Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by
and between BNP Residential Properties, Inc. (the "Company"), and Xxxxxx X.
Xxxxx (the "Executive"), dated as of August 31, 2006.
WHEREAS, the Company and the Executive are parties to an
employment agreement entered into on August 1, 2005 (the "Prior Agreement");
WHEREAS, the Company has entered into an Agreement and Plan of
Merger by and among Xxxxxxx & Xxxxx Bravo Holdings, LLC, Xxxxxxx & Xxxxx Bravo
Acquisition Corp., Xxxxxxx & Xxxxx Bravo Operating Partnership LP, the Company,
and BNP Residential Properties Limited Partnership, dated August 31, 2006 (the
"Merger Agreement").
WHEREAS, the Company desires to insure the continued
availability of the Executive's services, and the Executive is willing to
continue to render his services, following the consummation of the transactions
contemplated by the Merger Agreement (the "Merger");
WHEREAS, the Company and the Executive desire that the
Executive's continued employment be on the terms and conditions of this
Agreement;
NOW THEREFORE, in consideration of the mutual covenants
contained in this Agreement, the Company and the Executive agree as follows:
1. Employment. On the terms and conditions set forth in this Agreement,
the Company hereby employs the Executive during the Employment Term (as
defined in Section 2) as the Vice President and Chief Financial Officer
of the Company, and the Executive hereby accepts such employment.
2. Term. This Agreement shall be effective for a term which shall commence
on the consummation of the Merger (the "Effective Date") and shall
continue until the second anniversary of the Effective Date, unless
earlier terminated as provided herein. The term of this Agreement shall
be extended, without further action by the Company or the Executive, on
the second anniversary of the Effective Date and on each subsequent
anniversary of the Effective Date for successive periods of twelve
months each, unless either party shall have given 30 days advance
written notice to the other party, in the manner set forth in Section 8
below, prior to the applicable extension date that the term of this
Agreement is not to be extended or further extended (the period during
which this Agreement is effective, as extended, being referred to as
the "Employment Term").
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3. Duties of Executive. The Executive agrees to undertake the duties and
responsibilities inherent in the position of Vice President and Chief
Financial Officer, which may encompass different or additional duties
as may, from time to time, be reasonably assigned by the Company's
Board of Directors (the "Board of Directors"), and the duties and
responsibilities undertaken by the Executive may be reasonably altered
or modified from time to time by the Board of Directors, provided,
however, that the Executive's duties and responsibilities shall be no
less than those traditionally inherent in the position of Vice
President and Chief Financial Officer. The Executive agrees to abide by
the rules, regulations, instructions, personnel practices and policies
of the Company and any changes thereof that are applicable to the
employees of the Company in general. During the Employment Term, except
as approved by the Company's Board of Directors, the Executive will
devote his full business time and efforts to the business of the
Company and will not engage in consulting work or any trade or business
for his own account or for or on behalf of any other person, firm or
corporation that competes, conflicts or materially interferes with the
performance of his duties hereunder in any way. The Executive may
engage in non-competitive personal or charitable activities for
reasonable periods of time each month so long as such activities do not
interfere with the Executive's responsibilities under this Agreement.
4. Compensation and Benefits.
4.1 Base Salary. During the Executive's employment under this
Agreement, the Executive shall receive a base salary at an
annual rate of $250,000, payable in cash in accordance with
the Company's payroll practices generally applicable to the
Company's senior executives (the "Base Salary"). The Base
Salary shall be subject to increases, in the sole discretion
of the Board of Directors or a committee appointed by the
Board of Directors, at such times as salary reviews are
conducted generally for the Company's senior executives.
4.2 Annual Bonus. During the Executive's employment under this
Agreement, in the sole discretion of the Board of Directors,
the Company may pay to the Executive an annual bonus (an
"Annual Bonus"). The terms, conditions and amount of an Annual
Bonus, if any, shall be determined by the Board of Directors
or a committee appointed by the Board of Directors in its sole
and absolute discretion.
4.3 Benefit Plans. During the Employment Term, the Executive shall
be entitled to (i) participation in such employee retirement
and welfare benefit plans, programs, policies and arrangements
as maintained by the Company from time to time, provided,
however, the Company shall pay 100% of the cost of coverage
under the Company's health insurance plan for the Executive
and the eligible family members of the Executive under the
health insurance plan; (ii) reasonable vacation allowed on an
annual basis consistent with the Executive's duties and
responsibilities, provided, however, that any vacation time
accrued but not used during a calendar year shall not carry
forward from year to year; (iii) paid holidays, leave of
absence, leave for illness, funeral leave and temporary
disability leave in accordance with the policies of the
Company; and (iv) perquisites as from time to time provided by
the Company to its senior executives.
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4.4 Life Insurance. The Company will pay for an annually renewable
term life insurance policy, based on standard rates, on behalf
of the Executive in the amount of $400,000, and the Company
will pay any Federal, state or local income and employment
taxes incurred by the Executive as a result of such payment by
the Company. In the event the Executive does not qualify for a
standard rate life insurance policy, at the Executive's
election either (i) the Company shall reduce the amount of the
benefit provided to the Executive to the extent necessary for
the cost of the life insurance policy to the Company to equal
the cost of a standard rate policy, or (ii) the Executive may
pay the difference between the actual cost of the policy to
the Company and the cost of a standard rate policy. The
Company, in its sole discretion, may review and increase the
amount of such insurance policy upon each anniversary of the
Effective Date.
4.5 Expenses. During the Executive's employment under this
Agreement, the Company shall reimburse the Executive for
ordinary and reasonable out-of-pocket expenses incurred by the
Executive in the performance of the employment duties under
this Agreement, provided that the Executive shall account to
the Company for such expenses in accordance with the employee
business expense policies and practices of the Company.
4.6 Additional Payment.A. Immediately prior to the consummation of
the Merger, provided that (i) the Executive is employed by the
Company on such date or (ii) the Executive's employment with
the Company was terminated by the Company without Cause within
90 days prior to such date, the Company shall pay the
Executive a lump-sum cash payment equal to $600,000. Such
payment shall be in full satisfaction of the Company's
obligations under the Prior Agreement and, upon receipt of
such payment, the Executive shall have no further rights to
any payments or benefits under the Prior Agreement.
4.7 Accelerated Vesting and Lapse of Forfeiture Restrictions. As
set forth in the Merger Agreement, each stock option, stock
purchase right, any other similar right to acquire shares of
Company common stock, issued to the Executive under the BNP
Residential Properties, Inc. Amended and Restated 1994 Stock
Option and Incentive Plan (the "Stock Option Plan") shall be
fully vested at the Effective Date, and any restrictions with
respect to outstanding restricted shares awarded to the
Executive under the Stock Option Plan shall terminate or lapse
at the Effective Date.
5. Termination of Employment.
5.1 Dismissal without Cause and Resignation for Good Reason,
During the Employment Term.
5.1.1 Dismissal without Cause. The Company may terminate
the Executive's employment under this Agreement at
any time during the Employment Term without Cause (as
defined in Section 5.1.4) by giving written notice
thereof to the Executive at least 30 days before the
effective date of such
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termination. Upon such termination, the Executive
shall be entitled to the compensation as provided in
Sections 5.1.3 and 5.3 of this Agreement.
5.1.2 Resignation for Good Reason. The Executive may
terminate his employment under this Agreement at any
time during the Employment Term for Good Reason (as
defined in Section 5.1.5) by giving written notice
thereof to the Company at least 30 days before the
effective date of such termination. Such notice shall
specify in reasonable detail the Good Reason based
upon which the Executive intends to terminate his
employment. Upon such termination, the Executive
shall be entitled to such compensation as provided in
Sections 5.1.3 and 5.3 of this Agreement.
5.1.3 Payment upon Termination without Cause or for Good
Reason. If the Executive's employment under this
Agreement is terminated during the Employment Term
either by the Company without Cause or by the
Executive for Good Reason, the Executive shall be
entitled to the following:
A. As consideration for the Executive's
obligations under the restrictive covenants
set forth in Section 6, a cash lump sum
payment, paid within 30 days after the
effective date of termination, equal to (1)
$200,000 minus (2) the amount of any cash or
equity-based compensation in excess of
$200,000 per annum (whether paid under this
Agreement or otherwise) determined and paid
to the Executive following the consummation
of the Merger (the "Severance Payment").
B. For a period of two years following the
Executive's termination of employment, or,
if earlier, until the Executive becomes
re-employed with another employer, the
Company shall continue to provide health,
dental, life and disability insurance
benefits to the Executive on terms and
conditions at least equal to those which
would have been provided to the Executive in
accordance with the plans and programs
described in Sections 4.3(i) and 4.4 of this
Agreement if the Executive's employment had
not been terminated. In the event that the
Executive's participation in any such plan
or program is barred by applicable law, or
in the Company's discretion such benefits
cannot be provided without adverse income
tax consequences to the Company or the
Executive, the Company shall arrange to
provide the Executive with benefits
substantially similar to those which the
Executive would otherwise have been entitled
to receive under such plans and programs
from which continued participation is
barred.
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5.1.4 Definition of Cause. "Cause" means:
A. a deliberate or intentional material
misrepresentation by the Executive in the
Executive's relations with the Company;
B. the commission of a crime by the Executive
which constitutes a felony or a misdemeanor
which involves moral turpitude or which has
a material adverse effect on the Company,
its business, reputation or interests;
C. a material breach of any contract or
agreement between the Executive and the
Company (including this Agreement) or a
material breach by the Executive of a
fiduciary duty or responsibility to the
Company, which has not been cured within the
time periods if any) specified by the Board
of Directors;
D. the Executive's abuse of drugs or alcohol
which affects the Executive's ability to
perform the Executive's duties under this
Agreement or otherwise; or
E. the willful, negligent or wanton misconduct
of the Executive which results in material
damage to the Company, its business,
reputation or interests.
5.1.5 Definition of Good Reason. "Good Reason" means any of
the following if implemented by the Company without
the Executive's written consent and not cured or
corrected by the Company within 30 days after notice
thereof by the Executive to the Company under Section
5.1.2:
A. an assignment to the Executive of any
duties, responsibilities or status
materially and adversely inconsistent with,
or which constitute a material adverse
change in, the Executive's current position,
duties, responsibilities or status with the
Company; other than an assignment of or a
change in duties or responsibilities
resulting solely by virtue of the Merger and
the related adjustment of duties and
responsibilities in connection therewith;
B. a material adverse change in the Executive's
current reporting responsibilities, title or
office; other than a change in reporting
responsibilities resulting solely by virtue
of the Merger and the related adjustment of
duties and responsibilities in connection
therewith;
C. a reduction by the Company of the
Executive's Base Salary;
D. a material violation of the provisions of
Sections 4.3 or 4.4 of this Agreement; or
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E. a change in the Executive's principal work
location by more than 50 miles.
The determination of the amount of any compensation
and benefits or other payments to be paid or provided
to or in respect of the Executive under this
Agreement shall be made without regard to any
reduction therein constituting Good Reason.
5.2 Death, Disability, Termination for Cause or without Good
Reason or Termination at the End of the Employment Term.
5.2.1 Dismissal for Cause. The Company may terminate the
Executive's employment under this Agreement for Cause
at any time during the Employment Term by giving
written notice thereof to the Executive specifying in
reasonable detail the basis for the Cause upon which
the Company intends to terminate the Executive's
employment. The effect of such termination is
provided in Section 5.2.4.
5.2.2 Resignation without Good Reason. The Executive may
terminate the Executive's employment under this
Agreement without Good Reason at any time during the
Employment Term by giving written notice thereof to
the Company at least 30 days before the effective
date of such termination, which notice may be waived
in whole or in part by the Company in its sole
discretion. The effect of such termination is
provided in Section 5.2.4.
5.2.3 Termination upon Death or Disability. This Agreement
shall terminate automatically upon the Executive's
death. If the Company determines in good faith that
the Executive has a Disability as defined in this
Section, the Company may terminate his employment
under this Agreement by notifying the Executive
thereof at least 30 days before the effective date of
termination. For purposes of this Agreement,
"Disability" shall mean any medically determinable
physical or mental impairment which has lasted for a
continuous period of not less than 180 days and which
renders the Executive unable to perform the
Executive's material duties under this Agreement. If
there is any dispute between the parties as to the
Executive's Disability, the Company shall select or
approve a physician whose determination as to the
Executive's Disability shall bind the parties hereto.
The effect of a termination due to the Executive's
death or Disability is provided in Section 5.2.4.
5.2.4 Effect of Dismissal for Cause, Resignation without
Good Reason, Termination upon Death or Disability or
Termination at the End of the Employment Term. If the
Executive's employment under this Agreement is
terminated at any time during the Employment Term by
the Company for Cause, by the Executive without Good
Reason, or due to the Executive's death or Disability
as provided in this Agreement, or if the Executive's
employment terminates at the end of the Employment
Term,
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the Executive shall be entitled to receive
compensation only as provided in Section 5.3 of this
Agreement; provided, however, if the Executive's
employment under this Agreement is terminated at any
time during the Employment Term due to the
Executive's death or Disability as provided in this
Agreement, the Company shall pay the Executive, or
the Executive's estate as applicable, within 30 days
after the effective date of termination, an amount
equal to the Severance Payment..
5.3 Payment of Base Salary upon Termination. Upon a termination of
the Executive's employment under this Agreement for any
reason, the Company shall pay or cause to be paid to the
Executive his Base Salary earned but unpaid as of the
effective date of termination, payable in cash on or before
the day on which the Executive would have been paid such
amount if his employment hereunder had not been terminated,
but in no event later than the date as required by law.
5.4 No Duty to Mitigate. The Executive shall not be obligated to
seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any
of the provisions of this Agreement, and except as provided in
Section 5.1.3.B, such amounts shall not be reduced whether or
not the Executive obtains other employment.
5.5 Tax on Excess Parachute Payments. Notwithstanding anything in
this Agreement to the contrary, the Executive shall be
responsible for payment of any and all taxes imposed with
respect to any and all payments and other benefits the
Executive receives under this Agreement, including but not
limited to any excise tax imposed by Section 4999 of the Code.
6. Restrictive Covenants.
6.1 [Intentionally deleted].
6.2 Confidential Information. The Executive shall at all times
hold in a fiduciary capacity for the benefit of the Company
all secret, confidential or proprietary information, knowledge
or data relating to the Company, and all of its businesses,
which shall have been obtained by the Executive during his
employment by the Company and which shall not be or become
public knowledge (other than by acts by the Executive or his
representatives in violation of this Agreement) including, but
not limited to, information regarding clients and agents of
the Company ("Confidential Information"). During the
Executive's employment with the Company and after the
termination of such employment, the Executive shall not,
without the prior written consent of the Company, communicate
or divulge any Confidential Information to any Person other
than the Company and those designated by it or use any
Confidential Information except for the benefit of the
Company, provided that the Executive may make disclosures to
comply with the law or legal process. Immediately upon
termination of the Executive's employment with the Company at
any time and for any reason, the Executive shall return to the
Company all Confidential Information, including, but not
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limited to, any and all copies, reproductions, notes or
extracts of Confidential Information.
6.3 Solicitation of Employees. During the Employment Term and, if
the Executive's employment under this Agreement is terminated
for any reason other than the expiration of the Employment
Term or death, for one year after the effective date of such
termination, the Executive shall not: (i) solicit, participate
in or promote the solicitation of any person who was employed
by the Company or Xxxxxxx & Xxxxx Limited (together with its
affiliates, the "Group") at any time during the one-year
period prior to the Executive's termination of employment
under this Agreement to leave the employ of the Company or the
Group; or (ii) on behalf of himself or any other Person, hire,
employ or engage any such person. The Executive further agrees
that, during such time, if an employee of the Company or the
Group contacts the Executive about prospective employment, the
Executive will inform such employee that he cannot discuss the
matter further without informing the Company and the Group.
6.4 Remedies for Breach. The Executive agrees that damages in the
event of any breach of Sections 6.1. through 6.3. by the
Executive would be difficult to ascertain. The Executive
therefore agrees that, notwithstanding anything in this
Agreement to the contrary, including but not limited to the
provisions of Section 14, the Company, in addition to and
without limiting any other remedy or right it may have, shall
have the right to an injunction or other equitable relief in
any court of competent jurisdiction, enjoining any such
breach. The Executive hereby waives any and all defenses he
may have on the ground of lack of jurisdiction or competence
of the court to grant such an injunction or other equitable
relief. The existence of this right shall not preclude any
other rights and remedies at law or in equity which the
Company may have.
6.5 Definitions.
6.5.1 [Intentionally deleted].
6.5.2 Company. For purposes of Section 6, "Company" means
BNP Residential Properties, Inc., its subsidiaries
and affiliates and the successors thereof.
6.5.3 Person. For purposes of Section 6, "Person" means any
individual or entity, including but not limited to
any corporation, trust, sole proprietorship, joint
venture or partnership.
6.6 Survival of Section 6. The Executive agrees that the
non-competition agreements, non-disclosure agreements and
non-employment agreements in this Section 6 each constitute
separate agreements independently supported by good and
adequate consideration and, notwithstanding anything in this
Agreement to the contrary, shall be severable from the other
provisions of, and shall survive, this Agreement.
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7. Section 409A of the Code. Notwithstanding anything in this Agreement to
the contrary, in no event shall the Company be obligated to commence
payment or distribution to the Executive of any amount that constitutes
nonqualified deferred compensation within the meaning of section 409A
of the Code earlier than the earliest permissible date under section
409A of the Code that such amount could be paid without additional
taxes or interest being imposed under section 409A of the Code. The
Company and the Executive agree that they will execute any and all
amendments to this Agreement as may be necessary to ensure compliance
with the distribution provisions of section 409A of the Code.
8. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if
hand-delivered or sent by registered or certified mail to the Executive
at the last address he has filed in writing with the Company or, in the
case of notice to the Company, if sent by registered or certified mail
to the following address:
Xxxxxxx & Xxxxx
x/x Xxxxxx Xxxxx
0 Xxx Xxxxxxxxxxxx Xxxxx
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
with a copy to:
Xxxxxxx & Xxxxx
x/x Xxx Xxxxx
0 Xxx Xxxxxxxxxxxx Xxxxx
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
9. Withholding Taxes. The Company shall have the right, to the extent
permitted by law, to withhold from any payment of any kind due to the
Executive under this Agreement to satisfy the tax withholding
obligations of the Company under applicable law.
10. Successors and Assigns. The rights, duties and obligations of a party
hereunder may not be assigned, delegated or assumed without the prior
written consent of the other party, provided that the Company may
assign this Agreement to any parent or subsidiary thereof, without the
Executive's consent, and such assignment shall not constitute, a
termination of the Executive's employment hereunder. Nothing herein
shall cause a termination of this Agreement upon the acquisition,
reorganization, or merger of the Company. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors or permitted assigns. Nothing herein shall
be construed to confer upon any person not a party hereto any right,
remedy or claim under or by reason of this Agreement.
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11. Entire Agreement. This Agreement constitutes the entire understanding
of the Executive and the Company with respect to the subject matter
hereof and, as of the Effective Date, supersedes and voids any and all
prior agreements or understandings, written or oral, regarding the
subject matter hereof, including but not limited to the Prior
Agreement; provided however, in the event that the Merger Agreement is
terminated, this Agreement shall be null and void and the Prior
Agreement shall continue in full force and effect.
12. Amendment and Waiver. This Agreement may not be changed, modified, or
discharged orally, but only by an instrument in writing signed by the
parties. No waiver of any term or condition of this Agreement shall be
effective unless agreed to in writing between the parties.
13. Governing Law and Severability. This Agreement shall be governed by the
laws of the State of North Carolina (without giving effect to choice of
law principles or rules thereof that would cause the application of the
laws of any jurisdiction other than the State of North Carolina) and
the invalidity or unenforceability of any provisions hereof shall in no
way affect the validity or enforceability of any other provision. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating or
affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14. Arbitration. Disputes regarding the Executive's employment with the
Company, including, without limitation, any dispute under this
Agreement which cannot be resolved by negotiations between the Company
and the Executive, but excluding any disputes regarding the Executive's
compliance with Section 6, shall be submitted to, and solely determined
by, final and binding arbitration conducted by Jams/Endispute, Inc.'s
arbitration rules applicable to employment disputes, and the parties
agree to be bound by the final award of the arbitrator in any such
proceeding. The arbitrator shall apply the laws of the State of North
Carolina with respect to the interpretation or enforcement of any
matter relating to this Agreement; in all other cases the arbitrator
shall apply the laws of the state specified in the Company's
alternative dispute resolution policy as in effect from time to time
(if any). Arbitration may be held in North Carolina, or such other
place as the parties may mutually agree, and shall be conducted only by
a former judge. Judgment upon the award by the arbitrator may be
entered in any court having jurisdiction thereof.
15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but both of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company and the Executive have
executed and delivered this Agreement.
ATTEST/WITNESS BNP RESIDENTIAL PROPERTIES, INC.
/s/ Xxxx X. Xxxx By /s/ D. Xxxxx Xxxxxxxxx
--------------------------- -----------------------------------
Title: President
----------------------
Date: 8/31/2006
EXECUTIVE
/s/ Xxxx X. Xxxx /s/ Xxxxxx X. Xxxxx
--------------------------- -------------------------------------
Xxxxxx X. Xxxxx
Date: 8/31/06
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