EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this “Agreement”), effective as of January 15, 2010 (the “Effective
Date”), by and between Lexington Realty Trust, a Maryland real estate investment
trust (the “Company”) and (the “Executive”).
WITNESSETH:
WHEREAS,
the Board of Trustees of the Company (the “Board”), has determined that it is in
the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive and to provide the
Executive with compensation and benefits arrangements which are competitive with
those of other real estate investment trusts; and
WHEREAS,
the Board believes, among other things, it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties
and risks created by a pending or threatened Change of Control (as defined
below) and to encourage the Executive’s full attention and dedication to the
Company currently and in the event of any threatened or pending Change of
Control.
NOW,
THEREFORE, in order to accomplish these objectives and in consideration of the
mutual covenants and promises contained herein, the parties hereto, each
intending to be legally bound hereby, agree as follows:
1.
Employment.
Subject to the terms and conditions set forth herein, the Company shall employ
the Executive as [for X. Xxxxxx Eglin, Chief Executive Officer, Chief Operating
Officer and President; for E. Xxxxxx Xxxxxxx, Chairman; for Xxxxxxx X. Xxxxx,
Vice Chairman and Chief Investment Officer; and for Xxxxxxx Xxxxxxx, Executive
Vice President, Chief Financial Officer and Treasurer], and the Executive
accepts such employment for the Employment Term (as defined below). During the
Employment Term, the Executive shall perform the duties of the executive [for X.
Xxxxxx Eglin, Chief Executive Officer, Chief Operating Officer and President;
for E. Xxxxxx Xxxxxxx, Chairman; for Xxxxxxx X. Xxxxx, Vice Chairman and Chief
Investment Officer; and for Xxxxxxx Xxxxxxx, Executive Vice President, Chief
Financial Officer and Treasurer] and such other duties consistent with such
position as may from time to time be assigned to him by the
Board. [for E. Xxxxxx Xxxxxxx only: Notwithstanding the foregoing,
the Company understands and acknowledges that the Executive is, and has been
since 1972, Chairman of The LCP Group, L.P.; his affiliation with The LCP Group,
L.P. and its affiliates can continue so long as (i) such affiliation does not
interfere with the performance of his responsibilities as an employee of the
Company in accordance with this Agreement, (ii) he prioritizes his business
time, energy, experience and talents to address the needs of the Company ahead
of the needs of The LCP Group, L.P. and his affiliates, (iii) he will spend no
more than 33 1/3% of his business time and energy on the business of The LCP
Group, L.P. and its affiliates and (iv) neither The LCP Group, L.P. nor any of
its affiliates enter any line of business or make any investments that overlap
with the respective lines of business and target investments of the Company or
any of its affiliates.]
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2.
Performance. Except
as provided below, the Executive will serve the Company faithfully and to the
best of his ability and will devote substantially all of his business time,
energy, experience and talents to the business of the Company and its
affiliates; provided,
however, that it shall not be considered a violation of the foregoing for
the Executive to manage his personal or his family’s investments, or to serve on
civic or charitable boards or committees, or, with the advance written approval
of the Board, on industry boards or committees, so long as any of such
activities do not interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this
Agreement.
3.
Employment Term.
Unless earlier terminated pursuant to Section 6 below (including, but not
limited to, the Executive’s termination of employment due to death, resignation,
or Disability (as defined in Section 5(b)(iii) below)), the employment term
shall begin upon the Effective Date, and shall continue until January 15, 2012
(the “Employment Term”).
4.
Compensation and
Benefits. (a) Base
Salary. As compensation for services hereunder and in consideration of
the Executive’s other agreements hereunder, during the Employment Term, the
Company shall pay the Executive a base salary, payable in equal installments in
accordance with the Company’s procedures at an annual rate of [for X. Xxxxxx
Eglin, Five Hundred and Fifty Thousand Dollars ($550,000); for E. Xxxxxx
Xxxxxxx, Four Hundred and Fifty Thousand Dollars ($450,000); for Xxxxxxx X.
Xxxxx, Four Hundred and Seventy-Five Thousand Dollars ($475,000); and for
Xxxxxxx Xxxxxxx, Three Hundred and Seventy-Five Thousand Dollars ($375,000)],
subject to review by the Company no less frequently than annually for increase
(but not to be decreased) (such base salary, as increased from time to time
being hereinafter referred to as “Base Salary”).
(b) Bonuses and Incentive
Compensation. During the Employment Term, the Executive shall have
opportunities for bonuses and shall have opportunities for incentive
compensation comparable to those provided to other senior executives of the
Company and shall be eligible to participate in all bonus and incentive
compensation plans made available by the Company, from time to time, for its
senior executives.
(c) Medical, Dental, Disability,
Life Insurance, Pension and Other Benefits. During the Employment Term,
the Executive shall, in accordance with the terms and conditions of the
applicable plan documents and all applicable laws, be eligible to participate in
the various medical, dental, disability, life insurance, pension and other
employee benefit plans made available by the Company, from time to time, for its
senior executives.
(d) Vacation, Sick Leave.
D uring the Employment Term, the Executive shall be entitled to vacation and
sick leave in accordance with the Company’s established practices with respect
to its senior executives.
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(e)
Expenses. The
Executive shall be reimbursed by the Company for all reasonable expenses
actually incurred by him in connection with the performance of his duties
hereunder in accordance with policies established by the Company from time to
time and upon receipt of appropriate documentation. Expenses
reimbursable under this paragraph shall be reimbursed within reasonable period
of time following Executive’s submission of the reimbursement request and any
supporting documentation reasonably requested by the Company and no later than
the end of the calendar year following the calendar year in which the expenses
were incurred by Executive.
5.
Termination.
(a) The employment of the Executive
hereunder shall terminate at the end of the Employment Term. The employment of
the Executive hereunder may also be terminated at any time (i) by the Company
with or without Cause (as defined in Section 5(b)(i) below); (ii) by the
Executive with or without Good Reason (as defined in Section 5(b)(ii) below); or
(iii) by the Company without Cause or by the Executive with Good Reason, in
either case, within 12 months of a Change in Control (a “Double Trigger
Termination”). At any time after a Disability (as defined in Section 5(b)(iii)
below) occurs, provided that the Board, upon advice of a medical doctor selected
in accordance with Section 5(b)(iii) hereof, determines that the Executive
remains incapable of performing his essential duties and responsibilities
hereunder, subject to applicable legal requirements, the Company may terminate
the Executive’s employment effective forthwith after giving notice to the
Executive of such termination. Further, if the Board, upon advice of a medical
doctor selected in accordance with Section 5(b)(iii) hereof, shall reasonably
determine that the Executive has become physically or mentally incapable of
performing his essential duties and responsibilities as provided in this
Agreement and such incapacity is likely to last for a period of at least one
hundred eighty (180) days from the onset of such incapacity, the Company may, at
its discretion at any time thereafter while the Executive remains incapable of
performing his material duties hereunder, and subject to applicable legal
requirements, remove the Executive from his then position with the Company;
provided, further, that if he returns to full time employment, with the
permission of the Board, prior to the time he is determined to have incurred a
Disability, he shall be restored to his position or positions with the
Company.
(a)
For
purposes of this Agreement,
(i) “Cause”
shall mean: (A) the Executive’s conviction of, plea of nolo contendere to, or
written admission of the commission of, a felony or misdemeanor (but not a
traffic infraction, violation or similar offense), (B) any breach by the
Executive of any material provision of this Agreement; (C) any act by the
Executive involving moral turpitude, fraud or misrepresentation with respect to
his duties for the Company or its affiliates; or (D) gross negligence or willful
misconduct on the part of the Executive in the performance of his duties as an
employee, officer or member of the Company or its affiliates (that in only the
case of gross negligence results in a material economic harm to the Company);
provided, however, that
the Company may not terminate the Executive’s employment under clauses (B), (C)
or (D) unless the Company first gives the Executive notice of its intention to
terminate and of the grounds for such termination within 90 days of such event,
and in the case of a breach set forth in clause (B) above, the Executive either
(X) has not, within 30 days following receipt of such notice, cured such Cause,
or (Y) in the event such Cause cannot be cured within such 30-day period, has
not taken all reasonable steps to cure such Cause. No termination for Cause
shall be effective unless the Board makes a Cause determination after notice to
the Executive and the Executive has been provided with the opportunity (with
counsel of his choice) to contest the determination at a meeting of the
Board.
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(ii) “Good
Reason” shall mean the occurrence of any of the following conditions without the
Executive’s written consent, provided that Executive shall provide notice to the
Company of the existence of the condition within ninety (90) days of the initial
existence of such condition, upon the notice of which the Company shall have at
least thirty (30) days within which to cure such condition, and if the Company
fails to cure the condition within such cure period, the Executive must
terminate employment by sending written notice to the Company within thirty (30)
days following the Company’s failure to cure: (A) a material reduction of the
Executive’s authority, duties and responsibilities, or the assignment to the
Executive of duties materially inconsistent with the Executive’s position or
positions with the Company, (B) a reduction in the Executive’s rate of Base
Salary; or (C) a breach by the Company of any material provision of this
Agreement. Notwithstanding anything herein to the contrary, any
change of the Executive’s position with the Company to which the Executive
consents in writing shall not constitute Good Reason.
(iii) “Disability”
shall mean the mental or physical incapacity of the Executive such that (A) he
qualifies for long-term disability benefits under a Company-sponsored long-term
disability policy or (B) the Executive has been incapable as a result of
illness, disease, mental or physical disability, disorder, infirmity, or
impairment or similar cause of performing his essential duties and
responsibilities for any period of one hundred eighty (180) days (whether or not
consecutive) in any consecutive three hundred sixty-five (365) day period.
Disability shall be determined by an approved medical doctor selected by the
Company and the Executive. If the Company and the Executive cannot agree on a
medical doctor, each party shall select a medical doctor and the two doctors
shall select a third who shall be the approved medical doctor for this
purpose.
(iv) “Change
in Control” shall mean:
(A) The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) (“Beneficial Ownership”) of 20%
or more of either (i) the then outstanding common shares of beneficial interest
of the Company (the “Outstanding Company Common Stock”) or (ii) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of trustees (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (A), the
following acquisitions shall not constitute a Change in Control: (1) any
acquisition directly from the Company, (2) any acquisition by the Company, (3)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any entity controlled by the Company or (4) any
acquisition by any entity pursuant to a transaction which complies with clauses
(1), (2) and (3) of subsection (C) of this Section 5(b)(iv); or
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(B) Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a trustee subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the trustees then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of trustees or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(C) Consummation
of a reorganization, merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Company (a “Business Combination”), in
each case, unless, following such Business Combination, (1) all or substantially
all of the Persons who had Beneficial Ownership, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination have Beneficial Ownership of more
than 50%, respectively, of the then outstanding common shares of beneficial
interest and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of trustees, as the case may be, of
the entity resulting from such Business Combination (including, without
limitation, an entity which as a result of such transaction owns the Company or
all or substantially all of the Company’s assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (2) no
Person (excluding any entity resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such entity resulting
from such Business Combination) acquires Beneficial Ownership of 20% or more of,
respectively, the then outstanding shares of common stock of the entity
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such entity except to the extent that such
ownership existed prior to the Business Combination and (3) at least a majority
of the members of the board of trustees or board of trustees, as the case may
be, of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement with the
successor or purchasing entity in respect of such Business Combination, or of
the action of the Board, providing for such Business Combination;
or
(D) Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.
(v) “Long-Term
Incentive Award” shall mean any long-term incentive award previously granted to
the Executive, including but not limited to restricted shares, deferred share
awards, and share option awards, whether or not issued pursuant to an equity
award plan.
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6.
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Severance. (a)
If, during the Employment Term,
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1) the
Executive terminates his employment with the Company for Good
Reason;
2) the
Executive’s employment is terminated by the Company without Cause;
or
3) the
Executive’s employment is terminated in a Double Trigger
Termination;
then, the
Company shall have no liability or further obligation to the Executive except as
follows: the Executive shall be entitled to receive, subject to Section
6(e):
(i) within
30 days of such termination of employment, any earned but unpaid Base Salary for
the period prior to termination and any earned but unpaid bonuses, in cash, for
prior periods which have ended at the time of such termination
(“Entitlements”);
(ii) at
the time provided in such plan, any rights to which he is entitled in accordance
with such applicable plan or program provisions under any employee benefit plan,
program or arrangement, fringe benefit or incentive plan
(“Rights”);
(iii) within
60 days of such termination of employment, severance pay (the “Severance Pay”)
in a lump sum cash payment equal to [for X. Xxxxxx Eglin, two and one half
(2.5); for all others two (2.0)] times the sum of: (x) the Executive’s Base
Salary at termination (disregarding a reduction in Base Salary that constitutes
Good Reason), and (y) the average of the last two annual cash bonuses the
Company has paid to or agreed to pay to (if such payment has not yet been made)
the Executive (the Average Bonus”);
(iv) within
60 days of such termination of employment, a lump sum cash payment of a pro rata
annual bonus, without duplication of any Entitlements, determined by (x) the
number of days the Executive was employed by the Company during the fiscal year
divided by 365, and multiplied by (y) the Average Bonus (the “Pro Rata Cash
Bonus”); and
Additionally,
upon a termination of the Executive’s employment under Section 6(a)(1), 6(a)(2)
or 6(a)(3) above, (x) all non-vested time based Long-Term Incentive Awards and
all non-vested but earned performance based Long-Term Incentive Awards shall
accelerate, become fully earned and vested, and (y) the end of the performance
period for all non-vested but unearned performance based Long-Term Incentive
Awards shall be the date of such termination and a pro rata amount of any of
such awards then deemed to be earned awards (determined by the number of
completed days of the performance period for such award divided by the total
number of days in such performance period) shall accelerate, become fully earned
and vested; provided, that all unexercised share option awards shall terminate
within six months of such termination of employment.
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Additionally,
medical, dental, disability, life insurance and other employee welfare benefits
(the “Welfare Plans”) then provided to senior executives of the Company shall be
continued following the date of termination for a period of [for X. Xxxxxx
Eglin, two and one half (2.5); for all others two (2.0)] years and, if the
Executive is precluded from participating in any Welfare Plan by its terms or
applicable law during such period, the Company shall reimburse expenses actually
incurred by the Executive during such period to obtain similar Welfare Plan
coverage, but only to the extent Executive’s requested reimbursement of expenses
for similar Welfare Plan coverage does not exceed the Company’s premiums or
contributions that the Company would otherwise pay under the terms of this
Agreement as of the date of the Executive’s termination, or date of payment if
later, to continue Executive’s participation in the underlying Welfare Plan for
the period the expenses were incurred by the Executive. Expenses
reimbursable under this paragraph shall be reimbursed within thirty (30) days
following Executive’s submission to the Company of the reimbursement request and
supporting documentation reasonably requested by the Company and in no event
later than the end of the calendar year following the calendar year in which the
expenses were incurred by Executive. The expenses eligible for
reimbursement under this paragraph during any calendar year shall not affect the
expenses eligible for reimbursement under this paragraph in any other calendar
year.
Except in
the case of a Double Trigger Termination, as a condition of and upon receiving
the Severance Pay under Section 6(a)(iii) and the Pro Rata Cash Bonus under
Section 6(a)(iv) and the vesting of Long-Term Incentive Awards and Welfare Plan
benefits continuation under Section 6(a) (collectively, the “Forfeitable
Payments”), the Executive agrees to execute a release thereby releasing the
Company and its affiliates from any and all obligations and liabilities to the
Executive arising from or in connection with the Executive’s employment or
termination of employment with the Company and its affiliates and any
disagreements with respect to such employment, except that such release shall
not apply with respect to any rights of the Executive to indemnification under
the Company’s Declaration of Trust or By-Laws or to any rights of the Executive
to indemnification or directors’ and officers’ liability insurance coverage of
the Company and its affiliates. If the Executive does not execute the
release and the release does not become irrevocable within 60 days of his
termination of employment, the Executive shall forfeit his right to the
Forfeitable Payments.
(b) If
during the Employment Term, the Executive’s employment is terminated on account
of death or Disability, the Company shall have no liability or further
obligation to the Executive except as follows: the Executive (and his estate or
designated beneficiaries under any Company-sponsored employee benefit plan in
the event of his death) shall be entitled to receive, subject to Section
6(e):
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(i) any
Entitlements within 30 days of such termination of employment or, if later, the
date such Entitlement would otherwise be paid to active employees of the
Company, and any Rights at the time provided in the relevant plans;
(ii) within
60 days of such termination of employment, Severance Pay in a lump sum cash
payment of one (1) times the Executive’s Base Salary at termination;
and
(iii)
within 60 days of such termination, the Pro Rata Cash Bonus;
Additionally,
(x) all non-vested time based Long-Term Incentive Awards and all non-vested but
earned performance based Long-Term Incentive Awards shall accelerate, become
fully earned and vested, and (y) the end of the performance period for all
non-vested but unearned performance based Long-Term Incentive Awards shall be
the date of such termination and a pro rata amount of any of such awards then
deemed to be earned awards (determined by the number of completed days of the
performance period for such award divided by the total number of days in such
performance period) shall accelerate, become fully earned and vested; provided,
that all unexercised share option awards shall terminate within six months of
such termination of employment.
Additionally,
the group health plan then provided to senior executives of the Company shall be
continued following the date of termination for a period of [for X. Xxxxxx
Eglin, two and one half (2.5); for all others two (2.0)] years and, during such
period, if the Executive is precluded from participating in such group health
plan by its terms or applicable law at any time during such period, the Company
shall reimburse expenses actually incurred by the Executive during such period
to obtain similar coverage, but only to the extent Executive’s requested
reimbursement of expenses for such similar coverage does not exceed the
Company’s premiums or contributions that the Company would otherwise pay as of
the date of the Executive’s termination to continue the Executive’s
participation in the group health plan for the period the expenses for similar
coverage are incurred by Executive. Expenses reimbursable under this
paragraph shall be reimbursed within thirty (30) days following Executive’s
submission to the Company of the reimbursement request and supporting
documentation reasonably requested by the Company and in no event later than the
end of the calendar year following the calendar year in which the expenses were
incurred by Executive. The expenses eligible for reimbursement under
this paragraph during any calendar year shall not affect the expenses eligible
for reimbursement under this paragraph in any other calendar
year. Notwithstanding the foregoing, the continuation period for
group health benefits under Section 4980B of the Internal Revenue Code of 1986,
as amended (the “Code”) by reason of the Executive’s termination of employment
with the Company shall be measured from his actual date of termination of
employment.
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As a
condition of receiving the Forfeitable Payments, the Executive, or the
representative of his estate if he has died, agrees to execute a release thereby
releasing the Company and its affiliates from any and all obligations and
liabilities to the Executive arising from or in connection with the Executive’s
employment or termination of employment with the Company and its affiliates and
any disagreements with respect to such employment, except that such release
shall not apply with respect to any rights of the Executive to indemnification
under the Company’s Certificate of Incorporation or By-Laws or to any rights of
the Executive to indemnification or directors’ and officers’ liability insurance
coverage of the Company and its affiliates. If the Executive or the
representative of his estate does not execute the release and the release does
not become irrevocable within 60 days of his termination of employment or death,
the Executive or the estate shall forfeit the right to the Forfeitable
Payments.
(c) If
during the Employment Term, the Executive’s employment is terminated by the
Company for Cause or by the Executive without Good Reason, (i) all non-vested
and/or unexercised Long-Term Incentive Awards shall be forfeited, terminated and
cancelled and (ii) the Company shall have no liability or further obligation to
the Executive except as follows: the Executive shall be entitled to receive any
Entitlements within 30 days of such termination of employment or, if later, the
date such Entitlement would otherwise be paid to active employees of the
Company, and any Rights at the time provided in the relevant plans.
(d) The
payments made pursuant to this Section 6 shall be excluded from all pension and
benefit calculations under the employee benefit plans of the Company and its
affiliates, except as otherwise provided in the applicable employee benefit
plan.
(e) Notwithstanding
anything in this Section 6 to the contrary, if any amounts or benefits payable
under this Agreement in the event of Executive’s termination of employment
constitute “nonqualified deferred compensation” within the meaning of Code
Section 409A, payment of such amounts and benefits shall commence when the
Executive incurs a “separation from service” within the meaning of Treasury
Regulation 1.409A-1(h), without regard to any of the optional provisions
thereunder, from the Company and any entity that would be considered a single
employer with the Company under Code Section 414(b) or 414(c) (“Separation from
Service”). Such payments or benefits shall be provided in accordance
with the timing provisions of this Agreement by substituting the Agreement’s
references to “termination of employment” or “termination” with Separation from
Service. Notwithstanding the foregoing, if at the time of Executive’s
Separation from Service the Executive is a “specified employee” within the
meaning of Code Section 409A(a)(2)(B)(i), any amount or benefits that the
constitutes “nonqualified deferred compensation” within the meaning of Code
Section 409A that becomes payable to Executive on account of the Executive’s
Separation from Service will not be paid until after the earlier of (i) first
business day of the seventh month following Executive’s Separation from Service,
or (ii) the date of the Executive’s death (the “409A Suspension Period”). Within
14 calendar days after the end of the 409A Suspension Period, the Executive
shall be paid a cash lump sum payment equal to any payments (including interest
on any such payments, at an interest rate of not less than the prime interest
rate, as published in the Wall
Street Journal, over the period such payment is restricted from being
paid to the Executive) and benefits that the Company would otherwise have been
required to provide under this Section 6 but for the imposition of the 409A
Suspension Period delayed because of the preceding sentence. Thereafter, the
Executive shall receive any remaining payments and benefits due under this
Section 6 in accordance with the terms of this Section (as if there had not been
any Suspension Period beforehand). For the purposes of this
Agreement, each payment that is part of a series of installment payments shall
treated be as a separate payment for purposes of Code Section 409A.
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7. Covenants of the
Executive. (a) During the Employment Term and for
a period of one (1) year thereafter, (i) the Executive shall not, within any
jurisdiction or marketing area in which the Company or any of its affiliates is
doing business, directly or indirectly, own, manage, operate, control, consult
with, be employed by or participate in the ownership, management, operation or
control of any business of the type and character engaged in or competitive with
that conducted by the Company or any of its affiliates; (ii) the Executive shall
not, directly or indirectly, employ, solicit for employment or otherwise
contract for the services of any employee of the Company or any of its
affiliates at the time of this Agreement or who shall subsequently become an
employee of the Company or any such affiliate; provided, however, this
subparagraph (ii) shall not apply to the Executive’s personal secretary at the
time of termination; and (iii) the Executive will not solicit, in competition
with the Company or its affiliates, any person who is, or was at any time within
the twelve months prior to his termination of employment, a customer of the
business conducted by the Company or any of its affiliates. For purposes of
determining whether to permanently withhold, or recover, payments from the
Executive pursuant to Section 7(d) hereof, the Board shall determine what
constitutes a competing business; provided that (x) the scope
of businesses and the jurisdictions and marketing areas within which the
Executive has agreed not to compete pursuant to clause (a)(i) of this Section 7
shall, for any challenged activity of the Executive, be determined as of the
date of any such activity and (y) the Executive’s ownership of securities of two
percent (2%) or less of any publicly traded class of securities of a public
company shall not be considered to be competition with the Company or any of its
affiliates. Notwithstanding the foregoing, the provisions of this Section 7(a)
shall not apply following the Executive’s termination after the Employment
Term.
(b) For
the Employment Term and thereafter, (i) the Executive will not divulge, transmit
or otherwise disclose (except as legally compelled by court order, and then only
to the extent required, after prompt notice to the Company of any such order),
directly or indirectly, other than in the regular and proper course of business
of the Company, any confidential knowledge or information with respect to the
operations, finances, organization or employees of the Company or with respect
to confidential or secret processes, services, techniques, customers or plans
with respect to the Company; and (ii) the Executive will not use (except as
legally compelled by court order, and then only to the extent required, after
prompt notice to the Company of any such order), directly or indirectly, any
confidential information for the benefit of anyone other than the Company; provided, however, that the
Executive has no obligation, express or implied, to refrain from using or
disclosing to others any such knowledge or information which is or hereafter
shall become available to the public other than through disclosure by the
Executive. All new processes, techniques, know-how, inventions, plans, products,
patents and devices developed, made or invented by the Executive, alone or with
others, while an employee of the Company which are related to the business of
the Company shall be and become the sole property of the Company, unless
released in writing by the Company, and the Executive hereby assigns any and all
rights therein or thereto to the Company.
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(c) All
files, records, correspondence, memoranda, notes or other documents (including,
without limitation, those in computer-readable form) or property relating or
belonging to the Company or its affiliates, whether prepared by the Executive or
otherwise coming into his possession in the course of the performance of his
services under this Agreement, shall be the exclusive property of Company and
shall be delivered to Company and not retained by the Executive (including,
without limitations, any copies thereof) upon termination of this Agreement for
any reason whatsoever.
(d) The
Executive acknowledges that a breach of his covenants contained in this Section
7 may cause irreparable damage to the Company and its affiliates, the exact
amount of which will be difficult to ascertain, that the remedies at law for any
such breach will be inadequate and that the amounts payable to the Executive
pursuant to the provisions of Section 6(a)(iii), (iv) and the paragraphs
following 6(a)(iv) and /or 6(b)(ii), (iii) and (iv) hereunder are additional
consideration for the covenants contained in this Section 7. Accordingly, the
Executive agrees that if he breaches any of the covenants contained in this
Section 7, in addition to any other remedy which may be available at law or in
equity, the Company shall be entitled to specific performance and injunctive
relief. In addition, the breach of any of the covenants contained in this
Section 7 shall entitle the Company to permanently withhold, and to recover from
the Executive any amounts paid to the Executive pursuant to the provisions of
Section 6(a)(iii), (iv) and the paragraphs following 6(a)(iv) and /or 6(b)(ii),
(iii) and (iv) of this Agreement. The Company shall provide the Executive with
at least five days prior written notice before withholding of any payment
provided for in the immediately preceding sentence.
(e) The
Company and the Executive further acknowledge that the time, scope, geographic
area and other provisions of this Section 7 have been specifically negotiated by
sophisticated commercial parties and agree that all such provisions are
reasonable under the circumstances of the activities contemplated by this
Agreement. In the event that the agreements in this Section 7 shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of their extending for too great a period of time or over too great a
geographical area or by reason of their being too extensive in any other
respect, they shall be interpreted to extend only over the maximum period of
time for which they may be enforceable and/or over the maximum geographical area
as to which they may be enforceable and/or to the maximum extent in all other
respects as to which they may be enforceable, all as determined by such court in
such action.
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(f) The
Executive agrees to cooperate with the Company, during the Term of Employment
and thereafter (including following the Executive’s termination of employment
for any reason), by making himself reasonably available to testify on behalf of
the Company or any of its affiliates in any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, and to assist the Company, or
any affiliate, in any such action, suit, or proceeding, by providing information
and meeting and consulting with the Company’s Board or its representatives or
counsel, or representatives or counsel to the Company, or any affiliate as
reasonably requested; provided, however that the same does not materially
interfere with his then current professional activities or important personal
activities and is not contrary to the best interests of the Executive. The
Company agrees to reimburse the Executive, on an after-tax basis, for all
expenses actually incurred in connection with his provision of testimony or
assistance, and, if during the period following the Employment Term, the Company
requests the Executive’s cooperation for a period of greater than 8 hours per
month, the Company agrees to reimburse the Executive at a rate of $250.00 per
hour. Expenses reimbursable under this paragraph must be reimbursed within
thirty (30) days following Executive’s submission to the Company of the
reimbursement request and supporting documentation reasonably requested by the
Company and in no event later than the end of the calendar year following the
calendar year in which the expenses were incurred by Executive.
(g) The
Executive agrees that, during the Term of Employment and at any time thereafter
(including following the Executive’s termination of employment for any reason)
he will not make statements or representations, or otherwise communicate,
directly or indirectly, in writing, orally, or otherwise, or take any action
which may, directly or indirectly, disparage the Company or any of its
affiliates or their respective officers, directors, employees, advisors,
businesses or reputations. The Company agrees that, during the Employment Term,
and at any time thereafter, (including following the Executive’s termination of
employment for any reason) it will not make statements or representations, or
otherwise communicate, directly or indirectly, in writing, orally, or otherwise,
or take any action which may, directly or indirectly, disparage the Executive’s
reputation. Notwithstanding the foregoing, nothing in this Agreement shall
preclude the Executive or a representative of the Company from making truthful
statements or disclosures that are required by applicable law, regulation or
legal process.
8. Notices. Any notices
required or permitted hereunder shall be in writing and shall be deemed to have
been given when personally delivered or when mailed, certified or registered
mail, postage prepaid, to the following addresses:
If to the
Executive:
If to the
Company:
Xxx Xxxx
Xxxxx, Xxxxx 0000
Xxx Xxxx,
XX 00000-0000
Attention:
Compensation Committee Chairman
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with a
copy to:
Xxx Xxxx
Xxxxx, Xxxxx 0000
Xxx Xxxx,
XX 00000-0000
Attention:
Xxxxxx X. Xxxxxxxxx, Esq.
9. General. (a) Governing Law. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of New York applicable to contracts
executed and to be performed entirely within said State.
(b) Construction and
Severability. If any provision of this Agreement shall be held invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired, and the parties undertake to implement all efforts
which are necessary, desirable and sufficient to amend, supplement or substitute
all and any such invalid, illegal or unenforceable provisions with enforceable
and valid provisions which would produce as nearly as may be possible the result
previously intended by the parties without renegotiation of any material terms
and conditions stipulated herein.
(c) Assignability. The
Executive may not assign his interest in or delegate his duties under this
Agreement. This Agreement is for the employment of the Executive, personally,
and the services to be rendered by him under this Agreement must be rendered by
him and no other person. The Executive represents and warrants to the Company
that the Executive has no contracts or agreements of any nature that the
Executive has entered into with any other person, firm or corporation that
contain any restraints on the Executive’s ability to perform his obligations
under this Agreement. This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns. Notwithstanding anything
else in this Agreement to the contrary, the Company will assign this Agreement
to and all rights hereunder shall inure to the benefit of any person, firm or
corporation resulting from the reorganization of the Company or succeeding to
the business or assets of the Company by purchase, merger or
consolidation.
(d) Enforcement Costs. If
any contest or dispute shall arise under this Agreement involving the
termination of the Executive’s employment with the Company and its affiliates or
involving the failure or refusal of the Company to perform fully in accordance
with the terms hereof, the Company shall advance the Executive or pay directly
on his behalf, all reasonable legal fees and expenses, if any, incurred or, in
the case of fees and expenses for which payment is required before the services
are rendered, to be incurred within the next 30 days, by the Executive in
connection with such contest or dispute upon presentation of an itemized xxxx to
the Company regarding any such fees and expenses along with proof reasonably
satisfactory to the Company that such expenses have been incurred or will be
incurred within the next 30 days by the Executive; provided, however, that in the
event the resolution of any such contest or dispute includes a finding that the
Executive’s claims in such contest or dispute are frivolous or brought in bad
faith, the Executive shall be required to reimburse the Company, for all sums
advanced to the Executive pursuant to this Section 10(d) in connection with such
contest or dispute, together with interest in an amount equal to the prime rate,
as published in the Wall Street Journal, but in no event higher than the maximum
legal rate permissible under applicable law, such interest to accrue from the
date the Company makes payment to the Executive hereunder through the date of
the Executive’s repayment thereof. Notwithstanding the foregoing, any
reimbursements under this paragraph following the Executive’s termination of
employment with the Company shall be subject to the payment limitations
described in Section 6(e) of this Agreement.
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(e) Compliance with Rules and
Policies. The Executive shall perform all services in all material
respects in accordance with the applicable policies, procedures and rules
established by the Company, including, but not limited to, the By-Laws of the
Company. In addition, the Executive, where applicable, shall comply in all
material respects with all laws, rules and regulations that are generally
applicable to the Company, its affiliates and their employees, directors and
officers.
(f) Taxes. The Company
shall withhold from all amounts due hereunder any applicable withholding taxes
payable to federal, state, local or foreign taxing authorities. Except as set
forth in Section 8, the Company shall have no obligation to indemnify or hold
the Executive harmless from any taxes he may incur from any amounts payable
under this Agreement.
(g) Entire Agreement;
Modification. This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof, supersedes all prior
agreements and undertakings, both written and oral, including, but not limited
to the Employment Agreement dated April 1, 2003 between the Company and the
Executive.
(h) Duration.
Notwithstanding the Employment Term hereunder, the applicable sections of this
Agreement shall continue for so long as any obligations remain under this
Agreement.
(i) Survival. All of the
rights and covenants set forth in Sections 5, 6, 7, 8, 9(d) and 9(k) of this
Agreement shall survive and shall continue to be binding upon the Executive
notwithstanding the termination of this Agreement for any reason whatsoever. It
is expressly agreed that the remedy at law for the breach or threatened breach
of any such covenant is inadequate and that the Company, in addition to any
other remedies that may be available to it, in law or in equity, shall be
entitled to injunctive relief to prevent the breach or any threatened breach
thereof without bond or other security or a showing that monetary damages will
not provide an adequate remedy.
(j)
Waiver. No
waiver by either party hereto of any of the requirements imposed by this
Agreement on, or any breach of any condition or provision of this Agreement to
be performed by, the other party shall be deemed a waiver of a similar or
dissimilar requirement, provision or condition of this Agreement at the same or
any prior or subsequent time. Any such waiver shall be express and in writing,
and there shall be no waiver by conduct.
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(k) Indemnification. The
Company shall indemnify the Executive, to the maximum extent permitted by
applicable law, and in the same or better manner and to the same or better
extent with respect to each aspect of the indemnification as provided to any
other executive of the Company, against all costs, charges and expenses incurred
or sustained by the Executive in connection with any action, suit or proceeding
to which the Executive may be made a party, brought by any shareholder of the
Company directly or derivatively or by any third party by reason of any act or
omission of the Executive as an officer, director or employee of the Company or
of any subsidiary or affiliate of the Company.
(l)
Headings. The
headings of the sections contained in this Agreement are for convenience only
and shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.
(m) Counterparts. This
Agreement may be executed in two or more counterparts, all of which taken
together shall constitute one instrument.
(n) Compliance with Code Section
409A. This Agreement is intended to be exempt from (or comply
with) Code Section 409A, and the Company shall have complete discretion to
interpret and construe this Agreement and any associated documents in any manner
that establishes an exemption from (or otherwise conforms them to) the
requirements of Code Section 409A. If, for any reason including
imprecision in drafting, the Agreement does not accurately reflect its intended
establishment of an exemption from (or compliance with) Code Section 409A, as
demonstrated by consistent interpretations or other evidence of intent, the
provision shall be considered ambiguous and shall be interpreted by the Company
in a fashion consistent herewith, as determined in the sole and absolute
discretion of the Company. Nevertheless, and notwithstanding any
other provision of this Agreement, neither the Company nor any of its employees,
trustees, or their agents shall have any obligation to mitigate, nor to hold the
Executive harmless from, any or all taxes (including any imposed under Code
Section 409A) arising under this Agreement.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
hereunto executed this Agreement effective as of the day and year first written
above.
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Date:
January 15, 2010
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Name:
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Title:
Authorized Officer
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EXECUTIVE
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Date:
January 15, 2010
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