EMPLOYMENT AGREEMENT
This Employment Agreement dated as of December 3, 1999 (hereinafter
referred to as "Agreement") is entered into by and between Xxxxxxxxxxxxxx.xxx,
Inc. (hereinafter referred to as the "Company") and Xxxxx X. Xxxxxxxx
(hereinafter referred to as "Executive").
WHEREAS, the Company employs Executive in the capacity of President and
Chief Executive Officer and desires to modify the existing employment
arrangement; and
WHEREAS, the Company and Executive desire to set forth in this
Agreement all of the terms and conditions of said employment, and to establish a
mechanism to resolve disputes relating to said employment;
NOW, THEREFORE, in consideration of the mutual promises and obligations
contained in this Agreement, the Company and Executive agree as follows:
1. TERM OF EMPLOYMENT. This Agreement is effective January 1, 2000
(the "Effective Date"), and will automatically terminate without further notice
at 5:00 p.m. on December 31, 2004.
2. DUTIES AND RESPONSIBILITIES. The Company hereby employs Executive
as President and Chief Executive Officer with such powers and duties in that
capacity as may be established from time to time by the Company in its
discretion. Executive will devote his entire time, attention and energies to the
Company's business. During his employment, Executive will not engage in any
other business activities, regardless of whether such activity is pursued for
profits, gains, or other pecuniary advantage. However, nothing in this Agreement
shall prevent Executive from passively investing in business activities so long
as such investments require no active participation by Executive.
3. COMPENSATION.
(a) BASE SALARY. The Company promises to pay Executive an
annualized base salary of $250,000, less applicable deductions, payable
in installments according to the Company's normal payroll practices.
(b) SALARY INCREASES: Executive's base salary will be adjusted
upward on January 1 of each subsequent year by the twelve month average
of the Consumer Price Index ("CPI") for the preceding year. The minimum
CPI adjustment will be three percent (3%) per year and the maximum CPI
adjustment will be six percent (6%) per year.
(c) BONUSES: During the term of this Agreement, the Executive
shall receive an annual bonus from the Company of each year, in such
amount as shall, from time to time, be determined by the Board of
Directors of the Company, in its good faith discretion. Also, the
Executive shall receive a bonus, as determined by the Board of
Directors, for any and all acquisitions or mergers consummated by the
Company.
(d) VACATION. Executive shall be entitled to reasonable vacations
during each year of the Term, the time and duration thereof to be
determined by mutual agreement between Executive and the Company.
(e) STOCK OPTIONS. On the date of this Agreement, the Company
shall grant to Executive stock options to purchase an aggregate of
1,500,000 shares of common stock at an exercise price equal to $2.00 ,
which is the fair market value on the date of this agreement as
reported by the OTC Bulletin Board on that date. The options shall vest
300,000 options on December 3 of each year commencing December 3, 2000,
assuming that Executive remains employed by Company on the dates that
the options are to be deemed vested. In the event that Executive is not
employed by Company on dates that the options are to be deemed vested,
regardless of the reason for his separation from the Company, the
options that are not vested shall immediately terminate and expire.
There will be no "pro-rated" vesting of any options for the period in
which Executive ceases to be employed by Company. The vesting schedule
will be as follows: 300,000 options shall vest on December 3 of each
year commencing December 3, 2000. Executive will have five (5) years to
exercise all vested options.
(f) EXPENSES. The Company shall pay or reimburse the Executive for
all reasonable expenses which are actually incurred or paid by him in
the performance of his service hereunder.
(g) AUTOMOBILE. The Company shall provide Executive with a luxury
or comparable automobile, including maintenance, which may be used by
Executive for both personal and business purposes during the term of
his employment. A new vehicle shall be provided by the Company for
Executive at three-year intervals.
(h) MEMBERSHIPS. Company shall pay for Executive all appropriate
professional and associate membership dues necessary or appropriate for
fulfillment of Executive's responsibilities under this Agreement and
agree to provide an annual allowance of not in excess of $3,500 for
payment of social club memberships.
(i) PROFESSIONAL SEMINARS. Company shall afford Executive with 12
compensated days annually for the purpose of attending professional
seminars necessary to enable Executive to obtain and maintain licenses
and certification related to his employment. Company will pay all
reasonable travel, food and lodging costs associated with attending
such seminars.
(j) INSURANCE. The Executive agrees to allow the Company to
provide "Key-Man" Life Insurance. The Insurance will be at least
$2,000,000, with at least $1,000,000 of Universal Life or equivalent
type, and will be paid by the Company. The Company will be the
beneficiary of said policy, but the cash surrender value accumulated,
if any, will belong to the Executive.
(k) OTHER BENEFITS. Executive will be entitled to participate in
any group health, life or disability plan and is entitled to any other
benefits that the Company may maintain from time to time for all
employees, provided that Executive meets the respective eligibility
requirements.
4. INABILITY TO PERFORM JOB DUTIES. In the event of Executive's
death, this Agreement and the Executive's salary and compensation shall
automatically end. If Executive becomes unable to perform his employment duties
during the term of this Agreement for any reason, his compensation under this
Agreement shall automatically end until such time as Executive becomes able to
resume his job duties for the Company. In the event that Executive becomes
unable to perform his employment duties for a cumulative period of greater than
twelve (12) weeks within any span of twelve (12) months, this Agreement and
Executive's employment will be automatically terminated.
5. TERMINATION BY COMPANY FOR CAUSE. The Company may terminate this
Agreement, and Executive's employment "for cause" at any time. As used herein,
"for cause" shall mean any one of the following:
o The habitual neglect by Executive of his job duties and
responsibilities; or
o Conviction of any crime, excluding minor traffic offenses; or
o Commission of a serious violation of any of the Company's
personnel policies, including but not limited to violations of
the Company's policies against any form of harassment; or
o Any act or omission deemed as grounds for termination of
employees as set forth in the Company's personnel policies in
existence at the time; or
o A material breach of this Agreement.
In the event the Company terminates Executive's employment for cause,
Executive's salary and other compensation shall automatically terminate and be
forfeited.
6. TERMINATION OF AGREEMENT BY COMPANY WITHOUT CAUSE OR BY EXECUTIVE
WITH CAUSE. The Company may terminate this Agreement and Executive's employment
without cause at any time upon thirty (30) days prior written notice to
Executive. The Executive may terminate this Agreement and Executive's employment
without cause at any time upon thirty (30) days prior written notice to the
Company upon a material breach of this Agreement by the Company. In each such
event, the Company will pay to Executive a severance payment of an amount equal
to 299% of his then-current base salary, less taxes and other applicable
withholding amounts.
7. TERMINATION OF AGREEMENT BY EXECUTIVE. Executive may terminate
this Agreement and his employment with the Company without cause upon thirty
(30) days prior written notice to the Company. Executive may be required to
perform his job duties and will be paid his regular salary up to the date of the
termination. At the option of the Company, the Company may require Executive to
terminate employment upon receiving said thirty (30) days' notice from Executive
of the termination of this Agreement. In such event, the Company will pay to
Executive an amount equal to thirty (30) calendar days of his base salary.
Executive will not be entitled to receive any other compensation or severance
allowance under this Agreement.
8. CHANGE OF CONTROL. (a) For the purposes of this Agreement, a
"Change of Control" shall be deemed to have taken place if: (i) any person,
including a "group" as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (but excluding Executive and members of his family),
becomes the owner or beneficial owner of Company securities, after the date of
this Agreement, having 50% or more of the combined voting power of the then
outstanding securities of the Company that may be cast for the election of
directors of the Company (other than as a result of an issuance of securities
initiated by the Company, or open market purchases approved by the Board, as
long as the majority of the Board approving the purchases is the majority at the
time the purchases are made), or (ii) the persons who were directors of the
Company before such transactions shall cease to constitute a majority of the
Board, or any successor to the Company, as the direct or indirect result of or
in connection with, any cash tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any combination of the
foregoing transactions.
(b) During the remaining term hereof after the Change of
Control Date, the Company (or subsidiary) will (i) continue to pay Executive at
not less than the Base Salary on the Change of Control Date, (ii) pay Executive
bonuses in amounts not less in amount than those paid during the 12 month period
preceding the Change of Control Date, and (iii) continue employee benefit
programs as to Executive at levels in effect on the Change of Control Date (but
subject to such reductions as may be required to maintain such plans in
compliance with applicable federal law regulating employee benefit programs).
(c) If during the remaining term hereof after the Change of
Control Date (i) Executive's employment is terminated by the Company (or
subsidiary), or (ii) there shall have occurred a material reduction in
Executive's compensation or employment related benefits, or a material change in
Executive's status, working conditions, management responsibilities or titles,
and Executive voluntarily terminates his relationship with the Company within 60
days of any such occurrence, or the last in a series of occurrences, then
Executive shall be entitled to receive, a lump sum payment equal to 299% of
Executive's Base Salary. Such amount will be paid to Executive within 15
business days after his termination of affiliation with the Company.
9. COOPERATION. Upon the termination of this Agreement for any
reason, Executive agrees to cooperate with the Company in effecting a smooth
transition of the management of the Company with respect to the duties and
responsibilities which Executive performed for the Company. Further, after
termination of this Agreement, Executive will furnish such information and
proper assistance to the Company as it may reasonably require in connection with
any prior business arrangements in which Executive was involved, and any
litigation to which the Company is or may become party.
10. COVENANT NOT TO COMPETE. During the term of this Agreement, and
for two (2) years after its termination, Executive promises and agrees that
she/he will not enter into any employment or business relationship (whether as a
principal, agent, partner, employee, investor, owner, consultant, board member
or otherwise) with any company, business organization or individual that is
engaged in the same or similar business as that conducted by the Company or with
any other business that competes with the Company. This Section 10 is effective
regardless of the reason for the termination of the Agreement and regardless of
whether the Agreement is terminated by the Executive or the Company. This
restrictive covenant may be assigned to and enforced by any of the Company's
assignees or successors.
11. AGREEMENT NOT TO USE OR DISCLOSE TRADE SECRETS. During the term of
this Agreement and a period of five (5) years thereafter, Executive promises and
agrees that he/she will not disclose or utilize any trade secrets acquired
during the course of service with the Company and/or its related business
entities. As used herein, "trade secret" refers to the whole or any portion or
phase of any formula, pattern, device, combination of devices, or compilation of
information which is for use, or is used, in the operation of the Company's
business and which provides the Company an advantage, or an opportunity to
obtain an advantage, over those who do not know or use it. "Trade secret" also
includes any scientific, technical, or commercial information, including any
design, list of suppliers, list of customers, as well as pricing information or
methodology, contractual arrangements with vendors or suppliers, business
development plans or activities, or Company financial information. This Section
11 is effective regardless of the reason for the termination of the Agreement
and regardless of whether the Agreement is terminated by the Executive, the
Company or by its own terms. This restrictive covenant may be assigned to and
enforced by any of the Company's assignees or successors.
12. AGREEMENT NOT TO USE OR DISCLOSE CONFIDENTIAL OR PROPRIETARY
INFORMATION. During the term of this Agreement and a period of two (2) years
thereafter, Executive promises and agrees that he/she will not disclose or
utilize any confidential or proprietary information acquired during the course
of service with the Company and/or its related business entities, Executive
shall not divulge, communicate, use to the detriment of the Company or for the
benefit of any other person or persons, or misuse in any way, any confidential
or proprietary information pertaining to the business of the Company. Any
confidential or proprietary information or data now or hereafter acquired by
Executive with respect to the business of the Company (which shall include, but
not be limited to, information concerning the Company's financial condition,
prospects, technology, customers, suppliers, methods of doing business and
promotion of the Company's products and services) shall be deemed a valuable,
special and unique asset of the Company that is received by Executive in
confidence and as a fiduciary. For purposes of this Agreement "confidential and
proprietary information" means information disclosed to Executive as a
consequence of or through his employment by the Company (including information
conceived, originated, discovered or developed by Executive) prior to or after
the date hereof and not generally known or in the public domain, about the
Company or its business. This Section 12 is effective regardless of the reason
for the termination of the Agreement and regardless of whether the Agreement is
terminated by the Executive, the Company or by its own terms. This restrictive
covenant may be assigned to and enforced by any of the Company's assignees or
successors.
13. AGREEMENT NOT TO HIRE COMPANY EXECUTIVES. If Executive leaves the
employ of the Company or terminates this Agreement, Executive promises and
agrees that, during the two (2) years following his departure from the Company,
Executive will not, without the express written permission of the Company,
directly or indirectly employ as a consultant or employee any person who is
employed as a consultant or employee of the Company at the time of Executive's
termination, or any person who was an employee or consultant of the Company
during the six months preceding Executive's termination. This Section 13 is
effective regardless of the reason for the termination of the Agreement and
regardless of whether the Agreement is terminated by the Executive, the Company
or by its own terms. This restrictive covenant may be assigned to and enforced
by any of the Company's assignees or successors.
14. INJUNCTIVE RELIEF. In recognition of the unique services to be
performed by Executive and the possibility that any violation by Executive of
Section 10, Section 11, Section 12 or Section 13 of this Agreement may cause
irreparable or indeterminate damage or injury to Company, Executive expressly
stipulates and agrees that the Company shall be entitled, upon ten (10) days
written notice to Executive, to obtain an injunction from any court of competent
jurisdiction restraining any violation or threatened violation of this
Agreement. Such right to an injunction shall be in addition to, and not in
limitation of, any other rights or remedies the Company may have for damages.
15. JUDICIAL MODIFICATION OF AGREEMENT. The Company and Executive
specifically agree that a court of competent jurisdiction (or an arbitrator, as
appropriate) may modify or amend Section 10, Section 11, Section 12 or Section
13 of this Agreement if absolutely necessary to conform with relevant law or
binding judicial decisions in effect at the time the Company seeks to enforce
any or all of said provisions.
16. RESOLUTION OF DISPUTES BY ARBITRATION. Any claim or controversy
that arises out of or relates to Executive's employment, this Agreement, or the
breach of this Agreement, will be resolved by arbitration in Palm Beach County
in accordance with the rules of the American Arbitration Association. Judgment
upon the award rendered by the arbitrator may be entered in any court possessing
jurisdiction over arbitration awards. This Section shall not limit or restrict
the Company's right to obtain injunctive relief for violations of Section 10,
Section 11, Section 12 or Section 13 of this Agreement directly from a court
under Section 14 of this Agreement. Each party shall be required to bear its own
costs and attorney's fees incurred in any arbitration arising out of Executive's
employment, this Agreement, or the breach of this Agreement.
17. ADEQUATE CONSIDERATION. Executive expressly agrees that the
Company has provided adequate, reasonable consideration for the obligations
imposed upon him in this Agreement.
18. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
between the parties, and supersedes any prior agreements or understanding
between the Company and Executive. This Agreement may be amended only in
writing, signed by both parties.
19. LIMITED EFFECT OF WAIVER BY COMPANY. If the Company waives a
breach of any provision of this Agreement by Executive, that waiver will not
operate or be construed as a waiver of later breaches by Executive.
20. SEVERABILITY. If any provision of this Agreement is held invalid
for any reason, such invalidity shall not affect the enforceability of the
remainder of this Agreement.
21. ASSUMPTION OF AGREEMENT BY COMPANY'S SUCCESSORS AND ASSIGNS. At
the Company's sole option, the Company's rights and obligations under this
Agreement will inure to the benefit and be binding upon the Company's successors
and assigns. Executive may not assign his rights and obligations under this
Agreement.
22. APPLICABLE LAW. Executive and the Company agree that this
Agreement shall be subject to, and enforceable under, the laws of the State of
Florida.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
on December 3, 1999.
COMPANY EXECUTIVE
By: /s/ XXXXX XXXXXXXXX By: /s/ XXXXX XXXXXXXX
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/s/ XXXXXXX XXXXXXXXX /s/ XXXXXX XXXXX
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Witness Witness
