EXHIBIT E
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made this 5th day of April, 2002, is by and
between Newmark Homes Corp., to be known as Technical Olympic USA, Inc., a
Delaware corporation, (the "Company") and Xxxxxxx X. Mon, an individual
(hereinafter called "Executive").
BACKGROUND
Company currently successfully conducts its business in the United States
homebuilding industry. Executive possesses extensive experience in the United
States homebuilding industry stemming from, among other things, his service as a
top-level executive for certain other major companies in this industry. In
addition, Executive maintains a significant professional network of contacts and
relationships in this industry. Company seeks to employ Executive. This decision
by Company is prompted, in part, by Executive's proven capabilities in the
United States homebuilding industry. Company acknowledges that it will benefit
greatly from Executive's industry-related experience by entering into an
employment relationship with Executive.
In addition to the foregoing, Executive previously conducted a successful
consulting practice for numerous individuals and companies in various industries
throughout the United States and Europe. Company acknowledges that Executive has
fully divested himself of his consulting practice in order to work exclusively
for Company and will forego all other consulting and non-consulting
opportunities by agreeing to enter into the full-time employment of Company.
A committee comprised solely of "outside directors" of the Company, within
the meaning of Section 162(m) of the Internal Revenue Code, has approved this
Agreement and made the grants of incentive compensation provided in Sections 5.2
and 5.5. Accordingly, Company's employment of Executive shall be on the terms
and conditions contained in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the facts, mutual promises and
covenants contained herein and intending to be legally bound hereby, Company and
Executive agree as follows:
1. Definitions. As used herein, the following terms shall have the meanings
set forth below unless the contexts otherwise require:
"Affiliate" shall mean a person who, (i) with respect to any entity,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such entity; or (ii) with
respect to Executive, is a parent, spouse or issue of Executive, including
persons in an adopted or step relationship.
"Base Compensation" shall have the meaning set forth in Section 5.1 hereof.
"Board" shall mean the Board of Directors of Company.
"Business Day" shall mean any day other than a Saturday, Sunday or bank
holiday recognized in Ft. Lauderdale, Florida.
"Cause" shall mean:
(a) conviction of, or plea of nolo contendere to, a felony or a
misdemeanor involving moral turpitude;
(b) any act of fraud, misappropriation or personal dishonesty intended
to result in substantial personal enrichment at the expense of Company or
an Affiliate;
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(c) a material violation of any express direction of the Board or the
Chairman of the Board or a material violation of any rule, regulation,
policy or plan established by the Board from time to time regarding the
conduct of Company's employees and/or its business; or
(d) a material violation by Executive of an obligation hereunder that
is demonstrably willful and deliberate on Executive's part and, if capable
of being remedied, is not remedied within ten (10) Business Days (or such
additional reasonable period of time if additional time is necessary to
remedy) after receipt of written notice from Company.
A "Change of Control" shall mean the occurrence of any of the following
events, each of which shall be determined independently of the others:
(a) any "Person" (as defined below) becomes a "beneficial owner" (as
such term is used in Rule 13d-3 promulgated under the Exchange Act) of
thirty percent (30%) or more of the stock of any member of the Consolidated
Group entitled to vote in the election of directors. For purposes of this
Agreement, the term "Person" is used as such term is used in Sections 13(d)
and 14(d) of the Exchange Act; provided, however that the term shall not
include any member of the Consolidated Group, any trustee or other
fiduciary holding securities under an employee benefit plan of any member
of the Consolidated Group, or any corporation owned, directly or
indirectly, by the shareholders of any member of the Consolidated Group in
substantially the same proportions as their ownership of stock of each
member of the Consolidated Group;
(b) individuals who are "Continuing Directors" (as defined below)
cease to constitute a majority of the members of the Board of Directors of
any member of the Consolidated Group ("Continuing Directors" for this
purpose being the members of the Board of Directors of any member of the
Consolidated Group on the date of this Agreement, provided that any person
becoming a member of the Board of Directors of any member of the
Consolidated Group subsequent to such date whose election or nomination for
election was supported by two-thirds (2/3) of the directors who then
comprised the Continuing Directors shall be considered to be a Continuing
Director);
(c) shareholders of any member of the Consolidated Group adopt a plan
of complete or substantial (eighty-five percent (85%) or more) liquidation
or an agreement providing for the distribution of all or substantially all
of the assets of such member;
(d) any member of the Consolidated Group is party to a merger,
consolidation, other form of business combination or a sale of all or
substantially all (eighty-five percent (85%) or more) of its assets, unless
the business of such member is continued following any such transaction by
a resulting entity (which may be, but need not be, such member) and the
shareholders of such member immediately prior to such transaction (the
"Prior Shareholders") hold, directly or indirectly, at least two-thirds
( 2/3) of the voting power of the resulting entity (there being excluded
from the voting power held by the Prior Shareholders, but not from the
total voting power of the resulting entity, any voting power received by
Affiliates of a party to the transaction (other than such member) in their
capacities as shareholders of such member); provided, however, that a
merger or consolidation effected to implement a recapitalization of such
member (or similar transaction) in which no Person acquires more than ten
percent (10%) of the combined voting power of such member's then
outstanding securities shall not constitute a Change in Control;
(e) there is a Change of Control of any member of the Consolidated
Group of a nature that would be required to be reported in response to item
1(a) of Current Report on Form 8-K or item 6(e) of Schedule 14A of
Regulation 14A or any similar item, schedule or form under the Exchange
Act, as in effect at the time of the change, whether or not such member is
then subject to such reporting requirement;
(f) any member of the Consolidated Group is a subject of a "Rule 13e-3
transaction" as that term is defined in Exchange Act Rule 13e-3; or
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(g) there has occurred a "change of control", as such term (or any
term of like import) is defined in any of the following documents which is
in effect with respect to any member of the Consolidated Group at the time
in question: any note, evidence of indebtedness or agreement to lend funds
to such member, any option, incentive or employee benefit plan of such
member or any employment, severance, termination or similar agreement with
any person who is then an employee of such member.
Notwithstanding the foregoing, if immediately after the occurrence of any
event enumerated in paragraphs (a) through (g) above, Xxxxxxxxxxx Stengos
and/or one or more members of the "Stengos Family" continues to Control
Company (or, in the case of any merger or combination in which Company is
not the surviving entity, continues to Control such successor entity), such
event shall not constitute a Change of Control for purposes of this
Agreement until such time as Xxxxxxxxxxx Stengos and/or one or more members
of the Stengos Family ceases to Control Company or such successor entity.
For purposes of this Agreement, the term "Stengos Family" shall mean
Xxxxxxxxxxx Stengos, his spouse, sons, daughters, sons-in-law,
daughters-in-law, and the lineal descendants of any of the foregoing.
"Consolidated Group" shall mean (i) the group of companies composed of
Technical Olympic S.A., Technical Olympic (UK) PLC, Technical Olympic USA, Inc.,
and Company, and (ii) any successor or surviving company of any of the foregoing
entities.
"Control" shall mean (i) the power to elect the majority of the board of
directors or comparable governing body of an entity, or, if there is no such
body, the power to direct the management of such entity; or (ii) the direct
and/or indirect beneficial ownership of fifty-one percent (51%) or more of the
combined voting power of the then outstanding voting securities of such entity
entitled to vote in the election of directors (or comparable governing body or
management) of such entity.
"Commencement Date" shall mean April 5, 2002.
"Disability" shall mean Executive's inability, for a period of six (6)
consecutive months, or a cumulative period of one hundred twenty (120) Business
Days out of a period of twelve (12) consecutive months, to perform the essential
duties of Executive's position, even taking into account any reasonable
accommodation required by law, due to a mental or physical impairment. The
determination of whether Executive is suffering from a Disability shall be made
by three (3) independent physicians, one chosen by a representative of
Executive, one chosen by Company and one chosen by the physicians chosen by
Executive and Company.
"Employment Year" shall mean each twelve (12) month period, or part
thereof, during which Executive is employed hereunder, commencing on the
Commencement Date or on each anniversary of the Commencement Date of any
subsequent calendar year.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Good Reason" shall mean that:
(a) without Executive's prior written consent and in the absence of
Cause, one or more of the following events occurs:
(i) Company removes Executive from the position of Chief Executive
Officer or a member of the Board without Executive's consent (or fails
to re-elect Executive at any meeting of the Board held for the purpose
of electing or re-electing officers of Company) or substantially
adversely changes Executive's duties or reporting responsibility under
Section 2; provided that this Subsection (i) shall not apply in the
event such removal (or non re-election) is for Cause or as a result of
Executive's death, Disability or Executive's resignation not based on
the existence of Good Reason;
(ii) there is a material diminution in Executive's authorities,
duties or responsibilities normally associated with Executive's position
or there are assigned to Executive duties and responsibilities
materially inconsistent with those normally associated with such
position;
(iii) any failure by Company to comply with any of the material
provisions of this Agreement;
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(iv) any purported termination by Company of Executive's employment
other than as expressly permitted by this Agreement;
(v) Executive's aggregate cash compensation as provided for in
Sections 5.1 and 5.2 hereof (including, without limitation, Base
Compensation, as it may be increased from time to time, or Incentive
Compensation, as it may be increased from time to time), is or are
decreased by Company;
(vi) any of Executive's up front and long-term equity compensation
opportunities as provided for in Section 5.5 hereof are breached by
Company;
(vii) Executive's benefits as provided in Section 6 hereof are, in
the aggregate, reduced;
(viii) Company fails to obtain a written agreement from any
successor of Company to assume and perform this Agreement;
(ix) the occurrence of a "Change of Control"; and
(b) within sixty (60) Business Days of learning of the occurrence of
any such event, and in the absence of any circumstance that constitutes
Cause, Executive terminates employment with Company by written notice to
the Chairman of the Board; provided, however, that the events set forth in
subparagraphs (ii), (iii), (iv), (v), (vi), (vii) or (viii) shall not
constitute Good Reason for purposes of this Agreement unless, within twenty
(20) Business Days of Executive's learning of such event, Executive gives
written notice of the event to the Chairman of the Board and Company fails
to remedy such event within ten (10) Business Days (or such additional
reasonable period of time if additional time is necessary to remedy) of
receipt of such notice.
"Incentive Compensation" shall have the meaning set forth in Section 5.2
hereof.
"Nextera Report" shall mean that certain report of Nextera entitled
"Driving Value Through Executive Incentive Programs -- CEO: Final
Recommendations", a copy of which is attached to this Agreement as part of
Exhibit "A".
"Termination Payment" shall mean:
(a) the greater of the following: (i) three (3) times the sum of the
following: (x) the highest Base Compensation paid to Executive for any
Employment Year by Company pursuant to Section 5.1 during the thirty-six
(36) month period preceding the termination, (y) the highest annual
Incentive Compensation or annual incentive cash compensation paid to
Executive for any Employment Year by Company pursuant to Section 5.2 or 5.5
during the thirty-six (36) month period preceding the termination and (z)
the fair market value of any benefits and perquisites provided to Executive
pursuant to Section 6 hereof (including any payments made to Executive
pursuant to Section 6.13 hereof), the value of which shall be determined by
a certified public accountant jointly selected by Company and Executive; or
(ii) the sum of the following: (x) the aggregate Base Compensation that
would have been payable to Executive pursuant to Section 5.1 if Executive's
employment continued for the remaining Term of Employment, (y) the
aggregate Incentive Compensation or incentive cash compensation that would
be payable to Executive pursuant to Section 5.2 or 5.5, as applicable, if
Executive's employment continued for the then remaining Term of Employment,
and (z) the fair market value of any benefits and perquisites provided to
Executive pursuant to Section 6 hereof (including any payments made to
Executive pursuant to Section 6.13 hereof), the value of which shall be
determined by a certified public accountant jointly selected by Company and
Executive; and
(b) the stock options granted to Executive pursuant to Section 5.5, in
the forms of grant agreements attached hereto as part of Attachment A,
shall become vested and exercisable as provided therein.
"Term of Employment" shall have the meaning set forth in Section 3 hereof.
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2. Employment and Duties.
2.1. Position; Duties. Company hereby employs Executive and Executive
hereby accepts appointment or election as the Chief Executive Officer and as
Executive Vice-Chairman of the Board of Directors of Company. The principal duty
of Executive shall be to serve in such capacities and render such services as
are necessary and desirable to protect and advance the best interests of
Company, acting, in all instances, under the supervision of and in accordance
with the policies set by the Board and by the Chairman of the Board. As Chief
Executive Officer, Executive shall employ and terminate key employees, subject
only to policies set by and with the approval of the Chairman of the Board, and
shall sign agreements and otherwise commit Company, subject only to such
policies and such approval, and subject to the provisions of such operating
budget or budgets as may be approved from time to time by the Board or by the
Chairman of the Board. At the Commencement Date, Xxxxxxxxxxx Stengos shall be
the Chairman of the Board. The Chairman of the Board may be changed from time to
time by the Board. Notwithstanding the foregoing, Executive shall report only to
and be under the supervision of Xxxxxxxxxxx Stengos during such time as he shall
be Chairman of the Board (but, in the event of his unavailability, to Yannis
Delikanakis).
2.2. Permitted Activities. Executive acknowledges and agrees that he is
required to devote his full-time best efforts to his duties to Company
hereunder. Notwithstanding the foregoing, Executive may (i) serve on those
corporate, civic or charitable boards or committees set forth on Attachment B
attached hereto, as the same may be amended from time to time by the Chairman of
the Board and Executive; (ii) deliver lectures, fulfill speaking engagements or
teach at educational institutions; or (iii) manage personal passive investments,
so long as such activities, in the aggregate, do not in the good faith opinion
of the Chairman of the Board materially interfere with the performance of
Executive's duties to Company in accordance with this Agreement; provided,
however that Executive shall be given a reasonable period of time in which to
correct such interference. Any compensation received by Executive as a result of
performing any of the activities set forth in clauses (i) or (ii) of this
Section 2.2 during the Term of Employment shall be remitted by Executive to
Company.
2.3. Place of Employment. Company shall establish its primary office
location at a location mutually agreed to by Executive and Company in the
southern Florida region. Such office shall be Executive's primary office for
eight (8) out of twelve (12) months per Employment Year. Unless agreed otherwise
by the Chairman of the Board, Executive's secondary office for four (4) months
of the Employment Year shall be in Shrewsbury, New Jersey. Company and Executive
further acknowledge and agree that Executive may be required, in connection with
the performance of his duties, to work from time to time at other locations
reasonably and customarily required in connection with the business of Company.
3. Term. Executive shall be employed by Company for a term of employment
ending December 31, 2006 (the "Term of Employment"), commencing on the
Commencement Date. Upon termination of this Agreement, the parties agree to
discuss whether a new employment agreement or a one (1) year consulting
arrangement is mutually desired at that time and, if so, shall agree upon the
terms and conditions of such arrangement.
4. [intentionally omitted]
5. Compensation.
5.1. For all of the services rendered by Executive to Company, Executive
shall receive base compensation at the gross annual rate (before authorized or
legally required deductions and withholdings) of Eight Hundred Thousand Dollars
($800,000) ("Base Compensation"), payable not less than monthly in accordance
with Company's regular payroll practices in effect from time to time. Base
Compensation shall be increased as follows: (i) on the first anniversary of this
Agreement to $880,000, (ii) on the second anniversary of this Agreement to
$968,000, (iii) on the third anniversary of this Agreement to $1,064,800, and
(iv) on the fourth anniversary of this Agreement to $1,171,280. Thereafter, Base
Compensation shall be reviewed periodically and may be increased at any time and
from time to time; provided, however that in no event shall such increases on an
annual basis be less than the higher of (i) that percentage by which the
Consumer Price Index for the Ft. Lauderdale, Florida area published by the
United States government (the "Index") as of
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December 31 of the immediately preceding calendar year (the "Base Year") exceeds
the Index as of the December 31 of the calendar year immediately preceding the
Base Year, or (ii) ten percent (10%). If publication of the Index is
discontinued, the parties hereto shall accept comparable statistics on the cost
of living for the Ft. Lauderdale, Florida area as computed and published by an
agency of the United States government, or if no such agency computes and
publishes such statistics, by any regularly published national financial
periodical that does compute and publish such statistics.
5.2. In addition to the foregoing compensation, subject to shareholder
approval, Company shall pay to Executive an annual bonus ("Incentive
Compensation") under Company's Annual and Long-Term Incentive Plan as follows:
(i) for the period ending on December 31, 2002, a bonus at the gross annual rate
(before authorized or legally required deductions and withholdings) of not less
than One Million Dollars ($1,000,000), payable not less than monthly in
accordance with Company's regular payroll practices in effect from time to time;
provided, however, that after the first three (3) months of Executive's
employment hereunder, the payment of such monthly bonus to Executive is
contingent upon Company's average "Results of Operations" (as defined below) for
the immediately preceding three (3) months being positive (greater than or equal
to zero); provided, further, however, that if any of the first three months of
Executive's employment hereunder are in 2002, the payment of the bonus for any
such month shall be contingent on the Results of Operation for such month being
positive and (ii) in addition to the foregoing, such additional Incentive
Compensation as determined by the Board in its sole discretion. Any additional
Incentive Compensation due to Executive hereunder shall be paid to Executive
within twenty (20) Business Days after the end of the applicable fiscal year.
All payments of Incentive Compensation shall be subject to authorized or legally
required deductions and withholdings. For purposes of this Section 5.2, the term
"Results of Operations" shall mean Company's gross revenue less its cost of
sales, plus earnings generated from Company's mortgage and title businesses, but
shall not include the results of any restructuring or any unusual or
extraordinary items (as determined by a majority of the independent members of
the Board). In addition, if any Incentive Compensation (or any portion thereof)
is not payable because Company's average Results of Operations for the
immediately preceding one (1) month or three (3) months, whichever is
applicable, is not positive, such amount shall be deferred and paid to Executive
at such time as Company's average Results of Operations for a subsequent three
(3) month period is positive. Company shall act in good faith and shall use its
reasonable best efforts to obtain such shareholder approval.
5.3. Within twenty (20) Business Days after the end of each Employment
Year, the Chief Financial Officer of Company (or other officer of Company
designated by the Chairman of the Board) shall furnish a signed, written
statement to Executive showing the details applicable to Executive's right to
receive Incentive Compensation hereunder and showing the amount, if any, which
is due to Executive for such Incentive Compensation on account of the concluded
Employment Year.
5.4. Executive shall receive such additional bonuses and adjustments to
Base Compensation, if any, as the Board determines in its sole and absolute
discretion.
5.5. Company and Executive agree to jointly develop and implement
appropriate annual cash incentives and up-front and long-term equity
compensation programs or opportunities under Company's Annual and Long-Term
Incentive Plan to benefit Executive substantially in accordance with the Nextera
Report. The expense of such development and implementation shall be borne by
Company. Upon implementation of the Annual and Long-Term Incentive Plan, which
shall be subject to the approval of the shareholders of Company, Company shall
award to Executive thereunder up-front and long-term equity compensation or
opportunities substantially in the form of agreements attached hereto as part of
Attachment A and the further provisions of Attachment A, which are made a part
of this Agreement for all purposes. Company shall act in good faith and shall
use its reasonable best efforts to implement any necessary plans, secure
shareholder approvals (if not already obtained) and award to Executive the
appropriate up-front and long-term equity compensation or opportunities within a
reasonable period of time after the date of this Agreement as further provided
in Attachment A.
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6. Fringe Benefits. As an inducement to Executive to commence employment
hereunder, and in consideration of Executive's covenants under this Agreement,
Executive shall be entitled to the benefits set forth below throughout the Term
of Employment:
6.1. Company shall (i) furnish Executive with a monthly automobile
allowance calculated to cover the acquisition, operation, maintenance, insurance
and other costs for an automobile comparable to the automobile currently driven
by Executive (BMW 740 il or Mercedes SL500), or (ii) lease or purchase such
automobile for Executive's use and provide Executive with a monthly automobile
allowance calculated to cover the operation, maintenance, insurance and other
costs for such automobile. Executive and the Chairman of the Board shall jointly
determine which option shall be chosen.
6.2. Company shall lease or purchase (as determined by the joint decision
of Executive and the Chairman of the Board) for Executive a residence acceptable
to Executive with a purchase price not to exceed One Million Dollars
($1,000,000) proximately located to Company's office established in accordance
with Section 2.3 hereof in South Florida. Company shall be responsible for any
rent or mortgage payments for such residence and shall pay for or reimburse
Executive for all reasonable maintenance, utilities, repairs, association dues,
taxes or any other reasonable expenses related to Executive's occupancy of such
residence. Executive shall have the option, exercisable at any time during the
Term of Employment or for three (3) months after termination of Executive's
employment for any reason, to acquire such residence from Company for cash at
its appraised fair market value, as determined by an appraiser jointly selected
by Executive and Company. Exercise of such option by Executive shall terminate
Company's obligations under this Section 6.2. In addition, Company shall pay
directly or reimburse Executive for any expenses incurred by Executive to
transport any personal possessions of Executive or Executive's spouse from Sea
Girt, New Jersey to such residence in connection with Executive's initial move
into such residence.
6.3. Company shall pay for or reimburse Executive for up to two (2) club
memberships in the South Florida area of such kind and nature as is customary
for Executive's position in such area.
6.4. Company will reimburse Executive at least monthly for all reasonable
expenses incurred by Executive in connection with the performance of Executive's
duties hereunder upon receipt of documentation therefor in accordance with
Company's regular reimbursement procedures and practices in effect from time to
time. In addition, Company shall pay for the air travel and related expenses of
Executive's spouse at such time or times as Executive's spouse accompanies
Executive on Company-related trips, when such travel by Executive's spouse is
reasonably necessary or appropriate to such business travel and not primarily
for personal purposes, or when Executive's spouse travels between Executive's
residences (but not for more than fifteen (15) such round trip in any year).
Executive and Executive's spouse shall be entitled to upgraded air travel (first
class for all domestic air travel and business class for all international air
travel) at Executive's discretion at the expense of Company.
6.5. Subject to the provisions of Sections 6.6 and 6.7 regarding the
provision of health, life and disability insurance, Executive (and Executive's
spouse and dependents, where applicable) shall be eligible to participate in any
401(k) plan (or similar qualified plan) and any health, life, accident, general
liability, directors' and officers' liability, or disability insurance, sick
leave or other welfare benefit plans or programs made available to, and on terms
at least as favorable to, other similarly situated employees of Company as long
as they are kept in force by Company and provided that each such individual
meets the eligibility requirements and other terms, conditions and restrictions
of the respective plans and programs. Upon commencement of Executive's
employment hereunder, Company shall (unless otherwise prohibited by applicable
law) credit Executive (or Executive's spouse or dependents, as applicable) with
as many years of service as are necessary to (i) fully vest Executive (or
Executive's spouse or dependents, as applicable) in such welfare plans or
programs which are offered to Company's employees in general and are in
existence on the Commencement Date, and (ii) provide or make available to
Executive (or Executive's spouse or dependents, as applicable) with the maximum
benefit available under such welfare plans or programs which are offered to
Company's employees in general and are in existence on the Commencement Date.
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6.6. In lieu of participation in Company's health plans, Executive may
elect to receive from Company an allowance equal to Executive's actual cost for
any health coverage which Executive maintains for himself, his spouse or his
dependents from sources other than those offered by Company.
6.7. In lieu of participation in any Company-sponsored life or disability
insurance plans, Company shall pay to Executive an annual sum of Sixty Thousand
Dollars ($60,000). Company acknowledges that such payments by Company may be
made to a trust, family limited partnership or limited liability company or
other estate planning vehicle established or formed by Executive and/or
Executive's spouse and agrees to make such payments to such entities if
requested by Executive.
6.8. Executive shall be entitled to four (4) weeks paid vacation during
each year (pro-rated for the first Employment Year). Executive shall take
vacations at such time or times as shall be approved by the Chairman of the
Board, which approval shall not be withheld unreasonably.
6.9. Company shall provide Executive with a fully furnished office
comparable in size, furnishing and decorations to the office of other senior
level executives employed by Company, and the facilities of Company shall be
generally available to Executive in the performance of Executive's duties, it
being understood that all equipment, supplies, secretarial staff and other
office personnel required in the performance of Executive's duties shall be
supplied by Company. In addition, Company shall provide Executive a monthly
allowance in the amount of Three Thousand Dollars ($3,000) for the rental,
maintenance and upkeep of Executive's office in Shrewsbury, New Jersey for a
period of fifteen (15) months from the Commencement Date.
6.10. Company shall reimburse Executive for any reasonable legal,
accounting, tax or similar expenses incurred by Executive related to the
structure, negotiation or preparation of this Agreement and the resolution of
any issues arising therefrom, including, but not limited to, issues related to
Florida or New Jersey residence status and revising or updating Executive's
estate, tax or financial plan as a result thereof.
6.11. In addition to the amounts to be paid to Executive pursuant to
Section 6.10, above, Company shall reimburse Executive (up to a maximum of
Twenty-Five Thousand Dollars ($25,000)) for any financial planning, tax (advice
and return preparation), estate, legal or related costs incurred by Executive
during the Term of Employment; provided, however, that the maximum amount of
such reimbursement shall be increased by ten percent (10%) per Employment Year.
In addition, any amount of such available reimbursement not utilized by
Executive during any Employment Year may be carried forward into any succeeding
Employment Year.
6.12. Notwithstanding the foregoing, Company shall provide Executive with
such additional welfare benefits and perquisites as Company may provide to its
senior level executives in general at any time during the Term of Employment.
6.13. All (i) benefits provided to Executive pursuant to the provisions of
this Section 6, (ii) payments made to or on behalf of Executive pursuant to the
provisions of this Section 6, or (iii) benefits imputed to Executive as a result
of Executive's employment by Company, shall be grossed-up for the effect of any
federal, state or local income or similar taxes that Executive may be required
to pay as a result of receiving such benefits or payments or having such
benefits imputed to Executive so that the net value of each of the foregoing
fringe benefits provided to Executive by Company shall not be diminished by the
payment of any federal, state or local income or similar taxes thereon by
Executive; provided, however, that the maximum amount of such gross-up for any
calendar year shall not exceed Seventy-Five Thousand Dollars ($75,000);
provided, further, however, that such amount shall be increased on an annual
basis by that percentage by which the Consumer Price Index for the Ft.
Lauderdale, Florida area published by the United States government (the "Index")
as of December 31 of the immediately preceding calendar year (the "Base Year")
exceeds the Index as of the December 31 of the calendar year immediately
preceding the Base Year. If publication of the Index is discontinued, the
parties hereto shall accept comparable statistics on the cost of living for the
Ft. Lauderdale, Florida area as computed and published by an agency of the
United States government, or if no such agency computes and publishes such
statistics, by any regularly published national financial periodical that does
compute and publish such statistics. Notwithstanding the foregoing, such amount
may be further increased at the discretion of the Board. For purposes of
determining the amount of
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any additional payments to be made to Executive hereunder, (i) Executive shall
be deemed to pay federal income taxes at the highest marginal rates of federal
income taxation for the calendar year in which such payment is to be made, (ii)
Executive shall be deemed to pay applicable state and local income taxes in the
jurisdictions in which Executive is subject to such taxes at the highest
marginal rate of taxation for the calendar year in which such payment is to be
made; and (iii) the fact that the additional payments themselves are or may be
subject to tax shall be taken into account. All determinations required to be
made under this Section 6.13, including whether any additional payments are
required and the amount of such payments and the assumptions utilized in
arriving at such determination, shall be made by an accounting firm jointly
selected by Company and Executive. Such additional payments, if any, shall be
made to Executive concurrently with the payment of the corresponding fringe
benefit to or for the benefit of Executive or within a reasonable period of time
(not to exceed twenty (20) Business Days) thereafter.
7. Termination.
7.1. Termination by Company for Cause; Resignation of Executive without
Good Reason. If Company believes that an event constituting Cause has occurred,
Company may give Executive written notice of its intention to terminate this
Agreement for Cause. The preceding sentence notwithstanding, Executive's
employment shall not be deemed to have been terminated for Cause unless Company
has given or delivered to Executive (i) reasonable notice setting forth the
reasons for Company's intention to terminate Executive's employment for Cause;
and (ii) if the event is capable of being cured, an opportunity to cure such
event as provided in the definition of Cause. If this Agreement is terminated
for Cause, the termination shall be effective as of the date Company's notice is
given pursuant to clause (i) above, or such later date that may be specified in
such notice as the termination date. In the event Executive's employment is
terminated by Company for Cause, or in the event Executive resigns without Good
Reason, Executive shall be entitled to the following, payable via wire transfer
to an account designated by Executive on or prior to the date of termination or
as soon as reasonably practical following the date of termination:
(a) unpaid Base Compensation earned or accrued at the rate in effect
at the time of Executive's termination through the date of termination of
Executive's employment;
(b) a pro rata performance bonus for the year in which employment
terminates based on the performance of Company for the year during which
such termination occurs or, if performance results are not available, based
on the performance bonus paid to Executive for the prior year;
(c) reimbursement for covered expenses incurred by Executive but not
yet reimbursed by Company provided that appropriate documentation is
submitted within thirty (30) Business Days after Executive's employment
terminates; and
(d) any other compensation and benefits to which Executive may be
entitled under applicable plans, programs and other agreements of Company.
7.2. Termination Without Cause or for Good Reason. In the event
Executive's employment is terminated by Company without Cause and not as a
result of Disability or death, or in the event Executive terminates employment
for Good Reason, Executive shall be entitled to receive from Company (i) the
Termination Payment, and (ii) reimbursement for covered expenses incurred by
Executive but not yet reimbursed by Company, payable via wire transfer to an
account designated by Executive on the day of termination or as soon as
reasonably practical following the day of termination.
7.3. Death or Disability. If Executive dies or suffers a Disability
during the Term of Employment, the Term of Employment and Executive's employment
with Company shall terminate as of the date of death or Disability occurs. In
the event of the termination of Executive's employment due to Executive's death
or Disability, Executive or Executive's legal representatives, as the case may
be, shall be entitled to receive a payment from Company equal to the sum of (i)
unpaid Base Compensation earned or accrued at the rate in effect at the time of
Executive's death or Disability through the date of Executive's death or
Disability, (ii) a pro rata performance bonus for the year in which Executive's
death or Disability occurs based on the performance of Company for the year
during which such death or Disability occurs or, if performance results are not
available, based on the performance bonus paid to Executive for the prior year,
and
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(iii) reimbursement for covered expenses incurred by Executive but not yet
reimbursed by Company, payable via wire transfer to an account designated by
Executive or Executive's legal representatives within ten (10) Business Days of
the date of termination.
7.4. Continuing Eligibility. Notwithstanding the foregoing provisions of
this Section 7, unless Executive is terminated for Cause, to the extent
permitted by applicable law, Executive and Executive's spouse shall remain
eligible to participate in Company's group health plans without paying a premium
until (i) the younger of Executive or Executive's spouse reaches the age of
sixty-five (65) or becomes eligible (or is required) to participate in any
government funded health care coverage, or (ii) such individual becomes eligible
for coverage under another employer's group health plan, so long as such other
coverage is substantially similar to or exceeds the coverage being provided to
Executive and Executive's spouse by Company's plans. In lieu of such coverage
under Company's group health plans, Company may, in its sole discretion, provide
such coverage through one or more insurance contracts or other arrangements.
8. Certain Additional Payments by Company.
8.1. Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment, distribution or other action by
Company to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (including, without limitation, any additional payments required under
this Section 8), (a "Payment") would be subject to an excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or
any interest or penalties are incurred by Executive with respect to any such
excise tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), Company shall make a
payment to Executive (a "Gross-Up Payment") in an amount such that after payment
by Executive of all taxes (including any Excise Tax) imposed upon the Gross-Up
Payment, Executive receives (or Company pays to the Internal Revenue Service on
Executive's behalf) an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments, and Executive receives an amount equal to the product
of any deductions disallowed because of the inclusion of the Gross-Up Payment in
Executive's adjusted gross income and the highest applicable marginal rate of
federal income taxation for the calendar year in which the Gross-Up Payment is
to be made. For purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed to (i) pay federal income taxes at the highest
marginal rates of federal income taxation for the calendar year in which the
Gross-Up Payment is to be made, and (ii) pay applicable state and local income
taxes in the jurisdictions in which Executive is subject to such taxes at the
highest marginal rate of taxation for the calendar year in which the Gross-Up
Payment is to be made.
8.2. Subject to the provisions of Section 8.3, all determinations required
to be made under this Section 8, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by an accounting firm
jointly selected by Executive and Company (the "Accounting Firm") which shall
provide detailed supporting calculations both to Company and Executive within
fifteen (15) Business Days (but in no event later than forty-five (45) Business
Days) of the receipt of notice from Executive that there has been a Payment, or
such earlier time as is requested by Company. All fees and expenses of the
Accounting Firm shall be borne solely by Company. Any Gross-Up Payment, as
determined pursuant to this Section 8, shall be paid by Company to Executive
within five (5) Business Days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by Executive, it shall furnish Executive with a written opinion that failure to
report the Excise Tax on Executive's applicable federal income tax return would
not result in the imposition of any penalty or interest. Any determination by
the Accounting Firm shall be binding upon Company and Executive. As a result of
the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by Company should have been made
("Underpayment"), consistent with the calculation required to be made hereunder.
In the event that Company exhausts its remedies pursuant to this Section 8 and
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by Company to or for the
benefit of Executive. Notwithstanding the
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foregoing, the failure of the Accounting Firm to adhere to any specific period
set forth in this Section 8 shall not in any manner affect Executive's right to
receive any Gross-Up Payment.
8.3. Executive shall notify Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) Business Days after Executive is informed
in writing of such claim and shall apprise Company of the nature of such claim
and the date on which such claim is requested to be paid. Executive shall not
pay such claim prior to the expiration of the forty-five (45) Business Day
period following the date on which it gives such notice to Company (or such
shorter period ending on the date asserted by the Internal Revenue Service that
any payment of taxes with respect to such claim is due). If Company notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall:
(a) give Company any information reasonably requested by Company
relating to such claim;
(b) take such action in connection with contesting such claim as
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by Company;
(c) cooperate with Company in good faith in order effectively to
contest such claim; and
(d) permit Company to participate in any proceedings relating to such
claim;
provided, however, that Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold Executive
harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result
of such representation and payment of costs and expenses; and further
provided that any settlement of such claim by Company shall be subject to
the consent of Executive, which consent shall not be unreasonably withheld.
Without limitation on the foregoing provisions of this Section 8.3, Company
shall control (subject to Executive's consent, which consent shall not be
unreasonably withheld) all proceedings taken in connection with such
contest and may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect
of such claim and may either direct Executive to pay the tax claimed and
xxx for a refund or contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as Company shall determine; provided, however, that
if Company directs Executive to pay such claim and xxx for a refund,
Company shall advance the amount of such payment to Executive, on an
interest-free basis and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or
with respect to any imputed income with respect to such advance; and
further provided that any extension of the statute of limitations relating
to the payment of taxes for the taxable year of Executive with respect to
which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
8.4. If, after the receipt by Executive of an amount advanced by Company
pursuant to Section 8.3, Executive becomes entitled to receive any refund with
respect to such claim, Executive shall (subject to Company's complying with the
requirements of Section 8.3) promptly pay to Company the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by Executive of an amount advanced by Company
pursuant to Section 8.3, a determination is made that Executive shall not be
entitled to any refund with respect to such claim and Company does not notify
Executive in writing of its intent to contest such denial of refund prior to the
expiration of twenty (20) Business Days after such determination, then such
advance shall be forgiven and shall not be required to
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be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
9. Indemnification.
9.1. Company shall indemnify Executive to the fullest extent permitted by
Delaware law against all costs, expenses, liabilities and losses (including,
without limitation, attorneys' fees, judgments, fines, penalties, ERISA excise
taxes, penalties and amounts paid in settlement) reasonably incurred by
Executive in connection with a "Proceeding" (as defined herein). For the
purposes of this Section 9, a "Proceeding" shall mean any action, suit or
proceeding, whether civil, criminal, administrative or investigative, in which
Executive is made, or is threatened to be made, a party to, or a witness in,
such action, suit or proceeding by reason of the fact that he is or was an
officer, director or employee of Company or is or was serving as an officer,
director, member, employee, trustee or agent of any other entity at the request
of Company. Notwithstanding any other provision of this Agreement, Company's
obligation to indemnify Executive will survive the expiration or termination of
this Agreement by either party for any reason.
9.2. Executive shall promptly cause written notice of the commencement of
any Proceeding of which he has knowledge which is covered by this indemnity to
be forwarded to Company. Executive shall have the right, at his sole option and
at the expense of Company, to be represented by counsel of his choice in such
Proceeding, which must be reasonably satisfactory to Company, and to assume the
defense of, negotiate, settle or otherwise deal with any Proceeding which
relates to any losses indemnified against hereunder. If Executive elects to
assume the defense of, negotiate, settle or otherwise deal with any Proceeding
which relates to any losses indemnified against hereunder, he shall within five
(5) Business Days of receipt of written notice of the assertion of a Proceeding
(or sooner, if the nature of the Proceeding so requires) notify Company of his
intent to do so. If Executive elects not to defend against, negotiate, settle or
otherwise deal with any Proceeding which relates to any losses indemnified
against hereunder, or fails to notify Company of his election as herein
provided, Company may defend against, negotiate, settle or otherwise deal with
such Proceeding. If Company shall assume the defense of any Proceeding,
Executive may participate, at his own expense, in the defense of such
Proceeding; provided, however, that Executive shall be entitled to participate
in any such defense with separate counsel at the expense of Company if, (i) so
requested by Company to participate or (ii) in the reasonable opinion of counsel
to Executive, a conflict or potential conflict exists between Executive and
Company that would make such separate representation advisable. The parties
hereto agree to cooperate fully with each other in connection with the defense,
negotiation or settlement of any such Proceeding.
9.3. Company shall advance to Executive all reasonable costs and expenses
incurred in connection with a Proceeding within ten (10) Business Days after
receipt by Company of a written request for such advance. Such request shall
include an itemized list of the costs and expenses and an undertaking by
Executive to repay the amount of such advance if ultimately it shall be
determined that he is not entitled to be indemnified against such costs and
expenses.
9.4. The failure of Executive to give reasonably prompt notice of any
Proceeding shall not release, waive or otherwise affect Company's obligations
with respect thereto except to the extent that Company can demonstrate actual
loss and prejudice as a result of such failure.
9.5. Executive shall be entitled to indemnification under this Section 9
if Executive meets the standard of conduct specified under Delaware law. If
Executive in fact meets the applicable standard of conduct, he shall be entitled
to such indemnification whether or not Company (whether by the Board, the
shareholders, independent legal counsel or other party) determines that
indemnification is proper because he has met such applicable standard of
conduct. Neither the failure of Company to have made such a determination nor a
determination by Company that Executive has not met such applicable standard of
conduct, shall create a presumption in any litigation, arbitration or similar
proceeding commenced by Executive that Executive has not met the applicable
standard of conduct.
9.6. Company shall not settle any Proceeding or claim in any manner which
would impose on Executive any penalty or limitation without Executive's prior
written consent. Neither Company nor Executive will withhold consent to any
proposed settlement unreasonably.
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9.7. Company shall maintain a "claims-based" policy of directors' and
officers' liability insurance in form reasonably satisfactory to Executive with
coverage of at least $100,000,000 and a deductible not exceeding $250,000, which
shall cover, among other provisions, claims made against Executive with respect
to employment practices such as discrimination, wage claims or the like.
10. Company Property. All advertising, sales, manufacturers' and other
materials or articles or information, including without limitation data
processing reports, computer programs, software, customer information and
records, business records, price lists or information, samples, or any other
materials or data of any kind furnished to Executive by Company or developed by
Executive on behalf of Company or at Company's direction or for Company's use or
otherwise in connection with Executive's employment hereunder, are and shall
remain the sole property of Company, including in each case all copies thereof
in any medium, including computer tapes and other forms of information storage.
If Company requests the return of such materials (whether or not containing
confidential information) at any time during or at or after the termination of
Executive's employment, Executive shall deliver all copies of the same to
Company immediately.
11. Noncompetition, Trade Secrets, etc. In consideration of the employment of
Executive by Company, Executive hereby agrees as follows:
11.1. For so long as Executive remains an employee of Company and, unless
and to the extent waived by the Chairman of the Board, in his sole discretion,
for a period of eighteen (18) months after termination of Executive's employment
with Company for any reason (other than termination by Company for Cause, in
which event the foregoing eighteen (18) month time period shall be twelve (12)
months, unless the Chairman of the Board, in his sole discretion, elects to
extend such twelve (12) month period to eighteen (18) months) (the "Restricted
Period"), Executive shall not directly or indirectly (i) engage in (as a
principal, shareholder, partner, director, officer, agent, employee, consultant
or otherwise) or be financially interested in any business operating within any
county within any state in the United States in which Company or any Affiliate
conducts business or within any county adjoining any such county (the
"Restricted Area"), which competes with Company or any Affiliate; provided,
however, that nothing contained in this Section 11 shall prevent Executive from
holding or owning (directly or indirectly) for passive investment no more than
ten percent (10%) of any class of equity securities of a company whose
securities are publicly traded on a national securities exchange or in a
national market system; or (ii) induce or attempt to influence any employee,
customer, independent contractor or supplier of Company or any Affiliate to
terminate employment or any other relationship with Company or any Affiliate.
Executive acknowledges that Company and its Affiliates intend to expand the
areas in which they conduct business. The Chairman of the Board shall notify
Executive in writing (i) within thirty (30) Business Days of Executive's
termination whether all or any part of the Restricted Period is being waived and
(ii) not less than thirty (30) Business Days prior to the end of the twelve (12)
month Restricted Period for Cause, whether such period is being extended by six
(6) months.
11.2. Executive shall not use for Executive's personal benefit, or
disclose, communicate or divulge to, or use for the direct or indirect benefit
of any person, firm, association or company other than Company, any
"Confidential Information," which term shall mean any information regarding the
business methods, business policies, policies, procedures, techniques, research
or development projects or results, historical or projected financial
information, budgets, trade secrets, or other knowledge or processes of or
developed by Company or any names and addresses of customers or clients or any
data on or relating to past, present or prospective Company customers or clients
or any other confidential information relating to or dealing with the business
operations or activities of Company, made known to Executive or learned or
acquired by Executive while in the employ of Company, but Confidential
Information shall not include information otherwise lawfully known generally by
or readily accessible to the trade or the general public. The foregoing
provisions of this Section 11.2 shall apply during and after the period when
Executive is an employee of Company and shall be in addition to (and not a
limitation of) any legally applicable protections of Company's interest in
confidential information, trade secrets and the like.
11.3. Any and all writings, inventions, improvements, processes,
procedures and/or techniques which Executive may make, conceive, discover or
develop, either solely or jointly with any other person or persons, at any time
when Executive is an employee of Company, whether or not during working hours
and whether or
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not at the request or upon the suggestion of Company, which relate to or are
useful in connection with any business now or hereafter carried on or
contemplated by Company, including developments or expansions of its present
fields of operations, shall be the sole and exclusive property of Company.
Executive shall make full disclosure to Company of all such writings,
inventions, improvements, processes, procedures and techniques, and shall do
everything necessary or desirable to vest the absolute title thereto in Company.
Executive shall write and prepare all specifications and procedures regarding
such inventions, improvements, processes, procedures and techniques and
otherwise aid and assist Company so that Company can prepare and present
applications for copyright or Letters Patent therefor and can secure such
copyright or Letters Patent wherever possible, as well as reissues, renewals,
and extensions thereof, and can obtain the record title to such copyright or
patents so that Company shall be the sole and absolute owner thereof in all
countries in which it may desire to have copyright or patent protection.
Executive shall not be entitled to any additional or special compensation or
reimbursement regarding any and all such writings, inventions, improvements,
processes, procedures and techniques.
11.4. Executive acknowledges that the restrictions contained in the
foregoing Sections 11.1, 11.2 and 11.3, in view of the nature of the business in
which Company is engaged, are reasonable and necessary in order to protect the
legitimate interests of Company, that their enforcement will not impose a
hardship on Executive or significantly impair Executive's ability to earn a
livelihood, and that any violation thereof would result in irreparable injuries
to Company. Executive therefore acknowledges that, in the event of Executive's
violation of any of these restrictions, Company shall be entitled to obtain from
any court of competent jurisdiction preliminary and permanent injunctive relief
as well as damages and an equitable accounting of all earnings, profits and
other benefits arising from such violation, which rights shall be cumulative and
in addition to any other rights or remedies to which Company may be entitled.
11.5. If the Restricted Period or the Restricted Area specified in Section
11.1 above should be adjudged unreasonable in any proceeding, then the period of
time shall be reduced by such amount or the area shall be reduced by the
elimination of such portion or both such reductions shall be made so that such
restrictions may be enforced for such time and in such area as is adjudged to be
reasonable. If Executive violates any of the restrictions contained in the
foregoing Section 11.1, the Restricted Period shall be extended by a period
equal to the length of time from the commencement of any such violation until
such time as such violation shall be cured by Executive to the satisfaction of
Company. Company shall have the right and remedy to require Executive to account
for and pay over to Company all compensation, profits, monies, accruals,
increments or other benefits derived or received by Executive as the result of
any transactions constituting a breach of this Section 11, and Executive shall
account for and pay over such amounts to Company upon Company's request
therefor. Executive hereby expressly consents to the jurisdiction of any court
within the Restricted Area to enforce the provisions of this Section 11, and
agrees to accept service of process by mail relating to any such proceeding.
Company may supply a copy of Section 11 of this Agreement to any future or
prospective employer of Executive or to any person to whom Executive has
supplied information if Company determines in good faith that there is a
reasonable likelihood that Executive has violated or will violate such Section.
11.6. During the Restricted Period, the following provisions shall apply:
(a) If Executive's employment is terminated by Company for Cause, no
compensation shall be payable or benefits provided to Executive during the
Restricted Period, unless the Chairman of the Board elects to extend the
Restricted Period by six (6) months, in which event Company shall be
obligated during such six (6) month extension to (i) pay Executive Base
Compensation and Incentive Compensation as if Executive remained employed
by Company during such six (6) month period, and (ii) provide all of the
welfare benefits to Executive that Company would have provided as if
Executive remained employed by Company during such period, unless Company
is prohibited from providing such benefits pursuant to applicable law.
(b) If Executive's employment is terminated for any reason other than
death, Disability or for Cause, Company shall continue to (i) pay Executive
during the Restricted Period, except with respect to any part of the
Restricted Period that has been waived by the Chairman of the Board, Base
Compensation and Incentive Compensation as provided herein as if Executive
remained employed by
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Company during the Restricted Period, and (ii) provide all of the benefits
to Executive that Company would have provided pursuant to Section 6 (but
excluding Section 6.1), as if Executive remained employed by Company during
the Restricted Period, unless Company is prohibited from providing such
benefits pursuant to applicable law.
(c) Notwithstanding the foregoing provisions of this Section 11.6,
Company may pay to Executive the cash equivalent of any benefit which
Company is otherwise obligated to provide Executive in lieu of providing
such benefit. The amount of cash which is equivalent to the providing of
any such benefit shall be determined by a qualified third party jointly
selected by Company and Executive.
12. Prior Agreements. Executive represents to Company: (a) that there are no
restrictions, agreements or understandings, oral or written, to which Executive
is a party or by which Executive is bound that prevent or make unlawful
Executive's execution or performance of this Agreement; and (b) none of the
information supplied by Executive to Company or any representative of Company or
placement agency in connection with Executive's employment by Company misstated
a material fact or omitted information necessary to make the information
supplied not materially misleading.
13. No Mitigation; No Offset. In the event of any termination of Executive's
employment under this Agreement, Executive shall be under no obligation to seek
other employment, and there shall be no offset against amounts due under this
Agreement on account of any remuneration attributable to any subsequent
employment that Executive may obtain.
14. No Set-Off. Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which Company or any other member of the Consolidated Group may have
against Executive or others.
15. Miscellaneous.
15.1. Binding Nature of Agreement. This Agreement is personal to
Executive and without the prior written consent of Company shall not be
assignable by Executive except that the post-employment benefits may be assigned
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by Executive's heirs and legal
representatives. This Agreement shall inure to the benefit of and be binding
upon Company and its successors and assigns, except that Company may not assign
its obligations under this Agreement without the written consent of Executive
except in connection with a merger, consolidation, asset sale or other
transaction involving the sale or other transfer of all or substantially all of
the business and assets of Company, but only if the successor or assignee
executes and delivers to Executive an instrument reasonably acceptable to
Executive pursuant to which the successor or assignee assumes all of Company's
obligations hereunder and further provided that Executive's acceptance of such
instrument regarding the merger, consolidation, asset sale or other transaction
shall not in any way affect Executive's rights hereunder, including, without
limitation, Executive's right to resign for Good Reason. Upon Company's
successor or assignee delivering the foregoing assumption instrument to
Executive, Company shall be relieved of its obligations hereunder except for
those accrued through the effective date of the assignment of Company's
obligations hereunder. Notwithstanding any assumption of Company's obligations
hereunder by a successor to Company's business, Company shall remain bound to
its obligations hereunder to the extent that such obligations are not performed
or discharged by such successor.
15.2. Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part,
unless the absence of such invalid or unenforceable provision materially alters
the rights or obligations of either party hereto.
15.3. Entire Agreement. This Agreement (including the Background Section
hereof) contains the entire understanding among the parties hereto with respect
to the subject matter hereof, and supersedes all prior and contemporaneous
agreements and understandings, inducements or conditions, express or implied,
oral or written, except as herein contained. The express terms hereof control
and supersede any course of
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performance and/or usage of the trade inconsistent with any of the terms hereof.
This Agreement may not be modified or amended other than by an agreement in
writing.
15.4. Notices. All notices, requests, consents, and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally, by overnight
courier such as Federal Express, or by confirmed facsimile transmission with a
hard copy deposited in first class mail the same day or the following day, as
follows (or to such other address as either party shall designate by notice in
writing to the other):
If to Company:
Technical Olympic USA, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Attn: Xxxxxxxxxxx Stengos, Chairman of the Board
Telephone Number: (000)000-0000
Facsimile Number: (000)000-0000
With a copy to:
Technical Olympic, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxx, General Counsel
Telephone Number: (000)000-0000
Facsimile Number: (000) 000-0000
Technical Olympic S.A.
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxx
Xxxxxx 00000 Xxxxxx
Attn: Yannis Delikanakis
Telephone Number: (000) 00 0 000-0000
Facsimile Number: (000) 00 0 000-0000
If to the Executive:
Xxxxxxx X. Mon
000 Xxxxxxxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxxx, XX 00000
Telephone Number: (000)000-0000
Facsimile Number: (000)000-0000
With a copy to:
Xxxxxxx X. Xxxxxxxxxx, Esq.
Fox, Rothschild, O'Brien & Xxxxxxx, LLP
X.X. Xxx 000
000 Xxxxxxxxxxxx Xxxxx
Xxxxx, XX 00000
Telephone Number: (000)000-0000
Facsimile Number: (000)000-0000
15.5. Governing Law; Forum; Legal Fees. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of
Florida applicable to agreements made and to be performed entirely in Florida.
Any action or suit related to this Agreement shall be brought in the state or
federal courts sitting in Ft. Lauderdale, Florida. Each party hereto irrevocably
agrees to service of process by certified mail, return receipt requested to the
address of such party set forth herein. If a party initiates legal
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proceedings to enforce this Agreement, the non-prevailing party in the
proceedings shall pay to the prevailing party, upon demand, all costs and
expenses, (including reasonable legal fees and costs) incurred by the prevailing
party as a result of the proceedings (i.e. "loser pays").
15.6. Decisions by Chairman of the Board. It is understood and agreed
that any action taken or decision rendered by the Chairman of the Board
hereunder shall be deemed to be duly authorized by and binding on Company,
except to the extent Executive has actual knowledge that such action or decision
by the Chairman is contrary to any action or decision of the Board. Executive
shall be entitled to rely exclusively upon the provisions of this Section 15.6
without requiring Executive to verify or investigate the authority of the
Chairman of the Board to render such decision. Except as provided above, Company
hereby waives any defenses or other remedies that may be available against
Executive to negate or disaffirm any action or decision of the Chairman of the
Board hereunder.
15.7. Headings. The article and section headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
15.8. Amendment. This Agreement may be amended, modified, superseded,
canceled, renewed, or extended and the terms or covenants of this Agreement may
be waived, only by a written instrument executed by both of the parties, or in
the case of a waiver, by the party waiving compliance.
15.9. Waiver. The failure of either party at any time or times to require
performance of any provision of this Agreement shall in no manner affect the
right at a later time to enforce the same. No waiver by either party of the
breach of any term or covenant contained in this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such breach, or a waiver of the breach
of any other term or covenant contained in this Agreement.
15.10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original and all of which taken
together shall constitute one and the same instrument.
15.11. Withholding. Company shall withhold from all payments hereunder
all taxes that Company is required by law to withhold with respect to
compensation and benefits paid or provided to Executive.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
TECHNICAL OLYMPIC, INC.
By: /s/ XXXXXXXXXXX STENGOS
------------------------------------
Xxxxxxxxxxx Stengos,
Chairman of the Board
/s/ XXXXXXX X. MON
------------------------------------
Xxxxxxx X. Mon
E-17
ATTACHMENT A
NEXTERA REPORT AND FORMS OF STOCK OPTION AND ANNUAL GRANT AGREEMENTS
[ATTACHED]
Company and Executive have agreed that Company will grant to Executive the
Sign On Stock Option, Front End Stock Option and Performance Accelerated Vesting
Stock Option (the "Options"), all as set forth in the attached grant agreements,
subject to shareholder approval of the Annual and Long-Term Incentive Plan. The
parties have further agreed that if on the Commencement Date the fair market
value per share of the Class A common stock of Company is greater than $14.87
per share, instead of a grant of the Options on that date, Company shall have a
six month period during which it can elect at any time, in its sole discretion,
to grant the Options to Executive with an exercise price at the then fair market
value per share of the stock, except that the exercise price of Tranche I of the
Front End Stock Option shall be 10% higher than the grant date fair market value
of the stock, the exercise price of Tranche II of said option shall be 10%
higher than the exercise price for Tranche I, and the exercise price of Tranche
III of said option shall be 10% higher than the exercise price for Tranche II.
In the event the fair market value of the stock exceeds $14.87 per share on the
date of such Option grants, the number of shares subject to each such grant (and
each Tranche, where applicable), as reflected in the attached grant agreement
drafts, shall be increased by the percentage that the fair market value exceeds
$14.87, e.g., if the fair market value is $17.84 on the grant date, the number
of share subject to each option shall be increased by 20%. In all events,
Company shall make such grants to Executive not later than the earlier of (i)
six months after the Commencement Date or (ii) a Change of Control.
In addition to the foregoing, the exercise prices and the number of shares
reflected in each of the attached draft Option grant agreements are premised on
the number of shares of Class A and Class B common stock of Company being 32.2
million shares on the Commencement Date and the value agreed to for Company
being $478,814,000 (120% of the book value of $399,000,000 as reflected in page
14 of the Nextera Report). To the extent the number of such shares on that date
either exceeds, or is less than, 32.2 million shares, an equitable adjustment
shall be made in the exercise prices and the number of shares subject to each of
the Options as determined by Nextera and consistent with the Nextera Report.
E-18
ATTACHMENT B
XxxxXxxxx.xxx, Inc., a Delaware corporation, Investor and Advisory Board Member
University of Vermont -- Vice Chairman Scholarship Fund Committee
Christian Brothers Academy -- Trustee
Boy Scouts of America, Western Region -- Member Advisory Board (ends March 31,
2002)
California Big Brothers of America -- Honorary Trustee
E-19
