1
[XXXXXXX - WILS0N LETTERHEAD]
AMENDMENT TO
EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") is made and
entered into as of April 1, 1997, by and between XXXXXXX-XXXXXX, INC., A
Delaware corporation, with its principal office located in Santa Monica,
California (the "Company"), and Xxxxxxx X. Xxxx, an individual ("Employee").
RECITALS
WHEREAS, Company and Employee have entered into that certain Employment
Agreement dated as of April 1, 1996, (the "Agreement"), providing for the
employment of Employee by Company pursuant to the terms of such Agreement; and
WHEREAS, Company and Employee have agreed that the terms of the
Employment Agreement should be modified to change the Employee's term and
compensation.
AMENDMENT TO AGREEMENT
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties hereby amend the Agreement,
effective as of April 1, 1997 as follows:
1. The Term of the Agreement is extended until March 31, 1998.
Therefore, Section 2 of the Agreement is amended such that the
termination date of "March 31, 1997" is deleted and the
termination date of "March 31, 1998" is inserted in lieu
thereof.
2. Section 4(i) of the Agreement is amended such that Employee's
salary effective January 1, 1997 is equal to $150,600 per annum
payable on such basis as is the normal payment pattern of the
Company, not to be less frequently than monthly.
2
Subject to the foregoing, the Employment Agreement remains in
full force and effect, and Company and Employee hereby ratify and affirm
the Employment Agreement in each and every respect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date above written.
XXXXXXX-XXXXXX INTERNATIONAL
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------
Xxxxxxx X. XxXxxxxx
Chief Executive Officer
Date:
-----------------------------
EMPLOYEE
/s/ XXXXXXX X. XXXX, XX.
----------------------------------
Xxxxxxx X. Xxxx, Xx.
Date:
-----------------------------
2
3
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into as
of the 1st day of April, 1996, by and between Xxxxxxx-Xxxxxx, Inc., a Delaware
corporation with its principal office located in Santa Monica, California (the
"Company"), and Xxxxxxx X. Xxxx, Xx., an individual ("Employee").
A. KWI is a licensed California real estate broker in the business of
marketing real property by auction and other means and desires to retain the
services of Employee in conducting this business, subject to the terms and
conditions of this Agreement.
B. Employee desires to be employed by KWI pursuant to the terms and
conditions of this Agreement.
AGREEMENT
1. Services Provided to the Company. During the term of this Agreement,
Employee shall devote his full business time and best efforts in the employment
of the Company and its subsidiaries and shall have such powers and duties as may
from time to time be prescribed by the Board of Directors or the Chief Executive
Officer of the Company, which duties may, in the Company's reasonable
discretion, be changed in any legal manner from time to time; provided, however,
that any reassignment of Employee's duties shall not require him to move from
the Greater Los Angeles area and shall not involve duties which are not
appropriate for his level of expertise, ability or compensation level. Such
duties shall in all events be duties of an officer of the Company. The initial
duties of Employee shall include, without limitation, serving as Executive Vice
President and Chief Financial Officer of the Company with responsibility for
overseeing the financial affairs of the Company. Employee shall provide the
Company with the benefit of his best judgment and efforts in performing his
duties hereunder.
2. Term. Employee shall be employed by the Company pursuant to this
Agreement for a term beginning on the date of this Agreement and continuing
through to, and terminating at 11:59 PM on March 31, 1997 (unless earlier
terminated pursuant to Section 11 hereof).
3. Commitment to the Company. During the term of Employee's employment
under this Agreement, Employee shall not be involved, individually or as an
employee, principal, officer, general partner, director or shareholder, in any
real estate development activities without first obtaining the consent and
approval of a majority of the Company's Board of Directors, the consideration of
such consent shall not be unreasonably delayed and such consent shall be given
or withheld on a
4
consistent basis with the grant or refusal of the Board to grant consent to real
estate development activities by other officers of the Company who are party to
employment agreements with the Company. The limitation contained in this Section
shall not apply, however, to the ownership of no more than 1% of the capital
stock of any publicly held corporation or to participation in real estate
development activities as a limited partner. For purposes of this Section,
Employee shall be deemed the owner of any interests held by Employee, Employee's
spouse, or any other unemancipated minor member of Employee's family.
4. Compensation to Employee. During the term of this Agreement, the
Company shall pay to Employee compensation ("the Compensation") consisting of:
(i) a salary equal to $125,600 per annum, payable on such basis
as is the normal payment pattern of the Company, not to be less frequently than
monthly;
(ii) a discretionary bonus to be determined by the Company in its
sole and absolute discretion which if awarded may be up to 40% of base salary
($50,000) based on Company's determination in its sole and absolute discretion
of its achievement of profit goals. In determining whether any bonus shall be
paid and the amount thereof, Company may examine a number of factors including,
without limitation, employee achievement of the following:
a. To what extent did Employee provide Company Management with
proactive and timely advise to enhance and further Company's
business transactions and successes.
b. To what extent did Employee provide accurate, timely and
appropriate financial reports to Management, Board of Directors
and Public.
c. To what extent did Employee provide financial statements with
analysis and action plan to CEO by the 15th of the following
month.
d. To what extent did Employee manage accounting for capital
expenditures and K-W owned properties.
e. To what extent did Employee manage bank relationships.
f. To what extent did Employee provide financial analysis,
direction and control to guide the Company in meeting profit
goals.
Employee acknowledges that Company has not provided Employee with any
projections or estimates of Net Profit or Net Revenue that might be received by
Employee under the terms of this Agreement as an inducement to Employee to
accept employment with Company.
5
5. Expenses. Employee shall be entitled to reimbursement from the
Company for any out-of-pocket expenses, including travel expenses (which shall
not include the expense incurred for Employee's daily commute to and from work),
incurred by Employee in the ordinary course of providing his services hereunder
and shall not exceed $300.00 per month. Such reimbursement shall be made by the
Company after receipt of a statement therefor from Employee setting forth in
reasonable detail the expenses for which reimbursement is requested, accompanied
by customary documentation evidencing such expenses. In those instances, where
out of town travel and per diem or where rare and unusual circumstances arise
and may be required, expenses may exceed the $300 limit provided they are
pre-approved by Xxxxxxx X. XxXxxxxx.
6. Deductions. It is understood that all compensation paid to Employee
under this Agreement is subject to the customary tax, social security and other
similar withholding requirements.
7. Benefits. For such time as Employee is employed by KWI, he shall be
entitled to the same medical, dental and insurance, 401k plan, and other
benefits as are generally available to other employees of KWI from time to time
during the course of this Agreement.
8. Noncompetition Covenant. For so long as Employee is employed under
this Agreement and for a period of three years thereafter, Employee will not,
directly or indirectly:
(a) (i) in any manner induce, attempt to induce, or assist others to
induce or attempt to induce any employee, partner, joint venture, independent
contractor, agent or customer of the Company to terminate its, his or her
association with the Company, or (ii) do anything to interfere with the
relationship between the Company and such person or entity or other persons or
entities dealing with the Company; or
(b) Employee further acknowledges that all trade secrets, know-how,
technology data, formulae, plans, specifications and other information used by
the Company or under development in connection with its business are the
property of the Company, and that Employee does not have the right to disclose,
make available or use any of the foregoing for the benefit of himself or any
other person or entity.
(c) Nothing in this Section 8 shall restrict Employee from owning not
more than 1% of the outstanding shares of any class of securities registered
pursuant to the Securities Exchange Act of 1934, as amended, or any limited
partner interest in a limited partnership or similar passive investment interest
so long as the nature of such investment prevents, pursuant to applicable law,
Employee's control of the management of the issuer of such investment interest.
3
6
(d) The parties hereto intend that the covenants and agreements
contained in this Section 8 shall be deemed to be a series of separate covenants
and agreements, one for each and every country, county, state, city and other
jurisdiction in the world with respect to which the Company's business has been
or is hereafter carried on. If any of the foregoing is determined by any court
of competent jurisdiction to be invalid or unenforceable by reason of such
agreement extending for too great a period of time or over too great a
geographical area, or by reasons of its being too extensive in any other
respect, such agreement shall be interpreted to extend only over the maximum
period of time and geographical area and to the maximum extent enforceable, all
as determined by such court in such action. Any determination that any provision
hereof is invalid or unenforceable, in whole or in part, shall have no effect on
the validity or enforceability of any remaining provision thereof.
Notwithstanding the foregoing, nothing herein shall prevent Employee,
following the termination of his employment or the end of the term of this
Agreement, from being associated with any person or entity engaged in any real
estate activities or matters other than real estate auction activities or
matters or other activities which constitute a primarily line of business of the
Company at the time of such termination.
9. Confidential and Proprietary Information. Employee recognizes that he
has occupied and will occupy a position of trust with respect to business
information of a confidential or proprietary nature which is the property of the
Company and which has been and will be imparted to him from time to time in the
course of the performance of his duties under this Agreement. Employee agrees
that he shall not at any time, whether during the term hereof or thereafter, use
or disclose directly or indirectly any confidential or proprietary information
of the Company to any person, except that he may use and disclose to other
Company personnel such confidential and proprietary information in the course of
the performance of his duties hereunder. For purposes of this Agreement, the
term "confidential or proprietary information" of the Company shall, include all
information which is owned by the Company and which is not at the time publicly
available or generally known to persons engaged in businesses similar to that of
the Company, including practices, procedures and methods and other facts
relating to the business of the Company; practices, procedures and methods and
other facts related to sales, marketing, advertising, promotions, financial
matters, clients, client lists of the Company and similar information of a
confidential and proprietary nature.
10. Stock Options. Upon execution of this Agreement the Company shall
grant to Employee under the Company's 1992 Incentive and Nonstatutory Stock
Option Plan a non-transferable non-incentive option to purchase an aggregate of
5,000 shares of the Common Stock at an exercise price equal to the price of the
Common Stock on the effective date of the Agreement. The grant of such options
is to be approved by the Stock Option Committee of the Board of Directors of the
Company on such terms and subject to such conditions as are set forth in the
stock
4
7
option agreement between the Company and Employee and an additional 5,000 shares
of Common Stock on 12/31/96 providing Company and individual goals for 1996 are
met.
11. Termination.
(a) This Agreement will terminate upon the death or physical or mental
incapacity of Employee. Incapacity shall mean the inability to perform
the services due hereunder for a consecutive 60 calendar day period.
(b) This Agreement may also be terminated by the Company:
(i) in the event of a material breach of this Agreement by
Employee (which shall be limited only to a material breach by
Employee of the terms of Sections 3, 8 or 9 hereof or the first
sentence of Section 1 hereof).
(ii) for cause.
(c) This Agreement may be terminated by Employee at any time provided
that such termination shall have the effect set forth in paragraph (d)
below.
(d) Termination of this Agreement pursuant to Section 11(b) shall not
relieve Employee of his obligations to comply with Sections 8 and 9
hereof. If Employee resigns due to the Company's material breach which
is not corrected within ten days after the Employee's written notice of
the breach to the Company, then Employee shall be relieved of his
obligations under Section 8 hereof. If Employee resigns for any other
reason then his obligations under Sections 8 and 9 hereof will continue
to apply. Upon the termination of this Agreement by the Company pursuant
to Section 11(b) or upon the resignation of Employee during the term of
this Agreement other than following a material breach by the Company
hereunder, or prior to termination under Section 8 and 9 if applicable,
any further compensation to Employee shall terminate on the date this
Agreement is so terminated by the Company or Employee resigns. In all
other cases, Employee, or his estate, will receive all salary, bonuses
and fringe benefits (or if such fringe benefits cannot be provided
pursuant to the terms of the applicable plans, comparable benefits) due
hereunder and remaining to be paid during the term hereof in the
ordinary course, provided that the payment of fringe or comparable
benefits shall be subject to the availability of such benefits following
Employee's termination of employment at no additional cost above what
was previously being paid by the Company.
5
8
1 2. General Provisions.
(a) Notices. Any notice to be given pursuant to this Agreement shall be
in writing and, in the absence of receipted hand delivery, shall be deemed duly
given when mailed, if the same shall be sent by certified or registered mail,
return receipt requested, or by a nationally recognized overnight courier and
the mailing date shall be deemed the date from which all time periods pertaining
to a date of notice shall run. Notices shall be addressed to the parties at the
following addresses:
If to the Company, to: Xxxxxxx-Xxxxxx, Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Chief Executive Officer
If to Employee, to: Xx. Xxxxxxx X. Xxxx, Xx.
00 Xxxxxx Xxxxxx Xxxx
Xxxxxxx Xxxxx Xxxxxxx, XX 00000
(b) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the Company and any successors whether by merger,
consolidation, transfer of substantially all assets or similar transaction, and
it shall be binding upon and shall inure to the benefit of Employee and his
heirs and legal representatives. This Agreement is personal to Employee and
shall not be assignable by Employee.
(c) Waiver of Breach. The waiver by the Company or Employee of a breach
of any provision of this Agreement by the other shall not operate or be
construed as a waiver of any subsequent breach by the other.
(d) Entire Agreement/Modification. This Agreement shall constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof, and shall supersede all previous oral and written and all
contemporaneous oral negotiations, commitments, agreements and understandings
relating hereto. Any modification of this Agreement shall be effective only if
it is in writing and signed by the parties to this Agreement.
(e) Severability. Any provision of this Agreement which is deemed
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction and subject to this paragraph be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provisions of this Agreement invalid, illegal, or unenforceable in any other
jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable
because its scope is considered excessive, such covenant shall
6
9
be modified so that the scope of the covenant is reduced only to the minimum
extent necessary to render the modified covenant valid, legal and enforceable.
(f) Counterparts. This Agreement may be executed in a number of
identical counterparts, each of which shall be deemed an original for all
purposes.
(g) Choice of Law. This Agreement shall be governed by the laws of the
State of California.
(h) Alternative Dispute Resolution. The parties to this Agreement
specifically desire an early resolution of any dispute between them which arises
out of this Agreement. It is therefore, agreed that any controversy arising out
of this Agreement, whether dealing with breach, interpretation or otherwise,
shall be heard by a reference ("Referee") pursuant to the provisions of Section
638 of the Code of Civil Procedure and in accordance with the provisions
described below. Provided, however, that if injunctive relief is sought, the
complaining party may seek such relief from the Los Angeles Superior Court
without the use of a Referee.
1. Enforcement of Agreement. This reference provision may be enforced
by the filing of a complaint or petition or motion seeking specific enforcement.
Service of such motion on the opposing party shall constitute the "Claim Date"
for purposes of this provision.
2. Selection of Referee. The Referee shall be a retired Judge of the
Court selected by mutual agreement of the parties. If the parties cannot agree
then a Referee shall be appointed by the Los Angeles Superior Court in
accordance with Section 640 of the Code of Civil Procedure. Each party shall be
entitled to only one disqualification pursuant to Section 170.6 of the Code of
Civil Procedure. The parties hereby waive their right to a trial by jury and
agree that their dispute shall be tried by the Referee so selected.
3. Decisional Rules. The trial shall be conducted and the issues
determined in compliance with all judicial rules and all statutory and
decisional law of the Sate of California as if the matter were formally
litigated in Superior Court. The Referee shall conduct and decide all pre-trial
and post-trial procedures as if the matter were formally litigated in the
Superior Court. All rules of evidence as set forth in the California Evidence
Code, other statutory and decisional law of California and all relevant Los
Angeles County Superior Court Rules and California Rules of Court shall be
applicable to any proceeding before the Referee.
4. Discovery. The parties to this Agreement expressly waive their right
to engage in any discovery with the exception of depositions and requests for
the inspection, production and copying of documents. Interrogatories, requests
for admissions and depositions upon written interrogatories shall not be
permitted. The
7
10
Referee shall be authorized to issue subpoenas requiring attendance at hearings
and, or trial. All discovery permitted by this Agreement shall be completed no
later than fifteen (15) days before the first hearing date established by the
Referee. The Referee may extend such period in the event of a party's refusal to
provide requested discovery for any reason whatsoever, including legal
objections raised to such discovery or unavailability of a witness due to
absence or illness. No party shall be entitled to "priority" in conducting
discovery. Depositions may be taken by either party upon seven (7) days written
notice. Request for production or inspection of documents shall be responded to
within ten (10) days after service. All disputes relating to discovery shall be
submitted to the Referee whose decision shall be final and binding upon the
parties.
5. Hearings and Trial. Except as set forth in this Agreement, the
Referee shall determine the manner in which the proceeding is conducted
including the time and place of all hearings, the order or presentation of
evidence, and all other questions that arise with respect to the course of the
proceeding. All proceedings and hearings conducted before the Referee, except
for trial, shall be conducted without a court reporter unless one is requested
by a party. The party making the request shall have the obligation to arrange
and pay for the court reporter. The costs of the court reporter at the trial
shall be borne equally by the parties. The trial shall be conducted without a
jury on consecutive dates, as opposed to being conducted piecemeal on various
dates separated by postponements or adjournments. The trial shall be conducted
in a courtroom or in surroundings with formality as close to a courtroom as
possible. The Referee shall set the matter for hearing within sixty (60) days
after the Claim Date and try all issues of law or fact and report a statement of
decision upon them, if possible, within ninety (90) days of the Claim Date.
6. Decision of Referee. The Referee shall be empowered to enter
equitable as well as legal relief, to provide all temporary and/or provisional
remedies and to enter equitable orders that will be binding upon the parties.
The Referee shall issue a single judgment at the close of the proceeding which
shall dispose of all of the claims of the parties that are the subject of the
reference. Any decision rendered by the Referee shall be final, binding and
conclusive and judgment shall be entered pursuant to Section 644 of the Code of
Civil Procedure in any court in the State of California having jurisdiction.
7. Attorneys' Fees. The cost of the Referee shall be shared equally
between the parties. However, the prevailing party shall be entitled to receive
as part of the judgment in its favor an award of all actual attorneys' fees and
costs (including the Referee and court reporter fees) incurred with respect to
the reference, and interest at the highest rate permitted by law as of the date
of the breach.
8. Appeal The judgment entered upon the decision of the Referee shall be
subject to all post-trial procedures and to appeal in the same manner as an
appeal
8
11
from any order or judgment in a civil action.
(i) Assignment. This Agreement is for the unique personal services of
Employee and may not be assigned by Employee without the express written consent
of KWI. Except as so provided, this Agreement shall be binding upon and inure to
the benefit of the respective heirs, personal representatives, successors and
assigns of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
XXXXXXX-XXXXXX INTERNATIONAL
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------
XXXXXXX X. XXXXXXXX
Date: 4/22/96
-----------
EMPLOYEE
By: /s/ XXXXXXX X. XXXX
-------------------------------
XXXXXXX X. XXXX
Date: 4/17/96
-----------
9
12
SECOND AMENDMENT TO
EMPLOYMENT AGREEMENT
This Second Amendment to Employment Agreement (the "Second Amendment")
is made and entered into as of January 1, 1998, by and between XXXXXXX-XXXXXX,
INC., A Delaware corporation, with its principal office located in Santa Monica,
California (the "Company"), and Xxxxxxx Xxxxxx, an individual ("Employee").
RECITALS
WHEREAS, Company and Employee have entered into that certain Employment
Agreement dated as of January 1, 1997, (the "Agreement") providing for the
employment of Employee by Company pursuant to the term of such Agreement; and
WHEREAS, Company and Employee have agreed that the terms of the
Employment Agreement should be modified to change the Employee's Term and
Compensation.
AMENDMENT TO AGREEMENT
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties hereby amend the Agreement,
effective as of January 1, 1998 as follows:
1. The Term of the Agreement is extended until December 31, 1999.
Therefore, Section 3 of the Agreement is amended such that the
termination date of "December 31, 1998" is deleted and the
termination date of "December 31, 1999" is inserted in lieu
thereof.
2. Section 5(a) is deleted in its entirety and the following is
inserted in lieu thereof:
5(a) Employee shall be paid an annual salary equal to
$250,000 per annum for the period of January 1, 1998 to
December 31, 1999, payable on such basis is the normal
payment pattern of the Company, not to be less
frequently than monthly.
Subject to the foregoing, the Employment Agreement remains in full force
and effect, and Company and Employee hereby ratify and affirm the Employment
Agreement in each and every respect.
13
IN WITNESS WHEREOF, the undersigned have executed this Second Amendment
as of the date first above written.
"EMPLOYEE"
/s/ XXXXXXX XXXXXX
-------------------------------
Xxxxxxx Xxxxxx
"Company"
XXXXXXX-XXXXXX, INC.,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------
Xxxxxxx X. XxXxxxxx
Chief Executive Officer
