressly, absolutely and unconditionally to
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 or
assignment had taken place. For purposes of clarity, any failure of the Company
to obtain such agreement prior to the effectiveness of any such succession or
assignment shall be a material breach of this Agreement and shall entitle the
Executive to terminate this Agreement for good reason. As used in this
Agreement, the term "Company" shall mean the Company as hereinbefore defined and
any successor or assign to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this Section 5 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
6. MISCELLANEOUS.
6.01 GOVERNING LAW. This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of
Florida.
6.02 NOTICES. Any notice, request, or instruction to be given
hereunder shall be in writing and shall be deemed given when personally
delivered or three days after being sent by United States certified mail,
postage prepaid, with return receipt requested to, the parties at their
respective addresses set forth below:
(a) To the Company:
▇▇▇ ▇▇▇▇ Marketing, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
11
12
Attention: CEO
(b) To the Executive:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
6.03 SEVERABILITY. If any paragraph, subparagraph or provision
hereof is found for any reason whatsoever to be invalid or inoperative, that
paragraph, subparagraph or provision shall be deemed severable and shall not
affect the force and validity of any other provision of this Agreement. If any
covenant herein is determined by a court to be overly broad thereby making the
covenant unenforceable, the parties agree and it is their desire that such court
shall substitute a reasonable judicially enforceable limitation in place of the
offensive part of the covenant and that as so modified the covenant shall be as
fully enforceable as if set forth herein by the parties themselves in the
modified form. The covenants of Executive in this Agreement shall each be
construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of Executive against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants in this Agreement.
6.04 ENTIRE AGREEMENT, AMENDMENT AND WAIVER. This Agreement
constitutes the entire agreement and supersedes all prior agreements of the
parties hereto relating to the subject matter hereof, and there are no oral
terms or representations made by either party other than those herein. This
Agreement may not be amended, supplemented or waived except by a writing signed
by the party against which such amendment or waiver is to be enforced. The
waiver by any party of a breach of any provision of this Agreement shall not
operate to, or be construed as a waiver of, any other breach of that provision
nor as a waiver of any breach of another provision.
6.05 ARBITRATION OF DISPUTES. Any controversy or claim arising
out of or relating to this Agreement, or breach thereof (other than those
arising under Section 4, to the extent necessary for the Company to avail itself
of the rights and remedies provided under Section 4), shall be submitted to
arbitration in Broward County, Florida in accordance with the Rules of the
American Arbitration Association, and judgment upon the award may be entered in
any court having jurisdiction thereof, provided, however, that the parties agree
that (i) the panel of arbitrators shall be prohibited from disregarding, adding
12
13
to or modifying the terms of this Agreement; (ii) the panel of arbitrators shall
be required to follow established principles of substantive law and the law
governing burdens of proof; (iii) only legally protected rights may be enforced
in arbitration; (iv) the panel of arbitrators shall be without authority to
award punitive or exemplary damages; (v) the chairperson of the arbitration
panel shall be an attorney licensed to practice law in Florida who has
experience in similar matters; and (vii) any demand for arbitration made by the
Executive must be filed and served, if at all, within 365 days of the occurrence
of the act of omission complained of. Any claim or controversy not submitted to
arbitration in accordance with this Section shall be considered waived and,
thereafter, no arbitration panel or tribunal or court shall have the power to
rule or make any award on any such claim or controversy. The award rendered in
any arbitration proceeding held under this Section shall be final and binding,
and judgment upon the award may be entered in any court having jurisdiction
thereof, PROVIDED that the judgment conforms to established principles of law
and is supported by substantial record evidence.
6.06 ENFORCEMENT.
(a) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts are still payable to him hereunder, all
such amounts shall be paid in accordance with the terms of this Agreement to the
Executive's estate or beneficiary.
(b) In the event that the Company shall fail or refuse to make
payment of any amounts due the Executive hereunder within the appropriate time
period, the Company shall pay to the Executive, in addition to the payment of
any other sums provided in this Agreement, interest, compounded daily, on any
amount remaining unpaid from the date payment is required until paid to the
Executive, at the rate from time to time announced by Chase Manhattan Bank as
its "prime rate" plus 2%, each change in such rate to take effect on the
effective date of the change in such prime rate.
(c) The Company shall pay promptly as incurred (and in any
event within 10 days of its receipt of proper documentation of) all reasonable
fees and expenses (including attorneys' fees) that the Executive may incur
following a Change in Control as a result of the Company's contesting the
validity, enforceability, or the Executive's interpretation of, the provisions
of this Agreement relating to the Executive's entitlements pursuant to Section
3.04 (regardless of the outcome of any litigation to enforce this Agreement).
(d) In the event proceedings are initiated by either party to
enforce the provisions of this Agreement, the prevailing party shall be entitled
to recover reasonable costs, expenses, and attorney's fees from the other party,
except to the extent such costs,
13
14
fees and expenses are covered by Section 6.06(c), in which case Section 6.06(c)
shall control.
6.07 SURVIVAL OF RIGHTS AND OBLIGATIONS. All rights and
obligations of the Executive or the Company arising during the term of this
Agreement shall continue to have full force and effect after the date that this
Agreement terminates or expires.
6.08 COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which is an original but which shall together constitute
one and the same instrument.
6.09 RELEASE/COVENANTS. As a condition to his entitlement to
receive termination payments, Executive shall (i) have executed and delivered to
the Company a waiver and release satisfactory to the Company waiving and
releasing all claims against the Company and its direct or indirect subsidiaries
and their respective officers, agents, directors and Executives, and such waiver
and release shall have become irrevocable, and (ii) comply with Sections 4 and
6.11.
6.10 WRITTEN RESIGNATION. In the event this Agreement is
terminated for any reason (except by death), the Executive agrees that if at the
time Executive is a director or officer of the Company or any of its direct or
indirect subsidiaries, Executive will immediately deliver a written resignation
as such director or officer, such resignation to become effective immediately.
6.11 RETURN OF DOCUMENTS AND PROPERTY. Upon the termination of
the Executive's employment with the Company, or at any time upon the request of
the Company, the Executive (or Executive's heirs or personal representatives)
shall deliver to the Company (a) all documents and materials (including, without
limitation, computer files) containing confidential information relating to the
business and affairs of the Company and its direct and indirect subsidiaries,
and (b) all documents, materials and other property (including, without
limitation, computer files) belonging to the Company or its direct or indirect
subsidiaries, which in either case are in the possession or under the control of
the Executive (or Executive's heirs or personal representatives).
6.12 EXECUTIVE'S REPRESENTATIONS. The Executive represents and
warrants to the Company that (i) he is able to perform fully his duties and
responsibilities contemplated by this Agreement and (ii) there are no
restrictions, covenants, agreements or limitations of any kind on his right or
ability to enter into and fully perform the terms of this Agreement.
14
15
EXECUTION
Upon execution below by both parties, this Agreement will enter into
full force and effect as of October 20, 1997.
▇▇▇ ▇▇▇▇ MARKETING, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CEO
EXECUTIVE
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
15
