Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into on this 19th day of April 2002, by and
between First Reserve, Inc., a Florida corporation (the "Company") and Xxxxx X.
Xxxxxx ("Executive").
RECITALS
A. The Company, through Xxxxxxxxx-Xxxxxx-Xxxxxxx, Inc. ("EWM"), its wholly
owned subsidiary, is engaged in the real estate brokerage business.
B. The Executive has been employed as the Chairman and Chief Executive
Officer of EWM since 1984.
C. The Company and the Executive wish to memorialize their existing
relationship and provide for the Executive to continue as the Chairman
and Chief Executive Officer of EWM and as the Chairman and Chief
Executive Officer of the Company, subject to the terms and conditions
of this Agreement.
In consideration of the premises and the mutual agreements herein, the Company
and Executive hereby agree as follows:
1. Employment.
(a) The Company hereby employs Executive and Executive hereby accepts and
agrees to such employment, as the Chairman and Chief Executive Officer
of the Company and the Chairman and Chief Executive Officer of EWM.
(b) Executive shall have the duties and responsibilities normally
associated with the Chairman and Chief Executive Officer of both the
Company and EWM, including, but not limited to, overseeing and managing
all aspects of the Company's business.
(c) Executive shall report to the Board of Directors of the company. While
employed by the Company, Executive may render his professional services
to entities other than the Company and will devote sufficient
professional time, attention, and best efforts to the business of the
Company in order to fulfill his duties and obligations hereunder. The
Executive shall also serve on the Board of Directors of the Company.
2. Term. The Executive shall be employed for a term of two years from the date
hereof, subject to earlier termination as provided herein. If the Executive is
still employed at the end of the first
two-year term, the Executive may extend his employment for an additional
two-year, at the option of the Executive.
3. Compensation.
(a) For all service rendered by the Executive pursuant to Paragraph 1
hereof, the Company shall pay to and provide for Executive (i) a salary
of $150,000 per annum, (ii) a bonus based on the "pre-tax net income"
of the Company, as provided in Paragraph 2(b) below, and (iii) any
additional benefits provided herein. Executive's salary and commissions
shall be paid bi-monthly, or at such other regular intervals consistent
with the normal payroll periods of the Company's other sales
representatives, and such payments shall be subject to the usual
deductions for income tax, FICA, and Medicare. Executive's salary may
be adjusted annually by the Board of Directors; provided, however, that
Executive's salary shall at no time be less than his first year salary
and shall at all times be at least 3.0% higher than the salary paid to
the Executive for the previous year.
(b) In addition to base salary, Executive shall be entitled to a bonus of
up to 5.0% of the "pre-tax net income" of the Company, as determined by
the Company's compensation committee. For purposed of this Agreement,
"pre-tax net income" shall be defined in accordance with generally
accepted accounting principles. Executive's bonus may be up to 50% of
the salary set forth above. The bonus shall be paid to Executive within
60 days after the end of the Company's fiscal year.
4. Vacation. During the term of employment under this Agreement, Executive shall
be entitled to vacations (without deduction in compensation or benefits) of such
duration and at such time or times as may be consistent with prevailing vacation
policies of the Company, but not less than three weeks per calendar year. Such
vacation time shall be adjusted pro rata for the number of months worked in the
initial and final partial years of this Agreement. Unused available vacation
time may cumulate from one year into the following year.
5. Insurance and Other Benefits. To the extent eligible, Executive may
participate in any group disability, medical, retirement, pension or other
similar Company benefit or insurance plan, which is or may become generally
available to other Executives of the Company, including participation in a
4019(k) Plan. Additionally, the Company, at its expense, shall provide the
Executive with life insurance and disability insurance with the Executive or his
designees as the beneficiaries thereof. Any payments received by Executive from
such disability insurance or any other insurance provided herein shall not
reduce the Executive's salary hereunder.
6. Expenses. The Company will reimburse the Executive's reasonable and necessary
telephone, entertainment, travel and other expenses, which are
2
incurred in the furtherance of the Company's business purposes. The Company will
also provide a monthly luxury automobile allowance, at least equivalent in value
of a Mercedes S500 Sedan.
7. Death or Incapacity.
(a) In addition to any other rights of the Executive pursuant to any
disability policies provided to Executive by the Company, if Executive
is unable at any time during the term of this Agreement to perform his
services by reason of physical or mental illness or incapacity, he
shall receive his then regular compensation for the period then
established in the Company's policies and procedures for Executives of
the Company. If Executive is unable to consistently perform his
material duties under this Agreement for any period of 90 consecutive
days by reason of physical or mental illness or incapacity, the Company
may terminate this Agreement at any time without any further liability
to Executive beyond payment of two months of salary as a severance
payment. Periods of consecutive incapacity within the same twelve-month
period arising from the same mental or physical condition, which are
less than 90 days each shall by, cumulated and considered consecutive.
The Board of Directors of the Company shall determine in its sole
discretion whether Executive is ill or incapacitated for purposes of
this Paragraph.
(b) In addition to any rights existing under any life insurance policies
provided by the Company to Executive, in the event of death of
Executive at any time during the term of this Agreement, the Company
shall pay to his surviving spouse, if any, the pro rata salary to which
Executive was entitled through the date of his death. If Executive has
no surviving spouse, then the Company shall pay the aggregate amount of
such pro rata salary to Executive's estate.
(c) In the event of death or disability of Executive prior to the end of a
fiscal year of the Company, Executive (or Executive's estate, as the
case may be) shall be entitled to a partial bonus of each year equal to
the full bonus to which he would have been entitled under Paragraph
2(b), above, if any, multiplied by a fraction the numerator of which is
the number of days in the fiscal year during which the Executive was
employed by the Company and the denominator of which is 365.
8. Termination.
(a) The Company may terminate this Agreement, and the Executive's
employment hereunder, for "cause", subject to the notice and cure
provisions of paragraph 8(b) below, if at any time the Executive:
(i) commits an act of theft or embezzlement from or fraud on the
Company;
3
(ii) willfully refuse to continue his employment with the Company
(except if disabled);
(iii) materially fails to comply with the Company's policies, or
(iv) is convicted of a felony or commits an act of moral turpitude or
illegality that (a) brings the reputation of the Company into
public disrepute or (b) causes the Company to be viewed
unfavorably by the public.
Upon termination, the Company as applicable, shall have no further liability
hereunder except for salary accrued to the date of such termination notice or
the first date of willful refusal by Executive to continue his employment,
whichever the case may be.
(b) Before the Company terminates Executive it shall give him written
notice of his pending termination and give him 14 days from the date of
the notice in which to cure the reason that gave rise to his pending
termination. If in the reasonable determination of the Board of
Directors Executive has timely cured the reason, the Company shall send
written notification to Executive that he shall not be terminated.
Otherwise, Executive shall be forthwith terminated without further
notice, his last day of employment being the last day of his cure
period.
(c) In the event the Company unilaterally terminates this Areement without
cause prior to its expiration, the Company shall remain liable for all
salary, payments and benefits otherwise due to Executive for the
balance of the term of the Agreement.
9. Severance Change in Control.
(a) If the Company terminates the Executive for any reason other than "for
cause" as provided in paragraph 8, above, then the Executive shall be
entitled to receive severance compensation for a period of two years
(or the remainder of the Executive's term if shorter) following
termination, at a rate equal to the Executive's base salary as of the
date of termination. In addition, the Executive shall be entitled to
receive all medical, insurance and other benefits as provided hereunder
for the remainder of the term of the Agreement and the bonus payment
provided in paragraph 2(b) for the year in which the Executive was
terminated.
(b) In addition, should a Change in Control (as defined below) of the
Company occur and the Executive's employment is terminated within two
years thereafter (except if `for cause" as provided in paragraph 8
above), the Executive shall be entitled to a special lump sum severance
payment equal to two years base salary and bonus, with all insurance,
medical and other benefits to be provided to the Executive for the
remainder of the term of the Agreement.
4
(c) As used in this Agreement, a "Change in Control" is any of the
following:
(i) the acquisition of 25% or more of the outstanding voting stock
of the Company by any person or entity with the exception of the
Executive or Xxxxxx X. Xxxxxxxxx;
(ii) the persons serving as directors of the Company as of the date
hereof, and those replacements or additions subsequently
approved, cease to make up at least one-half of the Board;
(iii) a merger, consolidation or share exchange in which the
shareholders of the Company prior to the merger wind up owning
80% or less of the surviving corporation; or
(iv) a complete liquidation on dissolution of the Company or
disposition of all or substantially all of the assets of the
Company.
10. Entire Agreement. This agreement contains the entire agreement concerning
employment arrangements between the Company and Executive and supersedes all
prior written and oral understanding of the parties with respect thereto. This
Agreement may not be changed except by a writing signed by the party against
whom the enforcement of any waiver, change, extension, modification or discharge
is sought.
11. Notices. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and delivered in person or sent by certified
mail to the party involved at the address shown on the signature page, or to
such other address as either party may specify to the other in writing. The date
two days after the date of mailing of such notice shall be deemed to be the date
of delivery thereof.
12. Assignment. This agreement, including the provisions of Section 17, below,
shall inure to the benefit of, and shall be binding upon, the Company, and its
successors and assigns.
13. Severability. In the event any term, paragraph or provision of this
Agreement or application to any circumstances shall to any extent be deemed
invalid or unenforceable, the remainder of this Agreement shall be valid and
enforceable, the remainder of this Agreement shall be valid and enforceable to
the fullest extent permitted by law.
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida. Exclusive venue for any
proceedings shall be brought in Miami-Dade County, Florida only.
5
15. Consultation of Attorneys. The Company and Executive acknowledge that they
each have had the opportunity to consult its or his respective attorney with
respect to this Agreement and that they each understand its contents.
16. Gender Reference. Wherever appropriate, the masculine gender may include the
feminine or neuter, and the singular may include the plural and vice versa.
17. Non-Competition: During the term of this Agreement (including any extensions
and for a period of two years thereafter, the Executive agrees not to: (i) be
employed by or own any material (5% or more equity) interest in any residential
real estate brokerage business which maintains an office within 25 miles from
any EWM office; (ii) solicit any customer, employee, broker or agent of EWM; or
(iii) otherwise compete in any way with EWM.
18. Confidentiality. The Executive agrees to keep in strict secrecy and
confidence any and all of EWM's trade secrets, systems, procedures, manuals,
confidential reports, and lists of customers or clients, and any other
confidential and proprietary information (the "Confidential Information"). The
Executive will not, without EWM's prior written consent, disclose any such
Confidential Information to any third person or entity.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first written above.
"Company"
First Reserve, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Address: 0000 Xxxxx Xxxxx Xxx
Xxxxx Xxxxxx, XX 00000
"Executive"
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
6
