Exhibit 10.7
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 12th day of July 2001, between Xxxxxxx
Global Corporation ("Employer"), and Xxxxx Xxxxx ("Executive")
WITNESSETH
WHEREAS, Executive possesses an intimate knowledge of the business and affairs
of Employer, its policies, methods, personnel, opportunities and problems;
WHEREAS, Employer desires to assure itself of Executive's continued employment
by Employer and to compensate him for such efforts; and
WHEREAS, Executive is desirous of committing himself to serve Employer on the
terms herein provided;
NOW, THEREFORE, In consideration of the covenants herein contained, the parties
hereto hereby agree as follows:
1. Employment. Executive is hereby employed as the President and Chief Operating
Officer of Employer with primary responsibility over the Investment Banking
Division of Xxxxxxx Global Securities, Inc. ("LGS"). Executive, shall have
supervision and control over the operations and affairs of LGS, and shall have
such other powers and duties as may be from time to time assigned to him by the
Board of Directors of Employer (the "Board"), and Executive hereby accepts such
employment, all subject to the terms and conditions herein contained. Executive
hereby agrees that during the period of his employment hereunder he shall devote
substantially all of his business time, attention and skills to the business and
affairs of Employer and its subsidiaries.
2. Place of Performance. In connection with his employment by Employer,
Executive shall be based at Employer's principal executive offices where same
may be located from time to time.
3. Compensation.
a. Base Salary. Employer shall pay to Executive, and Executive shall
accept, for all services which may be rendered by him pursuant to
this Agreement, a base salary ("Base Salary") as hereinafter set
forth. The Base Salary during the term of this Agreement shall
initially be at the annual rate of $125,000 per year. The Base
Salary shall be increased to the annual rate of $150,000 forthwith
upon Employer obtaining, at any time after the date hereof, debt or
equity funding of at least $3,000,000.
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Any increase in Base Salary or other compensation granted by
Employer, the Board or any committee thereof shall in no way limit
or reduce any other obligation of Employer hereunder and, once
established at an increased specified rate Executive's Base Salary
hereunder shall not thereafter be reduced, other than as
necessitated by Employer's adverse financial condition. Executive's
salary shall be payable in accordance with Employer's payroll
practices as from time to time in effect.
b. Bonus In addition to Base Salary, Executive shall be entitled to a
minimum annual performance bonus of the greater of (i) $25,000
payable in January of each year during the term of the Agreement; or
(ii) 10% of the annual net income of the Investment Banking Division
of LGS, after adjusting same for allocation of direct overhead and
applicable income, franchise or other tax on the income of such
division, payable in January of each year during the term of this
Agreement.
c. Expenses. During the term of his employment hereunder, Executive
shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him in performing services hereunder, provided
that Executive properly accounts therefor in accordance with
Employer's policy relating thereto. Without limiting the generality
of the foregoing, the parties agree that any travel Executive
undertakes in connection with the performance of his duties
hereunder shall be in business class or better, and Employer shall
reimburse Executive for such expenses.
d. Benefit Plans. Executive shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement
currently available, or made available by Employer in the future, to
its executives and key management employees, subject to and on a
basis consistent with the terms, conditions and overall
administration of such plan or arrangement. Employer shall not make
any changes in any employee benefit plans or arrangements in effect
on the date hereof or during the term of this Agreement in which
Executive participates (including, without limitation, any pension
and retirement plan, supplemental pension and retirement plan,
savings and profit sharing plan, stock ownership plan, stock
purchase plan, stock option plan, life insurance plan, medical
insurance plan, disability plan, dental plan, health-and- accident
plan or arrangement) which would adversely effect Executive's rights
or benefits thereunder, unless such change occurs pursuant to a
program applicable to all executives of Employer and does not result
in a proportionately greater reduction in the rights of or benefits
to Executive as compared with any other executive of Employer. Any
payments or benefits payable to Executive hereunder in respect of
any calendar year during which Executive is employed by Employer for
less than the entire such year shall, unless otherwise provided in
the applicable plan or arrangement, be prorated in accordance with
the number of calendar days in such calendar year during which he is
so employed.
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e. Vacations, Holidays and Sick Leave. Executive shall be entitled to
the number of paid holidays, personal days off, vacation days and
sick leave days in each calendar year as are determined by Employer
from time to time for its senior executive officers, but not less
than four (4) weeks in any calendar year (prorated, in any calendar
year during which Executive is employed under this Agreement for
less than the entire such year, in accordance with the number of
calendar days in such calendar year during which he is so employed).
Vacation may be taken in Executive's discretion, so long as it is
not inconsistent with the reasonable business needs of Employer.
Executive shall be entitled to accrue from year to year all vacation
days not taken by him.
f. Perquisite. Executive shall be entitled to continue to receive the
perquisites and fringe benefits appertaining to the office of the
President and Chief Operating Officer of Employer in accordance with
present practice and appropriate to the industry.
g. Base Salary Not Effected by Other Benefits. None of the benefits to
which Executive is entitled under any of the provisions of Sections
3 (b) - 3 (g) hereof shall in any manner reduce or be deemed to be
in lieu of the Base Salary payable to Executive pursuant to Section
3(a) hereof.
4. Term of Employment. The employment by Employer of Executive pursuant hereto
shall commence as of the effective date (the "Effective Date") and, subject to
the provisions of Section 5 hereof, shall terminate three (3) years after the
Effective Date (the "Termination Date") . This Agreement shall automatically be
extended for one additional year beyond the Termination Date (the "Extended
Termination Date") unless at least thirty (30) calendar days prior to the
Termination Date, Executive or Employer shall have given notice that he or it
does not wish to extend this Agreement.
5. Premature Termination. Anything in this Agreement contained to the contrary
notwithstanding:
a. Death. Executive's employment hereunder shall terminate forthwith
upon the death of Executive.
b. Disability. Executive's employment hereunder shall terminate, at the
option of Employer, in the event that the Board makes a good faith
determination that Executive suffers from Disability (as hereinafter
defined) so as to be unable to substantially perform his duties
hereunder for an aggregate of one hundred and eighty (180) calendar
days during any period of twelve (12) consecutive months. As used in
this Agreement, the term "Disability" shall mean the material
inability, in the opinion of three-fourths (3/4) of the entire
membership of the Board set forth in a resolution giving the
particulars thereof, of Executive to render his agreed-upon services
to Employer due to physical and/or mental infirmity, which opinion
is concurred in by a physician or psychiatrist reasonably
satisfactory to Employer and Executive or his duly appointed
representative or guardian.
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c. Cause. Employer may terminate Executive's employment hereunder for
Cause. For purposes of this Agreement, Employer shall have "Cause"
to terminate Executive's employment hereunder upon (i) the willful,
intentional and continued failure by Executive to substantially
perform his duties hereunder (other than any such failure resulting
from Executive's incapacity due to physical or mental illness) after
demand for substantial performance is delivered by Employer
specifically identifying the manner in which Employer believes
Executive has not substantially performed his duties and a
continued, intentional disregard of such demand or (ii) the willful
engaging by Executive in conclusively proven misconduct which is
materially injurious to Employer, monetarily or otherwise, or (iii)
the willful violation by Executive of the provisions of Section 7
hereof provided that such violation results in material injury to
Employer. No act, or failure to act, on Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not
in good faith and without reasonable belief that his action or
omission was in the best interest of Employer. Notwithstanding the
foregoing, Executive shall not be deemed to have been terminated for
Cause unless and until there shall have been delivered to Executive
a copy of a resolution, duly adopted by the affirmative vote of not
less than three-fourths (3/4) of the entire membership of the Board
at a meeting of the Board called and held for such purpose (after
reasonable notice to Executive and an opportunity for him, together
with his counsel, to be heard before the Board), finding that, in
the good faith opinion of the Board, Executive conducted, or failed
to conduct, himself in a manner set forth above in clause (1), (ii),
or (iii) of this Section 5(c), and specifying the particulars
thereof in detail.
d. Termination by Executive. Executive may terminate his employment
hereunder Ci) for Good Reason (as hereinafter defined) or (ii) if
his physical or mental health becomes impaired to an extent that
makes the continued performance of his duties hereunder hazardous to
his .physical or mental health or his life, provided that Executive
shall have furnished Employer with a written statement from a doctor
or psychiatrist to such effect, and provided further, that, at
Employer's request and expense, Executive shall submit to an
examination by a physician or psychiatrist selected by Employer and
such physician or psychiatrist shall have concurred in the
conclusion of Executive's physician or psychiatrist. Until Executive
terminates his employment pursuant to clause (ii) of this Section 5
Cd), he shall continue to receive his full Base Salary, payable at
the time such payments are due.
e. "Good Reason" Defined. For purposes of this Agreement, "Good Reason"
shall mean Ci) a Change in Control (as hereinafter defined) of
Employer, or (ii) any limitation of the powers of Executive, or
(iii) any removal of Executive as, or any failure to re- elect
Executive to his title hereunder except in connection with
termination of Executive's employment for Cause (as hereinafter
defined) or Disability; provided, however, that any removal of
Executive as, or any failure to re-elect Executive (except in
connection with termination of Executive's employment for Cause or
Disability) shall not diminish or reduce
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the obligations of Employer to Executive under this Agreement. or
(iv) the failure of Employer to obtain the assumption of the
agreement to perform this Agreement by any successor to Employer, as
provided for in Section 8 hereof.
f. "Change of Control" Defined. For purposes of this Agreement, a
"Change in Control" (as hereinafter defined) of Employer shall be
deemed to have occurred if (i) any "person" (as such term is used in
Section 13 Cd) of the Securities Exchange Act of 1934 (the "Exchange
Act"), other than Employer or any "group" (as such term is defined
in Section 13(d) (3) of the Exchange Act) of which they are a
member, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities
of Employer representing twenty percent (20%) of more of the
combined voting power of Employer's then outstanding securities, or
(ii) during any period of two (2) consecutive years during the term
of this Agreement, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a
majority thereof, unless the election of each director who was not a
director at the beginning of such period has been approved in
advance by directors representing at least two-thirds (2/3) of the
directors then in office who were directors at the beginning of the
period.
g. Notice of Termination. Any termination of Executive's employment by
Employer or by Executive (other than termination pursuant to Section
5(a) hereof) shall be communicated by written Notice of Termination
to the~other party hereto. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment
under the provision so indicated.
h. Date of Termination.____________________ "Date of Termination" shall
mean (i) if Executive's employment is terminated by his death, the
date of his death, (ii) if Executive's employment is terminated
pursuant to Section 5(b) hereof, thirty (30) calendar days after
Notice of Termination is given (provided that Executive shall not
have returned to the performance of his duties on a full-time basis
during such thirty (30) day period), (iii) if Executive's employment
is terminated pursuant to Section 5(c) hereof, the date specified in
the Notice of Termination, and (iv) if Executive's employment is
terminated for any other reason, the date on which a Notice of
Termination is given; provided, however, that if, within thirty (30)
calendar days after any Notice of Termination is given, the party
receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding and final
arbitration award or by a final judgment order or decree of a court
of competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected)
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6. Payments and Benefits Upon Early Termination.
a. Early Termination for Death, Disability or Cause. Upon the
termination of this Agreement prior to the Termination Date (or, if
this Agreement shall have been extended to the Extended Termination
Date, as provided in Section 4 hereof, prior to the Extended
Termination Date) (X) by Employer as a result of death, Disability
or termination of Executive for Cause or (Y) by Executive for any of
the reasons set forth in clause (ii) of Section 5(d) hereof,
Employer shall pay Executive:
i. his Base Salary through the Date of Termination at the rate in
effect at the time of Notice of Termination is given or, in
the case of the death of Executive, the Date of Termination,
payable at the time such payments are due; and
ii. all other amounts to which Executive is entitled, including,
without limitation, expense reimbursement amounts accrued to
the Date of Termination or amounts under any benefit plan of
Employer, at the time such payments are due.
b. Early Termination Other than for Death, Disability or Cause. Upon
the termination of this Agreement prior to the Termination Date (or,
if this Agreement shall have been extended to the Extended
Termination Date, as provided in Section '4 hereof, prior to the
Extended Termination Date) (X) by Employer other than for death,
Disability or Cause or (Y) by Executive for Good Reason or as a
result of a breach of this Agreement by Employer, Employer shall pay
to Executive:
i. this Base Salary through the Termination Date at the rate in
effect at the time Notice of Termination is given, payable at
the time such payments are due (or, if this Agreement shall
have been extended to the Extended Termination Date, as
provided in Section 4 hereof, his Base Salary through the
Extended Termination Date at the rate in effect at the time
Notice of Termination is given, payable at the time such
payments are due);
ii. An amount equal to one year of Base Salary at the rate in
effect at the time Notice of Termination is given payable on
the Termination Date or the Extended Termination Date,
whichever date is applicable.
iii. all other amounts to which Executive is entitled, including,
without limitation, expense reimbursement amounts accrued to
the Date of Termination or amounts under any benefit plan of
Employer, at the time such payments are due; and
c. Mitigation Not Required. Executive shall not be required to mitigate
the amount of any payment provided for in this Section 6 by seeking
other employment or otherwise, nor shall the amount of any payment
provided for in this Section 6 be reduced by any compensation earned
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by Executive as the result of employment by another employer after
the Date of Termination, or otherwise.
7. Non-disclosure;
a. Confidential Information. Executive shall not, to the detriment of
Employer, knowingly use for his own benefit or disclose or reveal to
any unauthorized person, any trade secret or other confidential
information received by Executive in the course of his employment or
engagement in any capacity by Employer which relates to Employer or
to any of the businesses operated by it, including, but not limited
to, any customer lists, customer needs, price and performance
information, specifications, hardware, software, devices, supply
sources and characteristics, business opportunities, marketing,
promotional, pricing and financing techniques, or other information
relating to the business of Employer, and Executive confirms that
such information constitutes the exclusive property of Employer.
However, said restriction on confidential information shall not
apply to information which+/-5: Ci) generally available in the
industry in which Employer operates, (ii) disclosed in published
literature or (iii) obtained by Executive from a third party without
binder or secrecy. Executive agrees that, except as otherwise
expressly~agreed to by Employer, he will return to Employer,
promptly upon the request of the Board or any executive officer
designated by the Board, any physical embodiment of such
confidential information.
b. Remedies. Executive recognizes that the possible restrictions on his
activities which may occur as a result of his performance of his
obligations under this Section 7 are required for the reasonable
protection of Employer and its investments, and Executive expressly
acknowledges that damages alone will be an inadequate remedy for any
breach or violation of this Section 7, and that Employer, in
addition to all other remedies at law or in equity, shall be
entitled, as a matter of right, to injunctive relief, including
specific performance, with respect to any such breach or violation,
in any court of competent jurisdiction. If any of the provisions of
this Section 7 are held to be in any respect an unreasonable
restriction upon Executive, then they shall be deemed to extend only
over the maximum period of time, geographic area, and/or range of
activities as to which they may be enforceable.
c. Nonexclusive. The undertakings of Executive contained in Sections
7(a), 7(b) and 7(c) hereof shall be in addition to, and not in lieu
of, any obligations which he may have with respect to the subject
matter hereof, whether by contract, as a matter of law or otherwise.
8. Successors; Benefits.
a. Successors. Employer shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Employer, by
agreement in form and substance satisfactory to Executive, to
expressly
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assume and agree to perform this Agreement in the same manner and to
the same extent that Employer would be required to perform it if no
such succession had taken place. Failure of Employer to obtain such
agreement prior to the effectiveness of any such succession shall be
a breach of this Agreement and shall entitle Executive to
compensation from Employer in the same amount and on the same terms
as he would be entitled to hereunder if he terminated his employment
for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective
shall be deemed the Date of Termination. As used in this Agreement,
"Employer" shall mean Employer as hereinbefore defined and any
successor to its business and/or assets as aforesaid which executes
and delivers the agreement provided for in this Section 8 or which
otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
b. Benefits. This Agreement and all rights of Executive hereunder shall
inure to the benefit of and be enforceable by Executive's personal
or legal representatives, executors, administrators, successors,
heirs, distributes, devisees and legatees. If Executive should die
while any amounts would still be payable to him hereunder if he had
continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement
to Executive's devisee, legatee, or other designee or, if there be
no such designee, to Executive's estate.
9. Miscellaneous Provisions.
a. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original but
all of which taken together shall constitute one and the same
agreement.
b. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly
given or made as of the date delivered, if delivered personally, or
three (3) calendar days after having been mailed, if mailed by
registered or certified mail, postage prepaid, return receipt
requested, as follows:
If to Employer, to: Xxxxxxx Global Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Chairman of the Board
If to Executive, to: Xxxxx Xxxxx
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or to such other address as either party hereto shall have
designated by like notice to the other party hereto (except that a
notice of change of address shall only be effective upon receipt)
c. Amendment. This Agreement may only be amended by a written
instrument executed by each of the parties hereto.
d. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties
hereto, oral and written, with respect to the subject matter hereof.
e. Applicable Law. This Agreement shall be governed by the laws of the
State of New York applicable to contracts made and to be wholly
performed therein.
f. Headings. The headings contained herein are for the sole purpose of
convenience of reference and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of
this Agreement.
g. Waiver, etc. The failure of either of the parties hereto to at any
time enforce any of the provisions of this Agreement shall not be
deemed or construed to be a waiver of any such provision, nor to in
any way affect the validity of this Agreement or any provision
hereof or the right of either of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any
breach of any of the provisions of this Agreement shall be effective
unless set forth in a written instrument executed by the party
against whom or which enforcement of such waiver is sought; and no
waiver of any such breach shall be construed or deemed to be a
waiver of any other or subsequent breach and delivered by the
parties hereto as of the date first above written.
IN WITNESS WHEREOF, the undersigned have set their hands and seals as of the
first above written.
Xxxxxxx Global Corporation
By:
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Name:
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Title:
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Xxxxx Xxxxx
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