Employment Agreement
with
Xxxxx Xxxxx
10.1
EMPLOYMENT AGREEMENT
(and Agreement to serve as a Director)
THIS EMPLOYMENT AGREEMENT, made as of this 7th day of November, 1995,
by and between:
FIDELITY HOLDINGS, INC., a newly organized Nevada corporation having
its executive office at 00-00 Xxx Xxxxxxx Xx, Xxx Xxxxxxx, Xxxxxx, XX 00000
(hereinafter referred to as "EMPLOYER") AND
XXXXX XXXXX, an adult individual residing at 00 Xxxxxx Xxxx, Xxxxxx,
X.X. 00000 (hereinafter referred to as "EMPLOYEE")
WITNESSETH THAT:
WHEREAS, EMPLOYEE has certain education, experience, background and
contacts which would be useful and helpful to EMPLOYER in its business and
EMPLOYER is desirous of retaining EMPLOYEE in order to obtain the benefits of
such education, experience, background and contacts.
WHEREAS, EMPLOYEE is agreeable to being retained by EMPLOYER as a
consultant and providing the benefits of his education, experience, background
and contacts to EMPLOYER;
WHEREAS, the parties have agreed upon the terms of such retention and
desire a written, formal contract to evidence their agreements;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
forbearance's contained herein, and intending to be legally bound, the parties
have agreed as follows:
1. RETENTION. For the term-n provided in Paragraph 2, EMPLOYER hereby
retains EMPLOYEE, and EMPLOYEE hereby accepts that retention, upon the terms and
conditions hereinafter set forth.
2. TERM
(a) This Agreement shall become effective as of November 7, 1995.
(b) This Agreement, subject to the provisions of Paragraphs 14 and 15
below, shall continue and exist for an initial period from November 7, 1995 to
December 31, 1998.
(c) If, at September 30, 1998, neither party is then in default under
this Agreement, EMPLOYER shall have the option to extend the term of this
Agreement for an additional one (1) year period, i.e., to December 31, 1999.
Such option shall be exercised by EMPLOYER mailing-nailing notice to EMPLOYEE on
or before October 31, 1998, of its intention to so extend the Agreement. If
EMPLOYER shall not exercise its extension option by October 31, 1998, this
Agreement shall terminate on December 31, 1998.
(d) This Agreement shall be subject to successive additional one (1)
year extensions under the procedure provided in subparagraph (c), provided that
at September 30 of the then existing extension year neither party is then in
default under this Agreement and notice of exercise of the extension option is
given on or before October 31 of such extension year.
(e) Notwithstanding the foregoing, the term of this Agreement is
otherwise subject to the termination provisions contained hereafter.
3. COMPENSATION-BASE.
(a) For all services rendered under this Agreement, EMPLOYEE shall be
paid, as base compensation, such annual fee as shall be determined by the Board
of Directors of EMPLOYER, from time to time, but in no event shall such
compensation be at a rate of less than $150,000 per year. In the event of any
extension of this Agreement, such compensation shall be at a rate of no less
than $150,000 per year during each extension year. All such compensation shall
be subject to a Cost-of-Living Adjustment (COLA) annually based upon the
percentage increase in the Cost-of-Living Index, All Commodities, for the New
York City area. Subject to subparagraph (b) below, such compensation is to be
payable in equal installments at intervals no longer than semi-monthly. Such
base compensation shall be in addition to such fringe benefits and bonuses as
provided elsewhere herein.
(b) The base compensation for each year of this Agreement, including
the first and second year, and any extensions to this Agreement, shall be
subject to a retroactive increase, based upon an earnings per share formula
(actual common shares issued and outstanding at December 31 of each year, and
not fully diluted) as follows:
Profits Per Increase as a
Common Share Percent of Base Compensation
$.00 - $.01 5%
$.11 - $.20 10%
$.21 - $.30 20%
$.31 - $.40 30%
$.41 - $.50 40%
$.51 - $.60 50%
$.61 - $.70 70%
$.71 - $.80 90%
$.81 - $.90 110%
$.91 - $1.00 130%
over $1.00 150%
This retroactive increase, if any should occur, is not a bonus but a merit
adjustment to the base salary.
(c) EMPLOYER may assign EMPLOYEE to one or more of its subsidiaries
and/or affiliates, to perform services consistent with EMPLOYEE'S duties
hereunder. In such event, EMPLOYEE may be separately compensated by each such
subsidiary and/or affiliate. All such compensation shall be deducted from the
compensation payable under subparagraph (a) above and EMPLOYER shall pay
EMPLOYEE only the difference between (i) the total of all such compensations
from subsidiaries and/or affiliates and (ii) the base compensation.
(d) At the end of each calendar year, the Board of Directors of
EMPLOYER shall review the performance of EMPLOYEE for such year and, based upon
such evaluation, establish any increase in the base compensation payable to
EMPLOYEE for the succeeding calendar year, as adjusted by subparagraph (c)
above. EMPLOYER shall not be obligated to provide any increase, in excess of the
increase in the Cost-of-Living Index, All
Commodities, for the New York City area during the prior calendar year.
4. COMPENSATION-FRINGE BENEFITS. EMPLOYEE shall receive at least the
following additional benefits, which may be extended or increased, but not
reduced, by
EMPLOYER:
(a) Vacation - During each year of this Agreement, EMPLOYEE shall be
entitled to paid vacation of three (3) weeks.
(b) Personal Leave - During each year of this Agreement, EMPLOYEE shall
receive five days paid personal leave, which shall not be accumulated from year
to year if unused. EMPLOYEE shall not be compensated for any unused personal
leave. "Personal leave" shall include sick leave, bereavement leave, and all
other personal time off.
(c) Other EMPLOYEE shall receive such other medical, surgical,
hospital, dental or legal insurance and fringe benefits as are available to any
other officers/employees/consultants, consistent with EMPLOYER'S past practices
and such life/disability insurance, incentive or deferred compensation or
bonuses, pension/profit sharing plan and qualified and non-qualified stock
option plans as the Board of Directors of EMPLOYER shall establish. Nothing
contained in this Agreement shall be in lieu of any rights, benefits and
privileges to which EMPLOYEE may be entitled under any retirement, pension,
profit-sharing, insurance, hospital or other plans which may now be in effect or
which may hereafter be adopted. EMPLOYEE shall have the same rights and
privileges to participate in such plans and benefits as any other employee
during his period of retention.
5. COMPENSATION-BONUS. After the end of each calendar year, the Board
of Directors of EMPLOYER shall determine the net profits before taxes of
EMPLOYER for such prior year and shall determine any bonus for such year payable
to EMPLOYEE. EMPLOYER shall not be obligated to provide any bonus. Any bonus
awarded shall be paid at such time or times, in such amounts or installments, as
the Board of Directors may determine.
6. DUTIES. (a) EMPLOYEE is engaged as a business, management and
financial consultant to EMPLOYER and shall provide advice to the officers,
directors and key management of the EMPLOYER. EMPLOYEE'S performance shall be
subject to the supervision of EMPLOYER'S Board of Directors. In addition, at the
option of EMPLOYER management, and subject to the approval of the Employer's
shareholders, during the term of this Agreement EMPLOYEE shall serve as a
director of the EMPLOYER if so elected. The precise consulting scope and the
specific services to be rendered by EMPLOYEE may be defined, interpreted,
curtailed, or extended, from time to time, by determination of the Board of
Directors of EMPLOYER, provided, however, that any definition, interpretation,
curtailment, or extension is consistent with the status of, and/or educational
experience required for, the responsibilities for which EMPLOYEE has been
initially engaged hereunder. It is the intent of this provision to provide
EMPLOYER with flexibility in assigning responsibilities to EMPLOYEE and this
provision shall not be used to discipline, embarrass, humiliate or harass
EMPLOYEE.
7. EXTENT AND PLACE OF SERVICES. EMPLOYEE is a general businessman
engaged in various business activities, including consulting for other
companies. Nothing contained herein is intended to limit Employee's continuation
of existing business activities nor the commencement of new activities, provided
only that such activities are not directly competitive with the conduit pipe
business of EMPLOYER, for which reasons Paragraphs 11, 12 and 13 relate to
conduit pipe business only. EMPLOYER
acknowledges that the majority of employee's services will be rendered during
the initial months of this Agreement and the diminution of such services over
time shall not be a breach hereof nor a reason for reduction of compensation.
Furthermore, nothing contained herein shall be construed as preventing
EMPLOYEE from investing his assets in such form or manner as EMPLOYEE may
select, whether or not such investment will require any services on EMPLOYEE'S
part in the operation of the affairs of the companies in which such investments
are made.
8. WORKING FACILITIES. EMPLOYEE shall be furnished with all necessary
working facilities, including but not limited to an equipped office, clerical
help, and telephone/facsimile/copying services, suitable to his position and
adequate for the performance of his duties. EMPLOYEE may utilize his existing
office space, in which event EMPLOYER shall reimburse EMPLOYEE for its pro rata
share thereof.
9. EXPENSES. EMPLOYEE is not authorized to incur expenses on behalf of,
or chargeable to, EMPLOYER, with respect to his business travel, including
transportation, lodging, food, entertainment, etc. except within such guidelines
as may be established from time to time by the Board of Directors of EMPLOYER.
EMPLOYER shall reimburse EMPLOYEE for authorized expenses within such guidelines
upon presentation by EMPLOYEE, from time to time, of an itemized account of such
expenditures in such form as EMPLOYER may require, together with receipts or
other proofs of the expenditures as may be required.
10. DISCLOSURE OF INFORMATION REGARDING CONDUIT PIPE. EMPLOYEE
recognizes and acknowledges that: (a) during the course of his retention, he
will have access to valuable proprietary information regarding the conduit pipe,
and that (b) such information about the conduit pipe constitutes unique assets
of the business of EMPLOYER. EMPLOYEE will not, during or after his retention,
personally use or disclose all, or any part of, such proprietary information
regarding the conduit pipe to any person, firm, corporation, association,
agency, or other entity except as properly required in the conduct of the
business of EMPLOYER or one of its subsidiaries, or except as pre-authorized in
writing by EMPLOYER or one of its subsidiaries, publish, disclose or authorize
anyone else to publish or disclose, any secret or confidential matter relating
to any aspect of the business of EMPLOYER and its subsidiaries with which
EMPLOYEE'S service may in any way acquaint EMPLOYEE. In the event of a breach,
or threatened breach, by EMPLOYEE, of the provisions of this Paragraph, EMPLOYER
shall be entitled to a preliminary, temporary and permanent injunction
restraining EMPLOYEE from disclosing in whole or in part, any such proprietary
information and/or form rendering any services to any person, firm, corporation,
association, agency, or other entity to whom such information, in whole or in
part, has been disclosed or is threatened to be disclosed. Furthermore, nothing
herein shall be construed as prohibiting EMPLOYER from pursuing any other
equitable or legal remedies available to it for such breach or threatened
breach, including the recovery or damages from EMPLOYEE, and neither remedy
(injunction or damages) shall be exclusive of the other or constitute an
election of remedies.
11. RESTRICTIVE COVENANT.
(a) During the term of this Agreement and for a period of one (1) year
after the termination of this Agreement and any extension thereof, EMPLOYEE
shall not, within the eastern United States, as well as within such other areas
as EMPLOYER shall then be operating conduit pipe plants, be engaged in the
manufacture and/or sale of conduit pipe
or, directly or indirectly, own, manage, operate, control, be employed by,
consult for, participate in, or be connected in any manner with the ownership,
management, operation or control of any business relating to conduit pipe.
(b) EMPLOYEE agrees that the "time," "geographic area," and "scope of
business" provisions of this restrictive covenant are reasonable and proper and
have been negotiated connection with his participation in the proposed business
combination as well as in connection with his retention hereunder and
specifically the continued compensation provisionunder Paragraphs 14 and 15.
(c) EMPLOYER and EMPLOYEE agree, that if any court of competent
jurisdiction shall, for any reason, conclude that any portion of this covenant
shall be too restrictive, the court shall determine and apply lesser
restrictions, it being the intent of the parties that some such restrictions
shall be applicable for the protection of EMPLOYER and its shareholders.
12. NON SOLICITATION COVENANT.
(a) During the term of this Agreement and for a period of two (2) years
after the termination of this Agreement (including any extension thereof)
EMPLOYEE shall not solicit, directly or indirectly, by any means, any of the
customers, accounts, employees or "leads" of EMPLOYER relating to the conduit
pipe business.
(b) EMPLOYER and EMPLOYEE agree that, if any court of competent
jurisdiction shall, for any reason conclude that any portion of this covenant
shall be too restrictive, the court shall determine and apply lesser
restrictions, it being the intent of the parties that some such restrictions
shall be applicable for the protection of EMPLOYER and its shareholders.
(c) This covenant has been given to induce EMPLOYER to enter into this
Agreement and provide EMPLOYEE'S job responsibilities and compensation, and
specifically the continued compensation provisions under Paragraph 14.
13. DISABILITY.
(a) EMPLOYEE'S inability to perform his duties because of temporary
illness, disability, or incapacity, or for any other reasonable cause, shall not
constitute a failure to perform his obligations hereunder and shall not be
deemed a breach or default by him.
(b) If, at any time during the term of this Agreement and/or any
extension thereof, the EMPLOYEE is unable to perform his services b reason of
illness or incapacity, EMPLOYER shall continue EMPLOYEE'S compensation during
the period of such illness or incapacity, up to the balance of the initial term
of this Agreement or then current extension thereof.
(c) At any time, and from-n time to time, EMPLOYER may purchase
disability insurance to compensate EMPLOYEE during periods of disability. In the
event that such insurance is purchased, during any period for which benefits are
being paid by such insurance subparagraph (a) above shall be inapplicable. In
lieu thereof, EMPLOYER shall compensate EMPLOYEE at the agreed base compensation
rate less the benefits paid by such insurance.
14. TERMINATION.
(a) EMPLOYER can terminate employee's retention at any time for good
cause. Without intending to limit the definition of good cause hereby, good
cause will include:
(1) the EMPLOYEE'S death;
(2) the occurrence of one of the following events:
(i) EMPLOYEE commits, is arrested, or is officially charged with a felony or any
crime involving moral turpitude or unethical conduct which in the good faith
opinion of the EMPLOYER could impair his ability to perform his duties; (ii)
EMPLOYEE commits an act, or fails to take action in bad faith and to the
detriment of the EMPLOYER, and
(iii) in the good faith opinion of the Board of Directors, the EMPLOYEE fails to
fully and faithfully perform his obligations under this Consulting Agreement.
(b) The termination of EMPLOYEE'S services shall not constitute a
termination of the restrictive obligations and duties under Paragraphs 10, 11
and 12.
(c) In the event of the bankruptcy (Chapter 7), reorganization (Chapter
11) or other termination of the business of the EMPLOYER or of any subsidiary on
which EMPLOYEE'S continued retention and compensation is dependent, the
provisions of Paragraph 11 shall continue in full force and effect only so long
as full base compensation by EMPLOYER shall continue.
(d) In the event of the termination- or non-renewal of this Agreement
as a result of, or in connection with, or as the outcome of, a change of control
of EMPLOYER, the provisions of Paragraph 11 and the provisions of Paragraph 12
shall not remain in effect following termination.
15. ARBITRATION. Any controversy or claim arising out of, or relating
to this Agreement, or the breach thereof, shall be settled by arbitration in New
York City, New York in accordance with the rules then pertaining of the American
Arbitration Association, but with all rights of discovery provided by the New
York Rules of Civil Procedure, and judgment upon the award rendered may be
entered in any court having jurisdiction thereof.
16. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach by such other party. The failure of a party
to exercise any rights or privileges under this Agreement shall not be deemed to
be a waiver or extinguishment of such rights or privileges, all of which shall
continue to be exercisable.
17. BENEFIT. The rights and obligations of EMPLOYER under this
Agreement shall inure to the benefit of, and shall be binding upon, its
successors and assigns. The protection of Paragraphs 10, 11 and 12 shall inure
to the benefit of EMPLOYER and any successors and assigns. The rights and
obligations of EMPLOYEE under this Agreement shall inure to the benefit of, and
shall be binding upon, his heirs, administrators, executors, successors and
assigns.
18. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by certified mail to
his residence in the case of EMPLOYEE, or to its principal office in the case of
EMPLOYER.
19. LIFE INSURANCE.
(a) EMPLOYER and/or one or more of its subsidiaries may, in its
discretion at any time after the execution of this Agreement, apply for and
procure, as owner and for its own benefit, insurance on the life of EMPLOYEE, in
such amounts and in such forms as EMPLOYER may choose. EMPLOYER shall not be
required to give EMPLOYEE any interest whatsoever in any such policy or
policies, (although nothing contained herein shall be deemed to prohibit any
such arrangement) but EMPLOYEE shall, at the request of EMPLOYER, subject
himself to such medical examination, supply such information, and
execute such information releases and documents as may be required by the
insurance company or companies to whom EMPLOYER has applied for such insurance.
(b) The provisions of subparagraph (a) above shall be in addition to
any insurance purchased to fund any shareholder buy-sell agreement.
20. ENTIRE AGREEMENT. This instrument contains the entire agreement of
the parties and may be modified only by agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
21. APPLICABLE LAW. This Agreement shall be governed for all purposes
by the laws of the State of New York. If any provision of this Agreement is
declared void, such provision shall be deemed severed from-n this Agreement,
which shall otherwise remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto set their hands and seals as of the day and year herein above
written.
FIDELITY HOLDINGS, INC.
ATTEST:
______________________________
Secretary
WITNESS:
_______________________________ _____________________________ (L. S.)
