EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of this 22nd day of August 2001 and revised
this Twenty-first day of March 2002, is between West Coast Realty Investors,
Inc., a Delaware corporation (the "Company"), and Xxxxx X. Xxxxxxxx (the
"Executive").
RECITALS:
WHEREAS, the Company desires to employ the Executive and the Executive has
indicated his willingness to provide his services, on the terms and conditions
set forth herein:
NOW, THEREFORE, on the basis of the foregoing premises and in consideration of
the mutual covenants and agreements contained herein, the parties hereto agree
as follows:
Section 1. Employment. The Company hereby agrees to employ the Executive
and the Executive hereby accepts employment with the Company, on the terms and
subject to the conditions hereinafter set forth. Subject to the terms and
conditions contained herein, the Executive shall serve as the Company's
President and Chief Executive Officer and Chairman of the Board of Directors of
the Company (the "Board") and shall have such duties as are typically performed
by a president, chief executive officer and chairman of the board of a
corporation.
Section 2. Term. Unless terminated pursuant to Section 6 hereof, the
Executive's employment hereunder shall commence on the date hereof (the
"Effective Date"), and shall continue during the period ending on the third
anniversary of the Effective Date (the "Initial Term") and shall continue
thereafter for one-year terms unless either party provides notice of termination
ninety (90) days in advance of the end of the Initial Term or any subsequent
one-year term (the "Employment Term"). The Employment Term shall terminate upon
any termination of the Executive's employment pursuant to Section 6.
Section 3. Compensation. During the Employment Term, the Executive shall
be entitled to the following compensation and benefits:
(a) Salary. As compensation for the performance of the Executive's
services hereunder, the Company shall pay to the Executive during
the Initial Term a salary (the "Salary") of $200,000 per year. The
Salary shall be payable in accordance with the payroll practices of
the Company as the same shall exist from time to time. After the
Initial Term, the salary shall be negotiable.
(b) Bonus Plan. The Executive shall be eligible to receive an annual
cash bonus ("Bonus") in an amount determined by the Board on an
annual basis in accordance with the Company's annual incentive
program if such program is established by the Board and with such
terms as may be established by the Board in its sole discretion.
(c) Benefits. In addition to the Salary and Bonus, if any, the Executive
shall be entitled to full participation in the various group health
and medical insurance and other benefit plans of the Company as are
adopted from time to time at not less than the level at which other
senior executives of the Company participate; provided that until
the Company adopts a group health plan, the Company shall
reimburse the Executive for the costs, if any, of maintaining the
Executive's coverage under his spouse's group health plan or under
an individual health insurance policy.
(d) Stock Options. The Executive shall be granted an option to purchase
200,000 shares of Company common stock, subject to the terms of a
Stock Incentive Plan, at an exercise price of the then fair market
value per share upon grant, with 100,000 shares vesting after
completion of one year of service, and the remaining 100,000 shares
vesting on a quarterly basis over a 12-month period thereafter.
(e) Automobile. The Company shall pay the Executive at the mileage rate
established by the Internal Revenue Service for the use by the
Executive of his personal car in connection with his duties
hereunder.
(f) Indemnification and Insurance. The Company shall indemnify the
Executive as required by the Company's Bylaws, and will maintain
customary insurance policies providing for indemnification of the
Executive.
(g) Vacation, Holiday Pay and Sick Days. The Company shall provide
Executive with vacation days, holiday pay and sick days in
accordance with Company's policy for key employees, provided that
Executive shall receive a minimum per annum of twenty (20) accrued
vacation days and six (6) sick days.
Section 4. Exclusivity. During the Employment Term, the Executive shall devote
his full time (customary and reasonable personal time excepted) to the business
of the Company, shall faithfully serve the Company, shall in all respects
conform to and comply with the lawful, ethical and reasonable directions and
instructions given to him by the Board in accordance with the terms of this
Agreement, shall use his best efforts to promote and serve the interests of the
Company and shall not engage in any other business activity, whether or not such
activity shall be engaged in for pecuniary profit, except that the Executive may
(i) participate in the activities of professional trade organizations related to
the business of the Company and (ii) engage in personal investing activities,
provided that activities set forth in these clauses (i) and (ii), either singly
or in the aggregate, do not interfere in any material respect with the services
to be provided by the Executive hereunder.
Section 5. Reimbursement for Expenses. The Executive is authorized to incur
reasonable expenses in the discharge of the services to be performed hereunder,
including expenses for travel, entertainment, lodging and similar items in
accordance with the Company's expense reimbursement policy, as the same may be
modified by the Company from time to time. The Company shall reimburse the
Executive for all such proper expenses upon presentation by the Executive of
itemized accounts of such expenditures in accordance with the financial policy
of the Company, as in effect from time to time.
Section 6. Termination and Default.
(a) Death. The Executive's employment shall automatically terminate upon
his death and upon such event, the Executive's estate shall be
entitled to receive the amounts, if any, due to him pursuant to
Section 6(f) below.
(b) Disability. If the Executive is unable to perform the duties
required of him under this Agreement because of illness, incapacity,
or physical or mental disability for an aggregate of one hundred
twenty (120) days (whether or not consecutive) during any twelve
(12) month period during the term of this Agreement, in which event
the
Company may terminate Executive's employment; provided, however,
that if at such time the Executive is not covered by a long-term
disability plan of the Company, then the Executive's employment
shall terminate six months following such event.
(c) Cause. The Company may terminate the Executive's employment for
Cause if the event, conduct or condition that may result in
termination for Cause is not cured by the Executive within thirty
days after written notice is delivered to the Executive from the
Company. In the event of termination pursuant to this Section 6(c)
for Cause, the Company shall deliver to the Executive written notice
setting forth the basis for such termination, which notice shall
specifically set forth the nature of the Cause which is the reason
for such termination. For purposes of this Agreement, "Cause" shall
mean: (i) commission of material fraud or conduct amounting to gross
negligence in the conduct of the Executive's duties; (ii) conduct
for which a criminal conviction of a felony is obtained; (iii)
material violation of Company policies; or (iv) willful and material
violation of an employment agreement, employee agreement,
non-disclosure or confidentiality agreement, inventions agreement,
noncompetition agreement, nonsolicitation agreement or other similar
agreement(s) between the Executive and the Company. No act or
failure to act shall be considered "willful" unless it is done, or
omitted to be done, without a good faith belief that the action or
omission was in the best interest of the Company. In the event
corrective action is not satisfactorily taken by the Executive, in
each case as determined by the Board, as described above, a final
written notice of termination shall be provided to the Executive by
the Company.
(d) Resignation. The Executive shall have the right to terminate his
employment at any time by giving thirty (30) days prior written
notice to the Company of his resignation.
(e) Severance. The Executive shall be entitled to a lump sum payment
equal to 100% of the Executive's then-current annual base salary and
average bonus over the last three years of employment, and one year
of continued participation for the Executive, his spouse and
dependents in the Company's group insurance plans on the same terms
as if actively employed by the Company during such period of time,
in the event of:
(i) Termination of the Executive by the Company for any reason
other than death, disability or Cause; or
(ii) Voluntary resignation by the Executive for Good Reason. "Good
Reason" shall mean that the Executive has either:
1. incurred a material reduction in title, status,
authority or responsibility at the Company; or
2. been required to report to any one other than the Board;
or
3. failed to be re-elected to the Board and continue as the
CEO, President and Chairman and been able to nominate
one officer to the Board; or
4. incurred a reduction in base compensation from the
Company; or
5. been notified that the Executive's principal place of
work will be relocated by a distance of fifty (50) miles
or more; or
6. been required to work more than ten (10) days per month
outside of the Executive's principal offices for a six
(6) month continuous period.
All lump sum severance pay under this Section shall be paid to the
Executive no later than three (3) business days following the
effective date of his termination or resignation, as the case may
be. The Executive shall not be required to mitigate the amount of
any payment contemplated by this Section (whether by seeking new
employment or in any other manner), nor shall any such payment be
reduced by any earnings that the Executive may receive from any
other source.
(f) Payments. In the event that the Executive's employment terminates
for any reason, the Company shall pay to the Executive, in addition
to any other amounts or benefits due to the Executive under this
Section 6, all amounts accrued but unpaid hereunder through the date
of termination in respect of Salary or unreimbursed expenses.
(g) Change in Control. In the event of the Executive's resignation or
termination within one (1) year of a Change in Control of the
Company, the Executive shall be paid a lump payment equal to the sum
of 100% of the Executive's then-current base salary and the
Executive's average bonus in last three years, such lump sum payment
to be made no later than three (3) business days following the date
of such resignation or termination. "Change in Control" is defined
as (i) any "person" or "group" of such persons, without the consent
of the Board, is or becomes a "beneficial owner," directly or
indirectly, of securities of the Company representing thirty-five
percent (35%) or more of the combined voting power of the Company's
then outstanding securities (as such terms are defined in the
Securities Exchange Act of 1934 and regulations thereunder); (ii) a
merger, consolidation or other combination the result of which
persons who were shareholders of the Company immediately prior to
the merger, consolidation or other combination own less than
seventy-five percent (75%) of the voting power of the securities of
the resulting or acquiring entity having the power to elect a
majority of the board of directors of such entity; (iii) the sale,
transfer or disposition of assets of Company in excess of fifty
percent (50%) of the gross assets of the Company as shown on the
Company's then most recent audited financial statements; or (iv) a
change in the composition of the Board occurs, as a result of which
fewer than one-half of the incumbent directors are directors who
either (A) had been directors of the Company on the date of the
Agreement, or (B) were elected, or nominated for election, to the
Board with the affirmative votes of at least a majority of the
aggregate of the original directors who were still in office at the
time of the election or nomination and the directors whose election
or nomination was previously so approved.
(h) Survival of Operative Sections. Upon any termination of the
Executive's employment, the provisions of Sections 6(e), 6(f) and 7
through 16 of this Agreement shall survive to the extent necessary
to give effect to the provisions thereof.
Section 7. Proprietary Information and Inventions Agreement. The Executive
shall enter into the Employee's Proprietary Information and Inventions Agreement
attached hereto in the form of Exhibit A (the "Proprietary Agreement").
Section 8. Arbitration Agreement. The Executive shall enter into the
Arbitration Agreement attached hereto in the form of Exhibit B (the "Arbitration
Agreement").
Section 9. Successors and Assigns; No Third-Party Beneficiaries. The
Company shall require any successor (whether direct or indirect and whether by
purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets, by an agreement in substance and form
satisfactory to the Executive, to assume this Agreement and to agree expressly
to perform this Agreement in the same manner and to the same extent as the
Company would be required to perform it in the absence of a succession. The
Company's failure to obtain such agreement prior to the effectiveness of a
succession shall be a breach of this Agreement and shall entitle the Executive
to all of the compensation and benefits to which he would have been entitled
hereunder if the Company had involuntarily terminated his employment without
Cause immediately after such succession becomes effective. For all purposes
under this Agreement, the term "Company" shall include any successor to the
Company's business and/or assets which executes and delivers the assumption
agreement described in this Section 9 or which becomes bound by this Agreement
by operation of law. This Agreement and all rights of the Executive hereunder
shall inure to the benefit of, and be enforceable by, the Executive's personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
Section 10. Waiver and Amendments. Any waiver, alteration, amendment or
modification of any of the terms of this Agreement shall be valid only if made
in writing and signed by the parties hereto; provided, however, that any such
waiver, alteration, amendment or modification is consented to on the Company's
behalf by the Board. No waiver by either of the parties hereto of their rights
hereunder shall be deemed to constitute a waiver with respect to any subsequent
occurrences or transactions hereunder unless such waiver specifically states
that it is to be construed as a continuing waiver.
Section 11. Severability and Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
Section 12. Notices.
(a) All communications under this Agreement shall be in writing and
shall be delivered by hand or facsimile or mailed by overnight
courier or by registered or certified mail, postage prepaid:
(i) if to the Executive, at 0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0, Xxxxx
000, Xxxxx Xxxx, XX 00000 (Fax: (000) 000-0000), marked for
the attention of Xxxxx X. Xxxxxxxx or at such other address as
the Executive may have furnished the Company in writing, and
(ii) if to the Company, at 0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0, Xxxxx
000, Xxxxx Xxxx, XX 00000 (Fax: (000) 000-0000), marked for
the attention of the Chief Financial Officer, or at such other
address as it may have furnished in writing to the Executive.
(b) Any notice so addressed shall be deemed to be given: if delivered by
hand or facsimile, on the date of such delivery; if mailed by
courier, on the first business day following the date of such
mailing; and if mailed by registered or certified mail, on the third
business day after the date of such mailing.
Section 13. Section Headings. The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof, affect the meaning or interpretation of this
Agreement or of any term or provision hereof.
Section 14. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto regarding the subject matter
hereof. This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between the
parties relating to the subject matter of this Agreement.
Section 15. Severability. In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not effect the
remaining provisions of this Agreement which shall remain in full force and
effect.
Section 16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
WEST COAST REALTY INVESTORS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: Director
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By: /s/ Xxxxxxxx X. Xxxxxxx
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Name: Xxxxxxxx Xxxxxxx
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Title: Director
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By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: Director
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By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
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Title: Director
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By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
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Title: Director
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By: /s/ Xxxx X. Von der Xxxxxx
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Name: Xxxx X. Von der Xxxxxx
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Title: Director
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EXECUTIVE
/s/Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
