EXHIBIT 10.6
PINECREST INVESTMENT GROUP, INC.
EMPLOYMENT AGREEMENT
Agreement, effective as of January 1, 2000, by and between Xxxxx X. Xxxx,
an individual currently residing at 0000 Xxxxx Xxx Xxxxx, Xxxxxxx 00000, (the
"Executive"), and Pinecrest Investment Group, Inc., a Florida corporation
maintaining business offices at 0000 Xxxx Xxxx., Xxxxx 000, Xxxxx, Xxxxxxx 00000
(the "Corporation").
BACKGROUND INFORMATION
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The Corporation wishes to secure the employment services of the Executive
for a definite period of time and upon the particular terms and conditions
hereinafter set forth. The Executive is willing to be so employed. Accordingly,
the parties agree as follows:
OPERATIVE PROVISIONS
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1. Employment and Term.
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The Corporation hereby employs Executive and the latter hereby accepts
employment by the Corporation for the five year period commencing January 1,
2000 (the "Commencement Date"), which employment shall be automatically extended
for unlimited successive one year periods (each a "Successor Term") unless it is
terminated during the pendency of any such Term, whether Initial or Successor,
by the occurrence of one of the events described in Section 8. hereof, or at the
end of any such Term by one party furnishing the other with written notice, at
least 60 days prior to the expiration of such Term, of an intent to terminate
this Agreement upon the expiration of such Term.
2. Duties.
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During the Term of this Agreement, whether Initial or Successor, the
Executive shall render to the Corporation services as its President and Chief
Executive Officer, and shall perform such duties as may be designated by and
subject to the supervision of the Corporation's Board of Directors, and shall
serve in such additional capacities appropriate to his responsibilities and
skills as shall be designated by the Corporation, through action of its Board of
Directors. During such period, the Executive shall devote his full business
attention, time and energies to the operations and affairs of the Corporation
(subject to the terms of Section 7. below), and will use his best efforts to
promote the interests and reputation of the Corporation; provided that he may
pursue such noncompetitive activities during weekday evenings and on weekends,
such as teaching, consulting or other remunerative or non-remunerative
activities, as do not interfere, to any degree, with the complete performance of
his obligations hereunder. Any question of interpretation, which may arise under
the preceding provison, shall be resolved by majority decision of the
Corporation's Board of Directors. Hours of service to the Corporation during the
Term of this Agreement shall be a minimum of 40 per week and otherwise as
reasonably determined by the Corporation's Board of Directors. The Corporation
shall not, without his consent, remove the Executive's principal place of
business from Florida.
3. Base Compensation.
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For the services to be rendered by the Executive under this Agreement the
Corporation shall pay him, while he is rendering such services and performing
his duties hereunder, and the Executive shall accept as periodic payment for
such service, a base compensation (inclusive of any amounts subject to federal
or state employment related withholding requirements) of $156,000 per annum,
which amount will be payable in arrears in substantially equal semi monthly
installments coinciding with the Corporation's normal employment compensation
payment cycle or pursuant to such other arrangements as the parties may agree
upon (the "Base Compensation"). Such Base Compensation shall be reviewed as of
each anniversary of the Commencement Date and may then be increased to take into
account increases, if any, in the annual cost of living, or in recognition of
the Corporation's attainment of operational goals, all as determined by action
of the Corporation's Board of Directors; but under no condition may the
Executive's Base Compensation be decreased below the figure then being paid him
regardless of any change in or diminution of the Executive's duties owed to the
Corporation.
4. Vacation: Fringe Benefits: Reimbursement of Expenses.
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The Executive shall be entitled to 4 weeks of fully paid vacation during
the first annual period of his employment hereunder and to 4 weeks during each
successive annual period occurring within the Term of this Agreement, whether
Initial or Successor. The timing of vacation periods shall be within the
discretion of the Corporation's Board of Directors, reasonably exercised so as
not to unnecessarily inconvenience the Executive.
During his period of employment hereunder, the Executive shall further be
entitled to (a) such leave by reason of physical or mental disability or
incapacity and to such participation in individual or group medical, health,
disability, dental and life insurance programs; pension, profit sharing and
other retirement benefit plans; and any other fringe benefits, both for the
Executive and his family, as the Corporation may make generally available to its
most senior executive employee from time to time; and (b) reimbursement for all
normal and reasonable expenses necessarily incurred by him in the performance of
his obligations hereunder, subject in each case to such reasonable
substantiation requirements as may be imposed by the Corporation.
5. Bonus / Insentive Pay
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Employee shall earn a bonus, on a pro-rata basis, for meeting the Revenues,
Gross Profit and Net Operating Profit guideline indicated in Exhibit A attached
hereto and made a part hereof. Thresholds shall be calculated pursuant to GAAP
(Generally Accepted Accounting Principles) and as indicated in Exhibit A except
that Net Operating Profit shall be calculated as follows: Net Operating Profit
shall be the Net Profit before federal, state and local income taxes, determined
in accordance with GAAP and adjusted to exclude: (i) any bonus or incentive
payments paid to officers, directors, and/or stockholders; (ii) any
extraordinary gains or losses (including, but not limited to, gains or losses in
disposition of assets); (iii) any deficiency of federal and state income taxes
paid in a prior year; and (iv) depreciation. The Bonus shall be calculated
within thirty days after the end of each quarter. One-half of the Annually
Disbursable Bonus shall be disbursed to Employee within forty-five (45) days
after the end of the quarter, and the Bonus, paid annually, shall be disbursed
within 90 days after the end of the 60th month from the inception of this
Agreement or as otherwise indicated in this Agreement. If Net Operating Profit
drops below 50% of projections, No bonus will be paid.
6. Stock Options.
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Employee shall be entitled to incentive qualified stock options in the
amount of the market bid price. This price will be determined by the average of
the 10 business days prior to granting the option. Employee shall be entitled to
receive shares equivalent to 7% of the outstanding shares at the date of
granting the option. (See attached Option Agreeement)
7. Proprietary Interests.
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During or after the expiration of his term of employment with the
Corporation, the Executive shall not communicate or divulge to, or use for the
benefit of, any individual, association, partnership, trust, corporation or
other entity except the Corporation, any proprietary or confidential information
of the Corporation received by the Executive by virtue of such employment,
without first being in receipt of the Corporation's written consent to do so;
provided that nothing contained herein shall restrict the Executive's use or
disclosure of such information known to the public (other than that which he may
have disclosed in breach of this Agreement), or as required by law (so long as
the Executive gives the Corporation prior notice of such required disclosure).
8. Restrictive Covenant.
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a. Scope of Covenant. Subject to the provisions of Section 10e. below
(the occurrence of which shall render this ss.8. ineffective), the
Executive shall not (1) within any geographical area while employed by the
Corporation; or (2) within any state within which the Corporation is
actively engaged in the conduct of its business, during the two year period
following termination of such employment, engage or become interested in,
directly or indirectly, as owner, shareholder, partner, co-venturer,
director, officer, employee, agent, consultant or otherwise, any activity
which is then engaged in by the Corporation, nor, during the two year
post-termination period, employ or attempt to employ any employee of the
Corporation, or otherwise encourage or attempt to encourage any employee of
the Corporation to leave the Corporation's employ.
b. Confidentiality: Disclosure; Proprietary Information. The Executive
acknowledges that all records with respect to customers serviced by the
Corporation or with respect to employees of the Corporation ("Associated
Employees") and lists of customers or proposed customers of the
Corporation, or of Associated Employees, and all personal, financial or
business information concerning the customers or proposed customers of the
Corporation or of Associated Employees, obtained by the Executive during
the course of the Executive's employment by the Corporation, are valuable
and unique and are proprietary assets of the Corporation. During the
Executive's employment by the Corporation and following the termination
thereof; the Executive will not at any time disclose any of the records,
lists or information previously described in this subsection, nor utilize
the same for any reason not previously authorized in writing by the
Corporation.
c. Divisibility of Covenant Period. If any portion of the restrictive
covenant contained herein is held to be unreasonable, arbitrary or against
public policy, each covenant shall be considered divisible both as to time
and geographic area, such that each month within the specified period shall
be deemed a separate period of time and each state shall be deemed a
separate geographical area, resulting in an intended requirement that the
longest lesser time and largest lesser geographic area determined not to be
unreasonable, arbitrary or against public policy shall remain effective and
be specifically enforceable against the Executive.
d. Covenant Independent. Each restrictive covenant on the part of the
Executive set forth in this Agreement shall be construed as a covenant
independent of any other covenant or provision of this Agreement or any
other agreement which the Executive may have, whether fully performed or
executory, and the existence of any claim or cause of action by the
Executive against the Corporation, whether predicated upon another covenant
or provision of this Agreement or otherwise, shall not constitute a defense
to the enforcement by the Corporation of any other covenant.
e. Court Proceedings. In any action or proceeding by the Corporation
relating to or involving the enforcement of this covenant, the Executive
hereby waives any and all right to a trial by jury with respect to the
action, proceeding, or other litigation resulting from or involving the
enforcement of this covenant. Further, in any action or proceeding by the
Corporation to obtain a temporary restraining order and/or preliminary
injunction, the Executive hereby agrees to waive the necessity of the
Corporation posting an injunction bond in order to obtain a temporary
restraining order and/or preliminary injunction. Should the Corporation's
action for a temporary restraining order and/or motion for preliminary
injunction be granted in whole or in part and should the Corporation be
ultimately unsuccessful in obtaining a permanent injunction to enforce the
covenant, the Executive hereby waives any and all rights the Executive may
have against the Corporation for any injuries or damages, including
consequential damages, sustained by the Executive and arising directly or
indirectly from the issuance of the temporary restraining order and/or
preliminary injunction.
f. Indemnification. The Executive hereby agrees to indemnify and hold
the Corporation harmless from and against any losses, claims, damages or
expenses, and/or all costs of prosecution or defense of his rights
hereunder, whether in judicial proceedings, including appellate
proceedings, or whether out of court, including without limiting the
generality of the foregoing, attorney's fees, and all costs and expenses of
litigation, arising from or growing out of the Executive's breach or
threatened breach of any covenant contained herein.
g. Extension of Covenant Period. The period of time during which the
Executive is prohibited from engaging in the practices identified in a.
above shall be extended by any length of time during which the Executive is
in breach of such covenants.
h. Survival of Covenants. All restrictive covenants contained in this
Agreement shall survive the termination of this Agreement.
9. Remedies for Breach of Obligations.
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The parties agree that the services of the Executive are of a
personal, specific, unique and extraordinary character and cannot be readily
replaced by the Corporation. They further agree that in the course of performing
his services, the Executive will have access to various types of proprietary
information of the Corporation, which, if released to others or used by the
Executive other than for the benefit of the Corporation, in either case without
the Corporation's consent, could cause the Corporation to suffer irreparable and
continuing injury. Therefore, the obligations of the Executive established under
ss.7. and 8. hereof shall be enforceable by the Corporation both at law and in
equity, by injunction, specific performance, damages or other remedy; and the
right of the Corporation to obtain any such remedy shall be cumulative and not
alternative and shall not be exhausted by any one or more uses thereof.
10. Termination of Employment.
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a. Death. The Executive's employment hereunder shall terminate in the
event of the Executive's death. Except for any salary and benefits accrued,
vested and unpaid as of the date of any such termination and except for any
benefits to which the Executive or his heirs or personal representatives may be
entitled under and in accordance with the terms of any employee benefit plan,
policy or program maintained by the Corporation, the Corporation shall be under
no further obligation hereunder to the Executive or to his heirs or personal
representatives, and the Executive or his heirs or personal representatives no
longer shall be entitled to receive any payments or any other rights or benefits
under this Agreement.
b. Disability. The Corporation may terminate the Executive's
employment hereunder for disability if an independent physician mutually
selected by the Executive (or his legal representative) and the Board of
Directors or its designee (or, upon an inability of such parties to effect the
selection within a period often days, by the independent certified public
accounting firm then serving the Corporation) shall have determined that the
Executive has been substantially unable to render to the Corporation services of
the character contemplated by Section 2. of this Agreement, by reason of a
physical or mental illness or other condition, for more than 30 consecutive days
or for shorter periods aggregating more than 45 days in any period of 12
consecutive months (excluding in each case days on which the Executive shall be
on vacation). In the event of such disability, the Executive shall be entitled
to receive any salary and benefits accrued, vested and unpaid as of the date of
any such termination and any benefits to which the Executive may be entitled
under and in accordance with the terms of any employee benefit plan, policy or
program maintained by the Corporation; and upon the Executive's receipt of such
salary and benefits the Corporation shall be under no further obligation
hereunder to the Executive and the Executive no longer shall be entitled to
receive any payments or any other rights or benefits under this Agreement.
c. Termination by the Corporation for Cause. The Corporation may
terminate the Executive's employment hereunder for "Cause." For purposes of this
Agreement, "Cause" shall mean any of the following:
i. The Executive's repeated willful misconduct or gross
negligence;
ii. The Executive's repeated conscious disregard of his
obligations hereunder or of any other written duties reasonably
assigned to him by the Board of Directors;
iii.The Executive's repeated conscious violation of any provision
of the Corporation's bylaws or of its other stated policies, standards
or regulations;
iv. The Executive's commission of any act involving fraud or
moral turpitude; or
v. A determination that the Executive has demonstrated a
dependence upon any addictive substance, including alcohol, controlled
substances, narcotics or barbiturates;
provided, however, that if the Board of Directors of the Corporation desires to
terminate the Executive for any of the reasons set forth in: (1) clause (i),
(ii) or (iii) of this Section 10c., the Corporation must be able to demonstrate
that, within the 60 day period immediately following the alleged occurrence of
each proscribed act or omission preceding the act or omission upon which it is
basing its right to effect a termination for Cause, it furnished to the
Executive a written description of the allegedly proscribed act or omission and
a statement advising him that the Corporation views such conduct as being of the
type which could lead to a termination of the Executive for Cause; (2) clause
(ii) or (iii) of this Section 10c., the Board must be able to demonstrate that
the Executive has been furnished with a copy of the written duty, bylaw
provision, policy, standard or regulation, the violation of which the Executive
is being accused, at a time prior to the alleged commission of the violation; or
(3) clause (iv) or (v) of this Section 10c., the Board shall first be required
to obtain an opinion from Corporation counsel to the effect that there is an
adequate basis upon which either such determination may be made. Except for any
salary and benefits accrued, vested and unpaid as of the date of any such
termination, the Corporation shall be under no further obligation hereunder to
the Executive and the Executive no longer shall he entitled to receive any
payments or any other rights or benefits under this Agreement.
d. Termination by the Corporation Other Than for Cause. The
Corporation may terminate the Executive's employment hereunder upon the
expiration of the Initial Term or any Successor Term, provided that notice of
termination is furnished as set forth in Section 1, or at any time prior to the
expiration of any successor Term, upon 30 days notice to the Executive, and
subject, in either event, to the right of the Executive, within such
notification period, to effect his own Good Reason termination as described in
subsection e. below. In the event of either such termination, the Executive
shall be entitled to receive any salary and benefits accrued, vested and unpaid
as of the date of any such termination and any benefits to which the Executive
may be entitled under and in accordance with the terms of any employee benefit
plan, policy or program maintained by the Corporation, as well as, in the event
that the Executive shall have timely effected a Good Reason termination, those
benefits authorized under the provisions of subsection e.; and following his
receipt of such salary and benefits the Corporation shall be under no further
obligation hereunder to the Executive and the Executive no longer shall be
entitled to receive any payments or any other rights or benefits under this
Agreement.
e. Termination by the Executive for Good Reason. Notwithstanding
anything herein to the contrary, the Executive shall be entitled to terminate
his employment hereunder for "Good Reason" without breach of this Agreement. For
purposes of this Agreement, "Good Reason" shall exist upon the occurrence of any
of the following, in each case without the Corporation first being in receipt of
the Executive's written consent:
i. A material change in the title or a substantial elimination of
the duties and responsibilities of the Executive;
ii. A material breach by the Corporation of its obligations
hereunder;
iii. A decision by the Corporation to effect an early termination
of the Executive's employment under this Agreement pursuant to the
applicable provisions of Section 10d. above.
In the event of a Good Reason termination by the Executive, the
Executive shall nonetheless be entitled to continue to receive from the
Corporation his Base Compensation for the succeeding two month period. Except
for such continuing entitlement to compensation following any such termination,
and except for any salary and benefits accrued, vested and unpaid as of the date
of any such termination, the Executive no longer shall be entitled to receive
any payments or any other rights or benefits under this Agreement, and the
Corporation shall have no further obligation hereunder to the Executive
following any such termination.
f. Termination by the Executive for other Than Good Reason. The
Executive may terminate his employment hereunder upon the expiration of the
Initial Term or any Successor Term, provided that notice of termination is
provided as set forth in Section 1. In the event of such termination, the
Executive shall be entitled to receive any salary and benefits accrued, vested
and unpaid as of the date of any such termination and any benefits to which the
Executive may be entitled under and in accordance with the terms of any employee
benefit plan, policy or program maintained by the Corporation; and following his
receipt of such salary and benefits to the Corporation shall be under no further
obligation hereunder to the Executive and the Executive no longer shall be
entitled to receive any payments or any other rights or benefits under this
Agreement.
g. Life and Disability Insurance Coverage. If termination of
employment is due to any reason other than death, the Executive shall have the
right, subject to receiving approval of the Corporation (which shall not be
unreasonably withheld), to purchase any policy of insurance on his life or
insuring against his disability which is owned by the Corporation, the exercise
of which right shall be made by notice furnished to the Corporation within 30
days subsequent to the date of termination. The purchase price of each policy of
life insurance shall be the sum of its interpolated terminal reserve value
(computed as of the closing date) and the proportional part of the gross premium
last paid before the closing date which covers any period extending beyond that
date; or if the policy to be purchased shall not have been in force for a period
sufficient to generate an interpolated terminal reserve value, the price shall
be an amount equal to all net premiums paid as of the closing date. The purchase
price of each disability income policy shall be the sum of its cash value and
the proportional part of the gross premium last paid before the closing date,
which covers any period extending beyond that date. The purchase of any
insurance policy by the Executive shall be closed as promptly as may be
practicable after the giving of notice, in no event to exceed 30 days therefrom.
11. Indebtedness of Executive.
If, during the course of his employment, the Executive becomes indebted to
the Corporation for any reason, the Corporation shall, if it so elects, have the
right to set-off and to collect any sums due it from the Executive out of any
amounts which it may owe to the Executive for unpaid compensation. In the event
that this Agreement terminates for any reason, all sums owed by the Executive to
the Corporation shall become immediately due and payable.
12. Miscellaneous Provisions.
a. Notice: All notices or other communications required or permitted
to be furnished pursuant to this Agreement shall be in writing and shall be
considered as properly furnished if hand delivered, mailed from within the
United States by certified or registered mail, or sent by prepaid telegram to
the recipient party at the address appearing in the preamble to this Agreement
or to such other address as any such party may have designated by like notice
forwarded to the other party hereto. Change of address notices shall be deemed
furnished when received. All other notices shall be deemed furnished when
mailed, telegraphed or hand delivered.
b. Non-Assignability: Neither this Agreement nor any right or interest
hereunder shall be assignable by the Corporation or the Executive, but shall
inure to the benefit of and be binding upon the legal representatives and
successors in interest of each.
c. Entire Agreement: This Agreement, and any other document referenced
herein, constitute the entire understanding of the parties hereto with respect
to the subject matter hereof; and no amendment, modification or alteration of
the terms hereof shall be binding unless the same be in writing, dated
subsequent to the date hereof and duly approved and executed by each of the
parties hereto.
d. Enforceability: If any term or condition or this agreement shall be
invalid or unenforceable to any extent or in any application, then the remainder
of this agreement, and such term or condition except to such extent or in such
application, shall not be affected thereby and each and every term and condition
of this agreement shall be valid and enforced to the fullest extent and in the
broadest application permitted by law.
e. Application of Florida Law Jurisdiction: This Agreement, and the
application or interpretation thereof; shall be governed exclusively by its
terms and by the laws of the State of Florida. Venue shall be deemed located in
Hillsborough County, Florida. The parties agree that, irrespective of any
wording that might be construed to be in conflict with this paragraph, this
agreement is one for performance in Florida, The parties to this agreement agree
that they waive any objection, constitutional, statutory or otherwise, to a
Florida Court's taking jurisdiction of any dispute between them. By entering
into this agreement, the parties, and each of them understand that they might be
called upon to answer a claim asserted in a Florida court.
f. Counterparts: This Agreement may be executed by any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
g. Binding Effect: Each of the provisions and agreements herein
contained shall be binding upon and inure to the benefit of the personal
representatives, devisees, heirs, successors, transferees and assigns of the
respective parties hereto.
h. Legal Fees and Costs: If a legal action is initiated by any party
to this Agreement against another, arising out of or relating to the alleged
performance or non-performance of any right or obligation established hereunder,
or any dispute concerning the same, any and all fees, costs and expenses
reasonably incurred by each successful party or his or its legal counsel in
investigating, preparing for, prosecuting, defending against, or providing
evidence, producing documents or taking any other action in respect of; such
action shall be the joint and several obligation of and shall be paid or
reimbursed by the unsuccessful party(ies).
i. Beneficiary: As used herein, the term "Beneficiary" shall mean the
person or persons (who may be designated contingently or successively and who
may be an entity other than an individual, including an estate or trust)
designated on a written form prescribed by the Board of Directors to receive the
expiration of Agreement or death benefits described in Section 10. above. Each
Beneficiary designation shall be effective only when filed with the secretary of
the Corporation during the Executive's lifetime. Each Beneficiary designation
filed with the Secretary will cancel all designations previously so filed. If
the Executive fails to properly designate a Beneficiary or if the Beneficiary
predeceases the Executive or dies before complete distribution of the benefit
has been made, the Corporation shall distribute the benefit (or balance thereof)
to the Executive's probate estate.
In witness whereof; the parties have executed this Agreement.
PINECREST INVESTMENT GROUP, INC.
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, President
EXECUTIVE
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
