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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into this day ____ of March, 1998, by and
between LEGEND PROPERTIES, INC., a Delaware corporation (the "Company") and
XXXXXX X. XXXXXX, an individual residing in the State of Virginia, (hereinafter
"Xxxxxx" or "Employee").
W I T N E S S E T H :
WHEREAS, the Company desires to retain the services of Xxxxxx as
President and Chief Executive Officer of the Company and Xxxxxx is willing to
serve in such capacity.
NOW, THEREFORE, in consideration of their mutual promises
hereinafter set forth, the parties agree:
1. The Company hereby employs Xxxxxx as President and Chief
Executive Officer of the Company with full authority to
discharge his DUTIES (as defined in Exhibit A) in that
capacity, which DUTIES shall include the formulation of
policies and the administration of the affairs of the Company
in all respects thereto, subject, however, to the general
direction and control of the Chairman of the Board of the
Company. The Company further agrees to furnish Xxxxxx during
the term of this Agreement appropriate office space,
secretarial services, and other accommodations suitable to the
character of his position and adequate for the discharge of
his DUTIES.
2. Xxxxxx agrees that he will diligently discharge and perform on
a full-time basis the DUTIES required of him as President and
Chief Executive Officer of the Company during the term of this
Agreement.
3. The effective date of this Agreement shall be the date as
written above and shall continue for a period of three (3)
years from the date thereof. Notwithstanding the effective
date of this Agreement, all amounts due under this Agreement
shall be retroactive to August 1, 1997. Upon the conclusion of
this three (3) year period, this Agreement shall automatically
renew for one-year periods thereafter, unless the Company
provides Xxxxxx with sixty (60) days written notice of its
desire not to renew the Agreement. All extensions shall have a
five percent (5%) increase in the Base Compensation from the
previous year.
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4. The Company agrees to pay Xxxxxx as compensation for all
services rendered hereunder the salary fixed by the Board of
Directors of the Company, provided that such salary shall not
be less than the amounts set forth below (hereinafter referred
to as the "Base Compensation"):
8/1/97 to 7/31/98 $225,000.00
8/1/98 to 7/31/99 $235,000.00
8/1/99 to 7/31/00 $245,000.00
The Base Compensation shall be paid in equal monthly
installments on the first day of each month or in such other
fashion as constitutes the normal practice of the Company.
In addition to the foregoing Base Compensation, Xxxxxx shall
be entitled to such employee benefits as are normally
available to officers and employees of the Company.
5. In addition to the Base Compensation, the Company will pay to
Xxxxxx 0.25% of the annual gross volume of revenue that is up
to the amount established in the Company's adopted budget for
that fiscal year and 1.5% of the annual gross volume of
revenue that exceeds the Company's adopted budget for that
fiscal year (the "Incentive Compensation - Operations"). The
amount of annual gross volume shall be determined by the
Company's outside auditors in their financial report and the
adopted budgets shall be approved by the Company's Board of
Directors. The Incentive Compensation - Operations shall be
paid in each following year but no later than February 1.
6. In addition to the Base Compensation and Incentive
Compensation - Operations, the Company will pay an incentive
of 1.5% of funds raised through recapitalization loans or
joint ventures from third parties (the "Incentive Compensation
- Recapitalization"). This would exclude Xxxx RGI or any of
the Company's existing financial institutions currently used
and any new Norwegian lender. This would not exclude, however,
new loans from Xxxxxxx Bank's proposed merger partner
NationsBank.
7. If the Company sell or changes control, Xxxxxx will be entitle
to receive the balance owed him under this Agreement but no
less than one year's Base Compensation plus 1.5% of the asset
values that are part of the transactions, less debt
obligations (unless such debt obligations are assumed by the
acquiring entity) (the "Incentive Compensation - Sale or
Change of Control").
8. The Company hereby agrees and acknowledges that the (1) Base
Compensation, (2) Incentive Compensation - Operations, (3)
Incentive Compensation - Recapitalization and (4) Incentive
Compensation - Sale or Change of Control are a material part
of this Agreement and each level of compensation is due and
owing from the Company to Xxxxxx from time to time as the case
may be.
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9. In addition to the foregoing compensation, the Company agrees
to reimburse Xxxxxx for such expenses as he may reasonably and
necessarily incur in the discharge of his DUTIES hereunder. In
addition to his regular expenses, the Company agrees to
reimburse Xxxxxx $500.00 per month for automobile expenses,
regardless of usage, to be paid on the first day of the month
for the duration of the contract. Xxxxxx will assume
responsibility for all tax reporting requirements.
10. The Company agrees to provide Xxxxxx with the standard
benefits package for employees of the Company, including the
established 401(k) Plan, life insurance equal to two times the
Base Compensation and disability insurance equal to 100% of
the Base Compensation for the first six (6) months and 60% of
the Base Compensation until age 65. Further, Xxxxxx shall be
entitled to Company stock options as set forth on Exhibit B
attached hereto.
11. The Company will reimburse Xxxxxx for his relocation expenses
in the maximum amount of $31,000.00. This amount includes all
relocation, moving and related expenses, including, but not
limited to, the loss of any equity and related costs
associated with the sale of Xxxxxx'x residence in the State of
Wisconsin. In consideration thereof, Xxxxxx agrees to relocate
to the Washington, D.C. area no later than November 1, 1997.
12. Xxxxxx shall be entitled to a vacation period totaling up to
four (4) weeks in each year of the term of this Agreement
during which time his compensation shall be paid in full. Such
vacations shall be taken by Xxxxxx in his discretion so long
as they do not seriously interfere with the orderly
administration and conduct of the financial affairs of the
Company. At Xxxxxx'x option, one week of vacation may be
carried over into the following year.
13. This Agreement, and any extension or renewal thereof, may be
terminated:
a) By the Company
i. With or without cause upon sixty (60)
days written notice to Xxxxxx.
ii. If without cause, the compensation
payable to Xxxxxx pursuant to Paragraphs 4
through 8 and Exhibit C attached hereto
shall not xxxxx upon such termination and
shall continue to be paid to Xxxxxx for the
balance of the term of this Agreement plus
six (6) additional months, together with any
deferred compensation fully vested and paid.
iii. If with cause, no further payments
shall be made to Xxxxxx beyond the
termination date. For the purposes of this
subparagraph
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(a), termination for cause shall be
restricted to fraud, embezzlement or
misappropriation of funds by Xxxxxx or for
his willful neglect of or refusal to perform
his DUTIES as President and Chief Executive
Officer of the Company, which actions are
not remedied or corrected by him within
fifteen (15) days after receipt of written
notice from the Company as to the occurrence
thereof.
b) By Employee
i. With or without cause upon sixty (60)
days written notice to the Company.
ii. If without cause, no further payments
shall be made to Xxxxxx.
iii. If with cause, the compensation payable
to Xxxxxx pursuant to Paragraphs 4 through 8
and Exhibit C attached hereto shall not
xxxxx and shall continue to be paid to
Xxxxxx for the balance of the term of this
Agreement plus six (6) additional months,
together with any Deferred Compensation
fully vested and paid. For the purposes of
this subparagraph (b), termination for cause
shall constitute breach by the Company of
any of its covenants set forth in this
Agreement which are not corrected by the
Company within fifteen (15) days after
receipt of written notice of such breach
from Xxxxxx.
c) By Employee
i. In the event that Xxxxxx continues his
employment with the Company beyond the
expiration date of this Agreement and
Xxxxxx'x employment is subsequently
terminated, the Company agrees to pay
Xxxxxx the six (6) months of severance
pay referenced in paragraphs 13 (a -
ii) and 13 (b - iii) in a lump sum
upon his termination.
14. Company will reimburse Xxxxxx for the attorneys' fees and
expenses incurred by him in the drafting and negotiation of
this Employment Agreement in the amount of $2,500.00,
regardless of whether or not this Agreement is executed and
regardless of the amount of attorneys' fees actually incurred,
if any.
15. If Xxxxxx is unable to perform his DUTIES hereunder by reason
of illness or incapacity for a period of more than six (6)
months, this Agreement may be terminated at the option of
either party upon written notice to the other. Upon such
termination Xxxxxx will be entitled to six (6) months
continued
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compensation payable pursuant to Paragraph 4 and any
compensation due to him pursuant to Paragraphs 5 through
8 and Exhibit C hereof.
16. This Agreement shall be binding upon and inure to the benefit
of any successor of the Company and any such successor shall
be deemed substituted for the Company under the terms of this
Agreement. As used in this Agreement, the term "successor"
shall include any person, firm, corporation, or other business
entity which at any time, whether by merger, purchase or
otherwise, either directly or indirectly, acquires all or
substantially all of the assets or business of the Company.
17. Any notice required or permitted to be given under any
provision of this Agreement shall be sufficient if in writing
and sent by registered or certified mail, in the case of
Xxxxxx, to his residence at 0000 Xxxxxxx Xxxxx, Xxxxxx, XX,
00000, or to such other address as Xxxxxx shall later
designate, and in the case of the Company, to its principal
office to the attention of the President.
18. The waiver by either party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver
of any prior or subsequent breach by either party.
19. This instrument contains the entire Agreement of the parties
with the respect to the subject matter of Xxxxxx'x employment
by the Company, and may be amended only by an instrument in
writing signed by both parties.
20. This Agreement shall be subject to and governed by the laws of
the State of Virginia. The parties agree that in the event a
dispute arises under or in connection with this Agreement,
each irrevocably submits to the jurisdiction of any state or
federal court sitting in Prince Xxxxxxx County, Virginia with
respect to any action or proceeding brought as a result
thereof, and irrevocably waives to the fullest extent
permitted by law any objection which either may now or
hereafter have to the laying of venue in any such action or
proceeding in any such forum.
21. In the event that any provision of this Agreement shall be
held to be invalid in any circumstance, such invalidity shall
not affect any other provision or circumstance.
22. Xxxxxx shall be entitled to indemnification with respect to
any actions, claims or proceedings in which he is named,
either individually or in his corporate capacity, to the
extent provided by the Bylaws of the Company.
23. This Agreement supersedes that certain Employment Agreement
between Xxxxxx and LPI Development, Inc. dated April 1, 1997
(the "First Agreement") and the First Agreement is hereby
terminated.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be duly executed the day and year first above written.
LEGEND PROPERTIES, INC.,
a Delaware corporation
/s/ Xxxxxx X. Xxxxxx By /s/ Xxxxx X. Xxxx
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Xxxxxx X. Xxxxxx, Employee Xxxxx X. Xxxx, Vice President
and General Counsel
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