EXHIBIT 10.10
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT dated as of October 12, 2000, between XXXXXX &
XXXXXXXXX CORPORATION a Virginia corporation ("PLC"), and Xxxxxx Xxxxxxx (the
"Employee").
BACKGROUND
----------
Pursuant to the Stock Purchase Agreement dated as of even date herewith
(the "Purchase Agreement") between Orleans Homebuilders, Inc., a Delaware
corporation ("Orleans"), and all of the stockholders of PLC (the "Former
Stockholders"), Orleans is acquiring all of the issued and outstanding shares of
stock of PLC. The execution and delivery of this Agreement is a condition to
closing under the Purchase Agreement. This Agreement supercedes all existing
employment agreements, oral or written, between PLC and Employee.
PLC desires to employ Employee as Division Manager, Richmond of PLC,
and Employee desires to be so employed on the terms and conditions contained in
this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
SECTION 1. CAPACITY AND DUTIES
1.1 Employment; Acceptance of Employment. PLC hereby employs Employee
and Employee accepts employment by PLC for the period and upon the terms and
conditions hereinafter set forth.
1.2 Capacity and Duties.
(a) Employee shall be employed by PLC as its Division Manager,
Richmond and, subject to the supervision and control of the President of PLC
("President"), shall have duties and responsibilities generally consistent with
his current duties and responsibilities as they may from time to time be
specified by the President.
(b) During his employment hereunder, Employee shall devote his
full working time, energy, skill and best efforts to the performance of his
duties hereunder and shall not be employed by or participate or engage in or
take part in any manner in the management or operation of any business
enterprise or pursuit other than PLC and its Affiliates without the prior
written consent of the Board of Directors of Orleans (the "Board") which consent
may be granted or withheld in its sole discretion. For purposes of this
Agreement, "Affiliate" means any person or entity controlling, controlled by or
under common control with PLC. "Control," as used herein, means the power to
direct management and policies of a person or entity, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the term "controlling" and "controlled" shall have correlative meanings;
provided that, any person or entity that owns beneficially, either directly or
through one or more intermediaries, more than
20% of the ownership interests in a specified entity shall be presumed to
control such entity for purposes of the definition of "Affiliate."
SECTION 2. TERM OF EMPLOYMENT
The term of Employee's employment hereunder shall be two (2) years
commencing on the date hereof; provided that Employee may extend the term for an
additional six (6) months upon delivery to PLC of notice at least six (6) months
prior to expiration of the two (2) year term. Employee's employment hereunder
may be renewed for such additional term(s) as shall be set forth in a writing
signed by Employee and by PLC pursuant to express authorization of the Vice
Chairman of Orleans, and Employee's employment hereunder shall be subject to
termination as provided in Section 4 hereof.
SECTION 3. COMPENSATION
3.1 Basic Compensation.
As compensation for Employee's services hereunder, PLC shall pay to
Employee a salary at the annual rate of $137,000 (the "Base Salary"), payable in
accordance with PLC's regular payroll practices in effect from time to time
during the term of Employee's employment.
3.2 Stock. [INTENTIONALLY OMITTED]
3.3 Incentive Compensation. [INTENTIONALLY OMITTED]
3.4 Bonus Plan. Employee shall be entitled during the term of his
employment under this agreement to participate in the bonus plan summarized on
Schedule 3.3 hereof.
3.5 Fringe Benefits. Employee shall be entitled during the term of his
employment to participate in PLC's benefit plan(s) listed on Schedule 3.4 hereof
at PLC's cost, subject to such (i) co-payments and deductibles as are provided
for in such plans and (ii) modifications as shall be generally applicable to
senior employees of PLC.
3.6 Vacation. Employee shall be entitled to the number of vacation days
during each calendar year during the term of his employment as is provided
generally to other senior employees of PLC in respect of which time his
compensation shall be paid in full (not to exceed the greater of (i) three weeks
per calendar year, or (ii) the number of weeks per calendar year that Employee
is entitled to on the date hereof, calculated in accordance with PLC's vacation
policy based on years of service set forth in the Addendum to the PLC Employee
Handbook).
2
3.7 Expense Reimbursement. During the term of his employment, PLC shall
reimburse Employee for all reasonable expenses incurred by him in connection
with the performance of his duties hereunder in accordance with its regular
reimbursement policies as in effect from time to time and upon receipt of
itemized vouchers therefor and such other supporting information as PLC may
reasonably require.
3.8 Payments After Termination of Employment.
3.8.1. If Employee is terminated by PLC without Cause or
Employee terminates his employment for Good Reason (i) on a date prior to the
first anniversary of the date of this Agreement, PLC shall continue to pay
Employee his Base Salary until the first anniversary of the date of this
Agreement or for six (6) months, whichever period is longer, or (ii) on a date
after the first anniversary of the date of this Agreement, PLC shall continue to
pay Employee his Base Salary until thirty (30) months after the date of this
Agreement or for six (6) months, whichever period is shorter.
Employee shall have no right to payment under this
3.8.1 if Employee (i) is terminated by PLC for Cause, (ii) terminates his
employment without Good Reason, or (iii) is terminated for any reason after the
expiration of the term set forth in the first sentence of Section 2.
3.8.2 If Employee is terminated by PLC without Cause or
Employee terminates his employment for Good Reason during the term set forth in
the first sentence of Section 2, Employee shall be paid bonus and expense
reimbursement accrued to the date of termination.
SECTION 4. TERMINATION OF EMPLOYMENT
4.1 Death of Employee. Employee's employment hereunder shall
immediately terminate upon his death, upon which PLC shall not thereafter be
obligated to make any further payments hereunder other than (i) amounts
(including salary, bonuses and expense reimbursement) accrued as of the date of
Employee's death in accordance with generally accepted accounting principles
("GAAP"), as conclusively determined in the absence of bad faith or manifest
error by PLC, (ii) on each applicable Anniversary Date, an Installment
Allocation payable under Section 3.2.1, and (iii) at the times set forth in
Section 3.3, his allocation of the Incentive Compensation Payments.
3
4.2 Disability of Employee. If Employee, in the reasonable opinion of a
physician selected by Orleans, has been unable for any reason due to his
physical, mental or emotional illness or condition to perform his duties
hereunder for a period of 120 days within six consecutive months (a
"Disability"), then PLC shall have the right to terminate Employee's employment
upon 30 days' prior written notice to Employee at any time during the
continuation of such inability, in which event PLC shall not thereafter be
obligated to make any further payments hereunder other than (i) amounts
(including salary, bonuses and expense reimbursement) accrued as of the date of
such termination in accordance with GAAP, as conclusively determined in the
absence of bad faith or manifest error by PLC, (ii) on each applicable
Anniversary Date, an Installment Allocation payable under Section 3.2.1, and
(iii) at the times set forth in Section 3.3, his allocation of the applicable
Incentive Compensation Payment.
4.3 Termination for Cause. Employee's employment hereunder shall
terminate immediately upon notice that PLC is terminating Employee for "Cause"
(as defined herein), in which event PLC shall not thereafter be obligated to
make any further payments hereunder other than amounts (including salary,
incentive compensation, expense reimbursement, etc.) accrued as of the date of
such termination in accordance with GAAP, as conclusively determined in the
absence of bad faith or manifest error by PLC. As used herein, "Cause" shall
mean any of the following:
(i) fraud, theft or misappropriation or embezzlement of the
assets or funds of PLC or an Affiliate;
(ii) indictment for any felony or any other crime involving
fraud or misrepresentation or moral turpitude;
(iii) breach of Employee's obligations under Sections 5, 6.2
or 6.3 of this Agreement;
(iv) failure of Employee to perform his duties and
responsibilities to PLC, which persists for more than twenty (20) days after
written notice from PLC or Orleans or which recurs;
(v) willful violation in any material respect of any
reasonable direction or rule or regulation established by the President or the
Board; or
(vi) abuse of alcohol or abuse of other drugs or illegal
possession or use of any controlled substance.
4.4 Termination for Good Reason. Notwithstanding anything herein to the
contrary, Employee shall be entitled to terminate his employment by PLC for
"Good Reason" (as defined herein). As used herein "Good Reason" shall mean any
of the following that is not cured by PLC within thirty (30) days after Employee
delivers written notice thereof to the CEO and the Vice Chairman of Orleans:
4
(i) a decrease in Employee's Base Salary for any year while
employed by PLC below Employee's Base Salary in the immediately preceding year;
(ii) a material reduction in Employee's duties or authority
from the duties or authority that he had immediately after the acquisition
pursuant to the Purchase Agreement;
(iii) a change in the location at which Employee is required
to perform the majority of his duties with PLC to a location more than 20 miles
from the location on the date hereof; or
(iv) a material and disproportionate reduction (as compared to
employees that hold comparable positions with Orleans) by PLC of employee
benefits available to Employee and his dependents under employee benefit plans
or programs that either are in effect on the commencement of employment
following the closing of the acquisition under the Purchase Agreement or which
are adopted thereafter by PLC and in which Employee is eligible to participate;
provided that no such reduction shall be deemed to have occurred if PLC adopts
or implements a substitute plan or program for Employee that provides
substantially comparable benefits at no materially greater cost to Employee.
SECTION 5. RESTRICTIVE COVENANTS
5.1 Confidentiality. Employee acknowledges a duty of confidentiality
owed to PLC and Employee shall not, directly or indirectly, at any time during
or after his employment by PLC, retain in writing, use, divulge, furnish, or
make accessible to anyone, without the express authorization of the Board, any
trade secret, private or confidential information or knowledge of PLC or any
Affiliate obtained or acquired by him while employed at any time by PLC. All
computer software, books, records, and files and know-how generated or acquired
while an employee of PLC or any of its predecessors, are acknowledged to be the
property of PLC and shall not be duplicated, removed from PLC's possession or
made use of other than in pursuit of PLC's or Affiliates' businesses and, upon
termination of employment for any reason, Employee shall deliver to PLC, without
further demand, all copies thereof which are then in his possession or under his
control. The provisions of this Section 5.1 shall not apply to information which
(i) is or becomes generally available to the public other than as a result of
disclosure by Employee or (ii) is required to be disclosed by law or by order of
a court or governmental authority.
5.2 Noncompetition. During Employee's employment or, in the event
Employee terminates his employment without Good Reason or PLC terminates
Employee's employment for Cause, for the remainder of the term set forth in
Section 2 (as such term may be renewed as therein provided), Employee shall not
directly or indirectly: (a) engage in the construction or marketing of any homes
or the acquisition or development of any property for any such purpose or (b) be
or become a stockholder, partner, owner, officer, director or employee or agent
of, or a consultant to or give financial or other assistance to, any person or
entity engaging
5
in any such activities; provided, however, that nothing herein shall prohibit
the Employee and his affiliates from owning, as passive investors, in the
aggregate not more than 2% of the outstanding publicly traded stock of any
corporation so engaged. The duration of the Employee's covenants set forth in
this Section 5.2 shall be extended by a period of time equal to the number of
days, if any, during which the Employee is in violation of the provisions
hereof. This clause 5.2 is limited in geographical scope to a fifty mile radius
of Richmond, Virginia, a fifty mile radius of Suffolk, Virginia, and a fifty
mile radius of each other location in which PLC does business during employee's
employment with PLC that is material to PLC. This clause 5.2 is in addition to,
and not in limitation of, any other noncompetition agreement between Employee
and PLC or an Affiliate whether entered into before, concurrently or after this
Agreement.
5.3 Injunctive and Other Relief.
(a) Employee acknowledges that (i) the covenants contained in
Sections 5 and 6.3 herein are fair and reasonable in light of the circumstances
and (ii) damages alone would not be an adequate remedy for any breach by
Employee of his covenants contained herein and, accordingly, in addition to any
other remedies which PLC may have, PLC shall be entitled to injunctive relief in
any court of competent jurisdiction for any breach or threatened breach of any
such covenants by Employee. Nothing contained herein shall prevent or delay PLC
from seeking, in any court of competent jurisdiction, specific performance or
other equitable remedies in the event of any breach or threatened breach by
Employee of any of his obligations hereunder.
(b) In addition to such equitable relief with respect to
Sections 5 and 6.3, PLC shall be entitled to monetary damages for any breach in
an amount deemed reasonable to cover all actual and consequential losses.
(c) In the event that PLC, an Affiliate or Employee incurs
counsel fees or other costs and expenses in connection with the enforcement of
any and all of their respective rights under this Agreement, including any
arbitration proceeding pursuant to Section 6.1 hereof, the substantially
prevailing party shall be entitled to receive reasonable attorneys' fees and
costs and expenses in connection with the enforcement of such prevailing party's
rights.
6
SECTION 6. MISCELLANEOUS
6.1 Arbitration.
(a) All disputes arising out of or relating to this Agreement
which cannot be settled by the parties shall be settled by arbitration in
Richmond, Virginia, pursuant to the rules and regulations then obtaining of the
American Arbitration Association; provided that nothing herein shall preclude
PLC from seeking, in any court of competent jurisdiction, damages, specific
performance or other equitable remedies in the case of any breach or threatened
breach by Employee of Section 5 or 6.3 hereof. The decision of the arbitrators
shall be final and binding upon the parties, and judgment upon such decision may
be entered in any court of competent jurisdiction.
(b) Discovery shall be allowed pursuant to the intendment of
the United States Federal Rules of Civil Procedure and as the arbitrators
determine appropriate under the circumstances.
(c) The arbitration tribunal shall be formed of three (3)
arbitrators, one to be appointed by each party, and the third to be appointed by
the first two arbitrators. Such arbitrators shall be required to apply the
contractual provisions hereof in deciding any matter submitted to them and shall
not have any authority, by reason of this Agreement or otherwise, to render a
decision that is contrary to the mutual intent of the parties as set forth in
this Agreement.
6.2 Prior Employment. Employee represents and warrants that, on the
date hereof, he is not a party to any other employment, non-competition, joint
venture, partnership or other agreement or restriction that could interfere with
his employment with PLC or his or PLC's rights and obligations hereunder; and
that employment and the performance of his duties hereunder will not breach the
provisions of any contract, agreement, or understanding to which he is party or
any duty owed by him to any other person. Employee warrants and covenants that
he will not hereafter become a party to or be bound by any such conflicting
agreement.
6.3 Solicitation of Employees. During the term of Employee's employment
and for two years thereafter, Employee shall not directly or indirectly solicit
any person who is employed by PLC or any Affiliate with a view to the engagement
or employment of such person by any person or entity or otherwise interfere with
the employment relationship of any employee of PLC or any Affiliate.
6.4 Severability. The invalidity or unenforceability of any particular
provision or part of any provision of this Agreement shall not affect the other
provisions or parts hereof. If any provision hereof is determined to be invalid
or unenforceable by a court of competent jurisdiction by reason of the duration
or scope of the covenants contained therein, such duration or scope, or both,
shall be considered to be reduced to a duration or scope to the extent necessary
to cure such invalidity.
7
6.5 Assignment. This Agreement shall not be assignable by Employee.
This Agreement shall be assignable by PLC to Orleans or to any entity which may
be or may become a direct or indirect Subsidiary of Orleans, in which event such
assignee shall thereafter be deemed to be PLC for the purposes of this Agreement
and to have all of the rights and obligations of PLC hereunder. Subsidiary shall
mean an entity at least 80% of the equity of which is directly or indirectly
owned by Orleans and which is controlled directly or indirectly by Orleans.
Subject to the foregoing, this Agreement and the rights and obligations set
forth herein shall inure to the benefit of, and be binding upon, the parties
hereto and each of their respective permitted successors, assigns, heirs,
executors and administrators.
6.6 Notices. All notices hereunder shall be in writing and shall be
sufficiently given if hand-delivered, sent by documented overnight delivery
service or registered or certified mail, postage prepaid, return receipt
requested or by telegram, fax or telecopy (confirmed by U.S. mail), receipt
acknowledged, addressed as set forth below or to such other person and/or at
such other address as may be furnished in writing by any party hereto to the
other. Any such notice shall be deemed to have been given as of the date
received, in the case of personal delivery, or on the date shown on the receipt
or confirmation therefor, in all other cases. Any and all service of process and
any other notice in any action, suit or proceeding shall be effective against
any party if given as provided in this Agreement; provided that nothing herein
shall be deemed to affect the right of any party to serve process in any other
manner permitted by law.
(a) If to Orleans Homebuilders, Inc.:
Orleans Homebuilders, Inc.
Xxx Xxxxxxxxx Xxxxxx
0000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Vice Chairman
With a copy to:
Drinker Xxxxxx & Xxxxx LLP
One Xxxxx Square
00xx & Xxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esquire
8
(b) If to Employee:
At Employee's home address as reflected in PLC's records
With a copy to:
XxXxxxx Xxxxx, LLP
One Xxxxx Center
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esquire
6.7 Entire Agreement and Modification. This Agreement (including the
Schedules hereto) constitutes the entire agreement between the parties hereto
with respect to the matters contemplated herein and supersedes all prior
agreements and understandings with respect thereto. No amendment, modification,
or waiver of this Agreement shall be effective unless in writing. Neither the
failure nor any delay on the part of any party to exercise any right, remedy,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy, power, or
privilege with respect to any occurrence or be construed as a waiver of any
right, remedy, power, or privilege with respect to any other occurrence.
6.8 Governing Law. The parties acknowledge that this Agreement has been
entered into in connection with the acquisition by Orleans from the Former
Stockholders of all of the stock of PLC and that Orleans is an intended
beneficiary of this Agreement. Accordingly, the parties agree that this
Agreement is made pursuant to, and shall be construed and enforced in accordance
with, the internal laws of the Commonwealth of Pennsylvania (and United States
federal law, to the extent applicable), without giving effect to otherwise
applicable principles of conflicts of law.
6.9 Headings; Counterparts. The headings of paragraphs in this
Agreement are for convenience only and shall not affect its interpretation. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original and all of which, when taken together, shall be deemed
to constitute but one and the same Agreement.
9
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
XXXXXX & XXXXXXXXX CORPORATION
By: /s/ J. Xxxxxxx Xxxxxx
-----------------------------------------
Title: President
EMPLOYEE
/s/ Xxxxxx Xxxxxxx
---------------------------------------------
Xxxxxx Xxxxxxx
NC HOME OFFICE
SALE
-------------------------------- GROSS GROSS DIVISION ALLOCATED COST OF DIVISION
DIVISION # AVERAGE $ TOTAL $ PROFIT % PROFIT $ O/H O/H CAPITAL PROFIT
======================================================================================================================
RICHMOND 150 $233,000 $34,950,000 9.88% $3,453,060 $2,200,356 $517,812 $0 $734,892
[RESTUBBED TABLE]
BONUS BONUS TOTAL
DIVISION % AMOUNT SALARY COMP
======================================================
RICHMOND 6.00% $44,094 $137,000 $181,094
DIVISION $ $
PROFIT BONUS AMOUNT AMOUNT
-----------------------------------------------------
0-250 4.00% $0 $10,000
250-500 5.00% $12,500 $25,000
500-749 6.00% $30,000 $45,000
750-1000 7.00% $52,500 $70,000
+1000 8.00% $80,000
Schedule 3.4 To Employment Agreement
------------------------------------
The following is a list of benefits initially available to Employee.
The Employee may have access to these though he may choose not enroll in all of
them.
1. Health insurance plan currently in place or comparable.
2. 401(k) benefits comparable to existing plan (50% match of first 6%
employee contribution).
3. Use of Vehicle:
(a) Vehicle being provided by PLC on date of Agreement or
equivalent vehicle
(b) Leased by Employer
(c) Gas and Maintenance provided by Employer
4. Life insurance currently in place or comparable.
5. Disability insurance currently in place or comparable.
