XXXX MARKETS, INC.
0000 X. Xxxxxx Xx. X. X. Xxx 000 Xxxxxxx, XX 00000-0000
As of March 5, 2001
FROM: Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
TO: Xxxxxx Xxxxxxxx
RE: Employment Agreement ("Agreement")
Dear Xx. Xxxxxxxx:
This is to confirm our understanding regarding your employment with Xxxx
Markets, Inc. (the "Company") on the terms stated herein and in accordance
with the terms of employment contained in the letter from Xxxxxx X. Xxxx,
dated February 22, 2001, which are incorporated herein by reference. The
Company agrees to employ you as vice president and chief operating officer
until March 5, 2004 to perform such executive duties as are consistent with
the position of vice president and chief operating officer. The Company will
expect you during such time to diligently and conscientiously devote your full
time to such employment and to devote your best efforts in discharging your
duties of the Company.
The Company currently expects the President and Chief Executive Officer
of the Company to retire on or before January 31, 2003. The Company expects
that you will be considered to assume such positions upon his retirement,
taking into account your performance before such date and such other factors
as the Board of Directors of the Company considers relevant in its sole
discretion. If you are offered such positions, it will be on terms and
conditions commensurate therewith.
During the term of your employment, for your services, the Company will
pay you a salary at a monthly rate of not less than $29,166.67 per month
(less all amounts required to be withheld and deducted), subject to increase
from time to time at the discretion of the Compensation Committee of the Board
of Directors. In addition, you will be entitled to participate in the
Company's 401(k) Plan, SERP and Incentive Stock Option Plan, all other
incentive, savings and retirement plans, practices and programs applicable
generally to other peer executives of the Company and to receive coverage
under the Company's health, life, and disability insurance policies and to
participate in any other welfare plans, practices or policies and to receive
any other fringe benefits and vacation provided by the Company to other peer
executives of the Company.
If the Company experiences a change of control:
(i) as a result of the consummation of a reorganization, merger
or consolidation involving the Company, or sale or disposition of all
or substantially all of the assets of the Company unless, following
such transaction, all or substantially all of the persons with
beneficial ownership (as defined in Rule 13(d)-3 of the Securities and
Exchange Act of 1934, as amended (the "Act") aggregating 50% or more
of the Company's outstanding Common Stock as of the date of this
Agreement continue to own beneficially at least 50% of the successor
corporation's outstanding Common Stock (including a corporation which
as a result of such transactions owns all of or substantially all of
the assets of the Company),
(ii) as a result of the acquisition by any person or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Act) of beneficial
ownership (within the meaning of Rule 13d-3 of the Act) aggregating
50% or more of the outstanding Common Stock of the Company, or
(iii) in the event that individuals who as of the date hereof
constitute the Board (the "Incumbent Board"), cease to constitute at
least a majority of the Board (provided that a director subsequently
elected or nominated for election contest or other threat to the
composition of the then Incumbent Board, shall be considered a member
of the Incumbent Board),
and if, following such change of control (a) your employment is terminated by
the Company other than for Cause (defined below), or (b) you are asked to
relocate geographically to a location that is outside of a 60-mile radius from
the present location of the Company, or (c) your responsibilities or status
are substantially changed from those which you had within the six months prior
to the change of control (excluding for this purpose an isolated,
insubstantial and inadvertent action which is remedied promptly following
notice thereof given by you)(such events described in (a), (b) or
(c) hereinafter being referred to as a "Termination"), you may terminate your
employment with the Company.
Following a Termination under such circumstances, the Company will
continue to pay you, for the balance of the term of this Agreement, on the
same periodic basis as your salary was paid to you prior to the date of
Termination, an amount (less all amounts required to be withheld and deducted)
equal to the higher of (i) the rate of salary you were receiving from the
Company as of immediately preceding the date of such change of control, or
(ii) the rate of salary you were receiving from the Company as of immediately
preceding the date of such Termination. You will also be entitled to receive
such benefits as you were vested in as of the date of Termination. Subject
to the limitations in the following sentence, the Company will provide you,
at no cost to you, with health coverage comparable to that which you had
prior to the change of control, for the term of the contract, or the first
day of the first month in which you obtain new employment providing health
benefits coverage. The Company will attempt to continue your coverage under
its then-existing health insurance policy to the extent permitted by the
insurance company and by law or, if not so permitted, the Company will seek
alternative comparable coverage.
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Notwithstanding the foregoing, if you engage in "competition" with the
Company, you shall no longer be entitled to receive any payments or benefits
from the Company pursuant to this paragraph or otherwise. "Competition" shall
mean competition in the capacity of proprietor, employee, officer, director,
consultant, independent contractor or shareholder with any business in which
the Company is engaged at the time of such competition unless specifically
authorized by the Company's Board of Directors.
In the event that, following such Termination and before March 5, 2004,
you become employed by a third party as an employee, consultant, independent
contractor, agent or otherwise, any amounts owed to you under this Agreement
as periodic payments, shall be reduced by an amount equal to any amounts
received from such third party.
For purposes of this Agreement, the term "Cause" shall mean, in the
determination of the Board of Directors of the Company, (i) your death;
(ii) your physical or mental disability which prevents you from performing
your duties hereunder for any period of 90 or more consecutive calendar days
or 60 working days in any 120 consecutive calendar day period; (iii) your
conviction of, or pleading guilty or no contest to, a felony or other crime
having as its predicate element fraud or moral turpitude; (iv) your
commission of any wrongful act resulting in your personal enrichment at the
expense of the Company, or other illegal or gross misconduct that is
materially and demonstrably injurious to the Company; or (v) your breach of
this Agreement.
This Agreement and your employment may be terminated by the Company at
any time for Cause, subsequent to which you will be entitled to no payments
or benefits from the Company pursuant to this Agreement or otherwise. This
Agreement shall be binding upon and inure to the benefit of both parties and
on all successors and assigns of the Company, shall be governed by the law of
Pennsylvania and may only be amended by a writing signed by both parties.
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If this letter correctly describes our understanding, please sign two
copies of this letter and return a copy to my attention.
Sincerely,
Xxxx Markets, Inc.
By: //XXXXXX X. XXXX
-----------------------------
Xxxxxx X. Xxxx
Chairman & Treasurer
By: //XXXXXX X. XXXX
-----------------------------
Xxxxxx X. Xxxx
President
Agreed to and Accepted: Date:
--------------------
//XXXXXX XXXXXXXX
---------------------------------
Xxxxxx Xxxxxxxx
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