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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into effective as of December 30,
1996 by and between CL Acquisition Corp, a Delaware corporation ("Acquisition"),
and Xxxxx XxXxxxx of Hudson, Ohio (the "Employee").
In consideration of the mutual promises, terms, provisions and
conditions set forth in this Agreement, the parties hereby agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions set forth in
this Agreement, Acquisition hereby offers and the Employee hereby accepts
employment.
2. TERM. Subject to earlier termination as hereafter provided,
the Employee's employment hereunder shall be for a term of three (3) years,
commencing effective January 2, 1997, (the "Effective Date"). The term of this
Agreement, as from time to time extended or renewed, is hereafter referred to as
"the term of this Agreement" or "the term hereof."
3. CAPACITY AND PERFORMANCE.
(a) During the term hereof, the Employee shall serve as the
President of Acquisition. In addition, and without further
compensation, the Employee shall serve as a director and/or officer of
Acquisition and/or one or more of Acquisition's Affiliates if so
elected or appointed from time to time.
(b) During the term hereof, the Employee shall be employed by
Acquisition on a full-time basis, shall have all powers and duties
consistent with his position, subject to the direction and control of
Acquisition's Board of Directors (the "Board"), and shall perform such
other duties and responsibilities on behalf of Acquisition and its
Affiliates as may reasonably be designated from time to time by the
Board or by its designees.
(c) During the term hereof, the Employee shall devote his full
business time and his best efforts, business judgment, skill and
knowledge exclusively to the advancement of the business and interests
of Acquisition and its Affiliates and to the discharge of his duties
and responsibilities hereunder. The Employee shall not engage in any
other business activity or serve in any industry, trade, professional,
governmental or academic position during the term of this Agreement,
except as may be expressly approved in advance by the Board in writing
or to the extent that any such activity or service does not materially
and adversely affect the discharge of his duties and responsibilities
hereunder.
4. COMPENSATION AND BENEFITS. As compensation for all services
performed
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by the Employee under and during the term hereof and subject to performance of
the Employee's duties and of the obligations of the Employee, pursuant to this
Agreement or otherwise:
(a) BASE SALARY. During the term hereof, Acquisition shall pay
the Employee a base salary at the rate of One Hundred Twenty Five
Thousand Dollars ($125,000) per annum, payable in accordance with the
payroll practices of Acquisition for its executives and subject to
increase from time to time by the Board or a compensation committee of
the Board, in its sole discretion. Such base salary, as from time to
time increased, is hereafter referred to as the "Base Salary".
(b) BONUS COMPENSATION. Employee shall be entitled to
participate in such bonus plan as Acquisition provides to its
executives generally, in accordance with the terms of that plan, as
amended by Acquisition from time to time. Employee shall be entitled to
receive 40% of base salary in such plan.
(c) VACATIONS. During the term hereof, the Employee shall be
entitled to four (4) weeks of vacation per annum or such greater amount
of time as shall be approved by the Chief Executive Officer of
Acquisition, to be taken at such times and intervals as shall be
determined by the Employee, subject to the reasonable business needs of
Acquisition. Vacation time shall not cumulate from year to year.
(d) OTHER BENEFITS. During the term hereof and subject to any
contribution therefor generally required of employees of Acquisition,
the Employee shall be entitled to participate in any and all employee
benefit plans from time to time in effect for employees of Acquisition
generally, except to the extent such plans are in a category of benefit
(including without limitation bonus compensation) otherwise provided to
the Employee. Such participation shall be subject to (i) the terms of
the applicable plan documents, (ii) generally applicable Company
policies and (iii) the discretion of the Board or any administrative or
other committee provided for in or contemplated by such plan.
Acquisition may alter, modify, add to or delete its employee benefit
plans at any time as it, in its sole judgment, determines to be
appropriate, without recourse by the Employee. Employee shall receive,
at such time as is mutually determined by the Employee and Acquisition,
an option to purchase 75,000 shares of common stock in BridgeStreet (or
as such name is amended or changed) at an exercise price equal to the
price at which the common stock is offered in the IPO (as defined
herein).
(e) BUSINESS EXPENSES. Acquisition shall pay or reimburse the
Employee for all reasonable and necessary business expenses incurred or
paid by the Employee in the performance of his duties and
responsibilities hereunder, subject to any maximum annual limit and
other restrictions on such expenses set by the Board and to such
reasonable substantiation and
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documentation as may be specified by Acquisition from time to time.
5. TERMINATION OF EMPLOYMENT AND SEVERANCE BENEFITS.
Notwithstanding the provisions of Section 2 hereof, the Employee's employment
hereunder shall terminate prior to the expiration of the term under the
following circumstances:
(a) DEATH. In the event of the Employee's death during the
term hereof, the Employee's employment hereunder shall immediately and
automatically terminate. In that event, Acquisition shall pay to the
Employee's designated beneficiary or, if no beneficiary has been
designated by the Employee, to his estate, any earned and unpaid Base
Salary, prorated through the date of his death.
(b) DISABILITY.
(i) Acquisition may terminate the Employee's
employment hereunder, upon notice to the Employee, in the
event that the Employee becomes disabled during his
employment hereunder through any illness, injury, accident
or condition of either a physical or psychological nature
and, as a result, is unable to perform substantially all
of his duties and responsibilities hereunder for one
hundred eighty (180) consecutive days during any period of
three hundred sixty-five (365) consecutive calendar days.
(ii) The Board may designate another employee
to act in the Employee's place during any period of the
Employee's disability. Notwithstanding any such
designation, the Employee shall continue to receive the
Base Salary in accordance with Section 4(a) and benefits
in accordance with Section 4(d), to the extent permitted
by the then-current terms of the applicable benefit plans,
until the Employee becomes eligible for disability income
benefits under any disability income plan (if one is
provided by Acquisition) or until the termination of his
employment, whichever shall first occur.
(iii) While receiving disability income
payments under Acquisition's disability income plan, if
any, the Employee shall not be entitled to receive any
Base Salary under Section 4(a) hereof, but shall continue
to participate in Company benefit plans in accordance with
Section 4(d) and the terms of such plans, until the
termination of his employment.
(iv) If any question shall arise as to whether
during any period the Employee is disabled through any
illness, injury, accident or condition of either a
physical or psychological nature
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so as to be unable to perform substantially all of his
duties and responsibilities hereunder, the Employee may,
and at the request of Acquisition shall, submit to a
medical examination by a physician selected by Acquisition
to whom the Employee or his duly appointed guardian, if
any, has no reasonable objection to determine whether the
Employee is so disabled and such determination shall for
the purposes of this Agreement be conclusive of the issue.
If such question shall arise and the Employee shall fail
to submit to such medical examination, Acquisition's
determination of the issue shall be binding on the
Employee.
(c) BY ACQUISITION FOR CAUSE. Acquisition may terminate the
Employee's employment hereunder for Cause at any time upon notice to
the Employee setting forth in reasonable detail the nature of such
Cause. The following, as determined by the Board of Directors of
BridgeStreet International, Inc. ("BridgeStreet") in its reasonable
judgment, shall constitute Cause for termination:
(i) The Employee's repeated failure to perform
(other than by reason of disability), or gross negligence
in the performance of, his material duties and
responsibilities hereunder and the continuance of such
failure or negligence for a period of thirty (30) days
after notice to the Employee;
(ii) Material breach by the Employee of any
provision of this Agreement or any other written agreement
between the Employee and Acquisition or any of its
Affiliates;
(iii) Other conduct by the Employee that
involves a material violation of law or breach of
fiduciary obligation on the part of the Employee or is
otherwise materially harmful to the business, interests,
reputation or prospects of Acquisition or any of its
Affiliates.
Upon the giving of notice of termination of the Employee's
employment hereunder for Cause, Acquisition shall not have any further
obligation or liability to the Employee, other than for Base Salary
earned and unpaid at the date of termination.
(d) BY ACQUISITION AFTER THE IPO. If approved by a vote of
two-thirds of the directors of BridgeStreet, Acquisition may terminate
the Employee's employment hereunder upon notice to the Employee for any
reason or for no reason at any time after the completion, if any, of
BridgeStreet's initial public offering of its Common Stock (the "IPO")
(including the closing of any exercise by the underwriters in such an
offering of an over-allotment option granted to
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them by BridgeStreet); provided, however, that if the Employee is
unable to sell at least twenty percent (20%) of the shares of
BridgeStreet Common Stock held by him as of the Effective Date upon
completion of the IPO, then this subsection (d) shall, at such time, be
deemed null and void and of no further force and effect whatsoever
until such time as the Employee is able to sell such number of shares.
Upon the giving of notice of termination of the Employee's
employment under this Section 5(d), Acquisition shall not have any
further obligation or liability to the Employee, other than for Base
Salary earned and unpaid at the date of termination.
6. EFFECT OF TERMINATION. The provisions of this Section 6 shall
apply to termination due to the expiration of the term, pursuant to Section 5 or
otherwise.
(a) Payment by Acquisition of any Base Salary and
contributions to the cost of the Employee's continued participation in
Acquisition's group health and dental plans, if any, that are due the
Employee in each case under the applicable termination provision of
Section 5 shall constitute the entire obligation of Acquisition to the
Employee.
(b) Benefits shall terminate pursuant to the terms of the
applicable benefit plans based on the date of termination of the
Employee's employment without regard to any continuation of Base Salary
or other payment to the Employee following such date of termination.
(c) Provisions of this Agreement shall survive any termination
if so provided herein or if necessary or desirable fully to accomplish
the purposes of such provision, including without limitation the
obligations of the Employee under Section 7. The Employee recognizes
that no compensation is earned after termination of employment.
7. CONFIDENTIAL INFORMATION.
(a) The Employee acknowledges that Acquisition and its
Affiliates will continually develop Confidential Information, that the
Employee may develop Confidential Information for Acquisition or its
Affiliates and that the Employee may learn of Confidential Information
during the course of employment. The Employee agrees that, except as
required for the proper performance of his duties for Acquisition, he
will not, directly or indirectly, use or disclose any Confidential
Information, as defined below. The Employee understands and agrees that
this restriction will continue to apply after his employment
terminates, regardless of the reason for termination.
(b) The Employee agrees that all Confidential Information
which he creates or to which he has access as a result of his
employment is and shall
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remain the sole and exclusive property of Acquisition. Except as
required for the proper performance of his duties, the Employee will
not copy any documents, tapes or other media containing Confidential
Information ("Documents") or remove any Documents, or copies, from
Company premises. The Employee will return to Acquisition immediately
after his employment terminates, and at such other times as may be
specified by Acquisition, all Documents and copies and all other
property of Acquisition then in his possession or control.
8. ENFORCEMENT OF COVENANTS. The Employee acknowledges that he
has carefully read and considered all the terms and conditions of this
Agreement, including the restraints imposed upon him pursuant to Section 7
hereof. The Employee further agrees that all goodwill of Acquisition and its
Affiliates is their exclusive property. The Employee further acknowledges and
agrees that, were he to breach any of the covenants contained in Section 7
hereof, the damage would be irreparable. The Employee therefore agrees that
Acquisition or any of its Affiliates, as the case may be, in addition to any
other remedies available to it, shall be entitled to preliminary and permanent
injunctive relief against any breach or threatened breach by the Employee of any
of said covenants, without having to post bond.
9. CONFLICTING AGREEMENTS. The Employee hereby represents and
warrants that the execution of this Agreement and the performance of his
obligations hereunder will not breach or be in conflict with any other agreement
to which the Employee is a party or is bound and that the Employee is not
subject to any covenants against competition or similar covenants that would
affect the performance of his obligations hereunder. The Employee will not
disclose to or use any proprietary information of a third party without such
party's consent.
10. DEFINITIONS. Words or phrases which are initially capitalized
or are within quotation marks shall have the meanings provided in this Section
10 and as provided elsewhere herein. For purposes of this Agreement, the
following definitions apply:
(a) "Affiliates" means all persons and entities directly or
indirectly controlling, controlled by or under common control with
Acquisition, where control may be by either management authority or
equity interest.
(b) "Confidential Information" means any and all information
of Acquisition that is not generally known by others with whom
Acquisition does, or plans to, compete or do business, including but
not limited to (i) Acquisition's products and services, technical data,
methods and processes, (ii) Acquisition's marketing activities and
strategic plans, (iii) Acquisition's costs and sources of supply, (iv)
the identity and special needs of Acquisition's customers and
prospective customers and vendors and prospective vendors, and (v) the
people and organizations with whom Acquisition has business
relationships and those relationships. Confidential Information also
includes such
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information that Acquisition may receive or has received belonging to
customers or others who do business with Acquisition.
(c) "Person" means an individual, a corporation, an
association, a partnership, an estate, a trust and any other entity or
organization, other than Acquisition or any of its Affiliates.
11. WITHHOLDING. All payments made under this Agreement shall be
reduced by any tax or other amounts required to be withheld under applicable
law.
12. ASSIGNMENT. Neither Acquisition nor the Employee may make any
assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other; provided, however,
that Acquisition may assign its rights and obligations under this Agreement
without the consent of the Employee in the event that Acquisition shall
hereafter affect a reorganization, consolidate with, or merge into, any other
Person or transfer all or substantially all of its properties or assets to any
other Person. This Agreement shall inure to the benefit of and be binding upon
Acquisition and the Employee, their respective successors, executors,
administrators, heirs and permitted assigns.
13. SEVERABILITY. If any portion or provision of this Agreement
shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
14. WAIVER. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of either
party to require the performance of any term or obligation of this Agreement,
or the waiver by either party of any breach of this Agreement, shall not
prevent any subsequent enforcement of such term or obligation or be deemed a
waiver of any subsequent breach.
15. NOTICES. Any and all notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall be
effective when delivered in person or deposited in the United States mail,
postage prepaid, registered or certified, and addressed to the Employee at his
last known address on the books of Acquisition or, in the case of Acquisition,
at BridgeStreet's principal place of business, attention of Chief Executive
Officer, or to such other address as either party may specify by notice to the
other actually received.
16. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes all prior communications,
agreements and understandings, written or oral, with respect to the terms and
conditions of the Employee's employment.
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17. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Employee and by an expressly authorized
representative of Acquisition.
18. HEADINGS. The headings and captions in this Agreement are for
convenience only and in no way define or describe the scope or content of any
provision of this Agreement.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
20. GOVERNING LAW. This Agreement shall be construed and enforced under
and be governed in all respects by the laws of the State of Delaware, without
regard to the conflict of laws principles thereof.
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Employee and Acquisition, by its duly authorized
representative, as of the date first above written.
Employee: CL ACQUISITION CORP.
/s/ Xxxxx XxXxxxx By: /s/ Xxxxxx X. Xxxxxx
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Xxxxx XxXxxxx Name: Xxxxxx X. Xxxxxx
Title: President
