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Exhibit 10.26
EMPLOYMENT AGREEMENT
This Agreement is entered into this 17th day of May, 1996, by and
between Xxxxxx Corporation (hereinafter called the "Company") and Xxxxxx X.
Xxxxx, Xx. (hereinafter called the "Employee").
WHEREAS, the Employee has been employed by the Company since January 1,
1994, and currently serves as Senior Vice President, General Counsel and
Secretary; and
WHEREAS, the Employee desires to continue his employment with the
Company and to continue to serve the Company as Senior Vice President, General
Counsel and Secretary; and
WHEREAS, the Company desires to continue to retain the services of the
Employee as Senior Vice President, General Counsel and Secretary; and
WHEREAS, the Company and the Employee desire to enter into an
employment agreement to establish the rights and obligations of the Employee and
the Company in such employment relationship;
NOW, THEREFORE, and in consideration of the mutual covenants herein
contained, the Company and the Employee hereby mutually agree as follows:
1. EMPLOYMENT AND DUTIES. The Company hereby continues to employ the
Employee, and the Employee hereby accepts continued employment with the Company
upon the terms and conditions hereinafter set forth. The Employee shall continue
to serve the Company as Senior Vice President, General Counsel and Secretary. In
such capacity, the Employee shall have all powers, duties, and obligations as
are normally associated with such position. The Employee shall further perform
such other duties related to the business of the Company as may from time to
time be reasonably requested of him by the President/CEO. The Employee shall
devote all of his skills, time, and attention solely and exclusively to said
position and in furtherance of the business and interests of the Company.
2. TERM OF EMPLOYMENT. This Agreement shall be effective upon execution
by both parties and approval by the Compensation Committee of the Company's
Board of Directors. The term of employment shall begin, or be deemed to have
begun, on January 1, 1996 (the "Effective Date"). It shall continue through the
three-year period ending on the day before the third anniversary date of the
Effective Date, subject, however, to prior termination or to extension, as
herein provided.
3. COMPENSATION. For such services, the Employee shall receive an
initial annual base salary of One Hundred Thirty-five Thousand Dollars
($135,000.00), which may be increased, but not decreased, by the Company during
the term of this Agreement. In the event that the Company increases the
Employee's initial base salary, the amount of the initial base salary, together
with any increase(s), shall be his base salary. Said base salary
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shall be payable in equal installments in accordance with the Company's regular
payroll practices. In addition, the Employee shall be included in the bonus
program, as described in Appendix A which is attached hereto and made a part
hereof. Notwithstanding the provisions of Paragraph 19, Appendix A may be
amended, on a calendar year basis, during the term of this Agreement (and any
extensions thereof), by the Board of Directors of the Company.
4. FRINGE BENEFITS. The Company shall further provide the Employee
with all health and life insurance coverages, sick leave and disability
programs, tax-qualified retirement plans, stock option plans, paid holidays and
vacations, perquisites, and such other fringe benefits of employment as the
Company may provide from time to time to actively employed executives of the
Company who are similarly situated. Notwithstanding the preceding provisions of
this Paragraph 4, during the term of this Agreement (including extensions
thereof), the Employee shall be entitled to a minimum of three (3) weeks of
vacation per year.
5. EXTENSION OF TERM OF AGREEMENT. The Company and the Employee agree
that the Company's Board of Directors shall, based upon recommendations of the
Company's President/CEO, review the Employee's performance with the intent that,
if the Employee's performance so warrants, the Board may extend the term of this
Agreement for additional three-year periods. By the day preceding the first
anniversary date of the Effective Date, the Board shall notify the Employee of
its decision whether to grant an extension of this Agreement for an additional
three-year period. To the extent that the Board fails to notify the Employee, on
or before the date described in the preceding sentence, of the extension of the
term of this Agreement, the term of this Agreement shall be automatically
extended for an additional three-year period. By way of illustration of this
Paragraph 5, if, by December 31, 1996, the Board notifies the Employee that it
intends to grant an extension of the term of this Agreement (or, if by such
date, the Board fails to notify the Employee that it does not intend to grant
such an extension), the term of this Agreement shall be extended for an
additional three-year period beginning on January 1, 1997 and ending on December
31, 2000. This Agreement shall be subject to extension in the manner set forth
in this paragraph for additional three-year periods on the first anniversary
date of the Effective Date of the immediately preceding extension.
6. TERMINATION OF EMPLOYMENT.
a. Termination of Employment Other Than by Employee. The
Employee's employment hereunder may be terminated by the
Company. However, the Company shall be deemed to have
terminated the employment for "cause" only upon the
following:
i. Any unauthorized material disclosure by the Employee of
the Company's business practices or accounts to a
competitor which results in serious damage to the
Company.
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ii. Willful and wrongful misappropriation by the Employee
of funds, property, or rights of the Company which
results in serious damage to the Company.
iii. Willful and wrongful destruction of business records or
other property by the Employee, which results in
serious damage to the Company.
iv. Conviction of the Employee of a felony involving moral
turpitude, or, as the result of a plea bargain,
conviction of the Employee of a misdemeanor; provided,
the Employee was originally charged (prior to the plea
bargain) with a felony involving moral turpitude.
x. Xxxxx and willful misconduct by the Employee which
results in serious damage to the Company.
vi. The Employee's material breach of, or inability to
perform his obligations under, this Agreement other
than by reason of Disability.
b. Termination of Employment by Employee. The Employee may
terminate his employment at any time. However, he shall be
deemed to have terminated his employment for "Good Reason"
only if he terminates his employment by giving Notice of
Termination pursuant to Paragraphs 6(d) and 6(e)(iii) within
ninety (90) days after the occurrence of any of the
following events (provided the Company does not cure such
event within ten (10) days following its receipt of the
Employee's Notice of Termination):
i. The Employee's base salary is reduced for any reason
other than in connection with the termination of his
employment.
ii. For any reason other than in connection with the
termination of the Employee's employment, the Company
materially reduces any fringe benefit provided to the
Employee under Paragraph 4 below the level of such
fringe benefit provided generally to other actively
employed similarly situated executives of the Company,
unless the Company agrees to fully compensate the
Employee for any such material reduction.
iii. The Company assigns the Employee to duties inconsistent
in any respect with his position (including, without
limitation, his status, office, and title), authority,
duties or responsibilities as set forth by Paragraph 1,
or takes any other action that results in a material
diminution in such position, authority, duties, or
responsibilities.
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iv. The Company otherwise materially breaches, or is unable
to perform its obligations under this Agreement.
c. Termination of Employment Upon Death or Disability of the
Employee. The Employee's employment hereunder shall
terminate upon his death, and may be terminated by the
Company in the event of his Disability. For purposes of this
Agreement, "Disability" means the inability of the Employee
due to illness, accident, or otherwise, to perform his
duties for the period of time during which benefits are
payable to the Employee under the Company's Short-Term
Disability Plan, as determined by an independent physician
selected by the Company and reasonably acceptable to the
Employee (or his legal representative), provided that the
Employee does not return to work on a substantially
full-time basis within thirty (30) days after Notice of
Termination is given by the Company pursuant to the
provisions of Paragraphs 6(d) and 6(e)(ii).
d. Notice of Termination. Any termination of the Employee's
employment by the Company hereunder, or by the Employee
other than termination upon the Employee's death, shall be
communicated by written Notice of Termination to the other
party. For purposes of this Agreement, a "Notice of
Termination" means a notice that shall indicate the specific
termination provision in this Agreement relied upon, and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
the Employee's employment under the provision so indicated.
e. Date of Termination. "Date of Termination" means:
i. If the Employee's employment is terminated by his
death, the date of his death.
ii. If the Employee's employment is terminated by the
Company as a result of Disability pursuant to Paragraph
6(c), the date that is thirty (30) days after Notice of
Termination is given; provided the Employee shall not
have returned to the performance of his duties on a
full-time basis during such thirty- (30-) day period.
iii. If the Employee terminates his employment for Good
Reason pursuant to Paragraph 6(b), the date that is ten
(10) days after Notice of Termination is given
(provided that the Company does not cure such event
during that ten- (10-) day period).
iv. If the Employee terminates his employment other than
for Good Reason, the date that is two (2) weeks after
Notice of Termination is given; provided, in the sole
discretion of the Company, such date may be any earlier
date after Notice of Termination is given.
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v. If the Employee's employment is terminated by the
Company either for Cause pursuant to Paragraph 6(a) or
other than for Cause, the date on which the Notice of
Termination is given.
7. AMOUNTS PAYABLE UPON TERMINATION OF EMPLOYMENT OR DURING
DISABILITY.
a. Death. If the Employee's employment is terminated by his
death, the Employee's beneficiary (as designated by the
Employee in writing with the Company prior to his death)
shall be entitled to the following payments and benefits:
(i) any base salary that is accrued but unpaid, any vacation
that is accrued but unused, and any business expenses that
are unreimbursed -- all, as of the Date of Termination; (ii)
a pro rata award under the bonus program described in
Appendix A which is applicable to the Employee at the time
of his death, with proration based on service completed
during the calendar year for which the award is determined,
and payable when the award would have been paid had the
Employee's employment not terminated; and (iii) any benefit
following termination of employment which may be provided
under the fringe benefit plans, policies and programs
described in Paragraph 4. In the absence of a beneficiary
designation by the Employee, or, if the Employee's
designated beneficiary does not survive the Employee,
benefits described in this Paragraph 7(a) shall be paid to
the Employee's estate.
b. Disability.
i. During any period that the Employee fails to perform
his duties hereunder as a result of incapacity due to
physical or mental illness ("Disability Period"), the
Employee shall continue to receive his base salary at
the rate then in effect for such period until his
employment is terminated pursuant to Paragraph 6(c);
provided, however, that payments of base salary so made
to the Employee shall be reduced by the sum of the
amounts, if any, that were payable to the Employee at
or before the time of any such salary payment under any
disability benefit plan or plans of the Company and
that were not previously applied to reduce any payment
of base salary.
ii. Upon his termination of employment because of
Disability [as described in Paragraph 6(c)], the
Employee shall be entitled to the payments and benefits
described in Paragraph 7(a) as if the Employee had died
on his Date of Termination. In the event of the
Employee's death prior to the time that all payments
described in Paragraph 7(a) have been completed, such
payments and benefits shall be paid to the Employee's
beneficiary [as designated pursuant to Paragraph 7(a)],
or, in the absence of a beneficiary designation or
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if the designated beneficiary does not survive the Employee,
to the Employee's estate.
c. Termination by Company Without Cause, or Termination by
Employee for Good Reason. In the event that the Company
terminates the Employee's employment without Cause or the
Employee terminates his employment for Good Reason before
the expiration of the term of this Agreement, including any
extension thereof, the Employee shall be entitled to the
following payments and benefits:
i. Those described in Paragraph 7(a) as if the Employee
had died on his Date of Termination
ii. Within thirty (30) days after the Date of Termination,
a lump sum cash payment equal to one (1) year of the
base salary applicable to the Employee on the Date of
Termination.
iii. Within thirty (30) days after the Date of Termination,
a lump sum cash payment equal to eighteen (18) months
of the premium applicable to the Employee on the Date
of Termination for the Employee and his family
(provided the Employee had family coverage on the Date
of Termination) under the Company's group health plan.
d. Termination by Employee Other Than for Good Reason, or
Termination by Company for Cause. In the event that the
Employee terminates his employment other than for Good
Reason or the Company terminates his employment for Cause,
the Employee shall not be entitled to any compensation
except as set forth below:
i. Any base salary (but not bonus) that is accrued but
unpaid, any vacation that is accrued but unused, and
any business expenses that are unreimbursed -- all, as
of the Date of Termination.
ii. Any other rights and benefits (if any) provided under
plans and programs of the Company (excluding any bonus
program), determined in accordance with the applicable
terms and provisions of such plans and programs.
e. No Duty to Mitigate Damages. After any Date of Termination,
the Employee shall have no obligation to seek other
employment, but shall have the right to be otherwise
employed, and any compensation of any type whatsoever
received by the Employee in connection with such employment
shall not be offset by the Company against any of the
obligations of the Company under this Agreement.
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8. CHANGE IN CONTROL.
a. Occurrence of Change in Control. Immediately upon the occurrence
of a "Change in Control," the Employee shall become fully vested
in all employee benefit programs (other than any tax qualified
retirement plan, the Employee's interest in which shall vest in
accordance with such plan's terms), including without limitation,
all stock options in which he was a participant at the time of
the Change in Control. For purposes of this Agreement, the term
"Change in Control" shall mean the occurrence of any event which
results in either (a) Xxxxxx Realty Company's failing to own at
least thirty percent (30%) of the combined voting power of the
then outstanding voting securities of the Company entitled to
vote generally in the election of directors, or (b) both Xxx
Xxxxxx and Xxxx Xxxxxx ceasing to be directors and officers of
the Company.
b. Termination of Employment. If, at any time within two (2) years
following a Change in Control, the Company terminates the
Employee's employment without Cause or the Employee terminates
his employment for Good Reason, the provisions of this Paragraph
8(b) shall be applicable, instead of the provisions of Paragraph
7(c). To the extent that the provisions of this Paragraph 8(b)
are applicable, the Employee shall be entitled to the following
payments and benefits:
i. Those described in Paragraph 7(a) as if the Employee had
died on his Date of Termination; provided all cash payments
required under such paragraph shall be made within five (5)
calendar days of the Date of Termination;
ii. The lump sum payment, as described in Paragraph 7(c)(iii);
provided, such cash payment shall be made within five (5)
calendar days of the Date of Termination;
iii. A single lump sum payment, payable within five (5) calendar
days of the Date of Termination, equal to two (2) times the
Employee's annual base salary in effect upon the Date of
Termination; and
iv. Reimbursement of all expenses incurred by the Employee
through the use of any executive out-placement services to
assist him to seek other employment, which shall include,
but not be limited to (A) secretarial services, use of an
office, phone, office supplies and office services
comparable to the level of such services and supplies
available to the Employee prior to the Date of Termination
and (B) all unreimbursed travel expenses incurred by the
Employee to seek other employment up to a maximum amount of
Five Thousand Dollars ($5,000).
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9. NONEXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Employee's continuing or future participation in any incentive,
fringe benefit, deferred compensation, or other plan or program provided by the
Company and for which the Employee may qualify, nor shall anything herein limit
or otherwise affect such rights as the Employee may have under any other
agreements with the Company. Amounts that are vested benefits or that the
Employee is otherwise entitled to receive under any plan or program of the
Company at or after the Date of Termination, shall be payable in accordance with
such plan or program.
10. NONCOMPETITION COVENANT. The Employee agrees that, during the term
of this Agreement, including any extension thereof, and for a period of one (1)
year thereafter, he shall not:
a. Anywhere in the State of Ohio or in any other state in which
the Company is then conducting business, without the written
consent of the Company, provide advice with respect to, engage
in or directly or indirectly supervise or assist the provision
of any service or sale of any product which competes with any
service or product of the Company; or
b. Anywhere in any state, accept employment with, provide advice
to, or engage in or directly or indirectly supervise or assist
the provision of any service or sale of any product by any
person, company, partnership, corporation or other entity
which builds homes, develops land, or otherwise competes with
the Company in any market, city or area in which the Company
then conducts business.
Notwithstanding any provision contained in this Paragraph 10, following
his termination of employment with the Company, the Employee shall not be
precluded (for any period of time following such termination) from engaging, in
any capacity, in the general practice of law.
The restrictions on competition provided herein may be enforced by the
Company and/or any successor thereto, by an action to recover payments made
under this Agreement, an action for injunction, and/or an action for damages.
The provisions of this Paragraph 10 constitute an essential element of this
Agreement, without which the Company would not have entered into this Agreement.
Notwithstanding any other remedy available to the Company at law or at equity,
the parties hereto agree that the Company or any successor thereto, shall have
the right, at any and all times, to seek injunctive relief in order to enforce
the terms and conditions of this Paragraph 10.
If the scope of any restriction contained in this Paragraph 10 is too
broad to permit enforcement of such restriction to its fullest extent, then such
restriction shall be enforced to the maximum extent permitted by law, and the
Employee hereby consents and agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction.
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11. CONFIDENTIAL INFORMATION. The Employee shall hold in a fiduciary
capacity, for the benefit of the Company, all secret or confidential
information, knowledge, and data relating to the Company, that shall have been
obtained by the Employee during his employment with the Company and that is not
public knowledge (other than by acts by the Employee or his representatives in
violation of this Agreement). During and after termination of the Employee's
employment with the Company, the Employee shall not, without the prior written
consent of the Company, communicate or divulge any such information, knowledge,
or data to anyone other than the Company or those designated by it, unless the
communication of such information, knowledge or data is required pursuant to a
compulsory proceeding in which the Employee's failure to provide such
information, knowledge, or data would subject the Employee to criminal or civil
sanctions.
12. INTELLECTUAL PROPERTY. The Employee agrees to communicate to the
Company, promptly and fully, and to assign to the Company all intellectual
property developed or conceived solely by the Employee, or jointly with others,
during the term of his employment, which are within the scope of the Company's
business, or which utilized Company materials or information. For purposes of
this Agreement, "intellectual property" means inventions, discoveries, business
or technical innovations, creative or professional work product, or works of
authorship. The Employee further agrees to execute all necessary papers and
otherwise to assist the Company, at the Company's sole expense, to obtain
patents, copyrights or other legal protection as the Company deems fit. Any such
intellectual property is to be the property of the Company whether or not
patented, copyrighted or published.
13. ASSIGNMENT AND SURVIVORSHIP OF BENEFITS. The rights and obligations
of the Company under this Agreement shall inure to the benefit of, and shall be
binding upon, the successors and assigns of the Company. If the Company shall at
any time be merged or consolidated into, or with, any other company, or if
substantially all of the assets of the Company are transferred to another
company, then the provisions of this Agreement shall be binding upon and inure
to the benefit of the company resulting from such merger or consolidation or to
which such assets have been transferred, and this provision shall apply in the
event of any subsequent merger, consolidation, or transfer.
14. NOTICES. Any notice given to either party to this Agreement shall
be in writing, and shall be deemed to have been given when delivered personally
or sent by certified mail, postage prepaid, return receipt requested, duly
addressed to the party concerned, at the address indicated below or to such
changed address as such party may subsequently give notice of:
If to the Company: Xxxxxx Corporation
0000 Xxxxxx Xxxx
Xxxxxx, Xxxx 00000
Attn: President/CEO
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If to the Employee: Xxxxxx X. Xxxxx, Xx.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
15. INDEMNIFICATION. The Employee shall be indemnified by the Company,
to the extent provided in the case of officers under the Company's Articles of
Incorporation or Regulations, to the maximum extent permitted under applicable
law.
16. TAXES. Anything in this Agreement to the contrary notwithstanding,
all payments required to be made hereunder by the Company to the Employee shall
be subject to withholding of such amounts relating to taxes as the Company may
reasonably determine that it should withhold pursuant to any applicable law or
regulations. In lieu of withholding such amounts, in whole or in part, however,
the Company may, in its sole discretion, accept other provision for payment of
taxes, provided that it is satisfied that all requirements of the law affecting
its responsibilities to withhold such taxes have been satisfied.
17. ARBITRATION; ENFORCEMENT OF RIGHTS. Any controversy or claim
arising out of, or relating to this Agreement, or the breach thereof, shall be
settled by arbitration in the city of Columbus, Ohio, in accordance with the
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrator or arbitrators may be entered in any court having
jurisdiction thereof.
All legal and other fees and expenses, including, without limitation,
any arbitration expenses, incurred by the Employee in connection with seeking to
obtain or enforce any right or benefit provided for in this Agreement, or in
otherwise pursuing any right or claim, shall be paid by the Company, to the
extent permitted by law, provided that the Employee is successful in whole or in
part as to such claims as the result of litigation, arbitration, or settlement.
In the event that the Company refuses or otherwise fails to make a
payment when due and is ultimately decided that the Employee is entitled to such
payment, such payment shall be increased to reflect an interest equivalent for
the period of delay, compounded annually, equal to the prime or base lending
rate used by The Huntington National Bank, and in effect as of the date the
payment was first due.
18. GOVERNING LAW/CAPTIONS/SEVERANCE. This Agreement shall be construed
in accordance with, and pursuant to, the laws of the State of Ohio. The captions
of this Agreement shall not be part of the provisions hereof, and shall have no
force or effect. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. Except as otherwise specifically provided in this paragraph,
the failure of either party to insist in any instance on the strict
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performance of any provision of this Agreement or to exercise any right
hereunder shall not constitute a waiver of such provision or right in any
other instance.
19. ENTIRE AGREEMENT/AMENDMENT. This instrument contains the entire
agreement of the parties relating to the subject matter hereof, and the parties
have made no agreement, representations, or warranties relating to the subject
matter of this Agreement that are not set forth herein. Upon execution of this
Agreement, the Employment Agreement entered into between the parties on February
28, 1995, shall be terminated and superseded by this Agreement. This Agreement
may be amended at any time by written agreement of both parties, but it shall
not be amended by oral agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
XXXXXX CORPORATION
By:
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Xxxxxxx X. Xxxxxx
President
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Xxxxxx X. Xxxxx, Xx.
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APPENDIX A
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The target bonus will be an amount within a range from $0 to
$100,000.00. The determination of the amount of bonus to be awarded will be
based upon:
1. The quality of the Employee's performance of job elements and
business objectives as set forth on the attached summary,
together with any additional job elements and business objectives
that may be assigned to the Employee by the Chief Executive
Officer (40% of bonus); and
2. The performance of the Company in terms of achievement of its net
income goal, and the Employee's positive and meaningful impact
upon it (60% of bonus).
The determination shall be made by the Compensation Committee of the Board of
Directors with respect to those employees whose compensation must be
specifically reported for securities law purposes, and otherwise by the Chief
Executive Officer.
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SUMMARY
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1. Legal support to financial reporting.
2. Board of Directors and Board committee support.
3. Oversight of outside counsel.
4. Human Resources department.
5. Governmental affairs/political matters.
6. Legal support to land development and homes division.
