EMPLOYMENT AGREEMENT
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THIS Agreement is made and entered into this 10th day of September,
1999 effective May 10, 1999 ("Agreement"), between TECHNICAL CHEMICALS AND
PRODUCTS, INC., a Florida corporation ("TCPI"), with its principal place of
business at 0000 XX 00 Xxxxxx, Xxxxxxx Xxxxx, XX 00000 and XXXXXXX BLOCK, having
an address of (ADDRESS INTENTIONALLY OMITTED) ("Employee").
R E C I T A L S:
WHEREAS, Employee has accepted employment by TCPI as TCPI's Chief
Executive Officer and
WHEREAS, Employee and TCPI are desirous of entering into an agreement
to memorialize the employment relationship.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto mutually agree
as follows:
ARTICLE I
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TERM
1.1 Initial Term. The initial term (the "Initial Term") of this
Agreement shall commence as of the 10th day of May, 1999 and shall end on the
9th day of May, 2002 ("Initial Term Termination Date") unless terminated earlier
as provided herein.
1.2 Extension of Initial Term.The Initial Term shall automatically
renew for three (3) years on each anniversary of the commencement date, which
commencement date shall be deemed to be May 10, 1999, unless either party shall
give the other party written notice of its intent not to renew one hundred and
eighty (180) days' prior to such anniversary date. Notice of Non-Renewal
directed from TCPI to Employee shall be approved by the Board of Directors of
TCPI.
ARTICLE II
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SCOPE OF RESPONSIBILITIES
OFFER AND ACCEPTANCE OF EMPLOYMENT
2.1 Offer of Employment. Upon the terms and subject to the conditions
of this Agreement, and upon the acceptance by Employee as signified by
Employee's execution of this Agreement, TCPI, as of the May 10, 1999, hereby
employs Employee for the term of this Agreement as its Chief Executive Officer.
Employee shall have general and active charge of the business and affairs of
TCPI and, in such capacity, shall have the responsibility for the day-to-day
operations of the Corporation, subject to the authority and control of the Board
of Directors of TCPI. Employee's duties shall include the management of TCPI's
business interests ("Businesses") and such other duties as are consistent with
his position (the "Duties"). During the term of this Agreement and except for
illness, disability, reasonable vacation periods and reasonable leaves of
absence, Employee shall devote substantially his entire business time,
attention, skill and efforts as is necessary for the faithful performance of the
Duties. Notwithstanding the above, the Employee shall be permitted to be a Board
of Director member of other companies provided that (i) there is no conflict of
interest or legal impediment to such Board membership and (ii) that such service
as a Board member does not materially detract from Employee's Duties as Chief
Executive Officer. Such Duties shall be provided at Pompano Beach, Florida and
at such other place(s) as the needs, business or opportunities of TCPI may
require from time to time.
2.2 Acceptance By Employee. Employee hereby accepts such employment
and, consistent with fiduciary standards that exist between an employer and an
employee, Employee shall perform the Duties in an efficient, trustworthy and
businesslike manner.
2.3 Officer Title and Directorship. Employee has accepted employment
with TCPI as TCPI's Chief Executive Officer. As soon as practicable, and in
accordance with the Bylaws of TCPI, Employee shall be nominated for election and
elected to the Board of Directors as a Class II Director. TCPI represents to
Employee that it will take all corporate actions necessary to nominate and elect
Employee a Director.
2.4 Other Activities. Employee shall use Employee's best efforts for
the benefit of TCPI by whatsoever activities Employee deems appropriate to
maintain and improve TCPI's standing in the community generally and among other
members of the industries in which TCPI is from time to time engaged, including
such entertaining for business purposes as Employee considers appropriate
consistent with TCPI's policies.
2.5 Facilities, Staff and Support. To enable Employee to perform his
duties, during the term of employment, TCPI shall provide Employee with an
office of a size and with furnishings and other appointments, and personal
secretarial, staff and other assistance and support commensurate with his
position.
ARTICLE III
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COMPENSATION
3.1 Base Salary and Bonus and Stock Options. For all services rendered
by Employee in any capacity during his employment under this Agreement
(including any renewals hereof), TCPI shall pay Employee as compensation the sum
of the amounts set forth below:
3.1.1 Base Salary. During the term of this Agreement, Employee
shall be paid the sum of One Hundred and Sixty-Five Thousand
($165,000) Dollars on an annualized basis, payable in
installments at such periodic intervals as TCPI pays its other
Employees but not less than on a monthly basis. On January 1,
2000 and continuing on each January 1st thereafter during the
term of this Agreement and any extensions thereof, and for
each subsequent year during the term of this Agreement,
Employee shall be entitled to an annual salary review of
Employee's base salary and such base salary shall be increased
("Salary Increase"), but not decreased, at the discretion of
the Board of Directors of TCPI. Notwithstanding the foregoing
and any discretionary increase in base salary, Employee
beginning January 1, 2000 shall be paid a minimum salary
increase equal to the greater of five (5%) per annum or the
national Consumer Price Index as issued, from time to time, by
the United States Bureau of Labor Statistics.
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3.1.2. Bonus. Employee shall be entitled to the following
annual bonuses ("Bonus Award"):
3.1.2 (i) Bonus paid annually shall be a minimum of Ten
Thousand ($10,000) Dollars and not to exceed more than
fifty (50%) per cent of the Employee's salary in effect
for the period applicable to such Bonus Award based on
Employee achieving defined goals; and
3.1.2 (ii) A one-time Bonus Award in the amount of
Twenty-five Thousand ($25,000) Dollars ("One-time Bonus
Award") when TCPI achieves a fiscal year Net Income as
defined in Paragraph 3.1.2(iii). For each fiscal year
(including the fiscal year in which the One-time Bonus is
applicable), a Bonus Award equal to three (3%) percent of
TCPI's after tax Net Income up to a maximum Bonus Award of
fifty (50%) per cent of the Employee's salary ("Maximum
Amount") in effect for the period applicable to such Bonus
Award. For purposes of calculating the Bonus Award
pursuant to this paragraph 3.1.2(ii), the One-time Bonus
Award shall be a part of the Maximum Amount payable to
Employee.
3.1.2 (iii) For purposes of this Agreement the term "Net
Income" shall mean:
Pursuant to the year end audited consolidated
financial statements the Consolidated Statements
of Operations: Net Income attributed to common
stockholders, excluding loss carryforwards which
loss carryovers will be replaced with a
thirty-six (36%) tax rate on pre-tax income.
Adverse legal judgments for acts prior to May
10, 1999 shall not be recognized in the
calculation of net income.
3.2 Stock Options. TCPI does hereby grant to Employee the Incentive
Stock Options and the Non-Qualified Stock Options specified in Exhibit A annexed
hereto and made a part hereof pursuant to and under the terms of TCPI's Amended
and Restated 1992 Stock Option Plan. Any Incentive Stock Options that are to
terminate according to their terms shall automatically be converted to
Non-Qualified Stock Options and then be exercisable under the terms appropriate
thereto. Employee may exercise the Incentive Stick Options up to the maximum
time permitted by law.
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3.3 Share Appreciation Rights Plan. TCPI will grant Employee share
appreciation rights, and Employee will be entitled to participate in TCPI's
share appreciation rights plan, on the same basis as other senior executives of
TCPI. Employee shall be entitled to the highest and most favorable treatment
afforded any Employee of TCPI, other than Xxxx X. Xxxxxxxxx, under such plan.
3.4 Employee Loan. Upon the execution of this Agreement by Employee,
TCPI shall make a loan to Employee ("Employee Loan"), pursuant to a Negotiable
Promissory Note in form and substance acceptable to the parties hereto, under
the following terms and conditions:
3.4.1. Principal: $50,000.
3.4.2 Interest: London Interbank Rate adjusted quarterly.
3.4.3 Term: Due and payable, subject to paragraph 3.4.4, on September
1, 2001.
3.4.4 Credit Against Payment of Principal and Interest. As long as (i)
Employee remains an employee of TCPI or (ii) Employee's employment is
not terminated for Cause, Employee shall receive a credit against
payment of such loan equal to fifty (50%) per cent of the amount due
and owing under the Employee Loan on each anniversary date of this
Agreement. Thus, on the second Anniversary Date, if Employee remains an
Employee of TCPI through that Date, the loan and interest shall be
treated as paid in full. Should, prior to such date termination of
Employee's employment occur by termination by TCPI without cause or by
termination by Employee For Good Reason, then and in such event, the
loan and interest shall be deemed paid in full.
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ARTICLE IV
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BUSINESS EXPENSES AND BENEFITS
4.1 Business Expenses. Employee is authorized to incur and TCPI will
pay directly or reimburse Employee reasonable expenses to execute and/or promote
the businesses of TCPI, including, but not limited to, expenses related to
maintenance of professional licenses and attendance and participation at
professional meetings, subscriptions to scientific, medical and business
journals, and other expenses in accordance with TCPI's policies and procedures
as same are in effect from time to time, for entertainment, travel, and similar
items, in the same manner or basis, as other senior executives of TCPI. TCPI
will reimburse Employee for all reasonable travel or other expenses incurred
while on business.
4.2. Employee Benefit Plans. Employee shall be entitled to participate
in any and all plans, arrangements or distributions by TCPI pertaining to or in
connection with any pension, bonus, profit sharing, stock options and/or similar
benefits and/or health benefits for its regular employees and/or for its senior
level executives, as determined by the Board of Directors or its committees,
pursuant to the governing instruments which establish and/or determine
eligibility and other rights of the participants and beneficiaries under such
plans or other benefit programs. Such benefit plans and perquisites provided to
Employee shall not be reduced from those in existence on May 10, 1999.
4.3 Health Insurance and Other Plans. TCPI will provide for Employee
medical insurance and Employee will be entitled to participate in all other
benefit plans and receive perquisites on the same basis as other senior
executives of TCPI. Such health insurance and other benefit plans and
perquisites provided to Employee shall not be reduced from those in existence on
May 10, 1999.
4.4 Vacation and Sick Days. Employee shall be entitled to such
reasonable paid vacation time and paid and unpaid sick days and personal days in
accordance with TCPI's policies and procedures applicable to senior level
executives or as may be agreed to by the parties hereto from time to time;
provided, however, that Employee shall be entitled to at least three (3) weeks
paid vacation during each year of the term of this Agreement, or such greater
amount generally provided to senior executives of TCPI. In addition, Employee
shall receive an additional two (2) days of vacation for each year of employment
up to a maximum of five (5) weeks of paid vacation.
4.4.1 Should TCPI adopt a policy of accruing vacations from
year to year or paying senior executives the amount equaling
such unused vacation time, then the Employee shall have the
right to either (i) apply such accrued and unused vacation
time toward additional paid vacation time during subsequent
years of this Agreement or (ii) receive a lump-sum payment
equal to Employee's base salary for said accrued and unused
vacation time.
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ARTICLE V
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DEATH OR DISABILITY DURING EMPLOYMENT
5.1 If Employee dies or becomes permanently and totally disabled during
the term of the Agreement, TCPI shall pay to Employee or Employee's estate or
heirs, as the case may be, a sum equal to (i) the base salary which would
otherwise be payable to Employee for a period of one (1) year and (ii) an amount
equal to the most recent bonus awarded Employee ("Benefit Amount"). To the
extent that Employee incurs and has an obligation or liability for income taxes
as a result of receiving the Benefit Amount, then and in such event, TCPI shall
pay the Employee or Employee's estate or heirs an amount that, on an after-tax
basis (including federal income and excise taxes, and state and local income
taxes) increases the total payment under Paragraph 5.1 so much so that, in net
after-tax amount received, the Benefit Amount is, in effect, not reduced by the
federal income and excise taxes, and state and local income taxes imposed upon
Employee by reason of amounts payable under this Article. Upon such payment
being made by TCPI, TCPI shall have no further financial obligations to Employee
or his estate, except as otherwise provided in Articles III and IV hereof. For
purposes of this Agreement, "disability" is defined to mean that, as a result of
Employee's incapacity due to physical or mental illness:
5.1.1 Employee shall have been absent from his duties as an
officer of TCPI on a substantially full-time basis for four
(4) consecutive months; and
5.1.2 Within thirty (30) days after TCPI notifies Employee in
writing that it intends to replace him, Employee shall not
have returned to the performance of the duties as an officer
of TCPI on a full-time basis.
5.2 Notwithstanding the foregoing, if Employee determines, in his sole
and absolute discretion and acting in good faith, that Employee is able to
continue to perform his duties on a part-time basis greater than a) Fifty
Percent [50%] for up to nine [9] months, or b) Seventy-Five Percent [75%], then
no termination shall be permitted pursuant to this Paragraph 5.1 and Employee
shall notify the Board of Directors in writing of the percentage reduction in
Employee's duties corresponding to Employee's performance of his duties;
provided, however, that all amounts otherwise payable to Employee hereunder
shall be proportionately reduced by such percentage following Employee's
delivery of such notice to the Board of Directors.
5.3 Death or Disability. This Agreement shall terminate upon the death
or the disability of Employee. Termination for death or disability shall not be
termination for Cause.
5.4 All health insurance and other benefit plans that Employee
participated in under Paragraph 4.3 shall continue for the benefit of his spouse
who were covered under such plans for a period of one [1] year after Employee's
death or disability at TCPI's expense, if such coverage is allowed by those
plans.
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ARTCLE VI
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TERMINATION OF EMPLOYMENT
6.1 Termination by TCPI for Cause. Termination by Employee Without Good
Reason. If Employee's employment is terminated by (i) TCPI for Cause (as
hereinafter defined) or (ii) by Employee without Good Reason (as hereinafter
defined), then Employee shall be entitled to:
6.1.1 Base salary pursuant to Paragraph 3.1.1 earned through
the last day of employment ("Termination Date"); and
6.1.2 Accrued vacation under Paragraph 4.4 hereof; and
6.1.3 All applicable reimbursements from TCPI due pursuant to
this Agreement.
6.2. Termination by TCPI Without Cause, Constructive Discharge or
Termination by Employee For Good Reason. Except as provided below with respect
to a Change of Control (as hereinafter defined), if there is a termination of
this Agreement by (i) TCPI without Cause (as hereinafter defined); (ii)
Constructive Discharge of Employee or (iii) Employee for Good Reason (as
hereinafter defined), Employee shall be entitled to:
6.2.1 Receive, in one lump sum payment on the Termination
Date, that amount that is the greater of the amount due for
either the unexpired term of Employee's employment under this
Agreement or the amount that is equal to two (2) times: (a)
Employee's annual base salary as in effect on the date of the
termination plus (b) an amount equal to any bonuses paid to,
or accrued by Employee during the twelve month period
preceding the date of termination.
6.2.2 Accrued vacation under Paragraph 4.4 hereof; and
6.2.3 All reimbursements due Employee through the Termination
Date under this Agreement; and
6.2.4 All benefits described in Article IV shall be extended
for the period of one year after the Termination Date or
expiration of the Initial Term (or Extended Term as the case
may be), whichever is later.
6.2.5 Employer shall arrange and pay for outplacement services
with a recognized outplacement company who specializes in
executives of Employee's position for a period of six months
following the Termination Date.
6.2.6. To the extent that Employee incurs and has an
obligation or liability for income taxes as a result of
receiving payments pursuant to this Paragraph 6.2, then and in
such event, TCPI shall pay the Employee an amount that, on an
after-tax basis (including federal income and excise taxes,
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and state and local income taxes) increases the total payment
under this Paragraph 6.2 so much so that, in net after tax
amount received, the payments and benefits received pursuant
to this Paragraph 6.2 are, in effect, not reduced by the
federal income and excise taxes, and state and local income
taxes imposed upon Employee by reason of amounts payable under
this Article.
6.2.7 In addition to the foregoing, Employee shall have the
right to exercise all options and warrants granted to Employee
by TCPI that would have vested within 12 months of the date of
termination. All Options previously granted Employee shall
become immediately vested and exercisable at the option of
Employee; provided that any such Options must be exercisable
within ninety (90) days of the Termination Date to be treated
as incentive stock options.
6.3. Non-Renewal of Agreement. If there is a termination of this
Agreement as a result of notification by TCPI of its intent not to renew this
Agreement as provided for in paragraph 1.2, Employee shall be entitled to
receive on the Termination Date:
6.3.1 Base salary and all benefits described in Article 4.3
through the end of the Initial Term or Extended Term as
provided for in Paragraph 1.2; and
6.3.2 All reimbursements due Employee through the Termination
Date under Article IV;
6.3.3 All benefits as required under COBRA or similar
legislation and applicable Unemployment Compensation Laws.
6.4 Termination of Employment For Cause by TCPI. Employee's employment
may be terminated by TCPI at any time upon notice to Employee for "Cause." For
this purpose, the term "Cause" means:
6.4.1. Employee's material breach of any provision of this
Agreement; provided, however, that in the event TCPI believes
that this Agreement has been breached, it shall provide
Employee with written notice of such breach and provide
Employee with a thirty (30) day period in which to cure or
remedy such breach and no such termination shall be effective
if such breach is cured within such period;
6.4.2 An adjudication by a court of competent jurisdiction
that Employee committed an injurious act of fraud or
dishonesty against TCPI, its subsidiaries or affiliates; and
6.4.3. The use by Employee of an illegal substance, including,
but not limited to, marijuana, cocaine, heroin, and all other
illegal substances, and/or the dependence by Employee upon the
use of alcohol, which, in any case, materially impairs
Employee's ability to perform his Duties hereunder, which
dependence is not cured or rehabilitated within three (3)
months of receipt of written notice from TCPI to Employee.
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6.4.4 Notwithstanding the foregoing, TCPI shall not terminate
this Agreement pursuant to this Paragraph 6.4 unless TCPI
provides Employee with no fewer than thirty (30) days prior
written notice ("Notice") of its decision to terminate this
Agreement for Cause. Such Notice shall detail the basis for
such termination. Following receipt of such Notice, Employee
shall have the right to request in writing within ten (10)
days the opportunity to address a duly convened meeting of the
Board of Directors and attempt to refute the bases of his
termination ("Appeal"). If Employee requests an Appeal,
Employee shall not be terminated pursuant to Paragraph 6.4
until such time as the Board of Directors has met to consider
Employee's Appeal. Following an Appeal, the Board of Directors
shall, in its sole discretion, determine whether to terminate
Employee for "Cause."
6.5 Termination of Employment by Employee: Employee may terminate his
employment with TCPI:
6.5.1 Without Good Reason at any time upon thirty (30) days
prior written notice to TCPI.
6.5.2 At any time upon written notice to TCPI with Good
Reason. "Good Reason" shall mean:
(a) A material breach of the provisions of this
Agreement by TCPI and Employee provides at least
thirty (30) days' prior written notice to the
Chairman and at least two members of TCPI's Board of
Directors of the existence of such breach and his
intention to terminate this Agreement (no such
termination shall be effective if such breach is
cured during such period); or
(b) The failure of TCPI to meet its financial
obligations to Employee after ten (10) days written
notice to the Chairman and at least two members of
TCPI's Board of Directors of such failure and
Employee's intention to terminate this Agreement; or
(c) Without Employee's express written consent, the
assignment to Employee of duties inconsistent with
Employee's positions with TCPI as set forth in this
Agreement (including status, offices, titles and
reporting requirements), authority, duties or
responsibilities as contemplated by Paragraph 2 or
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(d) Notwithstanding anything to the contrary in this
Agreement, the requirement that the Employee perform
his principal Duties to TCPI at a location greater
than twenty-five (25) miles from Pompano Beach,
Florida for a period exceeding thirty (30) days
during a twelve month period or
(e) The failure of TCPI's Board of Directors to Elect
Employee Chief Executive Officer, or the action of
such Directors to effect Employee's removal from such
position, absent prior termination of Employee by
TCPI for Cause, Employee's death, disability or
resignation from employment at TCPI or
(f) The failure of shareholder's of TCPI to Elect
Employee a Director, provided that such failure is a
result of the vote of affiliated persons to TCPI, or
the Employee's removal as a Director due to the
actions of such affiliated persons, absent prior
termination of Employee by TCPI for Cause, his death,
disability or resignation from employment at TCPI
6.6 Effect of Termination/References. Any termination of employment
under this Agreement, whether or not voluntary, will automatically constitute a
resignation of Employee as an officer of TCPI and all subsidiaries of TCPI. In
the event that TPCI is contacted by persons seeking information concerning the
status of Employee or the circumstances surrounding such termination of
Employment, TCPI shall only furnish to such persons the dates that Employee was
employed, Employee's title, Employee's last salary and that Employee resigned.
ARTICLE VII
CHANGE IN CONTROL
7.1 Change in Control. In the event that within twenty-four (24) months
following the occurrence of a "Change of Control" there occurs a "Change of
Control Event" (as defined below), then Employee shall be entitled to receive
from TCPI the following:
7.1.1 Employee's annual Base Salary as in effect at the date
of termination, multiplied by two;
7.1.2 Base Salary then in effect earned through the date of
termination;
7.1.3 Accrued vacation pursuant to this Agreement;
7.1.4 All applicable reimbursements from TCPI due Employee
under this Agreement;
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7.1.5 All Options previously granted Employee shall become
immediately vested and exercisable at the option of Employee;
provided that any such Options must be exercised within 90
days of the Termination Date to be treated as incentive stock
options."
7.1.6 An amount equal to the amount of any bonuses paid to, or
accrued by Employee during the twelve month period preceding
the date of termination, multiplied by two; and
7.1.7 All benefits described in Paragraph 4.3 hereof, shall be
extended for a period of two years after the Termination Date
at TCPI's expense.
7.1.8 An amount that, on an after-tax basis (including federal
income and excise taxes, and state and local income taxes)
increases the total payment under this Article VII so much so
that, in net after-tax amount received, the payment and
benefits received pursuant to Article VII are, in effect, not
reduced by federal income and excise taxes, and state and
local income taxes imposed upon Employee by reason of amounts
payable under this Article VII. For purposes of this clause
7.1.8, the Employee shall be deemed to pay federal, state and
local income taxes at the highest marginal rate of taxation.
7.1.9 Employer shall arrange and pay for outplacement services
with a recognized outplacement company who specializes in
executives of Employee's position for a period of six months
following the Termination Date.
7.2 Change in Control. For purposes of this Agreement, the term "Change
in Control" shall mean:
7.2.1 The acquisition by any individual, entity or group
(within the meaning of ss. 13(d)(3) or ss. 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") (any of the foregoing described in this Paragraph 7.2.1
hereafter a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of either (a) the then outstanding shares of
Capital Stock of TCPI (the "Outstanding Capital Stock") or (b)
the combined voting power of the then outstanding voting
securities of TCPI entitled to vote generally in the election
of directors (the "Voting Securities"), provided, however,
that any acquisition by (x) TCPI or any of its subsidiaries,
or any Employee benefit plan (or related trust) sponsored or
maintained by TCPI or any of its subsidiaries or (y) any
Person that is eligible, pursuant to Rule 13d-1(b) under the
Exchange Act, to file a statement on Schedule 13G with respect
to its beneficial ownership of Voting Securities, whether or
not such Person shall have filed a statement on Schedule 13G,
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unless such Person shall have filed a statement on Schedule
13D with respect to beneficial ownership of 20% or more of the
Voting Securities or (z) any corporation with respect to
which, following such acquisition, more than 20% of,
respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Capital
Stock and Voting Securities immediately prior to such
acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the
Outstanding Capital Stock and Voting Securities, as the case
may be, shall not constitute a Change of Control; or
7.2.2 Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any
individual becoming a director subsequent to the date hereof
whose election or nomination for election by TCPI's
shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the
election of the Directors of TCPI (as such terms are used in
Rule 14a-11 of Regulation 14A, or any successor section,
promulgated under the Exchange Act); or
7.2.3 Approval by the shareholders of TCPI of a
reorganization, merger or consolidation (a "Business
Combination"), in each case, with respect to which all or
substantially all holders of the Outstanding Capital Stock and
Voting Securities immediately prior to such Business
Combination do not, following such Business Combination,
beneficially own, directly or indirectly, more than 20% of,
respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting
from Business Combination; or
7.2.4 A complete liquidation or dissolution of TCPI or the
sale or other disposition of all or substantially all of the
assets of TCPI other than to a corporation with respect to
which, following such sale or disposition, more than 20% of,
respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors is then owned beneficially, directly or indirectly,
by all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the
Outstanding Capital Stock and Voting Securities immediately
prior to such sale or disposition in substantially the same
proportion as their ownership of the Outstanding Capital Stock
and Voting Securities, as the case may be, immediately prior
to such sale or disposition.
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7.2.5 In the event that the beneficial ownership attributable
to Xxxx X. Xxxxxxxxx'x ownership of the Outstanding Capital
Stock or Voting Securities of TCPI ("Xxxxxxxxx Shares") is
reduced to less than 20%, then the 20% threshold number
contained in the foregoing paragraphs of this Article VII
shall be reduced in direct proportion to such reduction, but
in no event, less than 15%. By way of example, if the
Xxxxxxxxx Shares are reduced to 18% of the Outstanding Capital
Stock or Voting Securities, then the 20% provisos contained in
the other paragraphs of Article VII shall be reduced to 18%.
7.3 For purposes of Article VII, a "Change of Control Event" shall
mean: (i) Employee's employment with TCPI is terminated by TCPI for any reason
whatsoever or (ii) Employee terminates this Agreement with Good Reason or (iii)
the assignment to Employee of any duties inconsistent with the position of
Employee pursuant to Article II of this Agreement or a reduction or alteration
in the nature or status of Employee's responsibilities from those specified in
Article II or (iv) reduction in Employee's Base Salary in effect on the date a
Change in Control occurs or (v) Employee is required to perform his duties at a
location greater than twenty-five (25) miles from the current headquarters of
TCPI for a period exceeding thirty (30) days during a twelve month period.
7.4 The provisions of this paragraph 7.4 shall apply only within the
twenty-four month period immediately following a Change of Control. TCPI's
obligation to pay Employee the compensation and to make the arrangements
provided in this Article VII herein shall be absolute and unconditional and
shall not be affected by any circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense, duty to mitigate, or other right
that the TCPI may have against him or anyone else. The amount shall not be
reduced by reason of Employee's securing other employment or for any other
reason. All amounts payable by TCPI hereunder shall be paid without notice or
demand, and in no event later that seven business days after such payments
become due. Except as expressly provided herein, TCPI waives all rights that it
may now have or may hereafter have conferred upon it, by statute or otherwise,
to terminate, cancel or rescind this Agreement in whole or in part. Each and
every payment made hereunder by TCPI shall be final and TCPI will not seek to
recover all or any part of such payment from Employee or from whomsoever may be
entitled thereto, for any reason whatsoever. TCPI may withhold for income tax
purposes any amounts required to be withheld under applicable tax statutes and
regulations.
ARTICLE VIII
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NOTICES
8.1 Any notice, request, demand, offer, payment or communication
required or permitted to be given by any provision of this Agreement shall be
deemed to have been delivered and given for all purposes if written and if (i)
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delivered personally or by courier or delivery service, at the time of such
delivery; or (ii) directed by registered or certified United States mail,
postage and charges prepaid, addressed to the intended recipient, at the address
specified below, at such time that the intended recipient or its agent signs or
executes the receipt:
If to TCPI:
Technical Chemicals and Products, Inc.
Attention: President
0000 Xxxxxxxxx 00xx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
If to Employee:
Xxxxxxx Block, Ph.D.
(ADDRESS INTENTIONALLY OMITTED)
8.2 Any party may change the address to which notices are to be mailed
by giving written notice as provided herein to the other party. Commencing
immediately after the receipt of such notice, such newly designated address
shall be such person's address for purposes of all notices or other
communications required or permitted to be given pursuant to this Agreement.
ARTICLE IX
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CONFIDENTIAL BUSINESS INFORMATION
DUTY TO RETURN INFORMATION AND CONFLICT OF INTEREST
9.1 Employee represents and agrees that all documents and other
information, including, but not limited to client lists, prospective client
lists, vendors and vendees, research protocols, market research results,
reports, questionnaires, video and audio tapes, memorandum, drawings, data,
notes, financial information and all other information including copies thereof
produced by photocopy machines, computer programs, facsimile or otherwise
(collectively, the "Information") furnished to Employee or to which Employee is
exposed or obtains pursuant to this Agreement is confidential and proprietary to
TCPI and the disclosure by Employee of such Information to any third party will
cause irreparable injury to TCPI. Accordingly, Employee expressly agrees that:
9.1.1 Any Information which Employee receives is exposed to or
obtains pursuant to this Agreement, either in writing,
verbally or through computer software or otherwise, is highly
confidential and that disclosure of such information will
cause TCPI irreparable damage.
9.1.2 All such Information shall be treated by Employee as
Strictly Confidential.
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9.1.3 During the term of this Agreement and for a period of
five (5) years from the termination or other expiration of
this Agreement, Employee shall maintain all such Information
in strictest confidence and will not, directly or indirectly,
disclose or cause to be disclosed, such Information to any
third party, person or entity and will not use such
Information except as specifically authorized by this
Agreement.
9.1.4 During the term of this Agreement and any extensions
thereof, Employee shall be in compliance with TCPI's Conflict
of Interest policy as it may exist from time-to-time.
9.1.5 Immediately upon the termination or expiration of this
Agreement, Employee shall deliver to TCPI all Information
(regardless of the format which such Information takes) and
Employee shall not retain any copies of such Information. Upon
request, the Employee shall sign a statement prepared by TCPI
acknowledging that Employee has surrendered all such
Information to TCPI.
9.1.6 Information shall not include any information that: (a)
was in Employee's possession before the commencement date of
his employment with TCPI; or (b) is or becomes available to
the public through no fault of Employee; or (c) is received in
good faith by Employee from a third party and is not subject
to an obligation of confidentiality owed by the third party to
TCPI; or (d) is independently developed by Employee after his
Termination of employment with TCPI without reference to
Information received hereunder, as evidenced by Employee's
written records."
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ARTICLE X
---------
OWNERSHIP OF WORK PRODUCT
FREEDOM OF USE
10.1 Employee recognizes and agrees that all right, title and interest
to all information, inventions, methods, procedures, inventions, designs, ideas
and programs ("Discoveries") developed by Employee in connection with or
resulting in whole or in part from Employee's work pursuant to the Agreement
shall belong solely to TCPI and TCPI shall be free to use all such Discoveries
without any obligation to Employee.
10.2 If any patentable inventions or improvements, copyrights or
trademarks result in whole or in part from Employee's services under this
Agreement, all rights to apply for such patents and trademarks and any patents
and trademarks issued therefrom and copyrights ownership shall belong solely to
TCPI and Employee shall do whatever is reasonably necessary to aid TCPI in
securing such intellectual property rights at TCPI's expense.
ARTICLE XI
----------
RELOCATION
11.1 TCPI shall reimburse Employee for all reasonable housing
relocation and moving expenses from Employee's South Natick, MA residence to
South Florida, provided that TCPI coordinates such relocation. As part of such
relocation, TCPI will pay temporary housing and travel expenses until any
relocation occurs. This will include reasonable cost of travel between his
current residence and Florida incurred by Employee and his wife pending the
permanent relocation of his family to Florida, and temporary living expenses for
Employee and his wife in the Pompano Beach, Florida area. As relocation occurs,
TCPI shall pay or reimburse the reasonable costs of packing, moving, insuring,
and unpacking Employee's family and household goods to Florida.
11.2 To the extent that Employee incurs and has an obligation or
liability for income taxes as a result of such relocation by reason of the
reimbursement of such relocation costs, then and in such event, TCPI shall pay
to Employee an amount that, on an after-tax basis (including federal income and
excise taxes, and state and local income taxes) increases the total payment
under this Article XI so much so that, in net after tax amount received, the
payments and benefits received pursuant to this Article XI are, in effect, not
reduced by the federal income and excise taxes, and state and local income taxes
imposed upon Employee by reason of amounts payable under this Article.
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ARTICLE XII
-----------
MISCELLANEOUS
12.1 Florida Law. This Agreement shall be considered for all purposes a
Florida document and shall be construed pursuant to the laws of the State of
Florida, and all of its provisions shall be administered according to and its
validity shall be determined under the laws of the State of Florida without
regard to any conflict or choice of law issues.
12.2 Gender and Number. Whenever appropriate, references in this
Agreement in any gender shall be construed to include all other genders,
references in the singular shall be construed to include the plural, and
references in the plural shall be construed to include the singular, unless the
context clearly indicates to the contrary.
12.3 Certain Words. The words "hereof," "herein," "hereunder," and
other similar compounds of the word "here" shall mean and refer to the entire
Agreement and not to any particular article, provision or paragraph unless so
required by the context.
12.4 Captions. Paragraph titles or captions contained in this Agreement
are inserted only as a matter of convenience and/or reference, and they shall in
no way be construed as limiting, extending, defining or describing either the
scope or intent of this Agreement or of any provision hereof.
12.5 Counterparts. This Agreement may be executed in one or more
counterparts, including facsimile counterparts, and any such counterpart shall,
for all purposes, be deemed an original, but all such counterparts together
shall constitute but one and the same instrument.
12.6 Severability. The invalidity or unenforceability of any provision
hereunder (or any portion of such a provision) shall not affect the validity or
enforceability of the remaining provisions (or remaining portions of such
provisions) of this Agreement. In such case the parties shall attempt to replace
such provision with a similar, but enforceable, provision.
12.7 Entire Agreement. This Agreement (and all other documents executed
simultaneously herewith or pursuant hereto) constitutes the entire agreement
among the parties pertaining to the subject matter hereof, and supersedes and
revokes any and all prior or existing agreements, written or oral, relating to
the subject matter hereof, and this Agreement shall be solely determinative of
the subject matter hereof.
12.8 Waiver. Either TCPI or Employee may, at any time or times, waive
(in whole or in part) any rights or privileges to which he or it may be entitled
hereunder. However, no waiver by any party of any condition or of the breach of
any term, covenant, representation or warranty contained in this Agreement, in
any one or more instances, shall be deemed to be or construed as a further
continuing waiver of any other condition or of any breach of any other terms,
covenants, representations or warranties contained in this Agreement, and no
waiver shall be effective unless it is in writing and signed by the waiving
party.
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12.9 Attorneys' Fees. In the event that either party shall be required
to retain the services of an attorney to enforce any of his or its rights
hereunder, the prevailing party in any arbitration or court action shall be
entitled to receive from the other party all costs and expenses including (but
not limited to) court costs and attorneys' fees (whether in an arbitration or in
a court of original jurisdiction or one or more courts of appellate
jurisdiction) incurred by Employee or TCPI in connection therewith. The parties
hereby expressly confer on the arbitrator the right to award costs and
attorneys' fees in the arbitration. For the purpose of this Paragraph 12.9, the
"prevailing party" shall be the party determined not to have owed money to the
other party or determined to have owed less than the other party.
12.10 Venue. Any arbitration or other litigation arising hereunder
shall be instituted only in Broward County, Florida or in the county where TCPI
has its principal place of business.
12.11 Assignment. The rights and obligations of the parties under this
Agreement shall inure to the benefit of and shall be binding upon their
successors, assigns, and/or other legal representatives. This Agreement shall
not be assignable by TCPI. The services of Employee are personal and his
obligations may not be delegated by Employee except as otherwise provided
herein.
12.12 Amendment. This Agreement may not be amended, modified,
superseded, cancelled, or terminated, and any of the matters, covenants,
representations, warranties or conditions hereof may not be waived, except by a
written instrument executed by TCPI and Employee or, in the case of a waiver, by
the party to be charged with such waiver.
12.13 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 TCPI and Employee and their respective successors and permitted
assigns, any rights or remedies under or by reason of this Agreement.
12.14 Full Settlement. TCPI's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder, shall
not be affected by any set-offs, counterclaims, recoupment, defense or other
claim, right or action that TCPI may have against the Employee or others. In no
event shall the Employee be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Employee under any of
the provisions of this Agreement. In the event either party is in default in any
payment due to the other, the financial obligation of such party shall bear
interest at the Wall Street Journal prime rate per annum plus two percentage
points from the date payment was due and should have been made.
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ARTICLE XIII
------------
ARBITRATION
13.1 Arbitration. Any controversy or claim arising out of, or relating
to, this Agreement, or the breach hereof, shall be settled by arbitration in the
City of Fort Lauderdale, in accordance with the Commercial Rules of Arbitration
of the American Arbitration Association in the State of Florida, and any
judgment upon the award rendered may be entered in any court having jurisdiction
thereof.
13.2 Continuation of Salary. The Employee shall be entitled to receive
Employee's salary and other benefits in effect at the Termination Date upon the
commencement of Arbitration for the period of the earliest to occur of (i) the
termination of the Arbitration, (ii) Employee's employment by a third party or
(iii) one (1) year from the Termination Date, provided, however, that the
Employee would be obligated to repay TCPI such salary (without interest) in the
event that the Arbitrators determine that the termination of Employee's
employment was proper pursuant to the provisions of this Employment Agreement
and such Arbitrator(s) find such repayment justified and equitable.
IN WITNESS WHEREOF, TCPI and Employee have caused this Agreement to be executed
on the day and year first above written.
TECHNICAL CHEMICALS AND
PRODUCTS, INC.
---------------------------------- By
Witness
------------------------------
---------------------------------- XXXX X. XXXXXXXXX, Chairman
Witness
----------------------------------
Witness
---------------------------------- --------------------------------
Witness XXXXXXX BLOCK
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EXHIBIT 'A'
INCENTIVE STOCK OPTIONS
ELLIOT BLOCK
DATE OF NUMBER OF OPTION
GRANT SHARES VESTING EXPIRATION PRICE
----- ------ ------- ---------- -----
5/10/99 80,000 5/10/1999 10th anniversary of grant date $1.25
5/10/99 80,000 5/10/2000 10th anniversary of grant date $1.25
5/10/99 80,000 5/10/2001 10th anniversary of grant date $1.25
NON-QUALIFED STOCK OPTIONS
DATE OF NUMBER OF OPTION
GRANT SHARES VESTING EXPIRATION PRICE
----- ------ ------- ---------- -----
5/10/99 3,334 5/10/1999 10th anniversary of grant date $1.25
5/10/99 3,333 5/10/2000 10th anniversary of grant date $1.25
5/10/99 3,333 5/10/2001 10th anniversary of grant date $1.25