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EXHIBIT 10.13
ASTON - INSIGNIA/ESG HOLDINGS
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is entered into as of August
3, 1998, by and between Insignia/ESG Holdings, Inc., a Delaware corporation
with an office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 (the "Company"),
and Xxxxx X. Aston, an individual with an office at One Insignia Financial
Plaza, Greenville, SC 29062 (the "Executive"). This Agreement is effective as
of the date of the consummation of the spin-off of the Company from Insignia
Financial Group, Inc. ("IFG") to its shareholders, and as of such date the
obligations of IFG under the Amended and Restated Employment Agreement between
IFG and the Executive dated as of January 1, 1998 shall be assumed by the
Company, and the Company hereby assumes and agrees to pay (without duplication
under this Agreement) the rights thereunder regarding amounts owed by IFG
thereunder if IFG does not timely pay such amounts (in which case the Company
will be subrogated to the right of the Executive to collect such amounts from
IFG).
BACKGROUND
The Company desires to assure itself of the services of the Executive
for the period provided in this Agreement, and the Executive is willing to
serve in the employ of the Company for such period upon the terms and
conditions provided in this Agreement.
STATEMENT OF AGREEMENT
In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
SECTION 1. EMPLOYMENT. The Company hereby agrees to employ the
Executive, and the Executive hereby accepts such employment, in each case upon
the terms and conditions set forth herein, for a period commencing on the
effective date hereof (the "Commencement Date") and ending three years from the
Commencement Date, or on such earlier date as provided herein (the "Expiration
Date") (such period, as it may be so terminated, being referred to herein as
the "Employment Period").
SECTION 2. DUTIES AND SERVICES.
(a) DUTIES. Subject to Section 2(d), during the Employment Period
the Executive shall serve as Chief Financial Officer of the Company and, at the
Company's request, as an officer or director of one or more of its subsidiaries.
In the performance of his duties hereunder, the Executive shall report to and
shall be responsible only to the Chief Executive Officer and the Board of
Directors of the Company. The Executive agrees to his employment as described
in
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this Section 2. The parties hereto understand and agree that the Executive has
substantial business interests outside of the scope of this Agreement,
including, without limitation, at Metropolitan Asset Enhancement, L.P. and
Insignia Properties Trust, and under an employment or consulting agreement with
IFG, and both parties hereby consent to such arrangements. The Executive shall
be available to travel as the needs of the business of the Company reasonably
require.
(b) OFFICE. During the Employment Period, the Company shall
provide the Executive with an office located in Greenville, SC or at 000 Xxxx
Xxxxxx, Xxx Xxxx, XX, whichever the Executive chooses, or at such other
location as the Company and the Executive shall mutually agree. The Company
will provide the Executive with an office and executive secretary reasonably
acceptable to him, and other reasonable support appropriate to his duties
hereunder.
(c) PRIMARY RESPONSIBILITIES. Subject to Section 2(a) and 2(d),
during the Employment Period, the Executive shall have such responsibilities as
are assigned to him by the Chief Executive Officer and the Board of Directors
of the Company. The Executive shall comply with all written policies and
procedures of the Company.
(d) CONSULTING. If (i) without the prior written consent of the
Executive the Executive's title, powers or duties within the Company have been
substantially diminished, other than as a result of a Termination For Cause (as
defined in Section 7(a)(iv)), (ii) a Extraordinary Transaction (as defined in
Section 4(c)) or a Material Asset Disposition (as defined in Section 4(d)) has
taken place, or (iii) Xxxxxx X. Xxxxxx has elected to convert that certain
Employment Agreement, dated as of August 3, 1998, by and between the Company
and Xx. Xxxxxx (the "Xxxxxx Employment Agreement") into a consulting agreement,
then the Executive may elect in writing to convert this Agreement into a
consulting agreement. Under the terms of the consulting agreement, the
Executive shall consult with respect to the assets and liabilities of the
Company as they existed immediately before the Extraordinary Transaction or the
Material Asset Disposition. Such consultation shall be at the reasonable times
convenient to the Executive on no less than five business days' notice, the
parties recognizing that the Executive during the consulting period likely will
have substantial other business interests, including under an employment or
consulting agreement with IFG. The terms and conditions of this Agreement
(including all rights hereunder of the Executive as to compensation, bonus,
payments and benefits) shall continue unabridged during the period of
consulting. The other provisions of this Agreement also shall remain in effect
except that (i) Section 2(a) shall be deleted and the remainder of Section 2
shall be modified by this Section 2(d), (ii) Section 7(a)(iv)(B) and Section
7(a)(iv)(C) shall be deleted, and (iii) references to salary (and Base Salary)
in Section 4(a) and elsewhere in this Agreement shall be deemed to refer to a
consulting fee (and Base Consulting Fee), and such Base Consulting Fee shall be
paid to the executive in twelve monthly installments, payable on the first day
of each calendar month. The "Employment Period" shall be deemed to include the
period during which the Executive is obligated to provide consulting services
hereunder and therefore, to the extent permitted by law, the conversion shall
not be deemed a termination or resignation for any purpose and, if the law
requires that the conversion be treated as a termination, then the Company must
provide the Executive with benefits
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equivalent to those he would have received had there been no termination. The
Executive shall not be obligated to consult for more than five days or portions
of a day in any calendar month.
SECTION 3. KEY MAN LIFE INSURANCE. The Company shall have the
right to place a "key man" life insurance policy, providing a death benefit of
up to $15,000,000 upon the life of the Executive, for which the Company is the
beneficiary. In connection therewith, the Executive hereby authorizes the
Company, at its sole cost and expense, to purchase and maintain upon the life
of the Executive such insurance policy, and agrees to submit to such reasonable
medical examinations, and to provide and/or consent to the release of such
medical information, as may be necessary or desirable in order to secure the
issuance thereof. Except as may be required in order to obtain insurance
coverage as described in this Section 3, any and all information about
Executive's health or medical records shall be kept confidential by the Company
and shall not be disclosed by the Company to any party without the Executive's
prior written consent.
SECTION 4. COMPENSATION. As full compensation for his services
hereunder, the Company shall pay, grant, issue or give, as the case may be, to
the Executive the compensation and benefits specified below:
(a) BASE SALARY. Subject to the provisions of Section 7, a base
salary at the rate of $400,000 per annum ("Base Salary"), which Base Salary
shall be paid to the Executive in accordance with the customary executive
payroll policy of the Company as in effect from time to time; provided,
however, that the Base Salary, as in effect at any time and from time to time,
may be further increased by action of the Board of Directors; and further
provided, however, that in no event shall the Base Salary be decreased at any
time or from time to time without the prior consent of the Executive, which
consent may be granted or withheld in the Executive's sole discretion.
(b) ANNUAL DISCRETIONARY BONUS. An annual discretionary bonus
("Discretionary Bonus"), the amount of which, if any, shall be determined by
the Board of Directors of the Company in its sole and absolute discretion, which
shall be paid to the Executive, with respect to any fiscal year of the Company,
before the expiration of 74 days after the end of such fiscal year. In making
bonus determinations, the Company shall evaluate the Executive's performance in
accordance with the standard bonus guidelines used by the Company for executives
of the Company in the same or a similar position as the Executive. In the event
of the consummation of the sale of the present residential business of IFG to
Apartment Investment and Management Company pursuant to an amended and restated
merger agreement dated May 26, 1998 (the "AIMCO Merger") in any year, the
Company shall, immediately after the consummation of the AIMCO Merger, pay to
the Executive an amount equal to X times Y, where X equals: (a) if the
consummation of the AIMCO Merger occurs in 1998, the amount of the discretionary
bonus the Executive received from IFG with respect to 1997, (b) if the
consummation of the AIMCO Merger occurs in 1999, the amount of the discretionary
bonus the Executive received from the Company with respect to 1998, divided by
the number of days between the effective date of this Agreement and the end of
1998, and multiplied by 365, or (c) if the consummation of the AIMCO Merger
occurs after 1999, the amount of the discretionary bonus the Executive received
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with respect to the year prior to the year in which the consummation of the
AIMCO Merger occurred, and Y equals a fraction the numerator of which is the
number of days between the beginning of the year and the occurrence of the
consummation of the AIMCO Merger and the denominator of which is 365.
(c) EXTRAORDINARY TRANSACTION.
An "Extraordinary Transaction" as used herein means the occurrence of
any one or more of the following:
(i) the Company ceases to be required to file reports
under Section 13 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor to that Section;
(ii) a majority of the members of the Board of Directors
of the Company are not persons who (a) had been directors of the Company for at
least the preceding 12 consecutive months or (b) when they initially were
elected to the Board (x) were nominated (if they were elected by the
stockholders) or elected (if they were elected by the directors) with the
affirmative vote of two-thirds of the directors who were Continuing Directors
at the time of the nomination or election by the Board and (y) were not elected
as a result of an actual or threatened solicitation of proxies or consents by a
person other than the Board of Directors of the Company or an agreement
intended to avoid or settle such a proxy solicitation (the directors described
in clauses (a) and (b) being "Continuing Directors");
(iii) any "person," including a "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act, but excluding the
Company, any of its present affiliates (as such term is defined in Rule 405
promulgated under the Securities Act of 1933, as amended) ("Affiliates"), or
any employee benefit plan of the Company or any of its present Affiliates) is
or becomes the "beneficial owner" (as defined in Rule 13(d) (3) under the
Exchange Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities;
(iv) the purchase of Common Stock of the Company ("Common
Stock") pursuant to any tender or exchange offer or otherwise made by any
"person," including a "group" (as such terms are used in Sections 13 (d) and 14
(d) of the Exchange Act), other than the Company, any of its present
Affiliates, or any employee benefit plan of the Company or any of its present
Affiliates, which results in "beneficial ownership" (as so defined) of 30% or
more of the outstanding Common Stock;
(v) the execution and delivery of a definitive agreement
by the Company that provides for a merger or consolidation, or a transaction
having a similar effect (unless such merger, consolidation or similar action is
with a subsidiary of the Company or with another company, a majority of whose
outstanding capital stock is owned by the same persons or entities who own a
majority of the Company's outstanding Common Stock at such time), where (A) the
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majority of the Common Stock of the Company is no longer held by the persons
who were the stockholders of the Company immediately prior to the transaction,
(B) the sale, lease, exchange or other disposition of all or substantially all
of the assets of the Company but excluding the trading of marketable securities
held as portfolio securities or (C) the Company's Common Stock is converted
into cash, securities or other property (other than the common stock of a
company into which the Company is merged), provided, however, that, in the
event that the contemplated merger, consolidation or similar transaction is not
consummated, then any rights that may arise under this paragraph (v) by virtue
of such Change of Control shall not apply; and
(vi) upon the consummation of any transaction requiring
stockholder approval for the acquisition of the Company by an entity other than
the Company or a subsidiary through purchase of assets, or by merger, or
otherwise.
(d) MATERIAL ASSET DISPOSITION BONUS. In the event of a Material
Asset Disposition, as defined below, in consideration of the services performed
by the Executive and consistent with the prior terms of the Executive's
employment, the Company (or, in the case of clause (iii) below, the spin-off
entity or, in default thereof, the Company) shall pay to the Executive
immediately before the consummation of such Material Asset Disposition, a cash
bonus equal to the Bonus Percentage of the consideration (valued as set forth
below) received by the Company or its shareholders as a result of such Material
Asset Disposition; provided, however, that if the Material Asset Disposition
giving rise to the cash bonus contemplated by this Section 4(d) is the
consummation of the AIMCO Merger, the Company shall pay such cash bonus
immediately after the consummation of the AIMCO Merger, and the amount of such
cash bonus shall be equal to .25% of the consideration (valued as set forth
below) received by IFG or its shareholders as a result of the consummation of
the AIMCO Merger (not including the value of the distribution of shares of the
Company to shareholders of IFG). The Bonus Percentage shall be .25% if the
Executive is a consultant to the Company, or makes himself reasonably available
to consult for the Company with respect to the assets and liabilities of the
Company as they existed immediately after the spin-off of Insignia/ESG
Holdings, Inc. to the Company's shareholders, at the time the definitive
agreement regarding such Material Asset Disposition is executed. The Bonus
Percentage shall be .5% if the Executive is an employee of the Company (for
this purpose only, the word "employee" not including a consultant under this
Agreement), whether under this Agreement or otherwise, at the time the
definitive agreement regarding such Material Asset Disposition is executed. If
the Executive has been Terminated For Cause, or is otherwise not employed by
the Company and not available to consult for the Company, at the time the
definitive agreement regarding such Material Asset Disposition is executed,
then the Bonus Percentage shall be 0%.
A "Material Asset Disposition" as used herein means, without
duplication for the same matter: (i) a transaction which results in a majority
of the equity interest in the Company being beneficially owned by any "person"
or "persons," including any "group" (as such terms are used in Section 13(d)
and 14(d) of the Exchange Act), other than any of the Company's present
Affiliates; (ii) a sale or series of sales by the Company of subsidiaries,
divisions, assets (other than marketable securities), or operating businesses
representing in the aggregate 20% or more of
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the Company's 1998 budgeted EBITDA (which shall include for purposes of this
Agreement EBITDA for all contemplated subsidiaries of the Company) and each
such sale after such threshold has been reached or, if the AIMCO Merger is
consummated, a sale or series of sales by the Company of subsidiaries,
divisions, or assets (other than marketable securities), or operating
businesses regardless of size; (iii) a spin off, or series of spin offs, of any
of the Company's divisions, operating businesses or subsidiaries that meet the
1998 budgeted EBITDA threshold set forth in (ii) above (or, if the AIMCO Merger
is consummated, any such spin off, regardless of size) which is followed by a
subsequent Extraordinary Transaction (as defined above, but with reference to
the spun off entity rather than the Company) of the subsidiary, division or
business spun off within five years following such spin off; (iv) any
transaction which results in any one or more of the Company's divisions,
subsidiaries or operating businesses, representing in the aggregate 20% or more
of the Company's EBITDA, being owned by a third party or, if the AIMCO Merger
is consummated, any transaction, regardless of size, which results in any one
or more of the Company's divisions, subsidiaries, or operating businesses being
owned by a third party; or (v) the consummation of the AIMCO Merger. In the
event a Material Asset Disposition is consummated in one or more steps,
including, without limitation, by way of second-step merger, any additional
consideration paid or to be paid in any subsequent step in the Material Asset
Disposition in respect of (x) subsidiaries, divisions, assets (other than
marketable securities), or operating businesses of the Company and (y) capital
stock of the Company (and any securities convertible into, or options, warrants
or other rights to acquire, such capital stock) shall be included for purposes
of calculating the bonus payable pursuant to this Section 4(d).
"Consideration" shall not include the assumption, directly or indirectly, or
repayment of indebtedness or other liabilities of the Company but shall include
the assumption, directly or indirectly, or repayment of securities similar to
the IFG Trust Convertible Preferred Securities now outstanding. If all or a
portion of the consideration paid in the Material Asset Disposition is other
than cash or securities, then the value of such non-cash consideration shall be
the fair market value thereof on the date the Material Asset Disposition is
consummated as mutually agreed upon in good faith by the Company's Board of
Directors and the Executive. If the Board of Directors and the Executive are
unable to come to agreement on the fair market value of such non-cash
consideration following the provisions of this Section 4(d), then, at the
request of either, an independent valuation expert agreeable to both shall be
appointed to determine the fair market value of such non-cash consideration,
and the determination of such independent expert shall be binding on both the
Executive and the Company. If such non-cash consideration consists of common
stock, options, warrants or rights for which a public trading market existed
prior to the consummation of the Material Asset Disposition, then the value of
such securities shall be determined by the closing or last sales price thereof
on the date of the consummation of the Material Asset Disposition; provided,
however, that if such non-cash consideration consists of newly-issued,
publicly-traded common stock, options, warrants or rights for which no public
trading market existed prior to the consummation of the Material Asset
Disposition, then the value thereof shall be the average of the closing prices
for the 20 trading days subsequent to the fifth trading day after the
consummation of the Material Asset Disposition. In such event, the portion of
the bonus payable to the Executive pursuant to this Section 4(d) attributable
to such securities shall be paid on the 30th trading day subsequent to
consummation of the Material Asset Disposition. If no public market exists for
the common stock, options, warrants or other
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rights issued in the Material Asset Disposition, then the value of thereof
shall be as mutually agreed upon in good faith by the Company's Board of
Directors and the Executive. If the non-cash consideration paid in the
Material Asset Disposition consists of preferred stock or debt securities
(regardless of whether a public trading market existed for such preferred stock
or debt securities prior to consummation of the Material Asset Disposition or
exists thereafter), the value hereof shall be the face or principal amount, as
the case may be. Any amounts payable by a purchaser to the Company, any
shareholder of the Company or any Affiliate of either the Company or any
shareholder of the Company in connection with a non-competition, employment,
consulting, licensing, supply or other agreement shall be deemed to be part of
the consideration paid in the Material Asset Disposition. If all or a portion
of the consideration payable in connection with the Material Asset Disposition
includes contingent future payments, then the Company shall pay to the
Executive, upon consummation of such Material Asset Disposition, an additional
cash fee, determined in accordance with this Section 4(d) as, when and if such
contingency payments are received. However, in the event of an installment
purchase at a fixed price and a fixed time schedule, the Company agrees to pay
the Executive, upon consummation of the Material Asset Disposition, a cash fee
determined in accordance with this Section 4(d) based on the present value of
such installment payments using a discount rate of 6.5%. For purposes of
this Section 4(d), in no case shall the "consideration" received by the Company
be greater than the total market capitalization of the Company at the time of
the Material Asset Disposition.
(e) FRINGE BENEFIT PROGRAMS. In addition to the other benefits
provided to the Executive hereunder and to the extent he satisfies the
eligibility requirements thereof and to the extent permitted by law,
participation in fringe benefit programs made available generally to employees
or independent contractors of the Company, including, without limitation,
pension, profit sharing, stock purchase, savings, bonus, disability, life
insurance, health insurance, hospitalization, dental, deferred compensation and
other plans and policies authorized on the date hereof or in the future.
(f) EXPENSE REIMBURSEMENT. Reimbursement of the Executive for all
out-of-pocket expenses incurred by him in connection with the performance of
his duties hereunder, including professional activities and membership fees and
dues relating to professional organizations of which the Executive currently is
a member or is directed in writing to be a member by the Chief Executive
Officer of the Company and including, without limitation, expenses required for
professional licensing of the Executive, and business related cell phone
expense in accordance with the Company's written policies and procedures, all
upon the presentation of appropriate documentation therefore in accordance with
the then regular procedures of the Company.
(g) PERQUISITES. In addition to the other benefits provided to
the Executive hereunder, and at the sole cost and expense of the Company,
except as otherwise provided herein:
(i) the Executive shall be entitled to reasonable
business usage of aircraft owned or leased by the Company as determined by the
Chief Executive Officer of the Company.
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With prior consent from the Chief Executive Officer of the Company, the
Executive may utilize such aircraft for personal use and in such event the cost
of such use shall be added to and included in the Executive's compensation for
federal, state and local income tax purposes;
(ii) subject to the provisions of Section 7 hereof, the
Company will provide to the Executive disability insurance coverage identical
to the disability insurance coverage provided to senior executives of the
Company from time to time; and
(iii) the Executive shall be fully reimbursed for expenses
incurred in respect of professional continuing education.
(h) VACATIONS, ETC. Leaves-of-absence in accordance with the then
regular procedures of the Company governing senior executives, and four weeks
of paid vacation per year on a noncumulative basis.
(i) PARACHUTE LIMIT. Notwithstanding anything else herein, to the
extent the Executive would be subject to the excise tax under Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code"), on such amounts or
benefits received from the Company required to be included in the calculation
of parachute payments for purposes of Sections 280G and 4999 of the Code (the
"Parachute Payments"), the amounts of any Parachute Payments shall be
automatically reduced as described herein to an amount one dollar less than an
amount that would subject the Executive to the excise tax under Section 4999 of
the Code (the "Parachute Limit"); provided, however, that this Section 4(i)
shall apply only if the reduced Parachute Payments received by the Executive
(after taking into account further reductions for applicable federal, state and
local income, social security and other taxes) would be greater than the
unreduced Parachute Payments to be received by the Executive minus (i) the
excise tax payable under Section 4999 of the Code with respect to such
Parachute Payments and (ii) all applicable federal, state and local income,
social security and other taxes on such Parachute Payments. The foregoing
reduction shall be applied to the Parachute Payments as follows: (i) first by
reducing the amounts payable under Section 4(c) (if such amounts are included
in such computation) until such amounts have been exhausted up to the Parachute
Limit, (ii) then by reducing any such other amounts and benefits (other than
awards described in (iii) below) as determined by the Company, and (iii)
notwithstanding anything contained herein or in an option, warrant or
restricted stock agreement, award or plan relating to the Executive then, on a
pro-rata basis up to the Parachute Limit, by failing to accelerate the vesting
(without affecting the right to vest) upon a change in ownership or effective
control or change in ownership of a substantial portion of assets (as described
in Code Section 280G(b)(2)(A)(i)) of any unvested awards of shares of
restricted stock of the Company previously granted to Executive and options or
warrants to purchase shares of the Company previously granted to Executive.
Notwithstanding the foregoing, the Company shall treat any of the amounts
described in (i) through (iii) above as a Parachute Payment solely to the
extent required under applicable law.
(j) PURCHASE OF INSURANCE. Following the Executive's cessation
of employment with the Company for any reason, (i) the Executive shall have the
right to continue, at the
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Executive's sole cost, any or all life insurance policies on the life of the
Executive maintained by the Company during the Employment Period and to
designate the beneficiaries and owners thereof, and (ii) the Executive and his
dependents shall have the right to purchase from or through the Company or its
successor, at the Executive's or his dependents' sole cost, individual and
dependent care health insurance coverage. Notwithstanding anything in this
Agreement to the contrary, the provisions of this Section 4(j) shall continue
regardless of the cessation of the Executive's employment by the Company. In
the case of the death of the Executive, whether during or after the Employment
Period, the rights under Section 4(j)(ii) of the persons who were the
Executive's dependents at the time of his death shall continue in full force
and effect for the duration of each of their lives.
(k) VESTING. In the event of (a) a termination of Executive's
employment for any reason other than a Termination for Cause or voluntary
termination by the Executive, including, but not limited to a Death Termination
Event, Disability Termination Event, Termination Without Cause or in the event
of (b) the occurrence of an Extraordinary Transaction, an Influence Change
Event (as such term is defined in the Xxxxxx Employment Agreement)), or an
Extraordinary Stock Event (as such term is defined in the Xxxxxx Employment
Agreement) (whether or not resulting in a termination of Executive's
employment), all options and warrants then granted to the Executive will
immediately vest and be exercisable by the Executive.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
EXECUTIVE. The Executive represents and warrants to the Company as follows:
(a) He is under no contractual or other restriction or obligation
which is inconsistent with the execution of this Agreement, the performance of
his duties hereunder, or the other rights of the Company hereunder; and
(b) He is able to perform the essential functions of his duties
hereunder with or without reasonable accommodations.
SECTION 6. NON-SOLICITATION; CONFIDENTIALITY.
(a) NON-SOLICITATION.
(1) In recognition of the close personal contact
the Executive has or will have with the Company's and its affiliates' trade
secrets, confidential information, records and business relationships, and the
position of trust in which the Company holds the Executive, the Executive
further covenants and agrees that while the Executive is employed by the
Company and for a period lasting for one (1) year following the cessation of
the Executive's employment with the Company, the Executive will not, if such
action would have a material adverse effect on the Company, in direct
competition with the Company (where competition is measured as of the date the
Executive ceases to be employed by the Company), either for himself or as an
officer, director, employee, agent, representative, independent contractor or
in any relationship to any person, partnership, corporation, or other entity
(except the Company or its
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Affiliates or subsidiaries), solicit, directly or by assisting others, business
from any of the Company's customers or clients who were customers or clients of
the Company as of the date of the cessation of the Executive's employment and
with whom the Executive has had material contact (as defined below) during the
twelve (12) month period preceding the date of cessation of the Executive's
employment with the Company in the event of a cessation of employment with the
Company or, absent such cessation, during the twelve (12) months preceding the
solicitation, for the purpose of providing goods or services to said customers
and clients. For purposes of this Agreement, "material contact" exists between
the Executive and any of the Company's customers or clients (i) with whom the
Executive actually dealt; or (ii) whose dealings with the Company were handled,
coordinated or supervised by the Executive; or (iii) about whom the Executive
obtained confidential information in the ordinary course of business through
the Executive's association with the Company.
(2) The Executive covenants and agrees that, for
a period ending on the second anniversary of the date on which the Executive's
employment with the Company ceases, the Executive will not solicit any
employee, broker or sales person of the Company, or any of its respective
subsidiaries or affiliates to leave their employ for the employ of a person or
entity which directly competes with the Company, or any of its respective
subsidiaries or affiliates.
(3) The Executive covenants and agrees that, for
a period ending on the second anniversary of the date on which the Executive's
employment with the Company ceases, the Executive will not purchase for his own
account any limited partnership units of partnerships that, on the date of
purchase, are controlled directly or indirectly by the Company, except that the
provisions of this sentence shall not be deemed breached merely because the
Executive owns, immediately after a purchase, not more than one percent of the
outstanding units. Should the Executive breach the foregoing sentence, all his
options issued by the Company or any of its subsidiaries shall be canceled and
all of his restricted stock issued by the Company or any of its subsidiaries
(whether or not then vested) which he then owns shall be forfeited. For
purposes of this Section 6(a)(3), "purchase" shall mean the payment of cash
only for such limited partnership units and shall not include payment of cash
for interests in an entity whose assets consist in whole or in part of such
limited partnership units.
(4) The Executives covenants and agrees that he
will not, either for himself or as an officer, director, employee, agent,
representative, or independent contractor of any person, partnership,
corporation, or other entity (except the Company or its Affiliates or
subsidiaries), interfere with any contract that exists between the Company and
any customers or clients of the Company as of the effective date of this
Agreement.
The Executive acknowledges that the foregoing provisions are intended
to protect the Company's and its subsidiaries' and Affiliates' business and
customer contacts, not to prevent the Executive from pursuing a livelihood in
the general area of his previous training, and they should be interpreted
accordingly.
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(b) CONFIDENTIALITY. All confidential information which the
Executive may now possess, may obtain during or after his employment with
Company, or may create prior to the end of his employment with the Company or
otherwise relating to the business of the Company or any of its subsidiaries or
affiliates or of any customer or supplier of any of them shall not be
published, disclosed, or made accessible by him to any other person, either
during or after the cessation of his employment, or used by him except during
his employment with the Company in the business and for the benefit of the
Company and its subsidiaries and Affiliates. In addition, the Executive agrees
not to disclose, publish or make accessible to any other person, from and after
the date of this Agreement, during the Employment Period or at any time
thereafter, any of the terms or provisions of this Agreement, except the
Executive's accountants who need such information to advise him, prepare his
tax returns, make required filings and the like; provided, however, that the
Executive will be responsible for causing any such accountants to be aware of
and to abide by the obligations contained in this Section 6(b) and will be
responsible for any breach of such obligations by any of them. In the event
that the Executive becomes legally compelled to disclose any of the
confidential information, the Executive will provide the Company with prompt
written notice so that the Company may seek a protective order or other
appropriate remedy and/or waive in writing compliance with the provisions of
this Section 6(b) and in the event that such protective order or other remedy
is not obtained, or should the Company waive in writing compliance with the
provisions of this Section 6(b), the Executive will furnish only that portion
of the confidential information which is so legally required. The Executive
shall return all tangible evidence of such confidential information to the
General Counsel of the Company prior to or at the cessation of his employment.
(c) INTERPRETATION. Since a breach of the provisions of this
Section 6 could not adequately be compensated by money damages, the Company
shall be entitled, in addition to any other right and remedy available to it,
to an injunction restraining such breach and the Company shall not be required
to post a bond in any proceeding brought for such purpose. The Executive
agrees that the provisions of this Section 6 are necessary and reasonable to
protect the Company in the conduct of its businesses. If any restriction
contained in this Section 6 shall be deemed to be invalid, illegal, or
unenforceable by reason of the extent, duration, or geographical scope thereof,
or otherwise, then the court making such determination shall have the right to
reduce such extent, duration, geographical scope, or other provisions hereof,
and in its reduced form such restriction shall then be enforceable in the
manner contemplated hereby. Nothing herein shall be construed as prohibiting
the Company from pursuing any other remedies, at law or in equity, for such
breach or threatened breach.
(d) INVESTORS. Notwithstanding anything herein to the contrary,
nothing in this Agreement shall restrict the right of the Executive to solicit
or receive, on his own behalf or on behalf of others, any investment or any
funds in any form from any person, regardless of whether such person is an
investor in the Company or in any current or former affiliate of the Company.
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SECTION 7. TERMINATION.
(a) DEFINITIONS.
(i) Death Termination Event. As used herein, "Death
Termination Event" shall mean the death of the Executive.
(ii) Disability Termination Event. As used herein,
"Disability Termination Event" shall mean a circumstance where the Executive is
physically or mentally incapacitated or disabled or otherwise unable to fully
discharge his duties hereunder for a period of 185 consecutive days.
(iii) Estate. As used herein, "Estate" shall mean (A) in
the event that the last will and testament of the Executive has not been
probated at the time of determination, the estate of the Executive and (B) in
the event that the last will and testament of the Executive has been probated
at the time of determination, the legatees of the Executive who are entitled
under such will to the assets or payments at issue.
(iv) Termination For Cause. As used herein, the term
"Termination For Cause" shall mean the termination by the Company of the
Executive's employment hereunder upon a good faith determination by a majority
vote of the members of the Board of Directors of the Company that termination
of this Agreement is necessary by reason of (A) the Executive shall be
convicted of a felony, (B) the Executive shall commit any act or omit to take
any action in bad faith and to the material detriment of the Company and
Executive shall not have cured the same within 30 days after the Company sends
written notice thereof, or (C) Executive shall breach in a material way any
material term of this Agreement and fail to correct such breach within 30 days
after the Company sends written notice thereof.
(v) Termination Without Cause. As used herein,
"Termination Without Cause" shall mean any termination of the Executive's
employment by the Company hereunder that is not a Termination For Cause, a
Death Termination Event, or a Disability Termination Event but shall not
include a conversion of this Agreement to a consulting agreement.
(b) DEATH TERMINATION EVENT. Upon the occurrence of a Death
Termination Event, this Agreement will terminate automatically upon the date
that such Death Termination Event occurred (subject to the last sentence of
this Section 7 and to the last two sentences of Section 4(j)), whereupon the
Executive's Estate shall receive the consideration set forth in Sections 4(a)
through (d) through the date three years from the Commencement Date. In
addition, the Executive's Estate shall be entitled to receive the payments
contemplated by Section 4(c) and Section 4(d) if the event giving rise to such
payment occurs, or a definitive agreement regarding such event is executed,
before or within 180 days after the Death Termination Event.
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(c) DISABILITY TERMINATION EVENT. Upon the occurrence of a
Disability Termination Event, this Agreement shall terminate automatically upon
the date that such Disability Termination Event occurred (subject to the last
sentence of this Section 7 and to the last two sentences of Section 4(j)),
whereupon the Executive shall continue to receive the consideration set forth
in Sections 4(a) through (d) and Section 4(g)(iii) through the date three years
from the Commencement Date. In addition, the Executive shall be entitled to
receive the payments contemplated by Section 4(c) and Section 4(d) if the event
giving rise to such payment occurs, or a definitive agreement regarding such
event is executed, before or within 180 days after the Disability Termination
Event.
(d) TERMINATION FOR CAUSE. The Executive and the Company agree
that the Company shall have the right to effectuate a Termination For Cause in
accordance with the terms of this Agreement at any time. Upon the occurrence
of a Termination For Cause, this Agreement will terminate upon the date that
such Termination For Cause occurs (subject to the provisions of Section 9),
whereupon (i) the Executive shall not be entitled to receive any additional
payments hereunder other than the Base Salary, as then in effect, to and
including the date that such Termination For Cause occurs and (ii) the Company
shall be entitled to any and all remedies and damages available to it.
(e) TERMINATION WITHOUT CAUSE. Upon the occurrence of a
Termination Without Cause, this Agreement shall terminate upon the date that
such Termination Without Cause occurs (subject to the provisions of Section 9
and to the last two sentences of Section 4(j)), whereupon the Executive shall
continue to receive the consideration set forth in Sections 4(a) through (d)
and Section 4(g)(iii) through the date three years from the Commencement Date.
In addition, the Executive shall be entitled to receive the payments
contemplated by Section 4(c) and Section 4(d) if the event giving rise to such
payment occurs, or a definitive agreement regarding such event is executed, on
or before the date three years from the Commencement Date.
In the event of a termination of Executive's employment for any reason
other than a Termination for Cause or voluntary termination by the Executive,
including, but not limited to a Death Termination Event, Disability Termination
Event, or Termination Without Cause, all options, warrants and restricted stock
then held by and/or granted to the Executive will immediately vest and be
exercisable by the Executive but in the event of the occurrence of an
Extraordinary Transaction, no options, warrants or restricted stock then held
by and/or granted to the Executive will immediately vest as a result thereof.
SECTION 8. WITHHOLDING. The Company shall be entitled to
withhold from amounts payable to the Executive hereunder such amounts as may be
required by applicable law to be so withheld.
SECTION 9. SURVIVAL. Notwithstanding anything in this Agreement
to the contrary, Section 6 of this Agreement shall survive any termination of
this Agreement or cessation of the Executive's employment hereunder for the
periods stated therein.
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SECTION 10. MODIFICATION. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.
SECTION 11. NOTICES. Any notice or other communication required
or permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or delivered against receipt to the
party to whom it is to be given, at the address of such party set forth in the
preamble to this Agreement (or to such other address as such party shall have
furnished in writing in accordance with the provisions of this Section 11).
Notice to the Estate shall be sufficient if addressed to the Executive as
provided in this Section 11. Any notice or other communication given by
certified mail shall be deemed given at the time of certification thereof,
except for a notice changing a party's address which shall be deemed given at
the time of receipt thereof.
SECTION 12. WAIVER. Any waiver by either party of a breach of
any provision of Agreement shall not operate as a waiver of any other breach of
such provision or of any breach of any other provision of this Agreement. The
failure of a party to insist upon strict adherence to any term of this
Agreement on one or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term
or any other term of this Agreement. Any waiver must be in writing.
SECTION 13. BINDING EFFECT. The Executive's rights and
obligations under this Agreement shall not be transferable by assignment or
otherwise, such rights shall not be subject to commutation, encumbrance or the
claims of the Executive's creditors, and any attempt to do any of the foregoing
shall be void. The provisions of this Agreement shall be binding upon and
inure to the benefit of the Executive and his heirs and personal
representatives, and shall be binding upon and inure to the benefit of the
Company and its successors.
SECTION 14. HEADINGS. The headings in this Agreement are solely
for convenience of reference, and shall be given no effect in the construction
or interpretation of this Agreement.
SECTION 15. ENFORCEMENT. Should the Executive xxx to enforce any
of his rights under this Agreement and should the Executive prevail on any
issue in such suit, then the Company shall pay all the Executive's costs of
such suit (including attorneys fees and disbursements). If any taxes are
imposed on such payment, the Company shall make such additional payments to the
Executive as may be necessary, so that after deducting the taxes imposed on all
payments made to the Executive pursuant to this paragraph, the Executive is
left on an after tax basis with an amount equal to his claim for
indemnification prior to the payments described in this sentence.
SECTION 16. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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SECTION 17. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of South Carolina,
without reference to the conflict of law provisions thereof.
SECTION 18. CONSTRUCTION AND INTERPRETATION. Should any
provision of this Agreement require judicial interpretation, the parties hereto
agree that the court interpreting or construing the same shall not apply a
presumption that the terms hereof shall be more strictly construed against one
party by reason of the rule of construction that a document is to be more
strictly construed against the party that itself, or through its agent,
prepared the same, and it is expressly agreed and acknowledged that the
Executive, the Company and their respective attorneys and representatives have
participated in the preparation hereof.
SECTION 19. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALING BETWEEN OR AMONG THEM
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIPS BEING
ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO ENCOMPASS ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER
OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH
PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR
RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS
THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO THE TRIAL BY THE COURT.
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
INSIGNIA/ESG HOLDINGS, INC.
By:
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Name:
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Its:
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EXECUTIVE
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Name: Xxxxx X. Aston
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