CONFIDENTIAL AND
LEGALLY PRIVILEGED
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of June, 1990,
by and between XXXXX PROJECTS, INC., a Delaware corporation maintaining its
principal office at 00 Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx (the "Company") and
Xxxxx X. Xxxxx, now residing at 00 Xxxxxxxx, Xxxxxxxxxx, Xxx Xxxx (the
"Employee").
WITNESSETH THAT:
WHEREAS, the Employee is serving as First Executive Vice President and
Managing Director Project Implementation, and the Company desires to ensure that
the Employee will continue to be available to provide services in a similar
capacity in the future, which services are significant to the Company's
long-range prospects and the long-range prospects of the Company's subsidiaries
(the Company and its subsidiaries are hereinafter referred to as the "OPI
Group")
WHEREAS, to induce the Employee to provide such services, the Company
is offering to provide the Employee with the compensation, benefits and security
provided for in this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements
herein contained, the parties hereto agree as follows:
1. Employment/Capacity/Term. The Company agrees to and does hereby
continue to employ the Employee, and the Employee agrees to and does hereby
continue in the employ of the Company upon the terms and conditions set forth in
this Agreement. Such employment shall be in an executive capacity as First
Executive Vice president and Managing Director -Project Implementation. Such
employment shall commence on January 1, 1991 and shall continue through December
31, 1993, and from year to year thereafter subject to the right of the Employee
or the company to terminate such employment as of December 31, 1993, or any
subsequent December 31, by written notice given to the other party at least
sixty (60) days prior to such termination date stating an intention to so
terminate such employment. Termination by either party, in accordance with the
provisions of the preceding sentence, shall not require a statement of the
reason or cause for such termination and shall not be deemed a breach or
violation of this Agreement by the party giving such notice. As used in this
Agreement, the phrase "term of this Agreement" shall be deemed to include the
period subsequent to the date hereof and prior to termination of this Agreement;
however, such phrase shall not be construed as limiting the enforceability by
either
-2-
party of any rights which survive termination of this Agreement.
2. Time and Effort/Absences. During the term of this Agreement, the
Employee shall devote his entire time and attention during normal business hours
to the business of the Company and the OPI Group, subject to the supervision of
the Board of Directors of the Company, and he shall not engage in any other
business activity whether or not such business activity is pursued for gain,
profit, or other pecuniary advantage, but this restriction shall not be
construed to restrict the Employee (i) from performing services as a member of
the Board of Directors, Board of Trustees or the like of any non-profit entity
for which the Employee receives no compensation, provided that, such services do
not unreasonably interfere with the ability of the Employee to perform the
services and discharge the responsibilities required of him under this
Agreement, and (ii) from investing his assets in such form or manner as will not
require any services on the part of the Employee in the operation of the
business of the entity in which such investments are made. The Employee shall be
excused from rendering his services during reasonable vacation periods and
during other reasonable temporary absences as authorized from time to time by
the Board of Directors of the Company. At the date hereof, the principal office
of the Company is located in Fairfield, New Jersey, considered to be a New York
suburb and part of the metropolitan New York area.
-3-
It is understood that the Employee will not be required to relocate from the
metropolitan New York area to discharge his responsibilities under this
Agreement.
3. corporate Offices. If elected, the Employee will serve, without
additional compensation, as an officer and director (or in either capacity) of
the Company and the OPI Group.
4. Salary/Bonus/Other Benefits. In consideration of the services and
duties to be rendered and performed by the Employee during the term of this
Agreement, the company agrees to pay and provide for the Employee the
compensation and benefits described below:
(a) An annual salary, payable in equal monthly or bi-weekly
installments, in the amount of One Hundred Forty-Four Thousand and Two Hundred
Dollars ($144,200) or in such greater amount as may from time to time be fixed
by the Board of Directors of the Company.
(b) An annual incentive bonus in such amount as may from time to
time be fixed by the Board of Directors of the Company, provided that in
determining the annual incentive bonus the Board of Directors shall utilize
standards which are reasonably applied to the Employee and other executives of
the company who furnish services of comparable significance, on a
non-discriminatory basis.
(c) Other Benefits. It is intended that the Company shall
continue to provide the Employee with benefits
-4-
at least as favorable as benefits provided on behalf of other executives of the
Company and the OPI Group who furnish services of comparable significance, as
they may exist from time to time. Such benefit plans presently include Group
Life Insurance, Group Health Insurance, Automobile Allowance, Pension and Profit
Sharing Plans. Except as otherwise provided herein, any such participation shall
be in accordance with the provisions of such plans and nothing contained in this
Agreement is intended to or shall be deemed to affect adversely any of the
Employee's rights as a participant under any such plan. Nothing herein shall
prevent the Company from modifying or discontinuing any benefit plan on a
consistent and non-discriminatory basis applicable to all such executives.
5. Expense. The Employee shall be reimbursed for out-of-pocket
expenses incurred from time to time on behalf of the company and the OPI Group
or in the performance of his duties under this Agreement, upon the presentation
of such supporting documents and forms as the company shall reasonably request.
6. Disability/Disability Benefit. In the event that the Employee is
incapable because of physical or mental illness of rendering services of the
character contemplated hereby, for a period of six (6) consecutive months, the
Board of Directors of the Company may determine that the Employee
-5-
has become disabled. In the event of such a determination of disability, the
Company shall have the continuing right and option while such disability
continues to terminate this Agreement by notice in writing to the Employee,
effective thirty (30) days after such notice of termination is so given, unless,
within such thirty (30) day period, the Employee resumes rendering full-time
services of the character contemplated hereby. The incapacity due to physical or
mental illness to render the services of the character contemplated hereby,
shall not constitute a breach of this Agreement by the Employee. If this
Agreement is terminated by the Company as a result of a determination of
disability, as aforesaid, the company shall be obligated to continue the salary
and benefits of the Employee as provided in paragraph 4 for a period equal to
the greater of (a) twelve (12) months, or (b) such longer period as may be
determined by the Board of Directors of the Company, in each case reduced by any
disability insurance benefits provided for the benefit of the Employee at the
expense of the Company.
7. Death/Death Benefit. In the event of the death of the Employee
during the term of this Agreement, this Agreement shall terminate and the
Employee's salary shall continue to be paid to his designated beneficiary or, if
none, to his personal representative, through the last day of the
-6-
month in which such death occurs. In addition, the Employee, his personal
representative(s) and/or his beneficiaries will be entitled to such death
benefits as are provided to Employee under paragraph 4 hereof.
8. Company Stock Option plan. The Board of Directors of the Company
has awarded the Employee non-qualified stock options to purchase Thirty-Five
Thousand (35,000) shares of the Company Common Stock under the Company's
Employees' Stock option Plan (the "Employees' Plan"). If the employment of the
Employee terminates under circumstances entitling him to a Severance Payment (as
defined in paragraph 9.), he shall thereupon be entitled to exercise any an all
options granted to him under the Employees' Plan to the extent permitted
pursuant to the terms and conditions of the Employees' Plan.
9. Severance Payment. If the Company gives notice to terminate in
accordance with paragraph 1 or if the employment of the Employee is terminated
at any time (i) by the Employee for Good Reason (as defined in paragraph 10), or
(ii) by the Company for any reason other than for Cause (as hereinafter
defined), the Company will be obligated to pay to the Employee in cash a
severance payment equal to the product of (i) and (ii); where (i) shall equal
the sum of (A) the Employee's annual salary at the time of such termination, and
(b) the Employee's annual incentive bonus during the twelve (12) month period
ending with the close of the month in which such termination of employment
occurs (the "Date of Termination")
-7-
but not less than the incentive bonus awarded to the Employee in December 1989,
which was Seventy Thousand and 00/100 Dollars ($70,000), divided by twelve (12);
and where (ii) shall be thirty-six (36). Termination of the Employee's
employment on account of his disability, death or retirement (as hereinafter
defined) will not be considered a termination of the Employee's employment by
the Company and will not require the Company to pay and provide any Severance
Payment. No Severance payment will be required if the employment of the Employee
is terminated by the Company for Cause (as hereinafter defined) or by the
Employee (other than for Good Reason as defined in paragraph 10.) or if the
Employee gives notice to terminate in accordance with paragraph 1. The Severance
payment provided herein is provided in order to reinforce and encourage the
continued loyalty, attention, and dedication of the Employee to the Company's
business and affairs without the concerns which normally arise from the
possibility of a loss of employment security. As used herein, the terms
"Retirement" and "Cause11 shall have the following meanings, respectively:
(a) Retirement. Termination of the Employee's employment on
account of "Retirement" shall mean termination on or after the Employee's normal
retirement date in accordance with the terms of the Company's pension plan (or
any successor or substitute plan or plans of the Company or of any subsidiary of
the Company under which the Employee may be a participant); and
-8-
(b) Cause. Termination by the Company of the Employee's
employment for "Cause" shall mean termination as a result of (i) the willful and
continued failure by the Employee to devote the time, attention and effort
necessary to perform substantially the services contemplated by this Agreement
in a manner consistent with the Employee's past performance (other than any such
failure resulting from the Employee's incapacity due to physical or mental
illness) after a written demand for substantial performance is delivered to the
Employee by a member or representative of the Board of Directors of the Company
which specifically identifies the manner in which it is alleged that the
Employee has not substantially performed such services, or (ii) the willful
engaging by the Employee in gross misconduct which is materially and
demonstrably injurious to the Company; provided that, no act, or failure to act,
on the Employee's part shall be considered "willful" unless done, or omitted to
be done, in bad faith and without reasonable belief that such action or omission
was in, or not opposed to, the best interests of the Company. It is also
expressly understood that the Employee's attention to or engagement in matters
not directly related to the business of the Company shall not provide a basis
for termination for Cause if such attention or engagement is authorized by the
terms of this Agreement or has otherwise been approved by the Board of Directors
of the Company. Anything in this Agreement to the contrary notwithstanding the
Employee's employment may
-9-
not be terminated for Cause unless and until there shall have been delivered to
the Employee a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board (after reasonable
notice to the Employee and an opportunity for the Employee, together with his
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board the Employee was guilty of the conduct set forth in clause (i) or
(ii) of this subparagraph (b) and specifying the particulars thereof in detail.
Except as otherwise provided in paragraphs 1 and 6, no purported termination by
the Company of the Employee's employment which is not justified as a termination
of the Employee's employment for Cause shall be effective.
10. Termination by the Employee for Good Reason. The termination by
the Employee of his employment for "Good Reason" shall be deemed a justifiable
termination of his employment and shall excuse the Employee from the obligation
to render services as provided in Paragraph 2 hereof. Upon such termination, the
Employee shall be entitled to the severance Payment in accordance with the
provisions of Paragraph 9. hereof. As used herein, the phrase "Good Reason"
shall mean:
(a) a change in the Employee's status, title or position(s) as an
officer of the Company in the executive capacity set forth in paragraph 1.
hereof, which in his reasonable judgment, does not represent a promotion from or
-10-
enhancement of his status, title and position, or the assignment by the Board of
Directors of the Company to the Employee of any duties or responsibilities
which, in his reasonable judgment, are inconsistent with such status, title or
position, or any removal of the Employee from or any failure to reappoint or
reelect him to such position, except in connection with a justifiable
termination by the Company of the Employee's employment for Cause or on account
of disability, the Retirement or death of the Employee or the termination by the
Employee of his employment other than for Good Reason;
(b) a reduction in the Employee's annual salary or a failure by
the Company to pay to the Employee any installment of the annual salary required
by paragraph 4. hereof, which failure continues for a period of twenty (20) days
after written notice thereof is given by the Employee to the company;
(c) the Company's requiring the Employee to be based anywhere
other that the Fairfield, New Jersey area, except for required travel on the
business of the Company or the OPI Group to an extent substantially consistent
with the business travel obligations which the Employee has previously
undertaken on behalf of the Company or the OPI Group;
(d) the failure by the Company to obtain the assumption of this
Agreement in form and substance to the reasonable satisfaction of the Employee
by any successor
-11-
(other than by merger or consolidation for which no separate assumption is
necessary) as referred to in paragraph 17.; or
(e) any refusal by the company to allow the Employee to attend to
matters or engage in activities not directly related to the business of the
Company which is permitted by this Agreement or which, prior thereto, was
permitted by the Board of Directors of the Company.
11. Notice of Termination. Any purported notice of termination of the
Employee's employment (other than a Notice given by either party pursuant to
Paragraph 1. hereof) shall be communicated in writing and delivered to the other
party as provided in Paragraph 18. (hereinafter a "Notice of Termination"). For
purposes of this Agreement a "Notice of Termination" shall mean a notice which
specifies the termination provision relied upon by the party giving such notice
and shall set forth in detail such facts and circumstances claimed by said party
to provide a justified basis for termination of the Employee's employment under
the provision(s) so indicated.
12. Trade Secrets. Etc. The Employee acknowledges that prior to his
employment by the company he had no knowledge of the formulae, processes or
methods of manufacture or other trade secrets of the company. Upon the
termination of his employment, the Employee agrees forthwith to deliver up to
the company notebooks and other data relating to research or
-12-
experiments as conducted by him or relating to the products, formulae, processes
or methods of manufacture of the Company.
13. Customer List. The Employee recognizes and acknowledges that the
written list of the customers of the Company, its subsidiaries and affiliates,
as it may exist from time to time, is a valuable, special and unique asset. The
Employee agrees that he will not during the term of his employment or within
five (5) years thereafter, use for his own personal benefit or disclose the
written list of the customers of the Company, its subsidiaries and affiliates or
any part thereof, to any person, firm, corporation, association or other entity
for any reason or purpose whatsoever.
14. Limited Covenant Not to Compete. If the employment of the Employee
hereof is terminated (i) by the Employee pursuant to Paragraph 1. hereof or (ii)
by the Company for Cause (as defined in Paragraph 9. above), then in either case
(y) the Employee will not, for a period of two (2) years from such termination
of employment, within the territorial confines of the United States of America,
directly or indirectly, own, manage, operate, control, be employed by,
participate in, or be connected in any manner with the ownership, management,
operation or control of any business in competition with the business conducted
by the Company at the time of such termination, and (z) the Employee will, for a
period of two (2) years from such termination refrain from carrying on a
business similar to that presently carried on by the Company within the
-13-
states in which the business of the Company has been carried on, so long as the
company carries on like business therein.
15. Injunctive Relief. In the event of a breach or threatened breach
by the Employee of the provisions of Paragraphs 12., 13. or 14. during or after
the term of this Agreement, the Company shall be entitled to an injunction
restraining the Employee from violation of such paragraph. Nothing herein shall
be construed as prohibiting the Company from pursuing any other remedy it may
have in the event of breach of this Agreement by the Employee.
16. Certain Proprietary Rights. Employee agrees to and hereby does
assign to the Company all his right, title and interest in and to all
inventions, whether or not patentable, which are made or conceived solely or
jointly by him:
(a) At any time during the term of his employment by the Company
in an executive, managerial, planning, technical research or engineering
capacity (including development, manufacturing, systems, applied science and
sales), or
(b) During the course of or in connection with his duties during
the term of this Agreement, or
(c) with the use of time or materials of the Company. The
Employee agrees to communicate to the Company or its representatives all facts
known to him concerning such inventions, to sign all rightful papers, make all
rightful oaths and generally to do everything possible to aid the Company in
obtaining and enforcing proper patent protection
-14-
for all such inventions in all countries and in vesting title to such inventions
and patents in the Company. For the purpose of this Agreement, the subject
matter of any application for patent naming Employee as a sole or joint inventor
filed during the course of employment or within one year subsequent to the
termination thereof shall be deemed to be an invention made or conceived by him
during the course of his employment by the Company and assignable to the company
hereunder, unless the Employee establishes by a preponderance of the evidence
that such invention was made or conceived by him subsequent to termination of
his employment hereunder. At the company's request (during or after the term of
this Agreement) and expense, the Employee will promptly execute a specific
assignment of title to the company, and perform any other acts reasonably
necessary to implement the foregoing assignment.
17. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of:
(a) The Company, and any successors or assigns of the Company,
whether by way of a merger or consolidation, or liquidation of the Company, or
by way of the company selling all or substantially all of the assets of the
Company, or a division thereof, to a successor entity; however, in the event of
the assignment by the Company of this Agreement, the Company shall nevertheless
remain liable and obligated to the Employee in accordance with the terms hereof;
and
-15-
(b) The Employee, his estate, his executors, administrators,
heirs and beneficiaries.
18. Notice. Any notice or other communication required under this
Agreement shall be in writing, shall be deemed to have been given and received
when delivered in person, or, if mailed, shall be deemed to have been given when
deposited in the United states mail, first class, registered or certified,
return receipt requested, with proper postage prepaid, and shall be deemed to
have been received on the third business day thereafter, and shall be addressed
as follows:
If to the company, addressed to:
Xxxxx Projects, Inc.
00 Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: President
If to the Employee, addressed to:
Xxxxx X. xxxxx
00 Xxxxxxxx
Xxxxxxxxxx, Xxx Xxxx
or such other address as to which any party hereto may have notified the other
in writing.
19. Governing raw. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New Jersey.
20. Entire Agreement. This Agreement contains or refers to the entire
arrangement or understanding between the Employee and the Company relating to
the employment of the
-16-
Employee by the Company. No provision of the Agreement may be modified or
amended except by an instrument in writing by or for both parties hereto.
21. Waiver. Failure of either party hereto to insist upon strict
compliance by the other party with any term, covenant or condition hereof shall
not be deemed a waiver of such term, covenant or condition, nor shall any waiver
or relinquishment or failure to insist upon strict compliance of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.
22. Assignment by Employee. The rights and benefits of the Employee
under this Agreement are personal to him and no such right or benefit shall be
subject to voluntary or involuntary alienation, assignment or transfer;
provided, however, that nothing in this Paragraph 22. shall preclude the
Employee from designating a beneficiary or beneficiaries to receive any benefit
payable on his death.
XXXXX PROJECTS, INC.
By /s/ Xxxxx Xxxxx
--------------------------------
President and Chief
Executive Officer
/s/ Xxxxx Xxxxx
---------------------------------
Xxxxx Xxxxx
-17-
