EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, made as of the 5th day of August, 1998, by and
between LYNTON GROUP, INC., a corporation organized and existing under the
laws of the State of Delaware (the "Company"), and XXXXXXXXXXX XXXXXXX (the
"Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to employ the Executive to perform services
for the Company, any present or future parent, subsidiary, or affiliate of
the Company (collectively, with the Company, the "Lynton Companies"), upon
the terms and conditions hereinafter set forth and the Executive desires to
accept such employment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. EMPLOYMENT. The Company agrees to employ and retain the Executive, and
the Executive in turn agrees to be employed by the Company, upon the terms
and conditions of this Agreement.
2. TERM. The employment of the Executive hereunder shall commence and be
effective as of the date hereof (the "Commencement Date") and, unless
earlier terminated pursuant hereto, shall continue for a period of eighteen
(18) months thereafter (the "Term"). Notwithstanding the foregoing, if at
any time during the Term, the Company shall complete a public stock
offering in the United Kingdom, then and in such event, the Term shall be
automatically extended (unless earlier terminated pursuant hereto) for a
period of eighteen (18) months from the date thereof. In addition, if at
any time within eighteen (18) months of the Commencement Date, the Company
and the Lynton Companies, substantially as an entirety, merge, consolidate
with or are acquired by another entity, or substantially all of their
assets are sold, or at any time during the initial eighteen (18) month term
there is a change of the majority of the members of the Board of Directors
of the Company for any reason, then and in such event, the term hereof
shall be automatically extended (unless earlier terminated pursuant hereto)
for a period of eighteen (18) months beyond the initial eighteen (18) month
term.
3. NATURE OF THE EXECUTIVE'S SERVICES.
(a)The Executive shall serve as President and Chief Executive Officer of
the Company and shall serve as an executive for any of the other Lynton
Companies when and as requested by the Board of Directors of the Company.
The Executive further agrees, if requested, to continue to serve on the
Board of Directors of the Company and/or any of the other Lynton Companies.
The Executive shall perform and assist in such positions as may reasonably
be determined and as assigned to him from time to time by the Board of
Directors of the Company.
(b)The Executive agrees that he will at all times, to the best of his
ability, experience and talent, perform all of the duties that may be
required of him pursuant to the express and implicit terms hereof, and will
devote substantially all of his working time, energies and skills to the
performance of such duties.
4. COMPENSATION.
(a)As of the Commencement Date, the Company and/or any of the other Lynton
Companies shall pay the Executive, and the Executive agrees to accept, as
compensation for his services performed under this Agreement, a salary at
an aggregate annual rate of Two Hundred Eleven Thousand (U.S. $211,000)
Dollars. This amount shall include any and all amounts which may be paid
from time to time to Lynton International Limited for office space rented
to any of the Lynton Companies or for any other purposes as the parties may
agree. The Executive's salary shall be increased on each anniversary date
of the Commencement Date by any such annual cost of living increase, based
on the Consumer Price Index for the New York Metropolitan Area published
from time to time by the United States Bureau of Labor Statistics, or any
successor index, however designated, as may be determined by the
Compensation Committee or the Board of Directors of the Company. The
salary shall be payable in equal monthly installments or on such other
periodic basis as the parties may agree.
(b)In addition thereto, the Executive shall be eligible to receive bonus
compensation in such amounts and at such times as the Compensation
Committee or the Board of Directors of the Company shall, from time to
time, determine. Such determination including the amount of bonus
compensation, if any, shall be made in the sole discretion of the
Compensation Committee or the Board of Directors of the Company, as the
case may be.
5. EXPENSES AND BENEFITS. The Executive is authorized to incur reasonable
and necessary expenses in connection with the business of the Lynton
Companies. The Executive shall be reimbursed for such expenses upon
presentation by the Executive of such accounts and records as the Company,
or any of the other Lynton Companies, as the case may be, shall from time
to time require. The Executive shall also be provided with the following
benefits:
(a)Enrollment in all group insurance plans that are maintained for
executives of the Company and/or any of the other Lynton Companies;
(b)Participation in any other employee benefit plans now existing or
hereafter adopted by the Lynton Companies for its key employees;
(c)Such items and benefits as the Company shall, from time to time,
consider necessary or appropriate to assist the Executive in the
performance of his duties;
(d)The Executive shall be entitled (in addition to the usual public
holidays) to twenty-five (25) business days of paid vacation per year.
Unused vacation time shall not be carried over to subsequent years; and
(e)The Executive shall be provided with the use of an automobile for
normal and reasonable purposes, and shall be reimbursed for all normal and
reasonable expenses incurred in connection with the use of such automobile,
including, but not limited to, gasoline, parking, tolls, automobile
repairs, and insurance, upon presentation of such accounts and records as
the Company, or any of the Lynton Companies, as the case may be, shall from
time to time require. In addition thereto, the Executive shall be
reimbursed for any federal, state or, if applicable, any United Kingdom
taxes imposed upon the Executive for his use of such automobile for normal
and reasonable purposes.
6. TERMINATION.
(a)This Agreement shall be terminated in the event of the death of the
Executive, or of his disability to perform substantially those functions to
be performed by the Executive pursuant to the terms of this Agreement for a
period of ninety (90) consecutive days or an aggregate of one hundred
eighty (180) days in any twelve (12) month period, such determination to be
made in good faith by the Company's Board of Directors. In the event the
Executive disagrees with such determination, the Executive and the Company
shall each appoint its own physician who shall each promptly examine the
Executive and consult with one another. In the event the two physicians do
not agree on the status of the Executive's disability, they shall, promptly
and jointly, appoint a third physician, whose determination shall be
binding on all the parties hereto. After any termination under this
subsection, the Executive shall be entitled to no additional compensation
or other benefits of employment.
(b)This Agreement may be terminated immediately for cause by the Company
upon written notice. Cause shall include, without limitation, the
Executive's criminal activity, habitual absenteeism or willful or
habitually negligent disregard of his obligations hereunder, the
Executive's voluntary resignation as President and Chief Executive Officer
of the Company prior to the expiration of the Term, or such other conduct
as may be materially injurious to the business or affairs of the Company or
any of the other Lynton Companies. The Executive shall thereafter be
entitled to no additional compensation or other benefits of employment,
nor, respectively, shall the Company and/or any of the other Lynton
Companies be entitled to any further services.
(c)The Company may also terminate this Agreement, without cause, upon no
less than one (1) month's prior written notice to the Executive, such
notice being effective one (1) month from the date it is given. In such
event, the Executive shall continue to perform his services to the Company
and/or any of the other Lynton Companies until the effective date of such
notice only in the event that the Company, in its sole discretion, so
requests. After any termination under this subsection, the Company shall
continue to pay the Executive the compensation due under Section 4(a)
hereof, in the equal monthly installments specified in such Section, for
the balance of the Term unless the Executive violates his obligations under
Sections 7 or 8 hereof.
7. NONCOMPETITION.
(a)The Executive recognizes and understands that in performing the
responsibilities of his employment, he has and will continue to occupy a
position of fiduciary trust and confidence, pursuant to which he has and
will continue to develop and acquire experience and knowledge with respect
to the Company's business. It is the expressed intent and agreement of the
Executive and the Company that such knowledge and experience shall be used
exclusively in the furtherance of the interests of the Company and not in
any manner which would be detrimental to the Company's interests. The
Executive therefore agrees that so long as he is employed by or receiving
compensation from the Company and/or any of the other Lynton Companies, and
(i) for a period of one (1) year following the termination of this
Agreement if terminated for cause pursuant to Section 6(b) hereof, or (ii)
for a period of one (1) year following the expiration of the Term if prior
thereto the Company has made a Renewal Offer (as defined below) to the
Executive and the Executive has failed to accept the Renewal Offer within
thirty (30) days thereof, the Executive will not be employed by, work for,
advise, consult with, serve or assist in any way, directly or indirectly,
any party whose business is competitive with the activities or business of
the Company or any of the other Lynton Companies within the States of
Connecticut, New Jersey, New York or Pennsylvania, anywhere within the
United Kingdom, or any other states or jurisdictions in which the Company
or any of the other Lynton Companies may then operate or transact business.
The Executive agrees further that he will not, during the applicable
periods referred to above, purchase or otherwise acquire, directly or
indirectly, any interest of any kind in any such business which is
competitive with that of the Company or any of the other Lynton Companies.
The foregoing restrictions on competition by the Executive shall be
operative for the benefit of the Company and the other Lynton Companies and
of any business owned or controlled by the Company or the other Lynton
Companies, or any successor or assign of any of the foregoing. In the
event that the provisions of this Section 7 should ever be deemed to exceed
the time or geographic limitations permitted by applicable laws, then such
provisions shall be reformed to the maximum time or geographic limitations
permitted by applicable laws.
For purposes hereof, a "Renewal Offer" shall be deemed to have occurred if
at least sixty (60) days prior to the expiration of the Term, the Company
offers to renew this Agreement on similar terms as provided herein for a
minimum period of eighteen (18) months at compensation at least equal to
the compensation provided under Section 4(a) hereof. Notwithstanding the
foregoing, it is specifically understood that the Company has no obligation
to make a Renewal Offer to the Executive.
(b)The parties hereto, recognizing that irreparable injury will result to
the Company and the other Lynton Companies, their business and property in
the event of the Executive's breach of his covenant herein not to compete,
and that such covenant is a material part of the consideration upon which
this Agreement is founded, agree that in the event of the Executive's
breach of this covenant, the Company and the other Lynton Companies shall
be entitled, in addition to any other remedies and damages available to
them, to an injunction to restrain the violation thereof by the Executive,
his partners, agents, servants, employers, employees and all persons acting
for or with him. The Executive represents and admits that in the event of
the termination of his employment hereunder, the enforcement of a remedy
for a violation of this Section 7 by way of injunction will not prevent him
from earning a livelihood.
8. CONFIDENTIALITY. The Executive agrees that all confidential and
proprietary information relating to the business of any of the Lynton
Companies shall be kept and treated as confidential both during and after
the Term of this Agreement, except as may be permitted in writing by the
Company's Board of Directors or as such information is within the public
domain or comes within the public domain without any breach of this
Agreement.
9. NOTICES. All notices required hereby or given under this Agreement shall
be in writing and shall be served by hand-delivery, certified mail, return
receipt requested, or internationally recognized overnight courier service,
at the following addresses, or at such other address as the parties may
designate to one another in writing:
If to the Company:
Lynton Group, Inc.
0 Xxxxxxx Xxxx
Xxxxxxxxxx Municipal Airport
Morristown, New Jersey 07960
Attn: Chairman of the Board
With a copy to:
Danzig Garubo & Xxxx, LLP
00X Xxxxxxxx Xxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attn: Xxxxx X. Xxxx, Esq.
If to Executive:
Xxxxxxxxxxx Xxxxxxx
00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
Each such notice shall be deemed given at the time delivered by hand, if
personally delivered; five business days after being deposited in the mail,
postage prepaid, if mailed; and the next business day after timely delivery
to the courier, if sent by overnight courier.
10. ARBITRATION. Except as may be otherwise provided in Section 7(b)
hereof, any dispute or controversy between the parties regarding this
Agreement including, without limitation, whether the right to compel
arbitration has been waived or whether grounds exist for the
revocation of this Agreement, shall be determined by arbitration in
New Jersey pursuant to the rules of the American Arbitration
Association then in effect, and judgment upon the award rendered may
be entered in any court having jurisdiction thereof.
11. WAIVER. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one time or
more times be deemed a waiver or relinquishment of such right or power
at any other time or times.
12. SEVERABILITY. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any
other provision. The parties to this Agreement agree and intend that
this Agreement shall be enforced as fully as it may be enforced
consistent with applicable statutes and rules of law.
13. BENEFIT. The Executive's rights and interest hereunder may not be
assigned, pledged or encumbered by him. This Agreement shall inure to
the benefit of and be binding upon the Company, its successors and
assigns, including, without limitation, any corporation which may
acquire all or substantially all of the Company's assets or business
or with or into which the Company may be consolidated or merged, and
to the benefit of, and be binding upon, the Executive, his heirs,
executors, administrators and legal representatives.
14. ENTIRE AGREEMENT. This Agreement which shall become effective upon
the Commencement Date sets forth the entire understanding of the
parties hereto with respect to the subject matter hereof, may be
modified only by a written instrument duly executed by each party, and
supersedes all existing agreements between them concerning such
subject matter.
15. APPLICABLE LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New Jersey,
without giving effect to principles of conflicts of law.
16. NEGOTIATED AGREEMENT. This is a negotiated agreement. This Agreement
shall not be construed against the Company by reason of this Agreement
being prepared by counsel to the Company. The Executive acknowledges
that he has been advised to consult with independent counsel of his
own choosing and the Executive has done so to the extent that
Executive deems appropriate.
17. SURVIVAL. The provisions of Sections 7 and 8 shall survive the
termination or expiration of this Agreement, irrespective of the
reason therefor, except for wrongful termination of this Agreement by
the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
LYNTON GROUP, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
Name: Xxxx X. Xxxxx, Xx.
Title: Chairman of the Board
/s/ Xxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxx Xxxxxxx
