SENIOR EXECUTIVE EMPLOYMENT AGREEMENT
AGREEMENT made as of the 8th day of January, 1998, by and
between ▇▇▇▇ ▇▇▇▇▇ & Sons, Inc., a New York corporation, with offices at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as the
"Corporation"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ presently residing at ▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as the "Executive").
W I T N E S S E T H :
Executive is presently employed as Chief Operating Officer of the
Corporation. The Corporation and Executive desire to enter into an agreement of
employment on the terms and subject to the conditions hereinafter set forth,
contingent on the election of the Executive, by the Board of Directors of the
Company ("Board"), as President and Chief Executive Officer of the Corporation
NOW THEREFORE, the parties agree as follows:
1. Employment.
1.1 Effective May 1, 1998 or on such other date as the Board may
determine (the "Effective Date") and contingent on the election of Executive by
the Board, the Corporation hereby employs Executive as President and Chief
Executive Officer.
1.2 Executive hereby accepts such employment and shall devote his
full business time, attention, knowledge and skills faithfully, diligently and
to the best of his ability to the performance of his duties. Executive shall do
such traveling as may be reasonably required of him in the performance of his
duties. Executive shall be subject to and shall observe and carry out such
reasonable rules, regulations, policies, directions and restrictions consistent
with the duties to be performed by him hereunder as the Corporation shall from
time to time establish.
1.3 If at any time during the term of employment the Board of
Directors of the Corporation shall, without his consent, and other than for
cause or on account of death, disability or retirement, fail to re-elect
Executive as President and Chief Executive Officer or shall remove him from such
office, Executive shall have the right, exercisable by written notice to the
Corporation within ten business days after the occurrence of such failure to
re-elect or removal, to terminate his services hereunder, effective as of the
last day of the month of receipt by the Corporation of any such written notice,
and Executive shall have no further obligation under this Agreement. Termination
of Executive's services under this Section shall be treated as a termination of
employment by the Corporation other than for cause and shall be governed by the
provisions of Section 5.2 of this Agreement.
1.4 Executive shall not be entitled to compensation other than
the compensation provided for (or otherwise referred to) in this Agreement for
any services he may render as a director or officer of any of the Corporation's
subsidiaries.
1.5 Executive shall not without the prior written approval of the
Corporation accept employment or compensation from or perform services of any
nature for any business enterprise other than the Corporation or any of its
subsidiaries or joint-venture entities.
1.6 Executive shall not without the prior written approval of the
Corporation invest in any business enterprise -
1.6.1 if such enterprise engages in or involves a "Restricted
Business" as that term is hereinafter defined in Section 7.1;
1.6.2 if such investment interferes with the performance of
Executive's duties hereunder; or
1.6.3 if such investment would violate the Corporation's
announced business policy with respect to employee interests in suppliers of
goods or services to the Corporation or any of its subsidiaries.
Notwithstanding the foregoing, Executive may invest in securities
of any company if such securities are listed for trading on a national stock
exchange or traded on the over-the-counter market and Executive's investment
therein represents less than one percent (1%) of the total number of outstanding
shares of the class of shares or outstanding principal amount of the class of
other securities of such company, as the case may be.
1.7 Executive shall not without the prior written approval of the
Corporation serve on the board of directors of any business enterprise other
than the Corporation or any of its subsidiaries.
2. Term.
2.1 Executive's term of employment hereunder shall commence as of
the Effective Date and shall continue through April 30, 2001, unless sooner
terminated in accordance with this Agreement, and thereafter as herein provided.
Executive's term of employment shall automatically renew for subsequent three
year terms, the first of which would begin on May 1, 2001, subject to the terms
of this Agreement, unless either party gives written notice 30 days or more
prior to the expiration of the then existing term of his or its decision not to
renew. Failure by the Corporation to renew, although not a termination by the
Corporation without cause or for cause, shall for purposes of the benefits
intended to be provided to Executive (and the obligations of Executive under
Section 5.5) be deemed to constitute a termination without cause.
3. Compensation.
3.1 As compensation for his services hereunder, the Corporation
shall pay Executive a base salary at the rate of four hundred fifty thousand ($
450,000) Dollars per annum, subject to increase as hereinbelow provided, payable
in equal installments no less frequently than monthly.
3.2 Executive shall be eligible to participate in all of the
Corporation's executive compensation plans in which senior executives are
eligible to participate, including but not limited to the Executive Annual
Incentive Plan ("EAIP"), the Executive Long Term Incentive Plan ("ELTIP"), or
equivalents, for so long as such plans remain in effect and shall also be
entitled to all of his other presently existing employment benefits and
perquisites or equivalents.
3.3 Executive's compensation shall be reviewed periodically in
accordance with procedures and policies established by the Corporation for
salary review of its officers.
3.4 To the extent coverage is not duplicative of that provided
under an executive compensation plan in which Executive is eligible to
participate, Executive shall be included to the extent eligible under any and
all plans providing benefits generally for the Corporation's employees,
including, but not limited to, pension, group life insurance, hospitalization,
medical and disability plans. The Corporation shall not, however, be under any
obligation to continue the existence of any executive compensation or other
employee benefit plan referred to in Section 3.2 or this Section 3.4.
3.5 The Governance and Compensation Committee (the "Committee")
intends, at a meeting or by unanimous written consent of the Committee on or
about the Effective Date, to grant to Executive under the 1991 Key Employee
Stock Plan, an option to purchase 75,000 shares of Class A Common Stock of the
Corporation, at the market price on the date of grant, vesting as to all such
shares on the fifth anniversary of the date of grant, and otherwise in the form
of grant customarily used by Company for such options (the "Option"). The Option
is in addition to, and shall not be part of or affect the ELTIP, as applicable
to Executive.
3.6 Subject to the next sentence of this Section 3.6, (i) should
the Option not be timely granted, or should the Corporation cease to provide
incentive compensation plans in which Executive is eligible to participate,
substantially similar to those described in Section 3.2 above, and of a value,
in the aggregate, to Executive substantially similar to that of the present
plans, Executive shall have the right to terminate his services hereunder,
exercisable by written notice to the Corporation within ten business days after
the Effective Date, or after the cessation of such plans, as applicable,
effective as of the last day of the month of receipt by the Corporation of any
such notice, and Executive shall have no further obligation of any kind under or
arising out of this Agreement. Should a circumstance or event not within the
reasonable contemplation of the parties at the date hereof arise on or before
the Effective Date that makes it inadvisable or undesirable in the reasonable
judgment of the Committee to grant the Option to Executive and should the
Committee and/or the Board (as may be required) on or about such date, because
of such intervening circumstance or event, instead bestow upon Executive
benefits of reasonably equivalent value and having a comparable vesting date,
Executive shall thereupon forego his right of termination under the preceding
sentence. Termination of Executive's services under this Section 3.6 shall be
treated as a termination of employment by the Corporation other than for cause
and shall be governed by the provisions of Section 5.2.
4. Vacation.
Executive shall be entitled to four weeks of paid vacation, or such greater
amount, if any, as provided in the policies of the Corporation then applicable
to Executive, each calendar year during the period of his employment hereunder,
to be taken at times mutually agreeable to Executive and the Corporation.
5. Termination of Employment By Corporation.
5.1 The Corporation may terminate Executive's employment
hereunder at any time for cause without further obligation or liability except
as hereinbelow stated in this Section 5.1. For purposes of this Agreement, the
term "cause" shall be limited to the following grounds:
5.1.1 Executive's refusal to substantially perform his duties or
otherwise fulfill his material obligations under this Agreement (for reasons
other than death or disability), in any such case after due written notice
thereof, or serious willful misconduct in respect of his obligations hereunder;
5.1.2 Conviction of a felony crime;
5.1.3 Perpetration of a fraud against the Corporation or
misappropriation of the Corporation's property;
5.1.4 Habitual intoxication or illegal use of habit forming
substances; or
5.1.5 Knowingly making a material false statement to the
Corporation's Board of Directors or management regarding the affairs of the
Corporation.
In the event Executive's employment is terminated for cause, no
further payments of salary or benefits of any kind or nature (except to the
extent accrued to the date of termination) shall be paid to Executive, and
Executive shall have no further claim against the Corporation under the terms of
this Agreement or otherwise relating to his employment.
5.2 Corporation may terminate Executive's employment hereunder at
any time without cause. In the event of such termination the obligations of the
Corporation to Executive shall be limited to the following:
5.2.1 Salary accrued to the effective date of such termination;
5.2.2 Continuation of base salary at the per annum rate then in
effect, for a period of 36 months from the effective date of such termination
(hereinafter "the Severance Period");
5.2.3 The "target incentive amount" under any executive annual
incentive plan established by the Corporation for a fiscal year ending during
the Severance Period, and the same "target incentive amount" for any such
executive annual incentive plan, pro-rated to the end of the Severance Period,
for a fiscal year commencing during but ending after the Severance Period, or
the equivalent under any bonus or variable compensation plan which may hereafter
be adopted by the Corporation in lieu of such executive annual incentive plan;
5.2.4 The value of the "payout amount," in cash, for any
executive long term incentive plan established by the Corporation, the plan
cycle of which ends within 12 months after the effective date of termination,
pro-rated to the date of termination;
5.2.5 Lapse of restrictions on any outstanding restricted stock
awards not vested on the effective date of termination, or at the Corporation's
option, the cash value of the restricted stock forfeited under such awards based
on "fair market value" on the effective date of termination; and
5.2.6 Coverage during such Severance Period under the following
employee benefit plans or provisions for comparable benefits outside such plans,
but only to the extent comparable coverage is not provided by any new employer:
(1) Group Health Insurance Program; (2) Long-Term Disability Plan (as provided
under such Plan, the Executive shall be required to pay the premium); (3) Group
Life and Accidental Death and Dismemberment Insurance (at the levels in effect
at the date of termination of employment, taking into account any waiver of
coverage under the Corporation's Supplemental Executive Retirement Program).
For purposes of Section 5.2.5, the "fair market value" shall be
the mean between the highest and lowest prices at which the Common Stock is
traded on the effective date of termination as reported by the New York Stock
Exchange or any successor thereto. If there is no sale of the Common Stock on
such exchange on such date, the mean between the bid and asked prices on such
exchange at the close of the market on such date shall be deemed to be the fair
market value of the Common Stock.
Executive shall not be required to seek other employment during
such Severance Period, but in the event Executive renders personal services
during such period to any person or firm other than the Corporation, whether as
an employee, a partner or as a self-employed individual and earns income
(whether or not then payable) attributable to the performance of such personal
services during either the 12 month period commencing on the date of termination
of employment or the next two succeeding 12 month periods in excess of $ 100,000
per such 12 month period, (i) Executive shall notify the Corporation, in
accordance with Section 9.3 hereof, within 15 days of the commencement of such
employment, and (ii) the amount of salary which the Corporation would otherwise
be required to pay Executive during such 12 month period shall be reduced dollar
for dollar by such excess amount. If as a result of Executive's accruing such
income, the Corporation has overpaid Executive, Executive shall promptly
reimburse the Corporation for the amount of such overpayment.
5.3 Executive agrees that the payments described in Section 5.2
shall be full and adequate compensation to Executive for all damages he may
suffer as a result of the termination of his employment pursuant to Section 5.2,
and hereby waives and releases the Corporation from any and all obligations or
liabilities to Executive arising from or in connection with Executive's
employment with the Corporation or the termination of his employment including,
without limitation, all rights and claims Executive may have under the
Corporation's severance policy and federal, state or local statutes, regulations
or ordinances or under any common law principles of breach of contract or the
covenant of good faith and fair dealing, defamation, wrongful discharge,
intentional infliction of emotional distress or promissory estoppel; provided,
however, that any rights and benefits Executive may have under the employment
benefit plans and programs of the Corporation, including, without limitation,
the Corporation's Supplemental Executive Retirement Program, in which Executive
is a participant, shall be determined in accordance with the terms and
provisions of such plans and provisions.
5.4 If Executive voluntarily resigns, the Corporation shall have
no further obligation to Executive except for salary accrued to the effective
date of such resignation.
5.5 In the event the Corporation terminates Executive's
employment, whether with or without cause, or in the event of Executive's
voluntary resignation, Executive if so requested by the Corporation shall assist
in the orderly transfer of authority and responsibility to his successor.
6. Death or Disability.
6.1 In the event of the death of Executive during the term of
employment under this Agreement or during the period when payments are being
made pursuant to Section 5.2.2, this Agreement shall terminate and all
obligations to Executive shall cease as of the date of death except that the
Corporation will pay the then base salary under Section 3.1 until the end of the
month in which Executive dies, and except for any rights and benefits of
Executive under the benefit plans and programs of the Corporation including,
without limitation, the Supplemental Executive Retirement Plan in which
Executive is a participant, as determined in accordance with the terms and
provisions of such plans and programs. The payout under the EAIP, or equivalent,
for the fiscal year in which Executive's death occurs, shall be annualized and
paid at the normal time to Executive's estate pro rata to the date of death. The
value of the "payout amount," in cash, for any executive long term incentive
plan established by the Corporation, the plan cycle of which ends within 12
months after the date of Executive's death, shall be paid at the normal time to
Executive's estate. This Section 6.1 shall not affect any outstanding stock
options or stock awards, whether made under a long term incentive plan or
otherwise, before or after the date of this agreement, which options or awards
shall then be governed according to their terms.
6.2 In the event that Executive shall become entitled to salary
continuation payments under the Corporation's Group Long-Term Disability
Insurance Plan or under any generally similar plan then in effect, the
Corporation may, at its option, terminate the employment of Executive hereunder
without further obligation or liability on the part of the Corporation under the
terms of this Agreement.
7. Restrictive Covenant.
7.1 In consideration of the Corporation entering into this
Agreement, Executive shall not, directly or indirectly, for a period of 12
months after termination of such employment, whether because the term of
employment has ended by its terms or otherwise (unless such termination is by
the Corporation without cause or compliance herewith is excused pursuant to
Section 7.2), be employed by, render services to or participate in the
management, operation or control of, or serve as advisor or consultant to or
otherwise become financially interested in any business of the same nature as
that now (or hereafter during the term of this Agreement) carried on by the
Corporation or any of its subsidiaries (a "Restricted Business").
7.2 Should a Change of Control (as defined in the Corporation's
Supplemental Executive Retirement Plan) occur during the term of employment and
should the Executive terminate his employment for "Good Reason" (as defined in
said Plan) within a period of 18 months following such Change of Control such
termination by Executive shall constitute a waiver by the Corporation of the
restrictive covenant set forth in Section 7.1 and Executive shall have no
further obligation to comply with its terms.
7.3 Executive acknowledges and agrees that in the event of any
violation of the restrictive covenant set forth in Section 7.1, the Corporation
shall be authorized and entitled to obtain from any court of competent
jurisdiction temporary, preliminary or permanent injunctive relief as well as an
equitable accounting of all profits or benefits arising out of such violation
and any damages for the breach of this Agreement which may be applicable. The
aforesaid rights and remedies shall be independent, severable and cumulative and
shall be in addition to any other rights or remedies to which the Corporation
may be entitled.
7.4 The restrictions contained in this Section 7 are intended to
be reasonable. In the event that any restriction contained herein is held by any
court of competent jurisdiction or arbitrator to be in any respect unreasonable,
the court so holding may limit the territory to which it pertains or the period
of time in which it operates, or affect any other change to the extent necessary
to make it enforceable. The remaining provisions shall not be affected, but
shall, subject to the discretion of such court, remain in full force and effect
and any invalid and unenforceable provision shall be deemed without further
action on the part of the parties hereto modified, amended and limited to the
extent necessary to render the same valid and enforceable to the maximum extent
permissible.
7.5 Executive shall hold in a fiduciary capacity for the benefit
of the Corporation all confidential information, knowledge and data relating to
or concerned with the Corporation's products, operations, sales, business and
affairs which are proprietary and not readily ascertainable from trade sources
or other publicly available data, and he shall not, at any time hereafter, use,
disclose or divulge any such confidential information, knowledge or data to any
person, firm or corporation other than to the Corporation, its subsidiaries or
its designees or except as may otherwise be required in connection with the
business and affairs of the Corporation. A breach of Executive's obligations
hereunder shall entitle the Corporation to seek injunctive or equitable relief
and/or damages from any court of competent jurisdiction.
8. Change of Control Agreements.
It is understood and agreed that none of the benefits accruing to
Executive under the 1991 Key Employee Stock Option Plan or Supplemental
Executive Retirement Plan resulting from a "change of control" shall derogate
from the rights granted to Executive under this Agreement, and the rights
granted to him thereunder shall, subject to the triggering events thereof, be
supplementary to and not in substitution for his rights hereunder.
9. General.
9.1 Subject to Section 7.2 and Section 8 hereof, this Agreement
constitutes the entire agreement concerning Executive's employment, and no
amendment or modification hereof shall be valid or binding unless made in
writing and signed by the party against whom enforcement thereof is sought. This
agreement supersedes the 1994 Senior Executive Employment Agreement between the
Corporation and Executive.
9.2 The provisions of Section 7 hereof shall survive the
termination or expiration of this Agreement.
9.3 Any notice required, permitted, or desired to be given
pursuant to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if delivered in person or sent by
registered or certified mail, return receipt requested, postage and fees
prepaid, as follows:
If to the Corporation, at:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇ & Sons, Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
If to Executive, at:
▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Either of the parties hereto may at any time and from time to
time change the address to which notices shall be sent hereunder by notice to
the other party.
9.4 No course of dealing or any delay on the part of the
Corporation or Executive 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 of any other breach or default.
9.5 This Agreement relates to services to be performed
principally in, and accordingly shall be governed, interpreted and construed in
accordance with the laws of the State of New York.
9.6 If any provision 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 or part shall be ineffective but shall not in any
way invalidate or affect any other provision or part of this Agreement.
9.7 This Agreement, and the respective rights and obligations of
the parties hereunder, shall inure to the benefit of, and shall be binding upon,
the Corporation and its successors and assigns.
9.8 Should there arise any claim, dispute or controversy relating
to this Agreement, or the breach thereof, the parties shall use their best
efforts and good will to settle such claim, dispute or controversy by amicable
negotiations. Except as provided in Sections 7.2 and 7.4, any such claim,
dispute or controversy that arises between the parties relating to this
Agreement that is not amicably settled shall be resolved by arbitration, as
follows.
9.8.1 Any such arbitration shall be heard in New York, New York,
before a panel consisting of one (1) to three (3) arbitrators, each of whom
shall be impartial. Except as the parties may otherwise agree, all arbitrators
shall be appointed in the first instance by the President of the Association of
the Bar of the City of New York or, in the event of his unavailability by reason
of disqualification or otherwise, by the Chairman of the Executive Committee of
the Association of the Bar of the City of New York. In determining the number
and appropriate background of the arbitrators, the appointing authority shall
give due consideration to the issues to be resolved, but his decision as to the
number of arbitrators and their identity shall be final. Except as otherwise
provided in this Section 9.8, or as the parties may otherwise agree, arbitration
hereunder shall be governed by the rules of the American Arbitration
Association, as they then exist.
9.8.2 An arbitration may be commenced by any party to this
Agreement by the service of a written Request for Arbitration upon the other
affected parties. Such Request for Arbitration shall summarize the controversy
or claim to be arbitrated, and shall be referred by the complaining party to the
appointing authority for appointment of arbitrators ten (10) days following such
service or thereafter. If the panel of arbitrators is not appointed by the
appointing authority within thirty (30) days following such reference, any party
may apply to any court within the State of New York for an order appointing
arbitrators qualified as set forth below. No Request for Arbitration shall be
valid if it relates to a claim, dispute, disagreement or controversy that would
have been time barred under the applicable statute of limitations had such
claim, dispute or controversy been submitted to the Supreme Court of the State
of New York.
9.8.3 All attorneys' fees and costs of the arbitration shall in
the first instance be borne by the respective party incurring such costs and
fees, but the arbitrators shall have the discretion to award costs and/or
attorneys' fees as they deem appropriate under the circumstances. In addition to
the waiver set forth in Section 5.3 above, the parties hereby expressly waive
punitive damages, and under no circumstances shall an award contain any amount
that in any way reflects punitive damages.
9.8.4 Judgment on the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.
9.8.5 It is intended that claims, disputes or controversies
submitted to arbitration under this Section 9.8 shall remain confidential, and
to that end it is agreed by the parties that neither the facts disclosed in the
arbitration, the issues arbitrated, nor the views or opinions of any persons
concerning them, shall be disclosed to third persons at any time, except to the
extent necessary to enforce an award or judgment or as required by law or in
response to legal process or in connection with such arbitration.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
▇▇▇▇ ▇▇▇▇▇ & SONS, INC.
Date: ___________________
By_______________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief
Executive Officer
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