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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of March
30, 1999 (the "Effective Date") between Xxxxxxxxx Industries, Inc., a Delaware
corporation (the "Company"), and Zivi X. Xxxxxx, an individual resident of the
State of Florida (the "Employee").
RECITALS
The Employee has, as the President of East Shore Ventures, Inc. ("East
Shore"), served as the Chief Executive Officer of the Company and has been
responsible for the overall direction of the operations and administration of
the business of the Company. The Company and East Shore have agreed to terminate
the Management Agreement pursuant to which the Employee has provided such
services. The Company desires to employ the Employee to continue to provide such
services on substantially the same terms on which such services were provided to
the Company under the Management Agreement, and the Employee is willing to
accept such employment by the Company on such terms, subject to the terms and
conditions set forth in this Agreement.
TERMS OF AGREEMENT
In consideration of the above recitals and the mutual promises herein
contained, the Company and the Employee hereby agree as follows:
1. DEFINITIONS.
(a) The "Board" shall mean the Board of Directors of the
Company.
(b) The "Employment Period" shall mean the period commencing
on the Effective Date and ending on December 31, 2004, unless this Agreement
shall be terminated prior thereto by either party in accordance with the terms
of this Agreement.
(c) The "Executive Committee" shall mean the Executive
Committee of the Board of Directors of the Company.
(d) "GAAP" shall mean generally accepted accounting principles
as in effect in the United States from time to time.
(e) The "Restricted Period" shall mean (i) if the Employee
terminates this Agreement for "good reason" (as defined in Section 5(f)) or is
terminated "involuntarily" (as defined in Section 5(e)), then the Restricted
Period shall mean the Employment Period, and (ii) if the Employee shall
terminate this Agreement other than for good reason, or is terminated other than
involuntarily, then the Restricted Period shall mean the period including the
Employment Period and the three years following the Employment Period.
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2. EMPLOYMENT PERIOD. The Company hereby agrees to employ the Employee,
and the Employee hereby agrees to be employed by the Company, during the
Employment Period, subject to the terms and conditions provided herein. This
Agreement shall terminate at the end of the Employment Period, unless the
Agreement shall be terminated by either party prior thereto in accordance with
the terms of this Agreement.
3. TERMS OF EMPLOYMENT.
(a) POSITION AND DUTIES. During the Employment Period, the
Employee shall serve as President and Chief Executive Officer of the Company.
The Employee shall be responsible for the overall direction of the operations
and administration of the business of the Company and shall have such powers and
duties as provided for a president and chief executive officer of the Company
under the Company's Bylaws and under the General Corporation Law of the State of
Delaware, and such other incidental powers and duties as may be assigned to him
from time to time by the Board.
(b) LOCATION. The principal place of employment of the
Employee shall be the principal offices of the Company in Sunrise, Florida.
(c) COMPENSATION.
(i) BASE SALARY. The Employee's annual salary (the
"Salary") as of the Effective Date shall be $480,000 per annum and such Salary
shall apply for the duration of the Employee's employment hereunder unless and
until such Salary shall be increased by the Board. During the Employment Period,
the Salary may be reviewed and changed by the Board in its sole discretion;
PROVIDED, HOWEVER, that the Company shall in no event pay the Employee a Salary
of less than $480,000 per annum during the Employment Period. Any Salary payable
hereunder shall be paid in regular intervals in accordance with the Company's
payroll practices.
(ii) ANNUAL COMPANY BONUS. For each calendar year
commencing with the year ending December 31, 1999, at the end of which year the
Employee is employed by the Company:
(A) if the Company has Net Income (as
hereinafter defined) for such year in an amount equal to the Company's target
net income as determined in the sole discre tion of the Board (or the Executive
Committee) for such year (the "Target"), the Employee shall be entitled to a
bonus in an amount equal to the Salary of the Employee as of December 31 of such
year (the "Target Bonus");
(B) if the Company has Net Income for such
year in an amount which exceeds the Target but is less than 150% of the Target,
the Employee shall be entitled to a bonus calculated as follows:
B = Target Bonus + [Target Bonus x (NI - T)]
T
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where:
B = the bonus earned in such year
T = the Target for such year
NI = the actual Net Income of the Company for such year
as determined in accordance with GAAP;
(C) if the Company has Net Income for such
year in an amount which equals or exceeds 150% of the Target for such year, the
Employee shall be entitled to a bonus of 150% of the Target Bonus;
(D) if the Company has Net Income for such
year in an amount which is less than 50% of the Target for such year, the
Employee shall not be entitled to a bonus; or
(E) if the Company has Net Income for such
year in an amount which equals or exceeds 50% of the Target for such year but is
less than the Target for such year, the Employee shall be entitled to a bonus
calculated as follows:
B = Target Bonus - [Target Bonus x 2 X (T - NI)]
------------
T
where:
B = the bonus earned in such year
T = the Target for such year
NI = the actual Net Income of the Company for such year
as determined in accordance with GAAP
(iii) WITHHOLDING, ETC. The payment of any Salary
and bonus to the Employee shall be subject to all applicable withholding and
payroll taxes, and such other deductions as may be required under the Company's
employee benefit plans.
(d) BENEFITS. In addition to the compensation payable to the
Employee as set forth in Section 3(c) above, during the Employment Period, the
Employee shall be eligible to participate in all incentive, savings, pension,
welfare (including, without limitation, medical, dental, disability and salary
continuance insurance) plans, practices, policies and programs applicable on or
after the Effective Date to other executives of the Company. The Employee shall
be given credit for any period of time for which he has provided services to the
Company (including, without limitation, for the period of time for which he has
provided services to the Company as an employee of East Shore) toward all
employee benefit plans, practices, policies and programs maintained by the
Company. In addition, the Company shall, for the entire period commencing on the
Effective Date and ending
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on December 31, 2004 (the "Remaining Policy Period"), continue to pay the
premiums on the life insurance policy on the life of the Employee in the amount
of $4,000,000 previously obtained by the Company and transferred to the Employee
pursuant to the terms of the Management Agreement (the "Life Insurance Policy"),
and shall continue to reimburse the Employee for any Federal, state or local
income taxes payable by the Employee as a result of the payment by the Company
of such premiums on the Employee's behalf. In the event that this Agreement is
terminated (other than for cause (as hereinafter defined)) prior to December 31,
2004, the Company shall pay to the Employee a lump sum payment equal to the
aggregate unpaid premium payments payable under the Life Insurance Policy
through the end of the Remaining Policy Period, and any Federal, state or local
income taxes payable by the Employee as a result of the receipt of such payment.
(e) RELOCATION EXPENSES. If the Employee is relocated during
the Employment Period, the Employee shall be entitled to be reimbursed for
relocation expenses in an amount not greater than $10,000 in the case of any
move within the United States or $20,000 in the case of any move outside of the
United States.
(f) OTHER BUSINESS EXPENSES. During the Employment Period, the
Employee shall be entitled to receive prompt reimbursement from the Company for
all reasonable business expenses incurred by the Employee, itemized in
accordance with the Company's existing policies, practices and procedures.
(g) FRINGE BENEFITS. During the Employment Period, the
Employee shall be entitled in addition to any other benefits required to be
provided to him under the terms of this Agreement to all fringe benefits
applicable on or after the date hereof to other executives of the Company.
(h) VACATION. During the Employment Period, the Employee shall
be entitled to paid vacation in accordance with the policies and practices
applicable on or after the date hereof to executives of the Company, PROVIDED,
HOWEVER, that the Employee shall be entitled to a minimum of three weeks of paid
vacation per calendar year and all holidays that are prescribed by the Company's
policies and practices. If this Agreement is in effect for a portion of any
calendar year, the minimum three weeks shall be prorated for the period of such
year in which the Employee served pursuant to this Agreement (PROVIDED, HOWEVER,
that the Employee shall be given credit for the period of time for which he has
provided services to the Company (including, without limitation, for the period
of time for which he had provided services to the Company as an employee of East
Shore). Vacation accrued but unused at the end of a calendar year may be carried
over into the following calendar year or years; PROVIDED, HOWEVER, that such
accrued but unused vacation cannot be carried over for more than two years. All
earned, unused and accrued vacation shall be paid to the Employee upon the
expiration or termination of this Agreement.
(i) OFFICE AND SUPPORT STAFF. During the Employment Period,
the Employee shall be entitled to an appropriate office or offices and with
furnishings and other appointments and with a secretary and other support staff
as are usual and customary for a president and chief executive officer of a
corporation of comparable size to the Company.
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(j) AUTOMOBILE. During the Employment Period, the Company
shall make available to the Employee an automobile and shall pay for all
expenses related thereto including, without limitation, gas, maintenance and
insurance.
4. EMPLOYEE'S OBLIGATIONS AND REPRESENTATIONS.
(a) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Employee is entitled, the Employee agrees
to devote substantially all of his time and attention during normal business
hours to the business and affairs of the Company and to perform faithfully and
efficiently the responsibilities assigned to the Employee from time to time by
the Board. During the Employment Period it shall not be a violation of this
Agreement for the Employee to serve on corporate, civic or charitable boards,
deliver lectures, fulfill speaking engagements or teach at educational
institutions or manage personal investments, so long as such activities do not
significantly interfere with the performance of his duties and responsibilities
hereunder on behalf of the Company.
(b) The Employee represents and warrants to the Company that
there are no agreements or arrangements, whether written or oral, in effect
which would prevent the Employee from rendering to the Company the services
required of him hereunder during the Employment Period. The Employee further
represents, warrants and agrees with the Company that as of the Effective Date
he has not made, and will not make during the Employment Period, any commitment
or do any act in conflict with this Agreement, or take any action that might
divert from the Company any opportunity which would be in the scope of any
present or future business of the Company or any subsidiary thereof.
5. TERMINATION.
(a) MUTUAL AGREEMENT. During the Employment Period, this
Agreement may be terminated at any time by mutual agreement between the Company
and the Employee on terms to be negotiated at the time of such termination. Any
such termination by mutual agreement shall be set forth in a written document
signed by the Company and the Employee. In the event of a termination by mutual
agreement, the Company's obligation to the Employee under this Agreement shall
be determined by such mutual agreement.
(b) DEATH. This Agreement shall terminate automatically upon
the Employee's death. If the Employee's employment is terminated by reason of
the Employee's death, the Company shall have no further obligations to the
Employee's legal representatives under this Agreement, other than (i) those
obligations accrued, earned or vested by the Employee as of the date of his
death, (ii) that portion of any bonus determined pursuant to Section 3(c)(ii) of
this Agreement in respect of a prior calendar year that had been deferred, which
amount shall be paid to the Employee as soon as practicable, and (iii) with
respect to the calendar year in which the Employee's death occurs, in the event
that a bonus would have been payable to the Employee pursuant to Section
3(b)(ii) of this Agreement in respect of such calendar year had the Employee not
died, the Employee shall be entitled to receive a prorated amount of such bonus
based on a fraction, the numerator of which is the number of days in the
calendar year in which the Employee died that the Employee provided
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services to the Company and the denominator of which is 365, with such bonus
payment to be paid in one cash lump sum paid as soon as practicable following
delivery of audited financial statements for the year in which the Employee
dies. In addition, the Employee's family shall be entitled to receive benefits
at least equal to the most favorable benefits provided by the Company to
surviving families of executives of the Company based on the terms of the
benefit plans referenced in Section 3(d) of this Agreement as in effect on the
date of the Employee's death.
(c) DISABILITY. If the Company determines in good faith that
the Employee has a "disability" (as defined below), it may give the Employee
written notice of its intention to terminate the Employee's employment. In such
event, the Employee's employment with the Company shall terminate effective on
the 60th day after receipt by the Employee of such notice. No such notice of
termination by reason of disability shall be given until the Employee has
experienced a period of three consecutive months of disability and the
disability is continuing. The notice of termination shall not be effective if
the Employee returns to full-time performance of his duties prior to the
expiration of the 60 day notice period. For purposes of this Agreement,
"disability" shall mean a physical or mental condition which, three months after
its commencement, is determined to be total and permanent by a physician
selected by the Company and which prevents the Employee from performing his
duties hereunder. The Employee shall be entitled to all compensation and
benefits provided for under this Agreement during the three month waiting period
for the disability determination and during the 60 day notice of termination
period. In the event that the Company provides long-term disability benefits for
the Employee, such benefits shall not commence until after the employment of the
Employee has been terminated and the Company has ceased paying the Employee
compensation pursuant to the foregoing sentence. If the Employee's employment is
terminated by reason of the Employee's disability, this Agreement shall
terminate without further obligations to the Employee or the Employee's legal
representatives under this Agreement, other than (i) those obligations accrued,
earned or vested by the Employee as of the date of the termination, (ii) that
portion of any bonus determined pursuant to Section 3(c)(ii) of this Agreement
in respect of a prior calendar year that had been deferred, which amount shall
be paid to the Employee as soon as practicable, and (iii) with respect to the
calendar year in which this Agreement is terminated, in the event that a bonus
would have been payable to the Employee pursuant to Section 3(c)(ii) of this
Agreement in respect of such calendar year had this Agreement not terminated,
the Employee shall be entitled to a pro-rated amount of such bonus based on a
fraction the numerator of which is the number of days in the calendar year in
which this Agreement was terminated that the Employee provided services to the
Company and which were prior to the period of the Employee's disability and the
denominator of which is 365, with such bonus payment to be paid in one cash lump
sum paid as soon as practicable following delivery of audited financial
statements for the year in which this Agreement is terminated. In the event the
Employee becomes disabled but returns to active service under this Agreement
prior to the expiration of the three-month waiting period, or prior to the
expiration of the 60-day notice of intent to terminate period, the Employee
shall be entitled to the full amount of any bonus payable pursuant to Section
3(c)(ii) of this Agreement in respect of the year in which he became disabled
without regard to the period of absence due to the disability. In addition, the
Employee and the Employee's family shall be entitled to receive benefits,
including without limitation disability benefits, at least equal to the most
favorable benefits provided by the Company to executives of the Company based on
the terms of
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the benefit plans referenced in Section 3(d) of this Agreement as in effect on
the date the Employee's disability commenced.
(d) CAUSE. During the Employment Period, the Company may
terminate the Employee's employment for "cause" (as defined below), as
determined by the Board (or the Executive Committee). For purposes of this
Agreement, "cause" shall mean:
(i) an act or acts of personal dishonesty undertaken
by the Employee at the expense of or against the interests of the Company;
(ii) repeated violations by the Employee of his
obligations under Section 4(a) of this Agreement which are not remedied within a
reasonable period of time after receipt of written notice from the Company of
such violations;
(iii) any direct or indirect disclosure of any
confidential information or other special knowledge of the finances, business or
other affairs of the Company;
(iv) the conviction of the Employee of a felony; or
(v) the conviction of the Employee of a serious
misdemeanor involving illegal use, possession or sale of drugs, larceny, crimes
of violence or sex offenses.
If the Employee's employment is terminated for cause, this Agreement shall
terminate without further obligations to the Employee under this Agreement,
other than those obligations accrued, earned or vested by the Employee as of the
date of termination of employment. The Employee shall not be entitled to any
bonus in respect of the year of termination in the event the Employee's
employment is terminated for cause pursuant to this Section 5(d).
(e) INVOLUNTARY TERMINATION. Notwithstanding anything herein
to the contrary, the Company shall have the right, at any time upon notice to
the Employee, to terminate the Employee's employment. If, during the Employment
Period, the Company terminates the Employee's employment other than for reasons
set forth in Sections 5(a) through 5(d) above, the Employee shall be deemed to
have been "terminated involuntarily" (such termination being referred to herein
as an ("involuntary termination") and the Company shall pay to the Employee the
following amounts:
(i) to the extent not theretofore paid, the Company
shall pay the Salary through the date of such involuntary termination as well as
that portion of any bonus determined pursuant to Section 3(c)(ii) of this
Agreement in respect of a prior calendar year which had been deferred;
(ii) the Company shall pay the Employee on the date
of such involuntary termination an amount equal to two years of the Salary, plus
the amount of the bonus paid to the Employee pursuant to Section 3(c)(ii) of
this Agreement on account of each of the two calendar years preceding the year
in which such involuntary termination occurs;
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(iii) with respect to the year in which such
involuntary termination occurs, in the event that a bonus would have been
payable to the Employee pursuant to Section 3(c)(ii) of this Agreement in
respect of such year had this Agreement not been terminated, the Employee shall
be entitled to receive a pro-rated amount of such bonus based on a fraction in
which the numerator is the number of days in the calendar year in which this
Agreement terminated that the Employee provided services to the Company and the
denominator is 365, with such bonus payment to be paid in one cash lump sum paid
as soon as practicable following delivery of audited financial statements for
the year in which this Agreement is involuntarily terminated; and
(iv) the Company shall pay in one cash lump sum any
vacation days accrued but unused as of the date of the Employee's involuntary
termination.
(f) GOOD REASON. During the Employment Period, the Employee
may terminate his employment for "good reason" as defined below. For purposes of
this Agreement, "good reason" shall mean:
(i) the assignment to the Employee of any duties
inconsistent in any respect with the Employee's position as set forth in Section
3(a) of this Agreement or any action by the Company which results in a material
diminution in such position, or in the authority, duties or responsibilities of
the Employee, excluding for this purpose any isolated, insubstantial and
inadvertent action by the Company which is not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Employee;
(ii) any failure by the Company to comply with any of
the provisions of Sections 3(a) through 3(j) of this Agreement regarding the
Employee's Salary, compensation, benefits, expenses, fringe benefits, vacation
or office staff other than an isolated, insubstantial and inadvertent action by
the Company which is not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Employee;
(iii) the Company's requiring the Employee to be
based at any office or location other than the location set forth in Section
3(b) of this Agreement, except for travel reasonably required in the performance
of his responsibilities; or
(iv) any failure by the Company to comply with and
satisfy the terms of Section 10 of this Agreement with respect to successors.
In the event that the Employee terminates his employment for good reason as
defined in this Section 5(f), it shall be deemed an "involuntary termination" as
set forth in Section 5(e) above and the Employee shall be entitled to all
payments and obligations set forth in Sections 5(e)(i) through 5(e)(iv) of this
Agreement as if the Employee's employment had been involuntarily terminated.
(g) VOLUNTARY TERMINATION OR RETIREMENT. If the Employee shall
elect to voluntarily terminate his services under this Agreement (other than for
"good reason" as defined in Section 5(f) above) or to retire during the
Employment Period, this Agreement shall terminate
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automatically and the Company shall have no further obligations to the Employee
under this Agreement, other than those obligations accrued, earned or vested as
of the date of the termination or retirement. In the event of voluntary
termination or early retirement (prior to the Employee's 65 birthday), the
Employee shall be entitled to receive a pro-rated amount of any bonus payable in
respect of the year of voluntary termination or early retirement. If the
Employee retires upon the expiration of this Agreement at the end of the
Employment Period, and in the event that a bonus would have been payable to the
Employee pursuant to Section 3(c)(ii) of this Agreement in respect of such
calendar year had this Agreement not terminated, the Employee shall be entitled
to receive a pro-rated amount of such bonus based on a fraction in which the
numerator is the number of days in the calendar year in which the Employee was
terminated that he provided services to the Company and the denominator is 365,
with such bonus payment to be paid in one cash lump sum paid as soon as
practicable following delivery of audited financial statements for the year in
which this Agreement is terminated.
(h) NOTICE OF TERMINATION. Any termination by the Company for
any reason or by the Employee for any reason shall be communicated by such party
in a written notice to the other party which indicates (i) the specific
termination provision in this Agreement relied upon, (ii) the facts and
circumstances claimed to provide a basis for such termination, and (iii) the
date of termination.
(i) NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in any
benefit, bonus, incentive or other plans, programs, policies or practices
provided by the Company and for which the Employee may otherwise qualify.
Amounts which are vested benefits or which the Employee is otherwise entitled to
receive under any plan, policy, practice or program of the Company at or
subsequent to the termination of this Agreement shall be payable in accordance
with such plan, policy, practice or program.
(j) FULL SETTLEMENT. The 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 or
other claim, right or action which the Company may have against the Employee or
others. In no event shall the Employee be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Employee under any of the provisions of this Agreement. In connection with any
contest by the Company or others of the validity or enforceability of, or
liability under, any provision of this Agreement in which the Employee is
ultimately successful, the Company agrees to pay, to the full extent permitted
by law, all reasonable legal fees and expenses, as incurred by the Employee and
others which the Employee may reasonably incur as a result of any such contest.
6. CONFIDENTIALITY.
(a) The Employee shall hold in a fiduciary capacity for the
benefit of the Company all secret, proprietary or confidential information,
knowledge or data relating to the Company and its business, including without
limitation, financial information and customer lists, which shall have been
obtained by the Employee during the Employment Period and which shall not
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be or become public knowledge (other than by acts by the Employee in violation
of this Agreement). Notwithstanding the foregoing, the Employee may disclose any
such information if such information is compelled by legal process, provided
that if the Employee is so compelled, he shall provide the Company with prompt
notice so that it may seek a protective order or other remedy. In any event, the
Employee shall furnish only that portion of the confidential information that is
legally required to be disclosed.
(b) In the event that the Employee breaches any provision of
this Section 6, any payments or other benefits promised under this Agreement
shall be forfeited. In addition, the Company shall be entitled to apply to any
court of competent jurisdiction for an injunction restraining the Employee from
committing or continuing any violation of this Agreement.
7. NON-COMPETITION. The Employee agrees that during the Restricted
Period, he will not, without the prior consent of the Board, directly or
indirectly, alone or as a partner, joint venturer, officer, director, employee,
consultant, agent, independent contractor or shareholder of, or lender to, any
company or business, anywhere within the continental United States, Israel,
Ireland or any other country in which the Company has operations, engage or
participate or make any financial investments in or become employed by or render
advisory of other services to or for any person, firm or corporation, or in
connection with any business activity, other than that of the Company and its
subsidiaries, directly or indirectly in competition with any of the business
operations or activities of the Company and its subsidiaries as of the date in
question or, if later, as of the date of termination of this Agreement, whether
such companies are presently existing or hereafter acquired. Nothing herein
contained, however, shall restrict the Employee from making any investments in
any company whose stock is listed on a national securities exchange or actively
traded in the over-the-counter market, so long as such investment does not give
him the right to control or influence the policy decisions of any such business
or enterprise which is or might be directly or indirectly in competition with
any of such business operations or activities of the Company or any of its
subsidiaries.
8. RESTRICTION ON SOLICITATION. The Employee agrees that during the
Employment Period and for three (3) years thereafter he will not:
(a) directly or indirectly solicit, raid, entice or induce any
employee of the Company or any of its subsidiaries to become an employee of any
person, firm or corporation which is, directly or indirectly, in competition
with the business or activities of the Company or any of its subsidiaries or;
(b) directly or indirectly approach any such employee for
these purposes;
(c) authorize or knowingly approve the taking of such actions
by other persons on behalf of any such person, firm or corporation, or assist
any such person, firm or corporation in taking such action; or
(d) directly or indirectly solicit, raid, entice or induce any
person, firm or corporation who or which on the date hereof is, or at the time
during his employment with the Company or any of its subsidiaries shall be, a
customer of the Company or any of its subsidiaries,
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to become a customer for the same or similar products which it purchased from
the Company or any of its subsidiaries, of any other person, firm or
corporation, and the Employee shall not approach any such customer for such
purpose or authorize or knowingly approve the taking of such actions by any
other person; provided that if the Employee terminates this Agreement for good
reason or in the event of an involuntary termination by the Company, then this
subsection (d) shall not apply.
9. REMEDIES. The Employee hereby acknowledges that in the event of a
breach or threatened breach by him of the provisions of Sections 6, 7 or 8 of
this Agreement, the Company would suffer irreparable harm for which there would
be no adequate remedy at law. Accordingly, the Employee agrees that in such
event, in addition to any other remedies which the Company may have in law or in
equity for money damages or other relief, the Company shall be entitled to
temporary and/or injunctive relief, without the necessity of proving damages, to
enforce the provisions hereof.
10. SUCCESSORS. This Agreement is personal to the Employee and may not,
without the prior written consent of the Company, be assigned by the Employee
other then by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the legal representatives of the
Employee. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place. As used in this Agreement, "Company" shall mean the Company as
defined herein and any successor to its business and/or assets as aforesaid
which assumes this Agreement by operation of law or otherwise.
11. BINDING ARBITRATION. In the event that the Company and the Employee
cannot agree on an interpretation of any provision of this Agreement, or in the
event that either of the parties fails to make any payments or otherwise fulfill
any obligations required by the terms of this Agreement, the Company and the
Employee agree to resolve any such dispute through binding arbitration. Any
request for such arbitration shall be served on the other party by written
notice. The parties shall agree upon and select an arbitrator within 20 days
after written demand is made by either party for such arbitration. The
arbitrator shall set a time for hearing within 60 days of his/her selection.
Each party shall have an opportunity to present evidence on the issues in
dispute before the arbitrator and each party may be represented by legal counsel
if either so desires. The decision of the arbitrator shall be rendered in
writing to both parties within 30 days of the close of the hearing. The decision
of the arbitrator shall be final and binding upon both parties. Any legal fees,
expenses or other costs incurred by the Company and the Employee in connection
with such arbitration shall be borne by the Company. The parties agree that to
the extent not inconsistent with the foregoing provisions of this Section 11,
the then current rules of the American Arbitration Association shall apply.
12. INDEMNIFICATION.
(a) If the Employee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and the Employee had no reasonable
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cause to believe that his conduct was unlawful or detrimental to the Company,
the Company shall indemnify and hold harmless the Employee and his legal
representatives from and against any and all claims, losses, liabilities,
damages, costs, demands, causes of action (whether legal, equitable,
administrative, civil or criminal), judgments, settlements (subject to the last
sentence of paragraph (c) hereof), fines, court costs, and other expenses of any
kind or nature whatsoever, including, without limitation, attorneys' fees and
disbursements (collectively, "Losses"), which may be threatened against,
incurred or suffered by the Employee or his legal representatives in connection
with, relating to or arising out of, directly or indirectly, the Employee's
performance, duties and responsibilities to, for and on behalf of, the Company,
including, without limitation, (i) this Agreement and all actions or omissions
taken hereunder and (ii) any acts, omissions or alleged acts or omissions
arising out of the Employee's activities on behalf of the Company or in
furtherance of the interests of the Company.
(b) EXCEPTION. Notwithstanding anything contained herein or in
the By-Laws of the Company, the Company shall have no obligations to indemnify
the Employee if the Loss incurred by the Employee (i) arises out of an action
brought directly by the Company against the Employee or (ii) arises, directly or
indirectly, as a result of this Agreement being terminated for cause (as is
defined herein).
(c) NOTIFICATION OF CLAIM. Promptly after receipt by the
Company of notice of any claim against the Employee pursuant to which the
Employee is entitled to indemnification, the Company shall have the right to
assume the defense of such claim, including the employment of counsel of its
choice. Although the Employee shall have the right to employ his own counsel,
the fees and expenses of such counsel shall be at the expense of the Employee.
The Company shall not be liable for any settlement of any claim or action
effected without its written consent, PROVIDED, HOWEVER, that such consent was
not unreasonably withheld.
(d) PAYMENT OF INDEMNITY AMOUNTS. The Company agrees to pay
all amounts payable in respect of Losses immediately upon its receipt of a
statement with respect thereto rendered by the Employee, together with
appropriate supporting documentation thereof. It is the express intention of the
parties hereto that all such amounts shall be paid by the Company on or before
the date payment thereof is due, and that the Employee shall not be required at
any time to bear any costs or expenses on account of Losses.
13. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(b) The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
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(c) All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given if sent by
facsimile transmission, delivered by overnight or other carrier service, or
mailed, certified first class mail, postage prepaid, return receipt requested,
to the parties hereto at the following addresses:
If to the Company, to:
Xxxxxxxxx Industries, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chairman
Telecopier: (000) 000-0000
If to the Employee, to:
Xx. Xxxx X. Xxxxxx
c/x Xxxxxxxxx Industries, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
or to such other address as either party shall have furnished to the other in
accordance herewith.
(d) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(e) A party's failure to insist upon strict compliance with
any provision hereof shall not be deemed to be a waiver of such provision or any
other provision thereof.
(f) This Agreement embodies the entire agreement between the
Company and the Employee and supersedes all prior agreements and understandings,
oral or written, with respect to the subject matter hereof including, without
limitation, the Management Agreement.
(g) This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which, together, shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
XXXXXXXXX INDUSTRIES, INC.
By:__________________________________________
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
EMPLOYEE
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Zivi X. Xxxxxx
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