EMPLOYMENT AGREEMENT FOR XXXXX X. XXXXXXX
THIS EMPLOYMENT AGREEMENT (this "Agreement"), made as of this 1st day of
April, 2011, between Iron Eagle Group, Inc., a corporation organized
under the laws of the State of Delaware (the "Company"), and Xxxxx X.
Xxxxxxx (the "Executive").
BACKGROUND
WHEREAS, the Company is engaged in the business of owning, operating
and managing construction and construction-related companies (the
"Business").
WHEREAS, the Company desires to hire Executive and Executive desires to
work for the Company upon the terms and conditions hereinafter set
forth.
WHEREAS, this Agreement contains the entire understanding of the
employment arrangement with the Company and supersedes all discussions,
proposals or prior agreements, written or oral, and all other
communications relating to the subject matter hereinafter set forth.
WHEREAS, the provisions set out in this Agreement are to be interpreted
fairly between Executive and Company and not in favor or against either
party.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, and intending to be legally bound, the
parties, subject to the terms and conditions set forth herein, agree as
follows:
1. Definitions.
a. Cause. For purposes of this Agreement "Cause" with respect to
the termination by the Company of the Executive's employment shall mean
(i) failure by the Executive to perform his duties for the Company
under this Agreement or to perform the directives of the Board of
Directors of the Company (the "Board") which, if capable of being
cured, remains uncured for more than 20 days after written notice from
the Board specifying such failure; (ii) misconduct by the Executive
which causes material injury to the Company; (iii) a material breach or
violation by the Executive of (a) any provision of this Agreement or
(b) any employment policy of the Company which, in each case, if
capable of being cured remains uncured for more than 20 days after
written notice specifying such violation or breach is given to
Executive; or (iv) conviction of, or a plea of guilty or nolo contendre
to, a felony or other crime involving moral turpitude, embezzlement,
fraud or dishonesty (other than a traffic violation), habitual alcohol
abuse, drug abuse, or excessive absenteeism other than for illness,
after a warning (with respect to drunkenness or absenteeism only) in
writing from the Board to refrain from such behavior.
b. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good
Reason" shall mean any of the following, if taken without Executive's
express written consent (1) a reduction by the Company in the
Executive's annual salary (including deferred salary) to an amount less
than the Executive's Base Compensation (as defined in Section 4) or (2)
the Executive is demoted by means of a substantial reduction in
authority, responsibilities or duties usually consistent with the
position described in Section 1 hereof.
c. Term. This Agreement shall start on April 1, 2011 ("Start
Date") and shall terminate on March 31, 2015, or four (4) years from
the Start Date hereof (the "Initial Term"), unless sooner terminated in
accordance with the provisions hereof. For purposes of this Agreement,
the phase, the "Term" shall mean the Initial Term and any "Renewal
Term" as described in Section 1d below.
d. Renewal. This Agreement shall automatically renew on an
annual basis (each a "Renewal Term") after the initial four (4) year
term unless otherwise terminated by either party in writing sixty (60)
days prior to end of the Initial Term or any Renewal Term.
2. Position.
a. Duties. During the Term the Employee shall be hired as an
employee with the following duties: acting as Chief Financial Officer
of the Company with responsibility for the supervision of preparation
of financial statements, dealings with the Audit Committee of the Board
of Directors of the Company ("Board"), dealing with financial analysts
and outside counsel in connection with securities compliance matters,
and conducting financial due diligence in connection with target
acquisitions that the Chief Executive Officer and the Board believe fit
the Company's business model ("Duties"). Employee will report to the
Chief Executive Officer ("CEO") and to the Board. In addition, Employee
will also be responsible for such other duties that may be assigned to
Employee from time to time by the Board. The Employee shall devote his
full time, energy and attention to the business of the Company, and
shall not, during the Term, be engaged in any other activity that may
interfere in any respect with the performance of the Employee's Duties.
The Employee shall also serve, without any additional compensation, as
a member of the Board.
b. Company Policies. Executive agrees to comply with all Company
policies and procedures in effect as of the Start Date as well as any
modifications or additions to those policies and procedures. This will
include by way of example and those contained in an Executive handbook
or policy manual that is presently under development. The parties
understand however, that if there is a conflict between any policy or
procedure and any provision contained in this Agreement, the provisions
contained in this Agreement shall prevail.
4. Compensation.
a. Accrued Compensation. Notwithstanding anything else in
the Agreement, the Executive and Company agree that Executive's
compensation, severance, auto allowance, and /or other benefits will
accrue from the Start Date until the Company raises the necessary
capital to pay the purchase note of approximately $9.0 million,
representing the purchase price for its acquisition of Delta Mechanical
Contractors LLC ("Delta"). The current expectation is that once the
Company satisfies the Seller's Note related to the acquisition of
Delta, all Executive related accrued compensation will be paid. If the
acquisition of Delta shall be rescinded for any reason, and another
acquisition acceptable to the Executive and the Company is consummated
in 2011, any other capital raised in an amount in excess of the
purchase price for such alternative acquisition will be used to satisfy
the Executive's accrued compensation. In the event that the Delta
acquisition is rescinded and another acquisition acceptable to the
Executive is not consummated by December 31, 2011 or such later date as
the Executive may agree upon, the Executive may terminate this
Agreement effective not earlier than January 1, 2012; in which event
all accrued compensation shall be immediately due and payable.
b. Base Salary. The Company will pay Executive an annual gross
base salary ("Base Fee") in cash as per the following schedule payable
at least semi-monthly:
(i) April 1, 2011 through March 31, 2012: Two Hundred
Twenty Five Thousand ($225,000.00) Dollars
(ii) April 1, 2012 through March 31, 2013: Two Hundred and
Fifty Thousand ($250,000.00) Dollars
(iii) April 1, 2013 through March 31, 2014: Two Hundred
Seventy Five Thousand ($275,000.00) Dollars
(iv) April 1, 2014 through March 31, 2015: Three Hundred
Thousand ($300,000.00) Dollars
c. Guaranteed Annual Bonus Pool Bonus. Commencing April 1st and
ending March 31st during the Term of this Agreement (each an
"Anniversary Year"), the Company shall pay to the Executive not later
than 90 days following the expiration of each Anniversary Year, twenty-
five percent (25%) of a Bonus Pool which shall equal ten percent (10%)
of the consolidated pre-tax income of the Company earned in each
Anniversary Year before deduction for any payment of such Bonus Pool'
provided that the aggregate amount of such Bonus Pool payable to the
Executive and all other participants in such Bonus Pool shall not
exceed an aggregate of One Million ($1,000,000) Dollars in any such
Anniversary Year.
d. Discretionary Bonuses. In addition to the guaranteed
annual bonus pool, the Executive shall be entitled to receive such
additional bonuses (payable in cash and/or shares of common stock of
the Company) at such time(s), in such amount and upon such terms as
shall be determined in the sole discretion of the Compensation
Committee of the Board and ratified by the Board (with the Executive
abstaining from any such vote).
e. Incentive Stock Options. The Executive shall be entitled
to participate in such stock options or incentive stock compensation as
shall be established from time to time by the Board. The time, amount
and grant of Options shall be in the sole discretion of the Board based
upon Executive's performance on an annual basis.
5. Expenses and Fringe Benefits.
a. Expenses. During the Term, the Company shall reimburse the
Executive for all ordinary and necessary business expenses reasonably
incurred by him with respect to the business of the Company and
submitted to the Company (with appropriate supporting documentation)
for reimbursement in accordance with the policies established from time
to time by the Board.
b. Auto Allowance. The Executive shall be entitled to a monthly
auto allowance of $1,000.00, which includes all auto expenses,
including, but not limited to, mileage, lease, ownership, and/or
insurance.
c. Other Benefits. During the Term, the Executive also shall be
entitled to participate in or receive health and other benefits under
insurance and other Executive benefit plans of the Company which are
generally available to its Executives.
d. Vacation. The Executive shall be entitled to four (4) weeks
paid vacation, as well as a reasonable number of personal and sick
days, used as necessary.
6. Termination for Cause. The Company shall have the right to terminate
the Executive for Cause, upon written notice to him of the termination
which notice shall specify the reasons for the termination and the date
of termination. In the event of termination for Cause, the Executive
shall not be entitled to any further benefits under this Agreement,
other than and anything previously earned or accrued. For purposes of
this Agreement, the "date of termination" with respect to termination
for Cause, shall mean the date set forth in the notice of termination.
7. Disability. During the Term, if the Executive becomes permanently
disabled, or is unable to perform his duties hereunder for 3
consecutive months, in each case as determined by the Board in its
reasonable discretion, the Company may terminate the employment of the
Executive. In such event, the Executive shall not be entitled to any
further benefits under this Agreement other than payments under any
disability insurance policy which the Company may have obtained
generally for the benefit of its Executives.
8. Death Benefits. The Executive's employment arrangement hereunder
shall terminate upon his death. Upon the Executive's death, the
beneficiaries designated by the Executive shall be entitled to the
death benefits of any life insurance policy for the Executive (not
including any "key man" life insurance policy, the benefits of which
are payable to the Company) paid for by the Company, but his estate
shall receive unpaid base compensation including all scheduled Base Fee
through March 31, 2015 and anything previously earned or accrued at the
time of Executive's death.
9. Termination Without Cause or Resignation for Good Reason. The
Company may terminate the Executive without Cause during the Term by 20
days prior written notice to the Executive, and the Executive may
resign for Good Reason during the Term upon twenty (20) days prior
written notice (the "Resignation Notice") to the Company specifying the
Good Reason, provided, however, the Resignation Notice must be preceded
by a written warning ("Warning Notice") from the Executive to the
Company sent 25 days prior to the Resignation Notice, stating that Good
Reason exists and specifying the Good Reason. After the date of the
Executive's Warning Notice, the Company may cure the Good Reason within
20 days and, if it elects to do so, shall so notify the Executive
promptly. If the Company terminates the Executive's employment
arrangement during the Term without Cause or if the Executive Resigns
for Good reason, the Company shall pay the Executive a lump sum ("Lump
Sum Payment") equal to the remainder of unpaid base compensation
including all scheduled Base Fee through March 31, 2015 and anything
previously earned or accrued. If the Company terminates the Executive
under this provision with less than two years remaining but greater
than one year remaining than the Company shall pay a lump sum equal to
two (2) years of Base Fee.
The Lump Sum Payment is in lieu of, and not in addition to, any
severance or non-competition payment due or to become due to the
Executive under any separate agreement or contract between the
Executive and the Company or pursuant to any severance payment plan,
program or policy of the Company.
As a condition to the receipt of the Lump Sum Payment, the Executive
and the Company must first each execute and deliver to the other party
a bilateral mutual agreeable release releasing the Executive, the
Company and its affiliates, and the officers, managers, employees,
Executives and agents of the Company and its affiliates, from any and
all claims and from any and all causes of action of any kind or
character that the Executive or Company may have arising out of the
Executive's employment arrangement with the Company or the termination
of such employment arrangement.
10. Resignation Without Good Reason. In the event that the Executive
resigns from the Company at any time during the Term without Good
Reason, the Executive shall not be entitled to any additional
compensation for the time after which he ceases to work for the
Company, and shall not be entitled to any of the other benefits
provided hereunder nor any severance payment due or to become due to
the Executive under any separate agreement or contract between the
Executive and the Company or pursuant to any severance payment plan,
program or policy of the Company.
11. Non-Disclosure/Non-Compete.
a. Non-Disclosure of Confidential Information. Except in the
course of Executive's employment arrangement with the Company and in
the pursuit of the business of the Company or any of its subsidiaries
or affiliates, the Executive shall not, at any time during or following
the Term, directly or indirectly use for his own benefit or purpose, or
disclose to a third party or use for the benefit or purpose of any
person or entity other than the Company, any confidential information
or proprietary data of the Company or any of its subsidiaries or
affiliates. The Executive acknowledges that confidential information
includes, among other things, information regarding sales, costs,
customers, employees, Executives, products, services, apparatus,
equipment, processes, formulas, marketing, or the organization,
business or finances of the Company. The Company and the Executive
agree that as between them, all of the confidential information
constitutes important and material trade secrets of the Company and
affects the successful conduct of the Company's business and its
goodwill, and that any breach of any term of this section is a material
breach of this Agreement.
b. Ownership of Competitive Businesses. While acting as a
Executive for the Company, notwithstanding the foregoing, with the
exception of Iron Eagle, Executive may own, directly or in directly,
solely as an investment, up to five percent (5%) of any class of
Publicly Traded Securities of any person or entity which owns a
competitive business. For the purposes of this Agreement, the term
"Publicly Traded Securities" shall mean securities that are traded on a
national securities exchange or listed on the National Association of
Securities Dealers Automated Quotation System.
c. Non-disparagement. The Parties acknowledge the importance of
maintaining the privacy of Company and all individuals who have, will
have or have had any relationship with such organizations as a current
or former Executive, independent contractor, officer or director or
manager of such entities (the "Privacy Group"). For a period of
twenty-four (24) months after Termination, Executive and Company will
not disparage the Executive or Privacy Group in connection with
interviews, books and articles appearing in media, or participation on
a xxxxxxx xxxxxxxxxx show where any details other than the length of
Executive's employment arrangement and job title are discussed.
Moreover, Parties agree that the limitations and restrictions contained
in this subparagraph are part of the bargained for exchange and are
reflected in the consideration of the Parties under this Agreement.
d. Survival. This Section 11 shall survive the termination of the
Executive's employment arrangement hereunder and the expiration of this
Agreement.
12. GOVERNING LAW. THE TERMS OF THIS AGREEMENT SHALL BE GOVERNED BY,
AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE PROVISIONS OF, THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.
13. Entire Agreement. This Agreement supersedes all other prior
agreements and understandings with respect to the matters covered
hereby, with the exception of the employment agreement between
Executive and Company, dated November 5, 2009, and does not modify any
compensation or expenses due to Executive prior to January 1, 2011.
14. No Oral Amendment. The amendment or termination of this Agreement
may be made only in a writing executed by the Company and the
Executive, and no amendment or termination of this Agreement shall be
effective unless and until made in such a writing.
15. Successors; Assignment. This Agreement shall be binding upon any
successor (whether direct or indirect, by purchase, merger,
consolidation, liquidation or otherwise) to all or substantially all of
the assets or stock of the Company, as well as to the surviving entity
in any merger between the Company and another entity or entities. This
Agreement is personal to the Executive and the Executive may not assign
any of his rights or duties hereunder, but this Agreement shall be
enforceable by the Executive's legal representatives, executors or
administrators.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and is shall
not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart.
17. Modifications. No modification or alteration of any part of this
Agreement will be effective unless it is made in writing and signed by
Executive and the Chairman of the Board and approved by the Board. The
provisions of this Agreement are binding on all assigns and successors
in interest. Since employment involves personal services, we agree
that neither party may assign their rights or obligations hereunder.
18. Dispute Resolution.
a. Subject to the exceptions noted in this Paragraph, if Company
and Executive are unable to resolve any dispute on their own, both
parties agree to resolve the dispute in final and binding arbitration
in front of one arbitrator expert in areas relating to the dispute from
the Judicial Arbitration and Mediation Service ("JAMS") in accordance
with their then current employment arbitration rules. The venue for
the arbitration shall be New York City, New York.
b. Excluding any delay caused by JAMS, any arbitration
contemplated must be completed within 90 days of the filing of the
arbitration demand with JAMS. The arbitration hearing must be
completed within a single day and the arbitrator must provide a written
opinion specifying the reasons for the decision in writing within 10
business days of the arbitration hearing.
c. This provision is self executing and in the event that either
party fails to appear at any properly noticed arbitration proceeding,
an award may be entered against such party notwithstanding said failure
to appear. Any arbitration award shall be enforceable by any court of
competent jurisdiction.
d. Notwithstanding the foregoing, any claim relating to the
validity of any Confidential Information or any other proprietary
technology or intellectual property shall not be determined by
arbitration, but only by a Federal District Court located in New York
City, New York. We also agree that any breach of the obligations under
this Agreement which relates to proprietary rights or Confidential
Information or which is otherwise not subject to remedy by monetary
damages that will cause irreparable harm will be entitled to injunctive
relief in addition to all other remedies provided in this Agreement or
available at law, in any court of competent jurisdiction.
e. Parties agree that any claim for arbitration must be submitted
to arbitration within the earlier of 12 months of termination of the
termination date of the employment arrangement or 12 months from the
date of discovery. Any claim submitted beyond this period, Parties
agree is void.
f. Executive agrees that the provisions of this Paragraph will
apply if Executive has any dispute with any current or former Company
employee or board member relating directly or indirectly to Executive's
work with the Company.
g. This Paragraph 10 will survive termination of this Agreement.
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follows]
vIN WITNESS WHEREOF, the parties have the authority and have caused
this Agreement to be executed as of the day and year first written
above.
/s/Xxxxx X. Xxxxxxx
-----------------------------
Xxxxx X. Xxxxxxx
Iron Eagle Group, Inc.
By: /s/Xxxxxx X. XxXxxxx
-------------------------
Xxxxxx X. XxXxxxx
Chief Executive Officer
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