Exhibit 10.6
EXECUTIVE EMPLOYMENT AGREEMENT
Employment Agreement ("Agreement") dated as of June 30, 1998 between Arbor
National Holdings, Inc., a Delaware corporation (the "Company"), and Xxxxxx Xxxx
(the "Executive").
ARTICLE I
EMPLOYMENT
The Company hereby employs Executive, and Executive accepts employment with
the Company, upon the following terms and conditions:
1.1 EMPLOYMENT.
(a) The Company hereby employs Executive, and Executive agrees to
serve, as the Senior Vice President and General Counsel of the Company.
(b) Commencing January 1, 1999, the Executive agrees to devote
substantially his full business time and attention and best efforts to the
affairs of the Company and the Subsidiaries. Prior thereto, the Executive may
engage in activities not related to the Company, provided that these activities
do not interfere with the Executive's responsibilities to the Company as
determined by the Chief Executive Officer.
(c) Executive represents and warrants to the Company that he is free
to accept employment with the Company as contemplated herein and has no other
written or oral obligations
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or commitments of any kind or nature which would in any way interfere with his
acceptance of employment pursuant to the terms hereof or the full performance of
his obligations hereunder or the exercise of his best efforts in his employment
hereunder or which would otherwise pose any conflict of interest.
1.2 TERM. Subject to the provisions for earlier termination set forth in
Article IV hereof, this Agreement shall commence on the effective date of the
Company's initial public offering, and it shall continue until the close of
business on December 31, 2001 (the "Employment Term").
ARTICLE II
COMPENSATION
2.1 ANNUAL SALARY; BONUS.
(a) During the Employment Term, the Company shall pay to the
Executive a base annual salary of $175,000. The "Base Salary" shall be reviewed
annually and shall be payable in accordance with the Company's customary
procedures.
(b) The Executive shall be entitled to participate in the bonus pool
and any other compensation plans established for executive officers.
(c) The Executive shall receive such award of stock incentives
pursuant to the Company's 1998 Long-Term Incentive Plan as described on
Exhibit "A" annexed hereto.
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2.2 REIMBURSEMENT OF EXPENSES. The Executive shall be entitled to receive
prompt reimbursement of all reasonable expenses incurred by the Executive in
performing services hereunder, including all expenses of travel, entertainment
and living expenses while away from home on business at the request of, or in
the service of, the Company or any Subsidiary, provided that such expenses are
incurred and accounted for in accordance with the policies and procedures
established by the Company.
2.3 BENEFITS. The Executive shall be entitled to participate in and be
covered by all health, insurance, pension and other employee plans and benefits
established by the Company (collectively referred to herein as the "Company
Benefit Plans") for its executive employees generally, subject to meeting
applicable eligibility requirements.
2.4 VACATIONS AND HOLIDAYS. The Executive shall be entitled to an annual
vacation leave of four (4) weeks at full pay. The Executive shall be entitled
to such holidays as are established by the Company for all employees.
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ARTICLE III
CONFIDENTIALITY; NONDISCLOSURE; NON-COMPETE
3.1 CONFIDENTIALITY. Executive understands and acknowledges that during
his employment with the Company he will be exposed to Confidential information
(as defined below), all of which is proprietary and which will rightfully belong
to the Company. Executive shall hold in a fiduciary capacity for the benefit of
the Company such Confidential Information obtained by Executive during his
employment with the Company and shall not, directly or indirectly, at any time,
either during or after his employment with the Company, without the Company's
prior written consent, use any of such Confidential Information or disclose any
of such Confidential Information to any individual or entity other than the
Company or its employees, except as required in the performance of his duties
for the Company or as otherwise required by law. Executive shall take all
reasonable steps to safeguard such Confidential Information and to protect such
Confidential Information against disclosure, misuse, loss or theft. The term
"Confidential Information" shall mean any information not generally known in the
relevant trade or industry or otherwise not generally available to the public,
which was obtained by Executive from the Company, its subsidiary, or which was
learned, discovered, developed, conceived, originated or prepared
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by Executive during or as a result of the performance of any services by
Executive on behalf of the Company. For purposes of this Article III, the
Company shall be deemed to include any entity which is controlled, directly or
indirectly, by the Company and any entity of which a majority of the economic
interest is owned, directly or indirectly, by the Company.
3.2 NON-SOLICITATION. The Executive agrees that for a period of one
(1) year following his termination of employment with the Company, the
Executive will not, on behalf of himself or any other party, directly or
indirectly, solicit, recruit, hire or cause to be hired, any individual or
individuals who are employed by or act as agents or contractors for the
Company or its subsidiaries/affiliates on or after Executive's date of
termination.
3.3 RETURN OF DOCUMENTS. Except for such items which are of a personal
nature to Executive (E.G., daily business planner), all writings, records, and
other documents and things containing any Confidential Information shall be the
exclusive property of the Company and shall not be copied, summarized, extracted
from or removed from the premises of the Company, except in pursuit of the
business of the Company at the direction of the Company and shall be delivered
to the Company, without retaining any copies, upon the termination of
Executive's employment or at any time thereafter as requested by the Company.
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3.4 NON-COMPETE. During the Employment Term and for the "Non-Compete
Period" (herein defined), the Executive will not, directly or indirectly: (i)
own, manage, operate, join, control, or participate in or be connected with, as
an officer, employee partner, stockholder, director, adviser, consultant, or
agent (whether paid or unpaid), any business, individual, partnership, firm or
corporation (collectively "Entity"), which is at the time engaged in a business
which is, directly or indirectly, in competition with the business of the
Company or any Subsidiary; the foregoing provision being also intended to
prohibit the Executive from acquiring or holding more than one (1%) percent of
any issue of stock or securities of any Entity which has any securities listed
on a national securities exchange or quoted in the daily listing of
over-the-counter market securities; or (ii) solicit or assist any person or
entity to terminate such person's or entity's contractual and/or business
relationship with the Company or any Subsidiary.
For the purposes of this Paragraph, the term "Non-Compete Period"
shall mean (i) in the case the Executive's employment is terminated pursuant
to Paragraph "4.1" and "4.2" hereof, a one (1) year period from the date of
termination, and (ii) in the case the Executive terminates his employment
pursuant to paragraph "4.3" without Good Reason a one (1) year period from
the date of termination.
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The Executive agrees that the salary and benefits received by
Executive during the Employment Term is adequate consideration for the
non-competition covenants of Executive specified above. However, in order to
prevent undue hardship of Executive, the Company agrees that if, due to the
Executive's compliance with the non-competition covenants specified above,
Executive is unable to find suitable employment after the Employment Term and
demonstrates same to the Company's chief executive officer, then, if and to the
extent that the Company insists on compliance by Executive with this paragraph
3.4, then Company shall pay Executive an amount equal to his last annual base
salary, pro rata, for so long as Company insists on compliance by Executive with
the provisions of this paragraph 3.4.
3.5 RIGHT TO INJUNCTIVE AND EQUITABLE RELIEF. The Executive's obligations
not to disclose or use Confidential Information and to refrain from the
non-solicitation and non-compete activities described in this Article III are of
a special and unique character which gives them a peculiar value, and which is
supported by valuable consideration. The Company cannot be reasonably or
adequately compensated in damages in an action at law in the event Executive
breaches such obligations. Therefore, the Executive expressly agrees that the
Company shall be entitled to injunctive and other equitable relief without bond
or other security in the event of such breach in addition to any other rights or
remedies which the Company may possess. Furthermore,
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the obligations of the Executive and the rights and remedies of the Company
under this Article III are cumulative and in addition to, and not in lieu of,
any obligations, rights, or remedies created by applicable law relating to
mis-appropriation or theft or trade secrets of confidential information.
ARTICLE IV
TERMINATION
4.1 TERMINATION BY COMPANY FOR CAUSE. The Company may terminate
Executive's employment for cause on 30 days written notice (i) in the event of
default, non-performance or violation by Executive of any of the covenants,
provisions or terms of this agreement, (ii) Executive's conviction of any felony
or misdemeanor involving moral turpitude, (iii) Executive's repeated failure to
abide by reasonable requests of the Company's chief executive officer, and (iv)
Executive's failure to adequately perform his duties as determined by the
Company's chief executive officer.
4.2 PERMANENT DISABILITY. The Company may terminate Executive's
employment due to Executive's permanent disability. "Permanent Disability"
shall mean a physical or mental incapacity as a result of which the Executive
becomes totally unable to continue the performance of his duties hereunder
for a period of one hundred eighty (180) consecutive days or a period of an
aggregate of two hundred seventy (270) days in any consecutive twenty-four
(24) month
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period. A determination of Permanent Disability shall be subject to the
certification of a qualified medical doctor agreed to by the Company and the
Executive or, in the event of the Executive's incapacity to designate a doctor,
the Executive's legal representative. In the absence of agreement between the
Company and the Executive, each party shall nominate a qualified medical doctor
and the two doctors so nominated shall select a third doctor, who shall make the
determination as to the occurrence and continuance of a Permanent Disability.
4.3 TERMINATION BY EXECUTIVE. The Executive may voluntarily terminate
this Agreement upon ninety (90) days written notice to the Company, which
termination shall be deemed to be without Good Reason. The Executive may also
terminate this Agreement on thirty (30) days written notice to the Company with
Good Reason in the event the Company has materially breached its material
obligations to the Executive. In this case, the Executive shall state the
specific facts and circumstances of such breach in the written notice provided
to the Company.
4.4 DEATH OF EXECUTIVE. This Agreement shall terminate immediately
upon the death of the Executive.
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4.5 SEVERANCE BENEFITS RECEIVED UPON TERMINATION.
(a) If (i) the Executive's employment is terminated by death, or due
to permanent disability, or by the Company for cause pursuant to paragraph 4.1,
or (ii) the Executive terminates his employment without Good Reason, then the
Company shall pay the Executive his Base Salary through the end of the month
during which such termination occurs (or at the Executive's election, the rate
in effect on the first day of the month preceding the month in which the date of
termination occurs) plus credit for any vacation earned but not taken and the
Company shall thereafter have no further obligations to the Executive under this
Agreement; PROVIDED, HOWEVER, that the Company will continue to honor any
obligations that may have accrued under the existing Company Benefit Plans or
any other agreements or arrangements applicable to the Executive.
(b) If the Executive's employment is wrongfully terminated by the
Company or by the Executive with Good Reason because the Company has materially
breached its material obligations to the Executive as set forth in this
Agreement, then the Company shall:
(1) pay to the Executive within seven business days following
the date of termination his Base Salary through the end of
the month during which such Termination occurs (or at the
Executive's election, the rate in effect on the first day of
the month preceding the
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month in which the date of Termination occurs) plus credit
for any vacation earned but not taken;
(2) pay to the Executive as liquidated damages severance pay in
a lump sum, in cash, within five business days following the
date of termination, an amount equal to twelve months base
salary. The payment to Executive of severance pay as
liquidated damages shall be Executive's sole remedy for any
claim against the Company for wrongful termination or breach
of this Agreement by the Company. Executive and Company
agree that such amount is a reasonable approximation of
damages to the Executive in the event of a breach, and that
Executive and the Company are agreeing to this amount in
advance to avoid the need for costly or protracted
litigation on this issue.
ARTICLE V
GENERAL PROVISIONS
5.1 BENEFICIAL INTERESTS. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors,
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heirs, distributees, devisees and legatees. If the Executive should die while
any amounts are still payable to him or her hereunder, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's devisee, legatee, or other designee or, if there be
no such designee, to the Executive's estate.
5.2 NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt required, postage prepaid, as follows:
If to the Company:
Arbor National Holdings, Inc.
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn.: Chairman, Compensation Committee of
Board of Directors
If to the Executive:
Xx. Xxxxxx Xxxx
000 Xxxxxxx Xxxxxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
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5.3 NO WAIVERS. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by the Executive and the Company. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
5.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws.
5.5 SEVERABILITY OF PARTIAL INVALIDITY. The invalidity or
un-enforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
5.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
5.7 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties and supersedes all prior written
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or oral and all contemporaneous oral agreements, understandings, and
negotiations between the parties with respect to the subject matter hereof.
This Agreement is intended by the parties as the final expression of their
agreement with respect to such terms as are included in this Agreement and may
not be contradicted by evidence of any prior or contemporaneous agreement. The
parties further intend that this Agreement constitutes the complete and
exclusive statement of its terms and that no extrinsic evidence may be
introduced in any judicial proceeding involving this Agreement.
5.8 HEADINGS. The headings of the sections of this Agreement are inserted
for convenience only and shall not be deemed to constitute a part hereof and
shall not affect the validity or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ARBOR NATIONAL HOLDINGS, INC.
a New York corporation
By: /s/ Xxxx Xxxxxxx
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/s/ Xxxxxx Xxxx
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