EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of January 9, 1997, by and among The Xxxxxxx Xxxxxx Company, a Florida
corporation located at 000 Xxxxxxxx Xxx, Xxxxx Xxxxxx, Xxxxxxx 00000 (the
"Company"), Hospitality Worldwide Services, Inc., a New York corporation
("Hospitality") and Xxxxxxx Xxxxxx, residing at 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx
Xxxxxx, Xxxxxxx 00000 (the "Executive").
IN CONSIDERATION of the covenants and agreements set forth herein, and
other good and valuable consideration (the receipt and sufficiency of which is
hereby acknowledged) the parties covenant and agree as follows:
1. EMPLOYMENT OF EXECUTIVE. (a) The Company hereby employs the
Executive as its Chief Executive Officer on a full-time basis to perform the
duties and responsibilities incident to such office consistent with the duties
and responsibilities heretofore performed by the Executive for the Company,
subject at all times to the control and direction of the Board of Directors of
the Company (the "Board").
(b) The services of the Executive hereunder shall be rendered
primarily in the Miami, Florida metropolitan area at the Company's principal
executive offices; provided, however, that the Executive shall make such trips
outside of the Miami, Florida metropolitan area as shall be reasonably necessary
in connection with the Executive's duties hereunder.
2. ACCEPTANCE OF EMPLOYMENT; TIME AND ATTENTION. The Executive hereby
accepts such employment and agrees that throughout the Employment Period (as
hereinafter defined), he will devote such full time, attention, knowledge and
skills, faithfully, diligently and to the best of his ability, in furtherance of
the business of the Company as are necessary to perform the duties and
responsibilities assigned to him pursuant to Section 1 hereof, subject, at all
times, to the direction and control of the Board. The Executive shall at all
times be subject to, observe and carry out such reasonable rules, regulations,
policies, directions and restrictions as the Company shall from time to time
establish, consistent with the office of the Executive and prior practice of the
Company.
3. TERM. The Company agrees to employ the Executive and the Executive
agrees to serve, on the terms and conditions of this Agreement, for a period
commencing as of January 1, 1997 and ending on December 31, 1999, unless earlier
terminated in accordance with Section 11 hereof (the "Employment Period").
4. COMPENSATION. For all services rendered by the Executive under this
Agreement, the Company shall pay the Executive the following:
(a) a base salary of $175,000 per annum, payable in
equal, bi-weekly installments (the "Base Salary").
The Base Salary shall be increased annually,
beginning January 1, 1998, by a percentage equal to
the percentage by which the Consumer Price Index for
Urban Wage Borrowers and Clerical Workers: Xxx Xxxx,
X.X. - Xxxxxxxxxxxx Xxx Xxxxxx (0000-00 equals 100),
as published by the Bureau of Labor Statistics of the
United States Department of Labor, shall have
increased over the preceding year (the "CPI
Adjustment"). The CPI Adjustment shall be made as
soon as possible, but in no event later than fifteen
(15) days after the date upon which the Bureau of
Labor publishes its consumer price index statistics
for the month of December. Any portion of the
increase in the Executive's compensation
retroactively due shall be payable immediately upon
determination of the adjustment. If publication of
the Consumer Price Index is discontinued, the parties
hereto shall accept comparable statistics on the cost
of living for the New York, N.Y. - Northeastern New
Jersey area as computed and published by an agency of
the United States or by a responsible financial
periodical of recognized authority then to be
selected by the parties.
(b) In addition to the Base Salary, the Executive shall
be eligible to receive bonuses ("Bonuses") each year
during the Employment Period in an amount of up to
20% of the Base Salary based upon the achievement of
objective criteria presented to the Board by the
Executive and the President of the Company and
approved by the Board. Such objective criteria shall
be determined in consultation with the Executive on
an annual basis and shall be set forth in writing not
later than 60 days after the commencement of each
year during the term hereof.
(c) Simultaneously with the execution hereof, Hospitality
shall grant to the Executive stock options (the
"Options") pursuant to Hospitality's 1996 Stock
Option Plan to purchase Sixty-Five Thousand (65,000)
shares of Hospitality's common stock, $.01 par value,
such Options to be evidenced by an agreement attached
hereto as EXHIBIT A. The Executive shall be eligible
for additional grants during the term hereof in
accordance with policies
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established from time to time by the Company or
Hospitality.
The parties agree that the Company is authorized to deduct
from the Base Salary and Bonuses of the Executive, and any other compensation
paid to the Executive, only such sums as are required by law to be deducted or
withheld.
5. EXECUTIVE BENEFITS. The Executive shall be entitled to receive such
benefits as reasonably determined from time to time by the Board of Directors of
the Company and as are consistent with and not less than benefits provided to
other senior executives of the Company or Hospitality. In addition, the
Executive shall be entitled to fifteen (15) days of paid vacation for each 12
month period during the Employment Period provided, however, that the Executive
may, at his option, carry forward five (5) days of paid vacation to the
following 12 month period, provided further, however, that in no event may the
total number of days of paid vacation exceed twenty (20) during any twelve month
period. Any vacation shall be taken at the reasonable and mutual convenience of
the Company and the Executive.
6. REIMBURSEMENT OF EXPENSES. The Company shall reimburse the Executive
in accordance with its applicable policies for all expenses reasonably incurred
by Executive in connection with the performance of his duties hereunder and the
business of the Company, upon the submission to the Company of appropriate
receipts or vouchers.
7. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Company, its subsidiaries and any of its
affiliates all confidential information, knowledge and data relating to or
concerned with Hospitality, the Company, other subsidiaries of Hospitality and
any of their affiliates' operations, sales, business and affairs, and he shall
not, at any time, either during the Employment Period or after the termination
of the Executive's employment with the Company, use, disclose or divulge any
such confidential information, knowledge or data to any person, firm or
corporation (unless the Company, or such other entity, no longer treats such
information as confidential) other than to the Company or its designees and
employees or except as may otherwise be required in connection with the business
and affairs of the Company; PROVIDED, HOWEVER, that the Executive may disclose
or divulge such information, knowledge or data that is or becomes generally
available to the public through no wrongful act on the Executive's part or where
such disclosure is legally compelled by judicial or administrative action,
provided that the Executive agrees, to the extent practicable, to give the
Company prompt notice of any such judicial or administrative action to enable
the Company to seek an appropriate protective order.
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8. INTELLECTUAL PROPERTY. Any idea, invention, design, written
material, manual, system, procedure, improvement, development or discovery
conceived, developed, created or made by the Executive alone or with others
relating to the businesses of the Company, Hospitality or any of Hospitality's
other subsidiaries during the Employment Period, whether or not patentable or
registrable, shall become the sole and exclusive property of the Company. The
Executive shall disclose the same promptly and completely to the Company and
shall, during the Employment Period and at any time and from time to time
thereafter (i) execute all documents reasonably requested by the Company for
vesting in the Company the entire right, title and interest in and to the same,
(ii) execute all documents reasonably requested by the Company for filing and
prosecuting such applications for patents, trademarks, service marks and/or
copyrights as the Company, in its sole discretion, may desire to prosecute, and
(iii) at the expense of the Company give the Company all assistance it
reasonably requires, including the giving of testimony in any suit, action or
proceeding, in order to obtain, maintain and protect the Company's right therein
and thereto.
9. RESTRICTIVE COVENANT. In consideration of the Company entering into
this Agreement, the Executive agrees that while the Executive is an employee of
the Company and, except in the event of the Executive's termination (i) due to
his becoming "Permanently Incapacitated" (as hereinafter defined), (ii) by the
Company without "Cause" (as hereinafter defined), (iii) by the Executive with
"Good Reason" (as hereinafter defined) or (iv) at the conclusion of the
Executive Period, for a period of one (1) year thereafter, he will not:
(i) directly or indirectly own, manage, operate, join,
control, participate in, invest in, lend money to, guarantee the debts or
obligations of or otherwise be connected with, in any manner, whether as an
officer, director, employee, partner, investor or otherwise, any business entity
that is engaged in the business now or at the time of such termination engaged
in by Hospitality, the Company or any other subsidiary or affiliate of
Hospitality in the geographical areas where they conduct such business at the
time of such termination;
(ii) for himself or on behalf of any other person,
partnership, corporation or entity, call on any customer of Hospitality, the
Company or any other subsidiary or affiliate of Hospitality for the purpose of
soliciting, diverting or taking away any customer from Hospitality, the Company
or any other subsidiary or affiliate of Hospitality; or
(iii) induce, influence, or seek to induce or influence, any
person engaged as an employee, representative, agent, independent contractor or
otherwise by Hospitality, the Company or any other subsidiary or affiliate of
Hospitality, to terminate his
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or her relationship with Hospitality, the Company or any other subsidiary or
affiliate of Hospitality.
The provisions of this Section 9 shall immediately terminate
in the event that the Company fails to redeem the Preferred Stock in accordance
with the provisions of Section 5(b) of the Certificate of Designations,
Preferences and Other Rights and Qualifications of Redeemable Convertible
Preferred Stock of Hospitality.
Nothing herein contained shall be deemed to prohibit the
Executive from investing his funds in securities of an issuer if the securities
of such issuer are listed for trading on a national securities exchange or are
traded in the over-the-counter market and the Executive's holdings therein
represent less than 5% of the total number of shares or principal amount of the
securities of such issuer outstanding.
10. EQUITABLE RELIEF. The parties hereto acknowledge that the
Executive's services are unique and that, in the event of a breach or a
threatened breach by the Executive of any of his obligations under this
Agreement, the Company shall not have an adequate remedy at law. Accordingly, in
the event of any such breach or threatened breach by the Executive, the Company
shall be entitled to such equitable and injunctive relief as may be available to
restrain the Executive and any business, firm, partnership, individual,
corporation or entity participating in such breach or threatened breach from the
violation of the provisions hereof. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available at law or in
equity for such breach or threatened breach.
11. EARLY TERMINATION.
(a) The Employment Period shall terminate without action on
the part of the Company upon the death of the Executive. The Employment Period
shall also terminate upon 30 days written notice by the Company to the
Executive, (i) in the event that the Executive shall become "Permanently
Incapacitated" (as hereinafter defined); or (ii) for "Cause" (as hereinafter
defined). The Employment Period shall also terminate upon written notice by the
Executive to the Company for "Good Reason" (as hereinafter defined);
(b) For purposes of this Agreement, the Executive may, in the
sole discretion of the Company, be deemed Permanently Incapacitated in the event
that the Executive shall, by reason of his physical or mental disability as
determined by the Executive's physician or a physician designated by the
Company, fail to substantially perform his usual and regular duties for the
Company for a period of 120 consecutive days or for an aggregate of 120 days in
any consecutive twelve month period.
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(c) For purposes of this Agreement, "Cause" shall mean any (i)
criminal conviction of the Executive for an offense involving the
misappropriation of funds or material property of the Company, (ii) willful
refusal of the Executive to follow the reasonable and lawful directives of the
Board for the performance of material duties which the Executive is required to
perform hereunder (other than for reason of becoming Permanently Incapacitated)
in accordance with the prior activities of the Executive for the Company or
(iii) the breach by the Executive of a material provision of this Agreement;
PROVIDED, HOWEVER, that in the event of a claim by the Company pursuant to (ii)
or (iii) above, the Company shall first provide the Executive with written
notice specifying the nature of the cause and the Executive shall have thirty
(30) days within which to cure such cause.
(d) For purposes of this Agreement, "Good Reason" shall mean
any diminution of the Executive's position, duties, responsibilities, executive
benefits or compensation as Chief Executive Officer or the breach by the Company
of a material provision of this Agreement.
(e) In the event the Employment Period is terminated by reason
of the Executive's death, the Company shall, within 30 days, pay to the
Executive's estate the Base Salary, as adjusted, to and including the date of
such termination, any prorated Bonuses computed through the most recently
completed fiscal quarter and all expense reimbursements due the Executive.
(f) In the event the Employment Period is terminated (i) by
the Company for Cause, or (ii) by the Executive without Good Reason, the Company
shall, within 30 days, pay to the Executive his Base Salary, as adjusted, to and
including the date of such termination, any prorated Bonuses computed through
the most recently completed fiscal quarter and all expense reimbursements due
the Executive.
(g) In the event the Employment Period is terminated due to
the Executive becoming Permanently Incapacitated, the Company shall, within 30
days, pay to the Executive the Base Salary, as adjusted, to and including the
date of such termination, any prorated Bonuses computed through the most
recently completed fiscal quarter previously determined by the Board and all
expense reimbursements due the Executive.
(h) In the event the Employment Period is terminated (i) by
the Company without Cause, or (ii) by the Executive with Good Reason, the
Company shall, within 30 days, pay to the Executive an amount equal to the total
of all payments of Base Salary for the remainder of the Employment Period. In
addition, the Executive shall be entitled to any Bonuses for the remainder of
the Employment Period, shall be paid for accrued but unused vacation time
determined on a pro-rata basis and shall be entitled to the
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benefits provided pursuant to Section 5 hereof for the remainder of the
Employment Period.
12. ARBITRATION OF ALL DISPUTES. Any controversy or claim arising out
of or relating to this Agreement or the breach thereof (including the
arbitrability of any controversy or claim), shall be settled by arbitration in
the City of Miami, State of Florida (if such claim is brought by the Company or
Hospitality) or in the City of New York, State of New York (if such claim is
brought by the Executive), by three arbitrators, one of whom shall be appointed
by the Company, one by the Executive and the third of whom shall be appointed by
the first two arbitrators. If the first two arbitrators cannot agree on the
appointment of a third arbitrator, then the third arbitrator shall be appointed
by the American Arbitration Association. The arbitration shall be conducted in
accordance with the rules of the American Arbitration Association, except with
respect to the selection of arbitrators which shall be as provided in this
Section. The prevailing party shall be entitled to recover its attorneys fees
and costs. In the absence of fraud, the award of the arbitrators shall be
binding upon the parties and judgment thereon may be entered in any court having
jurisdiction thereof.
13. ENTIRE AGREEMENT; AMENDMENT. This agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter.
No amendment to or modification of this Agreement shall be valid or binding
unless made in writing and signed by the party against whom enforcement thereof
is sought.
14. NOTICES. Any notice or other communication required or permitted to
be given by this Agreement shall be writing and shall be effectively given if:
(a) delivered personally by hand;
(b) sent by prepaid courier service;
(c) sent by registered mail; or
(d) sent by prepaid telecopier, telex or other similar
means of electronic communication and confirmed by
mailing the original document so sent by prepaid mail
on the same or following day,
in each case addressed as follows:
(i) if to the Executive:
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Telecopier No. (000) 000-0000
(ii) if to the Company or Hospitality:
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. (000) 000-0000
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or at such other address as the party to whom such notice or other communication
is to be given shall have advised the party giving same in the manner provided
in this Section. Any notice or other communication delivered personally or by
prepaid courier service shall be deemed to have been given and received on the
day it is so delivered at such address, provided that if such day is not a
business day such notice or other communication shall be deemed to have been
given and received on the next following business day. Any notice or other
communication sent by registered mail shall be deemed to have been given and
received on the third business day following the date of mailing. Any notice or
other communication transmitted by telecopier, telex or other similar form of
electronic communication shall be deemed given and received on the day of its
transmission provided that such day is a business day and such transmission is
completed before 5:00 p.m. on such day, failing which such notice or other
communication shall be deemed given and received on the first business day after
its transmission. Regardless of the foregoing, if there is a mail stoppage or
labor dispute or threatened labor dispute which has affected or could affect
normal mail delivery, then no notice or other communication may be delivered by
registered mail. If there has been a mail stoppage and if a party sends a notice
or other communication by telecopier, telex or other similar means of electronic
communication, such party shall be relieved from the obligation to mail the
original document in accordance with this Section. "Business day" means any day
other than a Saturday, a Sunday or a statutory holiday observed in New York
City, New York.
15. WAIVERS. No course of dealing nor any delay on the part of any
party hereto in exercising any rights hereunder shall operate as a waiver of any
such rights. No waiver of any default or breach of this Agreement shall be
deemed a continuing waiver or a waiver of any other breach or default.
16. GOVERNING LAW. This Agreement shall be governed, interpreted and
construed in accordance with the laws of the State of New York, except that body
of law relating to choice of laws.
17. INVALIDITY. If any clause, paragraph, section or part of this
Agreement shall be held or declared to be void, invalid or illegal, for any
reason, by any court of competent jurisdiction, such provision shall be
ineffective but shall not in any way invalidate or affect any other clause,
paragraph, section or part of this Agreement.
18. FURTHER ASSURANCES. Each of the parties shall execute such
documents and take such other actions as may be reasonably requested by the
other party to carry out the provisions and purposes of this Agreement in
accordance with its terms.
19. COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts which may be by
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facsimile, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
20. GUARANTEE. Hospitality guarantees the full performance of the
obligations of the Company hereunder.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
THE XXXXXXX XXXXXX COMPANY
/s/ Xxxxxxx Xxxxxx
---------------------------- By: /s/ Xxxxxxx Xxxxxx
XXXXXXX XXXXXX --------------------------------
Name: Xxxxxxx Xxxxxx
Title:President
HOSPITALITY WORLDWIDE SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
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