Exhibit 10.10
XXXXX X. XXXXXX
EMPLOYMENT AGREEMENT
This employment agreement ("Agreement") is made effective as of June
1, 1997, by and between CB Commercial, Inc. (the "Company") and Xxxxx
X. Xxxxxx ("Executive").
In consideration of the mutual promises and agreements set forth
herein, the Company and Executive agree as follows:
1. TERM
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1.1 The term of this Agreement ("Term") shall commence on June 1,
1997 and shall terminate on December 31, 2000 unless the Company
and executive expressly agree in writing to extend the Term
beyond December 31, 2000.
2. POSITION AND TITLE
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2.1 The Company hereby employs Executive as its Chairman of the
Board and Chief Executive Officer, and Executive hereby accepts
such employment.
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2.2 Executive shall devote substantially all of his efforts on a
full-time basis to the business and affairs of the Company and to
its subsidiaries and affiliates. Executive shall not engage in
any business or perform any services in any capacity whatsoever
that is competitive with the Company.
2.3 Executive shall at al times faithfully, industriously, and to
the best of his ability, experience, and talents, perform all of
the duties of the office of Chairman of the Board and Chief
Executive Officer of the Company.
2.4 As Chairman of the Board and Chief Executive Officer, Executive
shall be responsible to the Board of Directors of the Company for
all actions and activities of the Company.
3. BASE SALARY
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3.1 Executive's annual base salary shall be $500,000 effective
January 1, 1997 and payable in equal monthly installments. The
cumulative difference between the amount of salary earned by
Executive for the period January 1, 1997 through May 31, 1997 and
the amount Executive
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would have earned had Executive's annual base salary been
$500,000 during this period shall be paid to Executive in a lump
sum, without interest, no later than June 15, 1997.
3.2 Executive's annual base salary shall be reviewed each January
during the Term by the Compensation Committee of the Board of
Directors (the "Committee"). Such annual base salary may be
increased at the discretion of the Committee based on merit,
changes in the competitive market, or other considerations as the
Committee shall deem appropriate.
4. ANNUAL INCENTIVE BONUS
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4.1 During the Term, Executive shall be eligible for an annual cash
incentive bonus beginning with the 1997 calendar year.
4.2 Such annual incentive bonus shall be based on the Company's
performance against an EBITDA target mutually agreed to by
Executive and the Committee. The EBITDA calculation for bonus
determination hall include EBITDA related to acquisitions, but
shall exclude "one-time" charges and costs associated with
acquisitions. The EBITDA target for 1997
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shall be $68.1 million.
4.3 The relationship between Executive's annual incentive bonus
opportunity and the Company EBITDA target shall be according to
the following table.
Actual EBITDA Bonus As A
As A Percent of Target Percent of Base Salary*
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Below 90% 0%
90% 25%
100% 75%
110% 100%
120% 125%
130% 150%
140% and Above 200%
*For performance between discrete points, bonus opportunity shall
be interpreted linearly.
4.4 The annual incentive bonus determined in accordance with the
table in Paragraph 4.3 hereinabove may be reduced by a maximum of
25% by the
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Committee if, in the discretion of the Committee, Executive has
failed to satisfactorily achieve other important strategic or
personal objectives previously established for Executive by the
Board of Directors. Such objectives must be reasonable and must
be set forth in writing by March 31 of the year in which
performance is being measured.
4.5 The annual incentive bonus earned by Executive shall be payable
no later than March 31 of the year following the calendar year in
which the bonus is earned.
5. STOCK OPTIONS
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5.1 On May 23, 1997, the Company shall cause Executive to be
granted stock option for 200,000 shares of the Company's common
stock.
5.2 Such stock options shall (i) be granted pursuant to the
Company's 1991 Service Providers Stock Option Plan, (ii) be
granted at the closing price of the Company's common stock on the
date of grant (such price being $21.25 per share), (iii) be in
the form of non-qualified stock
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options with a term of 10 years from the date of grant, and (iv)
vest in 31 equal monthly installments, with the first installment
vesting on June 30, 1997 and subsequent installments vesting on
the last day of each subsequent month through December 31, 1999.
5.3 Executive acknowledges that the 200,000 stock options granted
in accordance with Paragraphs 5.1 and 5.2 hereinabove shall
represent the only stock option grants to which Executive is
entitled during the Term. Notwithstanding the foregoing,
additional stock options may be granted to Executive from time to
time during the Term at the sole discretion of, and by, the Board
of Directors of the Company.
6. EMPLOYEE BENEFITS AND PERQUISITES
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6.1 Executive shall have the right to participate in all medical,
life, disability, savings and retirement, and other benefits
programs and perquisites offered to other executive officers of
the Company, so long as such benefits programs and perquisites
are continued by the Company. Among these benefits and
perquisites is an automobile allowance of $1,000 per month
pursuant to the Company's current policy.
7. TERMINATION OF EMPLOYMENT
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7.1 During the Term, the Board of Directors of the Company may
terminate Executive's employment herein at any time for "Cause".
For purposes of this Agreement, "Cause" shall be defined as any
of the following events: (i) willful and habitual neglect by
Executive of his duties under this Agreement except for reason of
disability or incapacity, (ii) willful failure by Executive to
follow a direct order of the Board of Directors of the Company
except in such case where, in the sound business judgment of
Executive, following such order would be harmful to the Company,
(iii) conduct or action by Executive which, in he opinion of the
majority of the members of the Board of Directors, is materially
injurious to the Company, and (iv) conviction of Executive of any
felony.
7.2 In the event that the Company terminates Executive's employment
during the Term for any reason other than for Cause as defined in
Paragraph 7.1 hereinabove or as a result of Executive's death or
disability, such action hall be considered a Termination Without
Cause. In addition,
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any reduction in Executive's title, responsibilities, salary,
bonus opportunity, benefits and perquisites, or movement of
Executive's primary place of business by more than 50 miles from
its present location during the Term without Executive's written
consent also shall be deemed to be a Termination Without Cause.
7.3 In the event that a Termination Without Cause occurs, then:
(a) the Company shall pay Executive a lump sum severance amount
within thirty (30) days following termination equal to two (2)
times the sum of (i) Executive's annual base salary in effect
as of the date of termination, and (ii) the higher of 75% of
Executive's annual base salary in effect as of the date of
termination and the annual bonus Executive would have received
during the year of termination if the Company has achieved
100% of its EBITDA target and no discretionary reduction in
such bonus amount was applied by the Board of Directors;
(b) all unvested stock options and unvested "Equity Incentive
Plan" shares previously granted to Executive shall
automatically vest in full;
(c) the Company shall provide Executive with substantially the
same
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level of medical and disability benefits in effect for
Executive as of the date of Executive's termination, with
Executive remaining obligated to continue to pay employee
contributions towards such coverage at the same level as in
effect as of the date of Executive's termination until the
earlier of (i) the second anniversary of the date of
Executive's termination, and (ii) the date Executive becomes
employed by another party.
Executive shall not be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to
Executive under any of the provisions of Paragraph 7.3
hereinabove.
7.4 In the event that Executive should die or become disabled or
incapacitated for an uninterrupted period in excess of six (6)
months during the Term, then (i) all unvested stock options and
unvested "Equity Incentive Plan" shares previously granted to
Executive shall automatically vest in full, and (ii) Executive
(or Executive's
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beneficiaries in he event of death) shall be entitled to a
prorated annual incentive bonus payment based on the amount
Executive would have received had he remained employed for the
full calendar year and no discretionary reduction as applied to
Executive's bonus as determined by the Company's EBITDA
performance in accordance with Paragraph 4.3 hereinabove.
Proration of the annual incentive bonus shall be based on the
number of full weeks of Executive's employment with the Company
during the year divided by 52.
7.5 In the event that Executive should voluntarily resign or is
terminated for Cause by the Company during the Term, Executive
shall not be entitled to any of the severance benefits described
in Paragraph 7.3, including the accelerated vesting of any stock
option grants.
8. CHANGE OF CONTROL
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8.1 In the event of a Change of Control at any time during the Term
of this Agreement, then:
(a) all unvested stock options and unvested "Equity Incentive
Plan" shares previously granted to Executive shall vest in
full upon the Change of Control;
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(b) in the event that a Termination Without Cause occurs within a
period of twelve (12) months following the date of the Change
of Control, Executive shall be entitled to the termination
benefits described in Paragraphs 7.3(a) and 7.3(c)
hereinabove; provided that the lump sum severance amount paid
to Executive under this Paragraph 8.1(b) which is calculated
based on Paragraph 7.3(a) hereinabove shall (i) be reduced to
equal the present value, determined in accordance with IRC
280G(d)(4), of the lump sum severance amount which otherwise
would be payable under Paragraph 7.3(a), and (ii) shall be
reduced to offset compensation and other earned income earned
by Executive in the manner provided for in Paragraphs 8.1(c)
and 8.1(d) below;
(c) the amount of the lump sum severance amount payable to
Executive under Paragraph 8.1(b) which is calculated based on
Paragraph 7.3(a) shall be reduced by one hundred percent
(100%) of any compensation and other earned income (within the
meaning of Section 911(d)(2)(A) of the Internal Revenue Code
("IRC") which is earned by Executive for services rendered to
persons or entities
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other than the Company or its affiliates for two years
following he date of termination. Medical disability benefits
shall be offset as provided for in Paragraph 7.3(c);
(d) by December 31 of each year, Executive shall account to the
Company with respect to all compensation and other earned
income earned by Executive which is required hereunder to be
offset against the lump sum severance amount received by
Executive from the Company under Paragraph 8.1(b), which is
calculated based on Paragraph 7.3(a). If the Company has paid
a lump sum severance amount in excess of the amount to which
Executive is entitled (after giving effect to the offsets
provided for above), Executive shall reimburse the Company for
such excess by December 31 of such year. The requirements
imposed under this Paragraph 8.1(d) shall terminate two years
following the date of Executive's termination.
8.2 Notwithstanding any other provisions in this Agreement or any
other agreement, plan or arrangement, if any payment or benefit
received or to be received by Executive, whether under the terms
of this Agreement, or any other agreement, plan or arrangement
with the Company, or any other plan, arrangement or agreement
with any person whose actions result in a Change of Control, or
any person affiliated with the Company (all such payments and
benefits being hereinafter referred to
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as "Total Payments") would be subject, in whole or in part, to
taxes imposed by IRC Section 4999, when the portion of the Total
Payments payable under this Agreement shall be reduced to the
extent necessary so that no portion of the Total Payments shall
be subject to the parachute excise tax imposed by Section 4999
(after taking into account any reduction in the Total Payments
provided by reason of IRC Section 280G in any other plan,
arrangement or agreement).
8.3 As used herein, the term "Change of Control" means either (i)
the dissolution or liquidation of the Company; (ii) a
reorganization, merger or consolidation of the Company with one
or more corporations as a result of which the Company is not the
surviving corporation; (iii) approval by the stockholders of the
Company of any sale, lease, exchange or other transfer (in one or
a series of transactions) of all or substantially all of the
assets of the Company; (iv) approval by the stockholders of the
Company of any merger or consolidation of the Company in which
the holders of voting stock of the Company immediately before the
merger or consolidation will not own fifty percent (50%) or more
of the outstanding voting
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shares of the continuing or surviving corporation immediately
after such merger or consolidation; or (v) a change of 50% or
more (rounded to the next whole person) in the membership of the
Board of Directors of the Company within a 12-month period,
unless the election or nomination or election by stockholders of
each new director within such period was approved by the vote of
at least 75% (rounded to the next whole person) of the directors
then still in office who were in office at the beginning of the
12-month period.
9. COVENANTS
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9.1 Executive agrees that any and all confidential knowledge or
information, including but not limited to customer lists, books,
records, data, formulae, specifications, inventions, processes
and methods, developments, and improvements, which has or have
been or may be obtained or learned by Executive in the course of
his employment with the Company, will be held confidential by
Executive and that Executive will not disclose the same to any
person outside the Company either during his employment with the
Company or after his employment with the Company has terminated.
9.2 Executive agrees that upon termination of his employment with
the
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Company, he will immediately surrender and turn over to the
Company all customer lists, books, records, forms,
specifications, formulae, data, and all papers and writings
relating to the business of the Company and all other property
belonging to the Company, it being understood and agreed that the
same are the sole property of the Company and that Executive will
not make or retain any copies thereof.
9.3 Executive agrees that al inventions, developments or
improvements which he make, conceive, invent, discover or
otherwise acquire during his employment with the Company in the
scope of his responsibilities or otherwise shall become the sole
property of the Company.
10. MISCELLANEOUS
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10.1 All terms and conditions of this Agreement are set forth
herein, and there are no warranties, agreements or
understandings, express or implied, except those expressly set
forth herein.
10.2 Any modification of this Agreement shall be binding only if
evidenced
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in writing signed by both parties hereto.
10.3 In any action at law or in equity or enforce any of the
provisions or rights under this Agreement, the unsuccessful party
to such legislation, as determined by the Court in a final
judgment or decree, shall pay the successful party or parties all
costs, expenses and reasonable attorneys' fees incurred therein
by such party or parties (including without limitation such
costs, expenses and fees on any appeals), and if such successful
party or parties shall recover judgment in any such action or
proceeding, such costs, expenses, and attorneys' fees shall be
included as part of such judgment. Notwithstanding the foregoing
provision, in no event shall the successful party or parties be
entitled to recover an amount from the unsuccessful party or
parties for costs, expenses and attorneys' fees that exceeds the
costs, expenses and attorneys' fees of the unsuccessful party or
parties in connection with the action or proceeding.
10.4 Any notice or other communication required or permitted to be
given hereunder shall be deemed properly given if personally
delivered or deposited in the United States mail, registered or
certified and postage prepaid, addressed to the Company at 000
Xxxxx Xxxxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000-0000, or to Executive
at X.X. Xxx 0000, Xxxxxx
00
Xxxxx, XX 00000, or at such other addresses as may from time to
time be designated in writing by the respective parties.
10.5 The laws of the State of California shall govern the validity
of this Agreement, the construction of its terms, and the
interpretation of the rights and duties of the parties involved.
10.6 In the event that any one or more of the provisions contained
in this Agreement shall for any reason be held to be invalid,
illegal or unenforceable, the same shall not affect any of the
other provisions of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provisions
had never been contained herein.
10.7 This Agreement shall be binding upon, and inure to the benefit
of, the successors and assigns of the Company, and the personal
representatives, heirs and legatees of Executive.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the
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date first above written.
CB COMMERCIAL, INC.
By /s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
Chairman of the Compensation
Committee of the Board of
Directors
EXECUTIVE
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Chairman & Chief Executive Officer
