Contract
Exhibit
10.1
This is
an EMPLOYMENT AGREEMENT
(the “Agreement”), dated as of May 12, 2008, by and between KENT FINANCIAL SERVICES, INC.,
a Nevada corporation (the “Company”), and Xxxx X. Xxxxxxx (the
“Executive”).
Recitals
The
Executive currently serves as Chairman of the Company. The
Company desires the Executive to continue to serve as the Company’s Chairman,
and the Executive desires to continue to serve the Company as its Chairman, on
the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties
agree as follows:
1.
Employment. The
Company hereby employs the Executive as Chairman of the Company, and the
Executive hereby accepts such employment, upon the terms and conditions set
forth herein.
2.
Duties and
Powers.
2.1 Duties. The
Executive shall serve as Chairman of the Company and perform the duties of
Chairman as defined in the Bylaws of the Company in effect on the date of this
Agreement. The Chairman shall receive the compensation provided
herein notwithstanding any future amendment to the Bylaws of the Company which
diminishes or alters the duties of the Chairman of the
Company. The Executive shall not be required to devote his
entire working time to the business of the Company, and may devote time to other
business interests, including directorships of other companies public and
private.
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2.2 Service
as Director. If elected,
the Executive shall serve as a director of the Company without additional
compensation, and shall have the right at any time to serve as a director of any
subsidiary of the Company.
3.
Term of
Agreement. The
initial term of employment under this Agreement shall be three years commencing
effective as of May 12, 2008 (the “Effective Date”) and shall extend until May
12, 2011 unless sooner terminated pursuant to Section 6 below. The
term of the Executive’s employment under this Agreement shall be automatically
extended one day for each day elapsed after the Effective
Date. Employment of the Executive by the Company prior to the
Effective Date shall, subject to the terms and conditions of the benefit plans
and arrangements referred to in section 5.1 below, be counted in determining the
Executive’s continuous service with the Company for purposes of any benefit
computation.
4.
Compensation. For
all services rendered by the Executive under this Agreement, the Company shall
pay the Executive an annual salary of $240,000 (the “Base Salary”), payable in
equal semi-monthly installments. The Board of Directors of the
Company shall from time to time review the compensation to be paid to the
Executive under this Agreement and shall increase (but not decrease) the
compensation in such amounts, if any, as the Board of Directors
determines.
5.
Benefits, Expenses,
Reimbursement, etc.
5.1 Benefit
Plans. The
Company shall provide the Executive with such medical and disability insurance,
hospital insurance and group life insurance and other benefits made available to
executive level employees of the Company, subject to the terms and conditions of
such benefit plans and arrangements. In the event of the Executive’s
death, the Company shall provide the same benefits to the Executive’s spouse at
Company expense for a period of three years commencing with the date of the
Executive’s death.
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5.2 Expenses. The
Company shall pay all expenses incurred by the Executive in furtherance of or in
connection with the business of the Company and its subsidiaries and affiliates
including, without limitation, all (i) travel and living expenses while away
from home on business or at the request and in the service of the Company or its
subsidiary or affiliate, and (ii) entertainment expenses, upon submission of
appropriate receipts or vouchers and in accordance with the standard expense
reimbursement policies of the Company as in effect from time to
time. If any such expenses are paid by the Executive, the Company
shall reimburse him promptly for those expenses. The Executive
shall also be entitled to reimbursement for the annual fee(s) of any credit
cards the Executive acquires for use in charging expenditures incurred in the
performance of his duties under this Agreement.
Vacations. The
Executive shall be entitled each year to a vacation of four weeks (twenty
working days), during which time his compensation shall be paid in full and such
holidays and other non-working days as are consistent with the policies of the
Company for executives generally. All vacations shall be
scheduled so as to cause minimal interference with the operations of the
Company. If the Executive’s employment under this Agreement is
terminated pursuant to Section 6, the Executive shall be entitled to payment for
all untaken vacation days.
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Death
Benefits. In
the event of the Executive’s death during the term of this Agreement or
thereafter during the period of any disability described in Section 5.5(C), the
Company shall pay to such beneficiaries as the Executive shall designate in
writing prior to the Executive’s death, or if he fails to designate a
beneficiary, to the Executive’s spouse, or, if none, to the Executive’s estate,
an annual benefit equal to three times the Executive’s Base Salary (the “Death
Benefit”). The Death Benefit shall be payable in equal monthly
installments for a period of 3 years, commencing on the first day of the next
month following the month in which the Executive’s death
occurs. Payments made pursuant to this Section 5.4 shall be
made in lieu of any and all payments provided for in Section 4 of this
Agreement.
Disability.
A. The
Executive shall be paid such benefits to which he is entitled under the terms of
such long-term disability insurance as the company has provided under Section
5.1 of this Agreement. However, if at any time during the term
of this Agreement (i) the Company is not providing the Executive with long-term
disability insurance coverage, or (ii) the amount of coverage provided pays
benefits less than an annual benefit of 80% of the Executive’s Base Salary,
which the Executive is being paid prior to the commencement of disability
benefits, or (iii) fails to pay benefits to age 80, and the Executive suffers
from a Condition (defined below), then the Executive shall be paid the amount
specified in Section 5.5(B) of this Agreement.
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B. If
during the term of this Agreement (i) the Executive shall be deemed disabled and
unable to perform his duties hereunder by an insurance company under any
disability insurance policy covering the Executive, (ii) the Executive suffers
any illness, disability or incapacity which renders him unable to perform his
duties hereunder and such illness, disability or incapacity is deemed by a duly
licensed physician (who may be the Executive’s personal physician) to be
permanent, or (iii) the Executive is unable to render services to the Company of
the nature required by this Agreement because of illness, disability or
incapacity for a period of 90 days, whether or not such days are consecutive,
during any year of the term hereof (each of the events described in paragraphs
(i), (ii) and (iii) above being defined as a “Condition”), then the Executive
shall continue to use his best efforts to render advisory and consulting
services as he is able and as may be reasonably requested by the Company and the
Company shall pay to the Executive disability payments equal to the difference,
if any, between 80% of the Executive’s Base Salary and the amount the Executive
actually receives under the Company’s long-term disability insurance
policy. The disability payments shall be paid to the Executive
in equal monthly installments until the Executive attains age
80. The total amount payable to the Executive under this
Section 5.5(B) shall be the “Disability
Benefit”. Such payments shall commence on the first day of the
month following the month in which the Condition occurs and shall be made even
if the Executive is unable to render any services to the
Company. Such payments shall be paid in lieu of any and all
compensation provided for in Section 4 of this Agreement.
C. In
the event of the Executive’s death at any time during the period in which
payments in respect of the Disability Benefit are required to be paid pursuant
to Sections 5.5(A) and 5.5(B) above, the Company shall cease paying any such
payments and shall pay the Death Benefit provided in Section
5.4.
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6.
Termination. The
Executive’s employment hereunder may be terminated only under the following
circumstances:
6.1 Cause. The
Company may terminate the Executive’s employment hereunder for “cause” upon not
less than five days prior written notice of such termination. For
purposes of this Agreement, the Company shall have “cause” to terminate the
Executive’s employment hereunder upon (A) the continued failure by the Executive
to substantially perform his duties hereunder (other than any such failure
resulting from the Executive’s incapacity due to physical or mental illness or
the removal of the Executive’s office to a location more than 5 miles from its
current location), which failure has not been cured (i) within three days after
a written demand for substantial performance is delivered to the Executive by
the Company that specifically identifies the manner in which the Company
believes the Executive has not substantially performed his duties (the “Three
Day Period”), or (ii) in the event such failure cannot be reasonably cured
within the Three Day Period, within 20 days thereafter, provided that the
Executive promptly commences and thereafter diligently prosecutes the cure
thereof, or (B) the Executive’s conviction of any criminal act or fraud with
respect to the Company. Notwithstanding the foregoing, the
Executive’s employment may not be terminated for cause unless and until the
Company has delivered to the Executive a copy of a resolution duly adopted by
the affirmative vote of not less than 80 percent of the entire Board of
Directors at a meeting of the Board (of which the Executive was given at least
20 days prior written notice and an opportunity, together with his counsel, to
be heard before the Board), finding that in the good faith opinion of the Board,
the Executive has not substantially performed his duties (which failure shall be
described in detail) and such failure has not been cured within the period
described in (ii) above. In addition, the Company shall not
have cause to terminate the Executive’s employment hereunder as a result of any
event occurring prior to the date hereof and previously disclosed to the
Company. The burden of establishing cause shall be upon the
Company.
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6.2 Termination
by the Executive. The
Executive may terminate his employment hereunder for “good reason” upon not less
than five days prior written notice to the Company. For
purposes of this Agreement, “good reason” shall mean the continued failure by
the Company to perform its obligations under this Agreement (including any
material change by the Company in the duties, responsibilities and powers of the
Executive as set forth herein or the removal of the Executive’s office to a
location more than 5 miles from its current location) which failure has not been
cured (i) within three days after a written demand for performance is delivered
to the Company by the Executive that specifically identifies the manner in which
the Executive believes the Company has not performed its obligations (the “Three
Day Period”), or (ii) in the event such a failure cannot be reasonably cured
within the Three Day Period, within twenty (20) days thereafter provided that
the Company promptly commences and thereafter diligently prosecutes the cure
thereof.
6.3 Change in
Control.
A. The
Executive may terminate his employment under this Agreement at any time for
“good reason” (as defined below) within 36 months after the date of a Change in
Control (as defined below) of the Company.
B. A
“Change in Control” of the Company shall be deemed to have occurred
if:
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(1) any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”) as in effect on the date hereof),
other than individuals beneficially owning, directly or indirectly, common stock
of the Company representing 30% or more of the Company’s issued and outstanding
common stock as of the Effective Date, is or becomes the beneficial owner,
directly or indirectly, of common stock of the Company representing 30% or more
of the Company’s then issued and outstanding common stock; or
(2)
individuals who constitute the Company’s Board of Directors on the date hereof
(the “Incumbent Board”) cease for any reason to constitute at least a majority
thereof, provided that any person becoming a Director subsequent to the date
hereof whose election, or nomination for election by the Company’s stockholders,
was approved by a vote of at least a majority of the Directors comprising the
Incumbent Board (either by a specific vote or by approval of the proxy statement
of the Company in which such person is named as a nominee for Director, without
objection to such nomination) shall be, for purposes of this clause, considered
as though such person were a member of the Incumbent Board. For
purposes of this Section 6.3(A) “good reason” shall mean a determination solely
by the Executive, in good faith, that as a result of the Change of Control of
the Company he may be adversely affected (i) in carrying out his duties and
powers in the fashion he previously enjoyed or (ii) in his future prospects with
the Company.
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C. If
the Executive terminates his employment after a Change of Control of the
Company, he shall notify the Company in writing of the effective date of the
termination (the “Termination Date”) of his employment and he shall be paid the
greater of (i) the Base Salary payable to the Executive under this Agreement
through to the Termination Date, or (ii) an amount equal to the product of (a)
the average annual Base Salary paid to the Executive during the five years
preceding the Termination Date, multiplied by (b) three. The
amount payable under this Section 6.3(C) shall be paid in a lump sum on or
before the fifth day following the Termination Date.
7.
Interest and Counsel
Fees.
7.1 Interest. All
amounts payable to the Executive under this Agreement shall be due and payable
at the time specified herein and any payment which is not made within five days
of the date of written demand shall be made with interest on the amount due from
the due date until paid in full at an annual rate equal to 2% over the prime
rate of interest generally published in The Wall Street
Journal as in effect from time to time during the period from such due
date until the date such payment is made.
7.2 Counsel
Fees. The
Company hereby irrevocably authorizes the Executive from time to time to retain
counsel of his choice at the expense of the Company to represent the Executive
in connection with the Executive’s initiation or defense of any litigation,
arbitration or other legal action relating to this Agreement or any provision
hereof (whether such action is by or against the Company or any director,
officer, stockholder or other person affiliated with the Company, or in any
jurisdiction). Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel, the Company
irrevocably consents to the Executive entering into an attorney-client
relationship with such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist between the
Executive and such counsel. The reasonable fees and expenses of
counsel selected by the Executive shall be paid or reimbursed to the Executive
by the Company on a regular, periodic basis upon presentation by the Executive
of a statement or statements prepared by such counsel in accordance with its
customary practices, up to a maximum aggregate amount of
$250,000. Notwithstanding the preceding, if it should be finally
determined by judgment or order of a court of competent jurisdiction (the time
for the appeal of which judgment or order shall have expired), that the
Executive has not prevailed in any such litigation, arbitration or other legal
action, the Executive shall promptly return to the Company, upon its demand, any
amounts so advanced in connection with such action together with interest
thereon at the rate provided in Section 7.1 above.
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8.
No Conflicting
Commitments.
8.1 Representation
and Warranty. The
Executive represents and warrants that he has no commitments or obligations of
any kind whatsoever inconsistent with this Agreement and is under no disability
of any kind whatsoever which would impair, infringe upon or limit Executive’s
ability to enter this Agreement or to perform the services required
hereunder.
8.2 Indemnification. The
Executive agrees to indemnify and hold the Company harmless against any claim or
other actions asserted against the Company based upon circumstances in which it
is alleged that the Executive has breached the warranty set forth in Section
8.1.
9.
Governing
Law. This
Agreement has been executed and delivered in the State of New Jersey, and shall
in all respects be interpreted, construed, and governed by and in accordance
with the law of the State of New Jersey. Except as otherwise
herein provided, all actions or proceedings arising directly, indirectly or
otherwise in connection with, out of, related to, or from this Agreement shall
be litigated exclusively and only in courts having situs within the State of New
Jersey, and the parties hereby consent and submit to the jurisdiction of any
state or federal court located in the State of New
Jersey. Notwithstanding the preceding, the Executive, at his
sole and exclusive option, exercisable by written notice given to the Company at
any time, may elect to submit any dispute arising under this Agreement to
resolution by arbitration held in Somerset County, New Jersey in accordance with
the rules of the American Arbitration Association.
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10. Notices. All
notices hereunder shall be in writing and personally delivered or mailed by
registered or certified mail, return receipt requested, to the following
address:
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If
to the Company:
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000
Xxxxxxxxx Xxxx
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P.
O. Xxx 00
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Xxx
Xxxxx, Xxx Xxxxxx 00000
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If
to the Executive:
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Xxxx
X. Xxxxxxx
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000
Xxxxxxxxx Xxxx
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P.
O. Xxx 00
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Xxx
Xxxxx, Xxx Xxxxxx 00000
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The
Company or the Executive may hereafter designate another address to the other in
writing for purposes of notices under this Agreement.
11. Waivers. Any
waiver by any party of any violation of, breach of or default under any
provision of this Agreement by the other party shall not be construed as, or
constitute, a continuing waiver of such provision, or waiver of any other
violation of, breach of or default under any other provision of this
Agreement.
12. Assignability. This
Agreement shall not be assignable by the Company without the written consent of
the Executive, except that if the Company shall merge or consolidate with or
into, or transfer substantially all of its assets to, another corporation or
other form of business organization, this Agreement shall be binding on the
Executive and be for the benefit of and binding upon the successor of the
Company resulting from such merger, consolidation or transfer without the
Executive’s consent, subject to the Executive’s right to terminate his
employment under Section 6.3 (C). The Executive may not assign,
pledge, or encumber any interest in this Agreement or any part thereof without
the express written consent of the Company, this Agreement being personal to the
Executive.
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13. Severability. Each
provision of this Agreement constitutes a separate and distinct undertaking,
covenant and/or provision hereof. In the event that any
provision of this Agreement shall finally be determined to be unlawful, such
provision shall be deemed severed from this Agreement, but every other provision
of this Agreement shall remain in full force and effect, and in substitution for
any such provision held unlawful, there shall be substituted a provision of
similar import reflecting the original intent of the parties hereto to the
extent permissible under law.
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date and year first set
forth above.
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KENT
FINANCIAL SERVICES, INC.
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By:
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Title:
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Chief Financial Officer
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Xxxx
X. Xxxxxxx
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