EXHIBIT 10.23
SEVERANCE AGREEMENT
SEVERANCE AGREEMENT ("Agreement") made as of September 19, 2000 by and
between xXxxxxxx.xxx, Inc. a Delaware corporation (the "Company"), and X. Xxxx
Xxxxx ("Employee").
WHEREAS, the Company considers it essential to the best interests of
its shareholders to xxxxxx the continuous employment of key management
personnel; and
WHEREAS, the Board of Directors of the Company (the "Board")
recognizes that, as is the case with many publicly-held corporations, the
possibility of a Change in Control (as defined in section 2 hereof) exists and
that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its shareholders; and
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of the
Employee to his assigned duties without distraction in the face of potentially
disturbing circumstances arising from the possibility of a Change in Control or
termination without Cause (as defined in section 2 hereof);
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company and Employee hereby agree as follows:
1. DUTIES. Employee shall, subject to overall direction consistent
with the legal authority of the Board, serve as, and have all power and
authority inherent in the office of Chief Financial Officer of the Company and
shall be responsible for those areas in the conduct of the business reasonably
assigned to him by the Chief Executive Officer, Chief Operating Officer or the
Board. Employee shall devote substantially all his business time and efforts to
the business of the Company.
2. DEFINITIONS.
(A) ACCRUED COMPENSATION. All amounts earned or accrued by the Employee
through the Termination Date but not paid as of the Termination Date,
including (i) Base Salary, (ii) reimbursement for reasonable and
necessary expenses incurred by the Employee on behalf of the Company
during the period ending on the Termination Date, (iii) vacation pay.
(B) BASE SALARY. The amount, not less than $70,000, the Employee is
entitled to receive as wages or a salary on an annualized basis.
(C) BONUS AMOUNT. The amount, not less than 10% of the Employee's Base
Salary, of total incentive or other compensation earned by the Employee
beyond wages or a salary.
(D) CAUSE. Shall mean (i) the final non-appealable adjudication of Employee
of a felony; or (ii) the reasonable determination of majority of Board
(other than Employee) that Employee has engaged in material intentional
misconduct or the gross neglect of his duties, which has a continuing
material adverse effect on the business of the Company.
(E) CHANGE IN CONTROL. A "Change in Control" shall mean the occurrence of
any of the following events:
(1) The acquisition in one or more transactions by any person,
entity or affiliated group of "beneficial ownership" (within
the meaning of Rule 13d-3 promulgated under the 0000 Xxx) of
fifty percent (50%) or more of the combined voting power of
the Company's then outstanding voting securities;
(2) Any merger, consolidation or business combination pursuant
to which the Company is not the surviving corporation or
fifty percent (50%) or more of the combined voting power of
the Company's then outstanding voting securities shall be
owned or controlled by any person (other than Employee),
entity or affiliated group;
(3) The individuals who are members of the Incumbent Board (as
defined below) cease for any reason to constitute at least
fifty one percent (51%) of the Board. The "Incumbent Board"
shall include the individuals who as of the Effective Date
are members of the Board and any individual becoming a
director subsequent to the Effective Date whose election, or
nomination for election by the Company's stockholders was
approved by a vote of at least fifty one percent (51%) of
the directors then comprising the Incumbent Board; PROVIDED,
further, however, no individual shall be considered a member
of the Incumbent Board if such individual initially assumed
office (1) as a result of either an actual or threatened
"election contest" (within the meaning of Rule 14a-11
promulgated under the 0000 Xxx) or other actual or
threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board (a
"Proxy Contest") or (2) with the approval of the other Board
members, but by reason of any agreement intended to avoid or
settle a Proxy Contest;
(4) A liquidation or dissolution of the Company; or
(5) The sale of all or substantially all of the Company's
assets.
(6) Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because twenty percent (20%) or
more of the then outstanding voting securities are acquired
by a trustee or other fiduciary holding securities under one
or more employee benefit plans maintained by the Company or
any of its subsidiaries.
(F) EFFECTIVE DATE. The date that the Agreement is signed and executed by
the Company and the Employee.
(G) GOOD REASON.
(1) Shall mean, without limitation:
(i) A change in an Executive's status, title, position or
responsibilities which reasonably represents an adverse
change in his status, title, position or
responsibilities;
(ii) The assignment of any duties or responsibilities which
reasonably are inconsistent with such status, title,
position or responsibilities;
(iii) Any removal of the Employee from or failure to reappoint
or reelect him to any of his offices or positions,
except in connection with the termination of his
employment for Disability, Cause, or as a result of his
death;
(iv) A reduction in the Employee's Base Salary or any failure
to pay the Employee any compensation or benefits to
which he is entitled within thirty (30) days of the date
due;
(v) The Company's requiring the Employee to be based at any
place outside a 50-mile radius from his current work
location, except for reasonably required travel on the
Company's business;
(vi) The insolvency or the filing by any party, including the
Company, of a petition for bankruptcy of the Company;
(vii) Any material breach by the Company of any provision of
this Agreement;
(viii)Anypurported termination of the Employee's employment
for Cause by the Company which does not comply with the
terms
of Section 2(d) of this Agreement; or
(ix) The failure of the Company to obtain an agreement,
satisfactory to the Employee, from any successor or
assign of the Company, to assume and agree to perform
this Agreement, as contemplated in Section 13 hereof.
(2) The Employee's ability to terminate his employment pursuant to
this Section 2(g) shall not be affected by his incapacity due
to physical or mental illness prior to the time the Employee
has been determined to have a Disability.
(H) NOTICE OF TERMINATION. "Notice of Termination" shall mean a notice that
indicates the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Employee's employment under the provision so indicated.
(I) PRO RATA BONUS. "Pro Rata Bonus" shall mean an amount equal to the
Bonus Amount (as defined above) that the Employee would have been
entitled to receive in respect of the fiscal year in which such
Employee's Termination Date occurs had he continued in employment until
the end of such fiscal year, calculated as if all performance targets
and goals (if applicable) had been fully met by the Employee for such
year, multiplied by a fraction the numerator of which is the number of
days in such fiscal year through the Employee's Termination Date and
the denominator of which is 365.
(J) SEVERANCE PAYMENTS AND BENEFITS. The benefits payable in accordance
with Section 3(d) of this Plan.
(K) TERMINATION DATE. The date provided in Section 6 of this Agreement.
3. SEVERANCE AND CHANGE OF CONTROL PROVISIONS.
(a) Upon the occurrence of a Triggering Event (as hereinafter defined),
Employee shall be entitled to the immediate receipt of Severance
Payments and Benefits (as hereinafter defined) from the Company in
accordance with the terms hereinafter set forth; and
(b) Upon the occurrence of a Change in Control or within six (6) months
after a Change in Control, Employee shall be entitled to the immediate
receipt of Severance Payments and Benefits (as hereinafter defined)
from the Company in accordance with the terms hereinafter set forth
provided Employee remains with the Company for a transition period of
no less than six (6) months following the Change in Control.
(C) TRIGGERING EVENT. The occurrence of any of the following events shall
be defined as a "Triggering Event" for purposes hereof:
(1) The involuntary termination of Employee's employment other
than for Cause;
(2) The voluntary resignation of Employee for any reason
whatsoever within six (6) months following a Change of
Control;
(3) The voluntary resignation of Employee for Good Reason; or
(4) The death or Disability of the Employee (as defined
herein).
(D) SEVERANCE PAYMENTS AND BENEFITS. For purposes of this Agreement, the
"Severance Payments and Benefits" shall mean:
(1) A lump sum payment equal to: one-fourth (1/4) multiplied by
the Employee's annual Base Salary in effect immediately
preceding the Triggering Event;
(2) All stock options, warrants, other stock appreciation
rights and other similar securities shall become
immediately and fully vested and all conditions applicable
to all contingently issued options, warrants, stock
appreciation rights and other similar securities shall be
deemed waived by the Company;
(3) All benefits applicable to Employee and his family members,
including, without limitation, all life insurance, group
health insurance, dental plans, disability plans,
retirement plans and other employee benefit plans of the
Company of the Agreement shall continue for a period of
three (3) months following the Triggering Event;
(4) In the event that Severance Payments and Benefits are
deemed to be "excess parachute payments" as defined under
Section 280G of the Internal Revenue Code, then the Company
shall pay to Employee an additional lump sum cash payment
as shall be necessary to provide Employee with the same
after-tax compensation and benefits as if no such excise
tax had been imposed;
(5) The Company shall pay as and when due any and all
attorneys' fees and costs that Employee may incur in
connection with the enforcement of his rights under this
Agreement or any dispute or settlement in connection
herewith; and
(6) Severance Payments and Benefits will not be subject to
mitigation in any respect.
4. STOCK OPTIONS, WARRANTS AND STOCK APPRECIATION RIGHTS (SARS).
Notwithstanding the foregoing, all stock options, warrants, stock
appreciation rights and other similar securities shall immediately vest upon the
occurrence of a Change in Control and at such time all conditions applicable to
contingently issued options, warrants, stock appreciation rights and other
securities shall be deemed waived by the Company.
5. REPRESENTATIONS AND WARRANTIES. Employee represents and warrants to the
Company that he is under no contractual or other restriction or obligation that
would prevent the performance of his duties hereunder or interfere with the
rights of the Company hereunder.
6. DISCLOSURE AND PROTECTION OF CONFIDENTIAL INFORMATION.
(a) For purposes of this Agreement, "Confidential Information" means
knowledge, information and material which is proprietary to the
Company, of which Employee may obtain knowledge or access through
or as a result of his employment by the Company (including
information conceived, originated, discovered or developed in
whole or in part by Employee). Confidential Information includes,
but is not limited to, (i) technical knowledge, information and
material such as trade secrets, processes, formulas, data,
know-how, improvements, inventions, computer programs, drawings,
patents, and experimental and development work techniques, and
(ii) marketing and other information, such as supplier lists,
customer lists, marketing and business plans, business or
technical needs of customers, consultants, licensees or suppliers
and their methods of doing business, arrangements with customers,
consultants, licensees or suppliers, manuals and personnel records
or data. Confidential Information also includes any information
described above which the Company obtains from another party and
which the Company treats as proprietary or designates as
confidential, whether or not owned or developed by the Company.
Notwithstanding the foregoing, any information which is or becomes
available to the general public otherwise than by breach of this
Section 11 shall not constitute Confidential Information for
purposes of this Agreement.
(b) During the term of Employee's employment with the Company and
thereafter, Employee agrees, to hold in confidence all
Confidential Information and to not use such information for the
protection of Confidential Information, and will inform the
Company of any defects in, or improvements that could be made to,
such rules and regulations.
(c) Employee will abide by any and all security rules and regulations,
whether formal or informal, that may from time to time be imposed
by the Company for the protection of Confidential Information, and
will inform the Company of any defects in, or improvements that
could be made to, such rules and regulations.
(d) Employee will notify the Company in writing immediately upon
receipt of any subpoena, notice to produce, or other compulsory
order or process of any court of law or government agency if such
document requires or may require disclosure or other transfer of
Confidential Information.
(e) Upon termination of employment, Employee will deliver to the
Company any and all records and tangible property that contain
Confidential Information that are in his possession or under his
control.
7. AVAILABILITY OF INJUNCTIVE RELIEF. Employee acknowledges and agrees that
any breach by him of the provisions of Section 10 6 hereof will cause the
Company irreparable injury and damage for which it cannot be adequately
compensated in damages. Employee therefore expressly agrees that the Company
shall be entitled to seek injunctive and/or other equitable relief, on a
temporary or permanent basis to prevent any anticipatory or continuing breach of
this Agreement or any part hereof, and is secured as an enforcement. Nothing
herein shall be construed as a waiver by the Company of any right it may have or
hereafter acquired to monetary damages by reason of any injury to its property,
business or reputation or otherwise arising out of any wrongful act or omission
of it.
8. SURVIVAL. The covenants, agreements, representations and warranties
contained in or made pursuant to this Agreement shall survive Employee's
termination of employment for a period of one (1) year, irrespective of any
investigation made by or on behalf of any party.
9. SUCCESSORS; BINDING AGREEMENT. This Agreement shall be binding on and
inure to the benefit of the Company, its Successors and Assigns and the Company
shall require any successor or assign to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that that the Company
would be required to perform it if no such succession or assignment had taken
place. The term the "Company" as used herein shall include all such successors
and assigns. The term "Successors and Assigns" as used herein shall mean a
person, corporation or other entity.
10. NOTICES. Any notice required or permitted hereunder shall be deemed
validly given if delivered by hand, verified overnight delivery, or by first
class, certified mail to the following addresses (or to such other address as
the addressee shall notify in writing to the other party):
If to Employee: X. Xxxx Xxxxx
0000 Xxxxxx Xxxxx Xx.
#000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
If to the Company: xXxxxxxx.xxx, Inc.
0000 XXX Xxxx., Xxxxx 000
Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
Attention: CEO or President
with a copy to: Xxxxxx X. Xxxxxxx, P.A.
Steel Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
11. WAIVER. Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach
of such provision or of any breach of any other provision of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
on one or more occasions shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. All waivers must be in writing.
12. BINDING EFFECT. The Company's rights and obligations under this Agreement
shall not be transferable by assignment or otherwise, and any attempt to do any
of the foregoing shall be void. The provisions of this Agreement shall be
binding upon the Employee and his heirs and personal representatives, and shall
be binding upon and inure to the benefit of the Company, its successors and
assigns.
13. HEADINGS. The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
14. GOVERNING LAW; VENUE. This Agreement is to be performed in the State of
Florida, and the validity, construction and enforcement of, and the remedies
under, this Agreement shall be governed in accordance with the laws of the State
of Florida, without giving effect to any choice of laws principles. In the event
of any litigation arising out of or relating to this Agreement, exclusive venue
shall be in Broward County, Florida.
15. ENTIRE AGREEMENT. This writing constitutes the binding and entire
agreement of the parties superseding and extinguishing all prior agreements or
understandings regarding the subject matter hereof, and may not be modified
without the written agreement by the parties.
16. INVALIDITY. The invalidity or unenforceability of any term of this
Agreement shall not invalidate, make unenforceable or otherwise affect any other
term of this Agreement, which shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first hereinabove written.
EMPLOYER:
xXxxxxxx.xxx, Inc., a Delaware
corporation
By: /s/ XXXXXXX X. XXXXXXX
--------------------------
Authorized Representative
EMPLOYEE:
/s/ XXXX XXXXX
--------------------------
X. Xxxx Xxxxx
