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Exhibit 10.3
EMPLOYMENT AGREEMENT
(Xxx X. Xxxxxxxx)
THIS AGREEMENT is made as of July 24, 1995 by and between WCI COMMUNITIES
LIMITED PARTNERSHIP, a Delaware limited partnership ("Employer") and XXX X.
XXXXXXXX ("Employee").
RECITALS
Employer and its affiliated entities are in the business of acquiring,
improving, developing, leasing and selling land and operating businesses related
to or arising out of the land activities. Employer desires to employ Employee in
a senior executive capacity and Employee desires to accept such employment on
the terms and conditions provided in this Agreement.
NOW, THEREFORE, in consideration of the agreements set forth herein, the
parties agree as follows:
1. Definitions
1.1 Affiliate - Each subsidiary, joint venture or other entity in which
either Employer or the general partner of Employer now has or
hereafter has a direct or indirect controlling equity interest.
1.2 Base Compensation - Five Hundred Thousand Dollars ($500,000) per
year, to be paid in equal monthly installments.
1.3 Benefit Allowance - Twenty percent (20%) of Base Compensation, to be
paid in equal monthly installments in lieu of employee welfare
benefits provided by Employer for executives and employees for
health, life and disability insurance, 401(k) savings plans and
other similar benefit programs.
1.4 Board - the board of directors of Investors or WCI, Inc., which is
or shall become the general partner of Employer.
1.5 Cause -
(a) gross negligence or willful or criminal misconduct in the
performance by Employee of his duties and responsibilities
hereunder, including the supervision of others; or
(b) negligence in the performance of his duties or supervision of
others; or
(c) conviction of Employee of the commission of any act which is a
felony; or
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(d) failure by Employee to devote the time necessary to the
performance of his duties hereunder, as determined by the
Board in its sole discretion, not to exceed 100% of business
time.
1.6 Disabled - Employee shall be deemed Disabled if he is unable to
perform his duties hereunder for a period in excess of one hundred
eighty (180) consecutive days, and in such case the date on which he
shall be deemed Disabled shall be the 181st day.
1.7 Partnership Agreement - The Agreement of Limited Partnership of the
Employer.
1.8 Pre-Disability Period - A period beginning on the date when the
Board determines, in good faith, that as a result of illness,
impairment or other disability, Employee is unable to perform
substantially all of the material duties of his employment
hereunder, and ending on the first to occur of (a) the 181st day
after such date of determination (b) the date Employee is Disabled
(c) the date when a court or competent jurisdiction shall finally
determine that Employee is able to perform all of the duties of his
employment hereunder and (d) the date that the Board determines that
the Pre-Disability Period has ended.
1.9 Severance Payment - the net present value of the unpaid Base
Compensation for the period from the date of termination under
Section 5.1. to the tenth (10th) anniversary of the date hereof,
determined on the date of termination at a discount rate of eight
percent (8%) per annum.
1.10 Term - a period of ten (10) years, beginning on the date hereof and
ending on the tenth (10th) anniversary of the date hereof.
2. Employment
Subject to all of the terms and conditions herein provided, Employer
hereby employs Employee in such executive capacities, and with such appropriate
duties as the Employer may determine from time to time. Initially, Employee
shall serve as Executive Vice President of Employer if and when appointed to
that position by Employer. If elected to the position of Chairman of the Board
of the general partner of Employer, Employee shall also serve in that position
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(provided, however, that Employee's election to the position of Chairman of the
Board, and subsequent removal of the Employee from that position shall not
constitute termination of employment for purposes of this Agreement). Employee
shall be subject to the supervision, direction and control of the Board and
shall report to the Board as a whole. The Board shall not appoint any individual
to whom Employee shall report, or who shall have the right to supervise
Employee, provided, however, that this provision shall not limit the right of
the Board to designate a person or persons (who shall be a member of or members
of the Board) to coordinate the reporting relationship. Employee's duties and
authority may be expanded or curtailed in whole or in part at any time and from
time to time by the Board. Employer will provide Employee with written notice
specifying the extent to which his duties or authority is modified,
Notwithstanding the foregoing, if the Board changes Employee's working
conditions or specifies duties so that Employee's powers and duties are
materially inconsistent with a senior level executive who reports directly to
the board of directors, or if the Board changes the reporting relationship so
that Employee reports to another officer or person, other than to the Board as a
whole, then at any time thereafter at Employee's option and upon thirty (30)
days notice and provided that such changes shall not have been rescinded or
corrected to the reasonable satisfaction of Employee within such thirty (30) day
period, Employee shall have the right to terminate the employment relationship,
and in such event, the employment shall be deemed to have been terminated by
Employer under Section 5.1, without Cause; provided, however, that nothing in
this sentence shall restrict the Board from changing duties and reporting
relationships during the pendency of a Pre-Disability Period, and during such
period, Employee shall not have the right to terminate the employment
relationship under this sentence.
3. Period of Employment
Except as specifically otherwise provided herein, Employee's employment
shall commence as of the date hereof and shall continue throughout the Term.
4. Compensation
4.1 During the Term, Employer shall pay to Employee Base Compensation plus
the Benefits Allowance.
4.2 During the Term, Employer shall pay to or reimburse Employee for the
cost and expense to Employee for:
(a) reasonable expenses incurred in the performance of Employee's
duties for travel,
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room and board and entertainment related to the business of
the Employer and its Affiliates;
(b) $15,000 paid quarterly as an allowance for secretary, office
and administrative staff, which payment and amount shall be
subject to review and modification by the Board on an annual
basis; and
(c) the reasonable costs for relocation, moving and costs for
temporary housing in the Naples, Florida, area until such time
as Employee permanently relocates to the Naples, Florida area.
No amounts shall be paid under this Section 4.2 following termination of
employment for any reason, except to the extent incurred by Employee prior to
the date of termination.
5. Termination of Employment
5.1 Termination without Cause - The Board may at its election and without
Cause terminate Employee's employment, upon not less than thirty (30) days
notice to Employee. Termination shall be effective at the end of the notice
period. If Employee's employment is terminated under this Section 5.1, on the
date such termination of employment is effective, Employer shall at its option,
either pay Employee the Severance Payment, or continue to pay to Employee Base
Compensation for the balance of the Term, on a monthly basis, as though no
termination had occurred. In either case, termination shall not affect
Employer's obligations under this Agreement to pay to Employee the Benefit
Allowance for the balance of the Term based upon the Base Compensation paid to
Employee immediately prior to termination, and Employer shall pay such amounts,
on a monthly basis, as though no termination had occurred.
5.2 Voluntary Resignation Prior to Expiration of Repurchase Option. If
Employee voluntarily resigns prior to the time that the "Repurchase Option" with
respect to the Employee as defined under Section 7.6 of the Partnership
Agreement expires without being exercised, then Employer shall have no further
obligations to Employee for payment of Base Compensation, Severance Payment or
Benefit Allowance, and all payments and obligations of Employer to Employee
under this Agreement (except those incurred or accrued prior to resignation and
for indemnification under section 10) shall cease as of the effective date of
such resignation.
5.3 Voluntary Resignation, Disability or Death. If Employee voluntarily
resigns (except as provided in Section 5.2), becomes Disabled or dies during the
Term (any of which are referred to herein as an "Employee Terminating Event"),
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Employee shall continue to receive Base Compensation, reduced as follows:
(a) If the Employee Terminating Event occurs prior to the third
anniversary of the date hereof, then effective upon such Employee
Terminating Event, each payment of Base Compensation thereafter will be
reduced by 75%;
(b) If the Employee Terminating Event occurs after the third
anniversary of the date hereof but prior to the sixth anniversary of the
date hereof, each payment of Base Compensation thereafter will be reduced
by 50%;
(c) If the Employee Terminating Event occurs after the sixth
anniversary of the date hereof, each payment of Base Compensation
thereafter will be reduced by 25%; and
in any of such cases, Employee shall also be entitled to receive, and shall
receive, Benefit Allowance based on such reduced amount. Employer shall have the
right and option to accelerate and prepay the entire amount to be paid under
Section 5.3(a), (b) or (c), as the case may be, within thirty (30) days after
the Employee Terminating Event, in which case the amount to be paid will be
discounted at the rate of eight percent (8%) per annum.
5.4 Termination for Cause.
(a) The Board may at its election and at any time terminate
Employee's employment for Cause under Section 1.5(a), 1.5(b) or 1.5(c),
which termination shall be effective on notice.
(b) If the Board determines, in good faith, that Employee is not
devoting the time necessary to the performance of his duties hereunder, it
may notify Employee of such determination, which notice shall state the
percentage of business time, not in excess of 100%, which the Board shall
require from Employee, and in such case, Employee shall have a reasonable
period, in the determination of the Board, to satisfy such Board
requirement. If, after the expiration of such reasonable period of time,
the Board determines that Employee shall not have satisfied the
requirements of the notice given under this Section 5.4(b), the Employee's
employment shall be terminated for Cause under Section 1.5(d), effective
upon notice to Employee of such determination,
(c) If Employee's employment shall have been terminated under
Section 5.4(b), Employee may within sixty (60) days of the effective date
of any such termination, file a legal proceeding in any court of competent
jurisdiction, to determine whether with respect to such termination for
Cause (x) the Board's
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determination thereof was in good faith and/or (y) the Board in its notice
was requiring more than 100% of the Employee's business time; provided,
however, that Employee expressly agrees and acknowledges that the
determination of the amount of business time necessary for the performance
of Employee's duties hereunder (but not whether the determination of such
amount was made in good faith) will be in the sole discretion of the Board
and will not be an element of determination in any legal proceeding.
During the pendency of any such proceeding (including the period between
termination and the commencement of such proceeding), the payments which
would be due to Employee but for such termination shall be deposited by
Employer in an interest bearing account. The interest shall be deemed
attributable during the pendency of such proceeding to the Employer. If
Employee is successful in such proceeding, the amount in such account
(including the interest thereon) shall be paid to Employee at the time a
final nonappealable judgment is issued for Employee, Employer shall be
deemed to have terminated the employment of Employee without Cause at the
time of the entry of such judgment, and Employer shall thereafter pay to
Employee the Severance Payment as of the date of entry of such judgment
and the Benefit Allowance for the balance of the Term. If Employer is
successful in such proceeding, the amount in such account (including the
interest thereon) shall be paid to Employer at the time a final
nonappealable judgment is issued for Employer.
(d) Upon termination for Cause, Employer shall have no further
obligations to Employee for payment of Base Compensation, Severance
Payment or Benefit Allowance, and all payments and obligations of Employer
to Employee under this Agreement (except those incurred or accrued prior
to termination and for indemnification under Section 10) shall cease as of
the date of such termination.
6. Non-Competition
Employee agrees that during the period of his employment and for a period
of three (3) years after termination of employment, he will not be a
shareholder, partner, joint venturer or other equity owner in, or sole
proprietor of, or officer, director, employee, consultant, agent or
representative of, or otherwise engage, directly or indirectly, in any business
which is competitive with the business conducted by Employer and its Affiliates
at the date of termination of employment; provided, however, that this provision
shall not apply to (i) Employee's serving as officer and director of, owning
equity and debt interests in and investing in Florida Design Communities, Inc.
("Florida Design") and in all subsidiaries, joint ventures and other entities in
which Florida Design and its controlling
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stockholders now or hereafter has a controlling equity interest ("Florida Design
Affiliates") and (ii) the ownership of not more than five percent (5%) of any
publicly traded entity (or if such publicly traded entity is the acquiring
entity of Florida Design, such percent as Employee may have received in such
acquisition). During the term of Employee's employment hereunder, any real
estate investment which comes to the attention of Employee shall first be
offered to the Employer, and if rejected by the Board may be offered to Florida
Design or to any Florida Design Affiliate. After termination of Employee's
employment hereunder and during the three (3) year noncompete period, Employee
shall not be actively involved through Florida Design or any Florida Design
Affiliate in any new business which is in direct competition with Employer's
business on the date of termination, unless Employee shall first offer the
business opportunity to Employer and Employer shall elect to not pursue such
opportunity.
7. Nonsolicitation
Employee agrees that during the term of his employment, and for a period
of three (3) years after termination of employment, he shall not solicit any
employee of Employer to accept employment with Employee or with any other
person; provided, however, that this provision shall not apply to any person who
shall have been an employee of Employee or any Florida Design Affiliate prior to
the date of this Agreement and whose employment was in the nature of executive
assistant or executive secretary to Employee.
5. Confidentiality
Employee agrees that during the period of his employment and for the
period following termination of employment for so long as Employee is a limited
partner of Employer, he shall not use or disclose to third parties any
confidential information of Employer or any Affiliate. All files, records
documents, data and similar items relating to Employer and Affiliates, as well
as all copies thereof, whether prepared by Employee or otherwise coming into his
possession, shall remain the exclusive property of the Employer and shall
immediately be returned to Employer upon termination of Employee's employment.
9. Remedy
Employee acknowledges that the restrictions contained in sections 6 and 7
of this Agreement are reasonable and necessary to protect the legitimate
interests of Employer, do not cause Employee undue hardship, and that violations
of those provisions of this Agreement will result in irreparable injury to
Employer and that, therefore, Employer shall be entitled to preliminary and
permanent injunctive relief without bond in any court of competent jurisdiction
to enforce
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such provisions, which rights shall be cumulative and in addition to any other
rights or remedies to which Employer may be entitled. The prevailing party in
any litigation to enforce the terms of this Agreement shall be entitled to
recover reasonable costs and expenses, including attorneys' fees.
10. Notices
All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be delivered personally, by
courier service, or mailed by postage prepaid certified U.S. mail, return
receipt requested, to the address herein designed or such other address as may
be designated in writing by notice given in the manner provided herein, and
shall be effective if delivered or sent by courier upon personal delivery; or if
mailed, three days after the date of deposit in the U.S. mail.
11. Indemnity
Employer shall indemnify Employee and hold him free and harmless from and
against any and all loss, liability, cost or expense resulting to Employee, or
to which he may be or become subject, as a result of any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (but not including any action between Employer and Employee, other
than an action in the nature of a derivative action in the right of the
Employer) by reason of any acts, omissions, or alleged acts or omissions,
arising out of his activities as officer, employee or agent of Employer, as a
director, officer or agent of any general partner of Employer or of any
Affiliate, or otherwise arising out of his activities on behalf of Employer or
any Affiliate or in furtherance of the interests of Employer or any Affiliate,
against expenses for which he has not otherwise been reimbursed (including
attorney's fees, judgments, fines and amounts paid in settlement) actually and
reasonably incurred by him in connection with such action, suit or proceeding so
long as he did not act fraudulently, or in a manner which constituted willful
misconduct or gross negligence, or, with respect to any criminal action or
proceeding, had no reasonable cause to believe such conduct was unlawful. During
the course of any investigation, proceeding or other matter (other than an
investigation, proceeding or other matter brought by the Employer directly
against the Employee or brought by the Employee directly against the Employer),
Employer shall pay the legal fees and expenses of Employee, notwithstanding that
at the time of such payment it shall not have been finally determined whether
Employee is actually entitled to indemnification, provided Employee agrees to
reimburse Employer if it is finally determined that he was not entitled to such
indemnification.
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12. Miscellaneous Provision
12.1 Binding Effect and Assignability. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
administrators, executors, legal representatives, successors, assigns, and
transferees. Employee shall have the right to pledge any and all of his rights
under this Agreement.
12.2 Insurance. In the event the Employer procures a term life insurance
policy for the benefit of Employer in the amount of five million dollars
($5,000,000) on the life of Employee, Employee agrees to pay (by a reduction of
the Benefit Allowance) one-half of each annual premium on such policy at all
times when Employee is an employee of Employer. If for any reason any such
policy is cancelled and there is a premium refund with respect to any premium
paid by Employee, Employee shall be entitled to his prorata share of such
refund. The agreements in this Section 11.2 are based upon the assumption that
the Employer will be able to obtain a life insurance policy with a premium of
approximately $60,000 per year, fixed for five years. If the Employer is unable
to obtain such insurance for such premium, then the parties will use
commercially reasonable best efforts, to make other mutually acceptable and
equitable arrangements, which may include a change in the terms of the
"Repurchase Option" as defined under the partnership Agreement.
12.3 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
supersedes any and all prior or contemporaneous agreements, either oral or in
writing, with respect to the subject matter hereof; provided, however, that this
Agreement does not supersede any written agreement between the Employer and
Employee relating to Employee's ownership interests and Employer's repurchase
rights with respect to equity interests in Employer. No modification, amendment
or waiver of any provision of this Agreement shall be binding upon any party
unless it is in writing and executed by both parties or, in the case of a
waiver, by the party waiving compliance.
12.4 Severability. Whenever possible, each provision of this Agreement
shall be construed and interpreted in such a manner as to be effective and
valid. If any court determines that any provision is prohibited by or invalid
under applicable law, such provision shall automatically be reformed to such
time, territory and/or other limitation as such court shall deem reasonable. The
reformation or invalidation of any provision shall not invalidate this Agreement
or any other provision.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
first above written.
WCI COMMUNITIES LIMITED
PARTNERSHIP
/s/ Xxx X. Xxxxxxxx By: A & D COMMUNITIES, INC.
----------------------------- The General Partner
Xxx X. Xxxxxxxx
By: /s/ Xxxxxx Xxxxxxx, Xx.
Address: -------------------------------
c/o Chandelle Ventures
00 Xxxxxx Xxxxxx , Xxx 000 Address:
Xxx Xxxxxx, XX 00000
000 Xxxxxx Xxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
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