Exhibit 10.17
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of December 1, 1999, between
Xxxxxxx-Xxxxx, Inc., a Delaware corporation (the "Company"), and Xxxxxx Xxxxx
("Executive").
Background
The Company wishes to retain the services of Executive to assist in the
management of the Company and its subsidiaries.
Terms
In consideration of the premises and of the mutual covenants herein
contained, the parties agree as follows:
1. Position. During the term of Executive's employment with the Company
hereunder, Executive shall serve as Managing Director-Finance and may also serve
as an officer of the Company's subsidiaries. Executive shall perform such duties
of an executive nature as shall be directed by the Chief Executive Officer.
Executive shall diligently devote Executive's entire business skill,
time and effort to Executive's employment hereunder; provided, however, that
Executive shall be entitled annually to vacation and sick leave pursuant to
policies adopted by the Company from time to time for executive officers of the
Company. Notwithstanding the foregoing, and provided that such activities do not
interfere with the fulfillment of Executive's obligations hereunder, Executive
may (a) serve as a director or trustee of any charitable or non-profit entity
and of not more than two for profit business corporations so long as such
entities are not, directly or indirectly in competition with the Company or any
entity directly or indirectly controlling, controlled by or under common control
with the Company and its direct and indirect subsidiaries (an "Affiliate"); (b)
deliver lectures, fulfill speaking engagements and teach at educational
institutions; and (c) acquire solely as an investment any securities of any
entity so long as (i) Executive remains a passive investor in such entity and
(ii) does not own directly or indirectly more than 2% of any class of securities
of a publicly traded company.
2. Term of Employment. The Executive's term of employment will begin on the
date this contract is executed and will continue for a period of 53 months. This
period will be called the Employment Term. After the completion of the
Employment Term, Executive's employment will continue for successive 12 month
periods, (each to be called an Extended Employment Term) unless written notice
of termination is given by either party to the other 180 days in advance of the
then current termination date, unless employment is terminated sooner as
provided later in this contract.
3. Compensation. As compensation for the services contemplated hereunder,
Executive shall receive from the Company during the Employment Term and each
Extended Employment Term a base salary equal to $170,000 per annum to be paid in
accordance with the Company's normal payroll policies for its officers. Such
salary rate shall be subject to annual merit reviews by the Chief Executive
Officer of the Company (such salary as adjusted from time to time being the
"Base Salary"). The Base Salary (including any increases thereto) shall not be
decreased during the Employment Term or any Extended Employment Term.
4. Other Payment; Bonus. In addition to the compensation provided to
Executive in Section 3, Executive shall be entitled to participate, during the
Employment Term and each Extended Employment Term, in an annual performance
bonus plan to be established by the Company and/or executive incentive programs
to determined from time to time by the Company. Executive shall be entitled to
participate in equity incentive programs established by the Company and
Xxxxxxx-Xxxxx Group, Inc., including, but not limited to, the 1999 Restricted
Stock and Stock Option Plan, provided that any allocations to Executive and the
terms of any grants thereunder shall be as determined by the Board of Directors.
5. Executive Benefits. Executive shall be entitled to participate, during
the Employment Term and each Extended Employment Term, in all medical benefit
plans, hospitalization plans, group life insurance, long term disability or
other Executive welfare benefit plans (collectively, the "Group Insurance
Plans") and any pension plans (including any supplemental executive retirement
plans) that may be provided by the Company or its subsidiaries to senior
executive officers from time to time during the Employment Term or Extended
Employment Term, as the case may be.
6. Expenses. The Company shall pay or reimburse Executive for any expenses
reasonably incurred by Executive in furtherance of Executive's duties hereunder,
including, but not limited to, reasonable expenses for traveling, meals and
hotel accommodations, and business related entertainment upon submission by
Executive of appropriate documentation thereof, all so prepared in compliance
with such policies and procedures relating thereto as the Company may from time
to time adopt.
7. Termination.
a) For Cause or Without Cause. The Board of Directors may terminate
this Agreement and (except as provided below) all of the Company's obligations
hereunder, either for "Cause" or "Without Cause." Such termination shall be
effected by notice thereof delivered by the Company to Executive, and shall be
effective as of the date of such notice. In the event that Executive is
terminated for Cause, Executive shall be entitled to receive all Base Salary
earned and accrued to the date of termination, but all other rights of Executive
-2-
hereunder shall terminate as of the effective date of Executive's termination,
except as otherwise provided by law.
In the event that Executive is terminated by the Company Without
Cause or Executive resigns with Good Reason, and for so long as Executive
complies with the provisions of Sections 8 and 9, Executive shall be entitled
(i) to receive all payments due as Base Salary during the remainder of the
Employment Term or the then current Extended Employment Term (as applicable), as
and when the same would have otherwise been payable had Executive not been
terminated, (such term, the "Continuation Period"), (ii) to receive any
Performance Bonus for the year in which Executive is terminated or resigns which
shall be payable at the time such bonus would have otherwise been payable had
Executive not been terminated or resigned, and (iii) to continue to participate
at the Company's expense in the Group Insurance Plans during the Continuation
Period.
As used herein, (i) "Cause" means (A) the willful and continued
failure by Executive to perform Executive's duties hereunder (in the good faith
determination of the Board of Directors) (other than any such failure resulting
from the termination of Executive's employment for death, Total Disability (as
hereinafter defined) or Good Reason), after written notice of such failure has
been given by the Board of Directors, and which failure has not been corrected
within the 30-day period after written notice has been given; (B) the willful
commission by Executive of acts that, in the good faith determination of the
Board of Directors, are dishonest and demonstrably and materially injurious to
the Company, monetarily or otherwise; (C) Executive's conviction of a felony;
(D) the failure by Executive to perform Executive's duties hereunder (other than
any such failure resulting from the termination of Executive's employment for
death, Total Disability (as hereinafter defined) at a satisfactory level as
determined by a majority of the members of the Board of Directors in good faith,
which failure has not been corrected within the 90-day period after written
notice has been given; or (E) a breach of any of the covenants set forth in
Sections 8 and 9 of this Agreement; (ii) "Without Cause" means any termination
of Executive other than (i) by the Company for Cause, (ii) by reason of
Executive's resignation, and (iii) by Total Disability or death, except that
"Without Cause" shall include resignation by Executive for Good Reason; and
(iii) "Good Reason" means the failure of the Company to pay Executive the
compensation or the Company to provide other material benefits as specified in
Sections 3, 4, 5 and 6 of this Agreement during the Employment Term or the
Extended Employment Term, as the case may be, which situation has not been cured
to Executive's reasonable satisfaction within 30 days after notice thereof is
given to the Board of Directors.
b) Resignation of Executive. In the event that Executive resigns
(except in the case of resignation due to Total Disability or for Good Reason)
during the Employment Term or any Extended Employment Term, Executive shall be
entitled to receive all Base Salary earned and accrued to the date of
resignation, but all other rights of Executive hereunder shall terminate as of
the date of Executive's resignation, except as otherwise provided by law.
c) Executive's Total Disability. As used herein, "Total Disability"
shall mean any physical or mental ailment or incapacity as determined in good
faith by the Board of Directors which prevents the Executive from performing the
duties incident to the Executive's employment hereunder at the level expected of
such Executive by the Board of Directors, which has continued for a period of
either (i) ninety (90) consecutive days in any 12-month period or (ii) one
hundred eighty (180) total days in any 12-month period, and which is expected to
be of permanent duration. Executive shall permit a licensed and board certified
physician designated by the Company and reasonably acceptable to Executive to
examine Executive from time to time prior to Executive's being determined to be
Totally Disabled, to enable the Board of Directors to determine whether
Executive has suffered a Total Disability hereunder. Notwithstanding the
-3-
foregoing, the Board of Directors may, in its sole discretion, determine that
Executive has suffered a Total Disability prior to the 90th consecutive day
referred to in clause (i) above and terminate Executive by reason of Total
Disability, at which time Executive would be considered for purposes of this
Agreement and this Section 7(c) to have been terminated due to Total Disability.
In the event Executive is terminated by reason of Total Disability, Executive
will receive base salary and bonus payments as if terminated without cause.
d) Death. In the event that Executive dies during the Employment Term,
Executive's estate shall be entitled to receive (i) all Base Salary earned and
accrued to the date of death and (ii) any Performance Bonus for the year in
which Executive dies which shall be payable at the time such bonus would
otherwise have been payable, but all other rights of Executive hereunder shall
terminate as of the date of Executive's termination due to death, except as
otherwise provided by law.
8. Protection of Confidential Information.
a) Covenant. Executive acknowledges that Executive's employment by the
Company will, throughout the term of this Agreement, bring him into close
contact with many confidential affairs of the Company and its Affiliates,
including information concerning the Company's finances and operating results,
its markets, key personnel, operational methods and other business affairs and
methods, technical data, computer software and other proprietary intellectual
property, other information not readily available to the public, and plans for
future developments relating thereto. Executive further acknowledges that the
services to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character. In recognition of the foregoing,
Executive covenants and agrees that Executive shall, and shall cause his
representatives and agents to, keep confidential and not disclose to any other
person (other than his legal and financial advisors and accountants) or use for
their own benefit or the benefit of any other person, any information regarding
the business and affairs of the Company or any of its subsidiaries or
affiliates. Executive's obligations hereunder shall not apply to information
which: (i) is or becomes generally available to the public without breach of the
commitment provided for in this Section 8; (ii) was otherwise available to
Executive on a non-confidential basis; or (iii) is required to be disclosed by
law, order or regulation of a court or tribunal or government or disclosures
necessary to implement the provisions of this Agreement; provided, however,
that, in the case of clause (iii) above, Executive shall provide the Company as
much advance notice of the possibility of such disclosure as practical so the
Company may attempt to stop such disclosure or obtain a protective order
concerning such disclosure.
b) Specific Remedy. If Executive commits a breach of any of the
provisions of Section 8(a), the Company and its Affiliates shall have the right
and remedy to have such provisions specifically enforced by any court having
equity jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and its
Affiliates and that money damages will not provide an adequate remedy to the
Company and its Affiliates.
-4-
9. Covenant Not to Compete and Non-Interference.
a) Covenant. In consideration of the benefits of this Agreement to
Executive and in order to induce the Company to enter into this Agreement,
Executive hereby covenants and agrees that during any period that he is
receiving compensation from the Company pursuant to paragraphs 3, 4 and/or 7 of
this Agreement or for a period that is one (1) year after the cessation of
Executive's employment by the Company, whichever is longer, Executive shall not,
without the prior written consent of the Company, and shall cause any employee
or Affiliate not to, directly or indirectly, as an employee, partner,
stockholder, director, consultant, joint venturer, investor or in any other
capacity, engage in, or own, manage, operate or control, or participate in the
ownership, management, operation or control of any business or entity in the
United States of America which engages in a substantially similar business or
line of businesses as those conducted by the Company or any of its direct or
indirect subsidiaries for which Executive worked or served at the time of the
termination of the Initial Employment Term or Extended Employment Term,
provided, however, that nothing herein shall prohibit Executive from owning not
more than 2% of any class of securities of a publicly traded entity in any
business or entity
b) During any period that he is receiving compensation from the
Company pursuant to paragraphs 3, 4 and/or 7 of this Agreement or for a period
one (1) year after the cessation of Executive's employment by the Company
whichever is longer, Executive shall not, without prior written approval of the
Company, directly or indirectly, solicit for employment any current employee of
the Company or any of their subsidiaries, provided, however, that the foregoing
shall not prevent Executive, or any of his Affiliates from hiring any such
person: (i) who contacts Executive or his Affiliates on his or her own
initiative without solicitation from any of Executive or his Affiliates, (ii) in
connection with general employment advertisements published in magazines,
journals, newspapers and other publications that are not targeted at the Company
or any of their employees, or (iii) who has been terminated by the Company prior
to any such solicitation.
c) Executive acknowledges that given the nature of the business of the
Company the covenants contained in this Section 9 contain reasonable limitations
as to time, geographic area and scope of activity to be restrained, and do not
impose a greater restraint than is necessary to protect and preserve for the
benefit of the goodwill of the Company and to protect the legitimate business
interests of the Company. If, however, this Section 9 is determined by any court
of competent jurisdiction to be unenforceable by reason of its extending for too
long a period of time or over too large a geographic area or by reason of its
being too extensive in any other respect or for any other reason it will be
interpreted to extend only over the longest period of time for which it may be
enforceable and/or over the largest geographic area as to which it may be
enforceable and/or to the maximum extent in all other aspects as to which it may
be enforceable, all as determined by such court and in such action.
d) Specific Remedy. Executive agrees that the Company's remedies at
law for any breach or threat of breach by Executive of the provisions of this
Section 9 will be inadequate, and that the Company shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this Section
9 and to enforce specifically the terms and provisions hereof, in addition to
any other remedy to which the Company may be entitled at law or equity. In the
event of
-5-
litigation regarding this Section 9, the prevailing party in such litigation
shall, in addition to any other remedies that prevailing party may obtain in
such litigation, be entitled to recover from the other party all reasonable
legal fees and out-of-pocket expenses incurred by such party in enforcing or
defending its rights hereunder.
10. Independence, Severability and Non-Exclusivity. Each of the rights and
remedies enumerated in Sections 8(b) and 9(d) shall be independent of the others
and shall be severally enforceable and all of such rights and remedies shall be
in addition to and not in lieu of any other rights and remedies available to the
Company or its Affiliates under the law or in equity. If any of the provisions
contained in Sections 8 or 9 or if any of the rights or remedies enumerated in
Sections 8 or 9 is hereafter construed to be invalid or unenforceable, the same
shall not affect the remainder of the covenant or covenants, or rights or
remedies, which shall be given full effect without regard to the invalid
portions. If the courts of any one or more jurisdictions shall hold all or any
part of such provisions wholly unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the parties that such determination
shall not bar or in any way affect the Company's or their Affiliates' right to
relief in the court of any other jurisdiction as to failures to observe such
provisions in such other jurisdictions, the above provisions as they relate to
each jurisdiction, being, for this purpose, severable into diverse and
independent provisions. If any of the provisions contained in Sections 8 or 9 is
held to be unenforceable because of the duration of such provision or the area
covered thereby, the parties agree that the court making such determination
shall have the power to reduce the duration and/or area of such provision and in
its reduced form such provision shall then be enforceable.
11. Assignment of Executive Benefits; Successors and Assigns. Absent the
prior written consent of the Company, and subject to the laws of descent and
distribution, Executive shall have no right to exchange, convert, encumber or
dispose of the rights of Executive to receive benefits and payments under this
Agreement, which payments, benefits and rights thereto are non-assignable and
non-transferable. This Agreement shall inure to the benefit of and shall be
binding upon the Company and Executive and, subject to the preceding sentence,
their respective heirs, executors, personal representatives, successors and
assigns. Nothing in this Section 11, however, shall prevent Executive from
making assignments or transfers for purposes of personal estate planning.
12. Notices. All notices hereunder shall be given in writing by personal
delivery or by registered or certified mail addressed to the Company at its
principal place of business and to Executive at Executive's residence address as
then listed in the Company's records.
13. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the rules of the American Arbitration Association and judgment
upon such award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The arbitration shall be held in New York, New York unless
another location shall be mutually agreed to by the parties at the time of
arbitration.
-6-
14. General.
a) Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the state of New York without
giving effect to conflicts of laws principles thereof which might refer such
interpretations to the laws of a different state or jurisdiction.
b) Captions. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
c) Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, between the parties.
d) No Other Representations. No representation, promise or inducement
has been made by any party hereto that is not embodied in this Agreement, and no
party shall be bound by or liable for any alleged representation, promise or
inducement not so set forth.
e) Amendments; Waivers. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms or covenants hereof
may be waived, only by a written instrument executed by all of the parties
hereto, or in the case of a waiver, by the party waiving compliance. The failure
of any party at any time or times to require performance of any provision hereof
shall in no manner affect the right of such party at a later time to enforce the
same. No waiver by any party of the breach of any term or covenant contained in
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such breach, or a waiver of the breach of any other term or covenant contained
in this Agreement.
-7-
IN WITNESS WHEREOF, the parties hereto have executed this
Employment Agreement as of the date first set forth above.
XXXXXXX-XXXXX GROUP, INC.
For the purpose of Section 4
By: /s/ G. Xxxxxxx Xxxxxxxx
--------------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: President & Chief Operating
Officer
XXXXXXX-XXXXX, INC.
By: /s/ G. Xxxxxxx Xxxxxxxx
--------------------------------------
Name: G. Xxxxxxx Xxxxxxxx
Title: President & Chief Operating
Officer
Xxxxxx Xxxxx
/s/ Xxxxxx Xxxxx
------------------------------------------
-8-
