EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made on this 16th day of
October 1997 ("Effective Date") by and between Xxxxxxxx Corporation, a New York
Corporation having its principal office at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Company") and XXXXX XXXX, XX. whose residence address is 0000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Employee").
WHEREAS, the Company desires to employ the Employee as the Chairman
and Chief Executive Officer of HRH Construction Corporation and Employee is
desirous of being so employed.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. EMPLOYMENT: The Company hereby hires Employee as the Chairman and
Chief Executive Officer of HRH Construction Corporation and Employee accepts
such employment upon the terms and conditions set forth herein. The Employee
shall report directly to the Company's Board of Directors.
2. TERM: The term of Employee's employment with the Company pursuant
to this Agreement shall be from the Effective Date and continue until December
31, 1999 during which time the Employee agrees to remain in the exclusive
employ of the Company. This Agreement may be extended and/or modified only by
written agreement of the parties.
3. DUTIES: The Employee shall devote his best efforts, knowledge,
skill and full working time and attention to the performance of his duties for
the Company. The Employee's duties shall include but not be limited to:
(a) Being fully responsible for the management and supervision of
the Company's operations and offices including supervision of
the Company's employees.
(b) Performing such other functions and duties as may be assigned
by the Company's Board of Directors.
(c) The Company may change, increase or decrease the Employee's
duties at any time upon oral or written notice to him.
4. COMPENSATION: During the Agreement Term, while he is employed by
the Company, the Company shall compensate the Employee for the Employee's
services as follows:
(a) BASE SALARY: The Company shall pay to the Employee, in
bi-weekly installments, an annual Base Salary of $300,000.
(b) PERFORMANCE BONUS: In addition to the Base Salary, the
Employee shall be eligible to receive an annual bonus under
the Company's incentive compensation plan (the "Plan")
attached as Exhibit A, based on a number of factors including
but not limited to the Company's and the Employee's
performance.
(c) BENEFITS: The Employee shall be entitled to participate in
and be covered by any executive Company insurance plans
(including but not limited to family medical and dental), to
the same extent and on the same terms as such benefits are or
may be provided to all other full time executive employees of
the Company. The Company may modify, supplement or eliminate
such plans at its discretion. The Company shall continue
contributions to the Employee's annuity at the same rate and
conditions as exist on the Effective Date. If however, the
Company's Pension Fund is unfrozen at any time during the
term of this Agreement, the Company's obligation to
contribute to the Employee's annuity shall cease and the
Company shall commence making contributions to the Pension
Fund at the same amount as contributions to Employee's
annuity.
(d) WITHHOLDING: The Company shall withhold from any amounts
payable under Section 4(a) of this Agreement all mandatory
and authorized deductions.
5. EXPENSES INCIDENT TO EMPLOYMENT. The Company shall reimburse the
Employee for out-of-pocket business-related expenses provided that: (a) such
expenses are incurred by the Employee in or about the performance of his duties
hereunder; (b) the Employee provides the Company with appropriate documentation
reflecting those expenses; and (c) subject to any reasonable limitations set by
the Company's Board of Directors.
6. VACATION AND HOLIDAYS: The Employee is entitled to take vacation
and holidays in accordance with the policies of the Company.
7. TERMINATION.
(a) BY EMPLOYEE: The Employee may terminate this Agreement
without cause upon thirty (30) days advance written notice to
the Company.
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(b) WITHOUT CAUSE BY COMPANY: The Employee acknowledges and
agrees that he is an Employee-at-will and that the Company
may terminate his employment at any time for any reason or
for no reason, and the Company shall not be required to
specify a reason for the termination, provided that
termination of the Employee's employment shall be deemed to
have occurred under this Paragraph 7(b) only if it is not
for reasons described in Paragraph 7(c) or 7(d).
(c) DEATH OR DISABILITY: The Employee's employment and the
Company's obligations pursuant to this Agreement shall
automatically terminate upon the occurrence of the following
events:
(i) The death of the Employee; or
(ii) If the Employee shall at any time be prevented by illness,
accident or disability from performing the duties customarily
assigned him by the Company for a consecutive period of more
than twelve (12) weeks, or if he shall be absent from his
duties by reason of illness, accident or disability for any
twelve (12) weeks during any six (6) month period.
(d) WITH CAUSE BY COMPANY: The Company may also immediately
terminate this Agreement "for cause" by written notice to the
Employee. Any one or more of the following events shall
constitute "cause" for termination of this Agreement:
(i) The failure by Employee to substantially perform his duties
for the Company (other than because of illness, accident or
disability) or to abide by the policies, rules and
regulations of the Company;
(ii) Any conduct of the Employee which, in the reasonable opinion
of the Company, is materially detrimental to the reputation
of the Company or its stockholders;
(iii) Theft, fraud, embezzlement, dishonesty, or the Employee being
convicted of a crime;
(iv) The engaging by Employee in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise;
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(v) If the Employee resigns without providing the Company with
thirty (30) days advance written notice;
(vi) Employee's breach of any of the provisions set forth in this
Agreement, or breach of any of the representations and
warranties set forth in this Agreement.
(vii) Breach of the Employee's fiduciary duties and duty of loyalty
to the Company.
(e) SEVERANCE PAYMENT: If the Company terminates this Agreement
pursuant to Paragraph 7(b), the Company shall pay to the
Employee the amount of twelve (12) months of his Base Salary
(as defined in Section 4 (a)), less applicable federal, state
and local taxes, ("Severance Payment") . The Severance
Payment shall be paid to Employee in twelve (12) monthly
installments. The Employee shall also be entitled to
continuation of his health insurance benefits for a period of
twelve (12) months following his termination pursuant to
Paragraph 7(b) under the same terms and conditions as during
his employment. Employee shall also be entitled to
compensation as set forth in the Plan, except that payments
under the Plan for the year in which the termination occurs
shall be made during the second twelve months following the
termination in twelve (12) monthly installments. If, however,
the Agreement is terminated pursuant to any other provision
herein, including without limitation, paragraphs 7(a) , 7(c)
or 7(d), the Company shall not be obligated to pay severance
or any further remuneration to the Employee under this
Agreement, except, if any, as set forth in the Plan and
Paragraph 7(f)
(f) DISABILITY SEVERANCE: In the event the Company terminates the
Employee pursuant to Paragraph 7(c) (ii) , the Company shall
continue to compensate the Employee at a rate of fifty
percent of his Base Salary for a period of twenty-four (24)
months from the date of termination. The Employee shall also
be entitled to compensation pursuant to the Plan for the year
in which the termination occurs, which payments shall be made
during the second twelve months following the termination in
twelve monthly installments.
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(g) All determinations pursuant to paragraphs 7(b), 7(c) (ii)
and 7(d) of this Agreement shall be made by the Company, in
its sole discretion.
(h) The Severance Payment provided for in section 7(e) above
shall be contingent upon and in consideration of the Employee
fully releasing the Company and its officers and Directors
from any and all claims and liabilities arising out of his
employment.
(I) The Company may immediately terminate the Employee's
employment under this Agreement following the delivery of the
Employee's written notice of termination providing for the
Employee's resignation pursuant to Paragraph 7(a), and the
Company shall have no other obligations under this Agreement,
nor shall the Employee receive any benefits, except those to
which he is legally entitled.
8. LOYALTY, NON-COMPETITION, AND CONFIDENTIALITY. The Employee
acknowledges that his services are unique and that in the course of his
employment with the Company he will have dealings with and develop special
relationships with the clients of the Company and its subsidiaries and
affiliates. The Employee further acknowledges that in the course of his
employment with the Company, he has obtained and will continue to obtain
confidential and proprietary information or material relating to the Company,
its principals and shareholders, its subsidiaries and affiliates, and its and
their clients and potential clients. The Employee also acknowledges that if the
Employee were to compete with the Company through the use of the confidential
and proprietary information obtained through his employment, the Company would
be severely and irreparably injured.
Therefore, in consideration of the employment provided by this
Agreement, including the payments described herein, and in order to protect the
Company's legitimate business interests, goodwill, relationships with clients
and employees, and confidential and proprietary information and material
relating to the Company, its principals and shareholders, its subsidiaries and
affiliates and its and their clients and potential clients, the Employee agrees
with the Company as follows:
(a) CONFIDENTIALITY: The Employee agrees to keep secret and
confidential indefinitely all non-public information
concerning the Company, its principals and shareholders, and
its subsidiaries and affiliates which was acquired by
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or disclosed to the Employee during the course of his
employment with the Company, and not to disclose the same,
either directly or indirectly, to any other person, firm, or
business entity, or to use it in any way. To the extent that
the Employee obtains information on behalf of the Company,
its principals or shareholders, or any subsidiary and
affiliate that may be subject to attorney-client privilege,
the Employee shall take reasonable steps to maintain the
confidentiality of such information and to preserve such
privilege.
The confidential information and documents containing that information
in which the Company and/or its clients have a proprietary interest includes,
but is not limited to: the identity of clients; the identity of client contact
persons; rates and fees charged to clients; market research; the identity of
potential business opportunities; the means and methods of obtaining business;
the specifics of transactions; costs/fees/and rents; all financial records
including but not limited to accounts payable and receivable ledgers,
checkbooks, tax returns, W-2's, 1099's, payroll records; blue
prints/plans/sketches; written strategies/internal memoranda; proposals; all
documents and records which the Company regularly uses in the normal course of
business.
(b) COMPELLED DISCLOSURE: In the event that the Employee is
compelled by any form of legal process to reveal any of the
confidential and/or proprietary information of the Company,
Employee shall provide immediate notice to the Company and
allow the Company an opportunity, prior to disclosure, to
challenge the requirement of disclosure should it so desire.
(c) RETURN OF MATERIALS: The Employee agrees that all materials,
books, files, reports, records, correspondence and other
documents, papers and property ("Company Materials") used,
prepared or made available to the Employee in the course of
rendering his services to the Company or subsidiary or
affiliate hereunder shall remain the property of the Company.
Upon termination, the Employee shall immediately return all
Company materials (and copies thereof) to the Company.
(d) COVENANTS NOT TO COMPETE: The Employee covenants that during
the term of his employment and for a period of one year
following termination thereof
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pursuant to paragraphs 7(a), (b) and (d) he shall not:
(1) engage or be interested, whether alone or together
with or on behalf or through any other person, firm,
association, trust, venture, or corporation, whether
as sole proprietor, partner, shareholder, agent,
officer, director, employee, adviser, consultant,
trustee, beneficiary or otherwise, in any business
principally and directly engaged in construction or
real estate development in New York City and its
Metropolitan Area (a "competing business");
(2) assist others in conducting any competing business;
(3) directly or indirectly recruit or induce or hire any
person who is an employee of the Company or any of
its subsidiaries, or solicit any of the Company's
customers, clients or providers; or
(4) own any capital stock or any other securities of, or
have any other direct or indirect interest in, any
entity which own or operates a competing business;
other than (i) the ownership of less than five
percent (5%) of any such entity whose stock is
listed on a national securities exchange or traded
in the over-the-counter market and which is not
controlled by the Employee or any affiliate of the
Employee or (ii) the ownership of any limited
partnership interest in such an entity.
(e) NON-SOLICITATION:
(i) Following the termination of Employee's employment
with the Company or any subsidiary or affiliate
pursuant to paragraphs 7(a), (b) or (d), the
Employee agrees not to solicit or in anyway
interfere with any business or business opportunity
for which the Company has received a Request For
Proposal or for which the Company has made a bid or
pitch to receive business during the Employee's
employment with the Company.
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(ii) For eighteen (18) months following the
cessation of his employment with the Company
pursuant to paragraphs 7 (a), (b) or (d), the
Employee shall not (whether on his own
account or on behalf of any person,
corporation, partnership, or other business
entity, and whether directly or indirectly)
solicit or endeavor to entice away from the
Company or any subsidiary or affiliate any
employee or group of employees thereof.
(f) NON-DISPARAGEMENT. During and after the expiration
of this Agreement, the Employee agrees that he shall
not make any false, defamatory or disparaging
statements about the Company, its subsidiaries and
affiliates, or their officers and directors.
(g) REMEDIES. The Employee has reviewed the provisions
of paragraph 8 with his legal counsel, and he
acknowledges that the Company would be irreparably
injured by a violation of paragraph 8, that the
provisions of that paragraph are reasonable and
that the Company could not adequately be compensated
in damages if the Employee fails to comply with any
of the provisions of paragraph 8. Accordingly, the
Employee agrees that the Company, in addition to any
other remedies available to it for such breach or
threatened breach, shall be entitled to a preliminary
injunction, temporary restraining order, permanent
injunction, or other equivalent relief, restraining
the Employee from any actual or threatened breach of
paragraph 8 of this Agreement. In the event the Company
brings an action to enforce the provisions of paragraph 8
of this Agreement, the Employee expressly consents to
the jurisdiction of the state and federal courts in
New York, New York.
9. APPLICABLE LAW. The provisions of this Agreement shall be
construed in accordance with the laws of the State of New York, without regard
to the conflict of law provisions of any state.
10. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement will not affect the validity or enforceability
of any other provision of this Agreement, and this Agreement.
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11. WAIVER OF BREACH. No waiver by any party hereto of a breach
of any provision of this Agreement by any other party, or of compliance with
any condition or provision of this Agreement to be performed by such other
party, will operate or be construed as a waiver of any subsequent breach by
such other party.
12. SUCCESSORS. This Agreement shall be binding upon, and inure
to the benefit of, the Company and its successors and assigns and upon any
person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets and business.
13. NOTICES. All notices and all other communications hereunder
shall be in writing and shall be given by either party by personal delivery
or facsimile transmission addressed to the other party as follows:
If to the Company, to: Xxxxxxxx X. Xxxxxxx Xxxxxxxx Xxxxx
Company, Inc. 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
If to the Employee, to: Xxxxx Xxxx, Xx. HRH Construction
Corporation One Park Avenue, New York, New York
or to any of them at such other address as shall have been
specified in a notice similarly given.
14. BLUE-PENCILLING. If any court determines that any covenant
contained in this Agreement, including, without limitation, any provision
in paragraph 8 of this Agreement, or any part thereof is unenforceable
because of the duration or geographical scope of such provision, or for
any other reason, the duration or scope of such provision, as the case
may be, shall be reduced so that such provision becomes enforceable and,
in its reduced form, such provision shall then be enforceable and shall be
enforced.
15. SURVIVAL OF AGREEMENT. Except as otherwise expressly provided
in this Agreement, the rights and obligations of the parties to this Agreement
shall survive the termination of the Employee's employment with the Company
and the termination of this Agreement.
16. ENTIRE AGREEMENT. Except as otherwise noted herein this
Agreement, including Exhibits annexed hereto, constitutes the entire agreement
between the parties concerning the employee's employment with the Company.
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17. ARBITRATION: The parties expressly agree that any controversy
or claim arising out of or relating to this Agreement, or breach thereof,
or the Employee's employment with or termination from the Company shall be
exclusively subject to arbitration in accordance with the rules of the
American Arbitration Association ("AAA") except as to any claim arising
out of Paragraph 8 of this Agreement. Venue of the arbitration shall be
in New York City. Any controversy or claim shall be submitted to one (1)
arbitrator selected pursuant to the rules and procedures of AAA. Each party
shall bear all costs associated with their counsel and the presentation
of their evidence, and each party shall share equally the costs of the
proceeding itself.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
/s/ Xxxxx Xxxx Xx.
------------------------
(Employee)
Xxxxxxxx Corporation
By: /s/ Xxxx Xxxxxxxx
------------------------
Xxxx Xxxxxxxx
Chairman of the Board
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EXHIBIT A
INCENTIVE COMPENSATION PLAN
This Incentive Compensation Plan (the "Plan") is incorporated by
reference into the Employment Agreement between Xxxxxxxx Corporation
(the "Company") and Xxxxx Xxxx, Xx. (the "Employee") dated October 15, 1997.
The Employee shall be entitled to ten (10%) percent of HRH Construction
Corporation and its subsidiaries' first $3 Million of pre-tax net income on
an annual basis and five (5%) percent of all pre-tax net income on an annual
basis thereafter.
IN WITNESS WHEREOF, the parties hereto have duly executed this agreement
as of the day and year first above written.
Xxxxxxxx Corporation
/s/ Xxxxx Xxxx, Xx. by: /s/ Xxxx Xxxxxxxx
---------------------- --------------------
Xxxxx Xxxx, Xx. Xxxx Xxxxxxxx
Chairman of the Board
