EXHIBIT 99.3
AMENDED AND RESTATED
EMPLOYMENT AND CONSULTING AGREEMENT
This Employment and Consulting Agreement (the "Agreement"), which is
amended and restated as of December 12, 2007, was originally entered into as of
January 1, 2004 (the "Effective Date"), by and between Xxxxxx Xxxxxxx, residing
at 000 Xxxx 00xx Xxxxxx, Xxx. 00X, Xxx Xxxx, Xxx Xxxx 00000 ("Executive") and
PRESIDENTIAL REALTY CORPORATION, a Delaware corporation having offices at 000
Xxxxx Xxxxxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000 (the "Company") and subsequently
amended as of January 3, 2006;
W I T N E S S E T H:
WHEREAS, Company is desirous of employing Executive as its Executive
Vice President and Chief Financial Officer; and
WHEREAS, Executive desires to render such services to Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties hereto agree as follows:
1. Employment. Company hereby employs Executive as its Executive Vice
President, Chief Financial Officer and Executive hereby accepts such employment,
upon the terms and conditions hereinafter set forth.
2. Duties.
(a) In his capacity as Executive Vice President and Chief Financial
Officer of Company during the Employment Term, the Executive shall perform for
Company the executive, administrative and technical duties customarily
associated with such positions, as well as such other duties reasonably
consistent therewith as may be reasonably assigned to Executive from time to
time by the President or the Board of Directors of Company; provided, however,
that the duties assigned shall be of a character and dignity appropriate to a
senior executive of a corporation and consistent with Executive's experience,
education and background.
(b) Except as otherwise set forth in this paragraph, during the
Employment Term the (i) Executive shall devote his full time and efforts during
normal business days and hours to the performance of this Agreement; and (ii)
Executive shall not engage in the real estate business or in any other business
which conflicts with or competes in any material way with the business of
Company. Notwithstanding the foregoing, (x) Executive may devote reasonable time
and efforts during normal business days and hours to the business of Scorpio
Entertainment, Inc. and Scorpio Ventures, Inc. (collectively "Scorpio") pursuant
to the Option/Shareholders Agreement dated November 14, 1991 among Employer,
Scorpio, Xxxxxx Xxxxxx, Xxxxxx Xxxxxxx and Xxxxxxx X. Xxxxxx, as modified by
certain agreements dated as of August 1, 1996 between such parties (the "Option
Agreement") and the Employment Agreement between Executive and Scorpio executed
pursuant to the Option Agreement and (y) Executive may devote such time and
efforts to winding up the business of Ivy Properties Ltd. and its affiliates
(collectively, "Ivy") as Executive deems reasonably necessary, so long as the
devotion of such time and effort does not conflict or interfere with Executive's
performance of his duties as Executive Vice President and Chief Financial
Officer of Company and in fact Executive does diligently perform his duties as
Executive Vice President and Chief Financial Officer of Company to the
satisfaction of the Board of Directors of Company. During the Term of this
Agreement, Employer will permit Executive, at no cost to Executive, to utilize
his office space to carry on the business of Scorpio to the extent permitted by
this paragraph (b), provided, however, that Executive and/or Scorpio will pay,
or reimburse Employer for, the direct costs for duplicating, telecopying,
telephone and other business expenses used by Scorpio in a manner reasonably
satisfactory to Employer.
(c) During the Consulting Term, Executive will be engaged by Company
as a consultant to render to Company such consulting services as may be
reasonably assigned to him from time to time by the Board of Directors of
Company, or by the Executive Committee of Company, provided that such services
are of a type, dignity and nature appropriate to the former Executive Vice
President and Chief Financial Officer of Company and further provided that: (i)
such consulting services shall be required to be rendered by him only in White
Plains, New York or such other location in the United States designated by
Executive; (ii) Executive's inability to act as such consultant by reason of
illness, disability or lack of capacity shall not be deemed a breach of this
Agreement; and (iii) such services shall not be detrimental or injurious to
Executive's health. It is further agreed that such services shall not require
more than sixty (60) hours service during any month; that Executive's
unavailability at any particular time shall not constitute a breach of this
Agreement; such services may be rendered by telephone, mail or other means of
communication; and that Executive's failure to render such services because of
his absence from White Plains, New York or such other location in the United
States designated by Executive shall not be deemed a breach of this Agreement.
3. Term.
(a) The employment term ("Employment Term") of this Agreement shall
commence on the Effective Date and shall continue until the earliest of (i)
three years after notice from Company to Executive terminating the Employment
Term, (ii) Company ceasing to do business as a result of it having been finally
declared bankrupt or insolvent by a court of competent jurisdiction in
accordance with Treasury Regulation Section 1.409A-3(j)(4)(ix)(A)
("Bankruptcy"), (iii) December 31, 2011, or (iv) upon Executive providing a
level of services that has permanently decreased to below twenty five percent
(25%) of the average level of services performed over the immediately preceding
twelve (12) months in accordance with Treasury Regulation Section 1.409A-1(h)(1)
(ii) (a "Separation from Service"). The consulting term ("Consulting Term") of
this Agreement shall be the three-year period commencing on the termination of
the Employment Term for any reason other than for cause, Executive's voluntary
resignation pursuant to Section 11(f), Executive's death, Executive's Permanent
Disability or Company's Bankruptcy. The Consulting Term shall terminate in the
event of Executive's discharge for cause, voluntary resignation, death or
Permanent Disability, or Company's Bankruptcy. The term ("Term") of this
Agreement shall be for the full Employment Term and Consulting Term.
(b) This Agreement may be terminated at any time by Company for
"cause," as defined herein. For the purpose of this Agreement, termination of
Executive's employment or engagement shall be deemed to have been for "cause"
only if termination of his employment or engagement, as the case may be, shall
have been the result of (i) the conviction of Executive of any crime
constituting a felony or any other crime involving moral turpitude, (ii)
Executive's willful refusal to follow a reasonable direction of the Board of
Directors of Company after written notice that such continued refusal shall
result in termination of his employment or engagement as a consultant, for
cause; (iii) Executive's failure to fulfill his employment duties hereunder as
is required by Section 2(b) above after written notice that such continued
failure shall result in termination of his employment for cause; or (iv)
Executive's failure to fulfill his consulting duties hereunder as is required
by and subject to the provisions set forth in Section 2(c) above after written
notice that such continued failure shall result in termination of his consulting
services for cause.
(c) This Agreement may also be terminated by Company as set forth in
Section 11 or Section 13 below.
4. Compensation and Fees.
(a) During the Employment Term, Company shall pay to Executive in
consideration of the services to be rendered hereunder compensation in the form
of a salary:
(i) for the period beginning on the Effective Date and ending on
December 31, 2004, at the annual rate of Two Hundred One Thousand Four Hundred
Thirty and 80/100 ($201,430.80) Dollars; and
(ii) for the calendar year beginning on January 1, 2005, and for
every calendar year thereafter commencing during the Employment Term of this
Agreement, in an amount equal to the salary paid for the previous calendar year
times the lesser of (i) 1.05 and (ii) the Cost of Living Adjustment Factor
(as hereinafter defined);
The salary for all such periods shall be prorated if any partial
calendar year is involved and shall be paid less appropriate deductions, if any,
for federal, state and city income taxes, FICA contributions, N.Y.S. disability
and any other deductions required by law.
The Cost of Living Adjustment Factor as it is applied in calculating
compensation payable to Executive for any period referred to above (and
retirement compensation payable to Executive for any period described in Section
12 below) shall be the sum of (x) one (1) plus (y) a fraction (A) which has as
its numerator the amount, if any, by which the Revised Consumer Price Index for
Urban Wage Earners and Clerical Workers for the New York-Northern New Jersey
area (1982-84=100), published by the U.S. Department of Labor Statistics (the
"Index") for the last calendar month preceding the commencement of such period
(which will be December in each case of annual salary described in this Section
4) (the "Increase Index Month") exceeds the Index for the calendar month
occurring one year prior to the Increase Index Month (the "Base Index Month"),
and (B) which has as its denominator the Index for the Base Index Month.
In the event that the Index is converted to a different standard
reference base or otherwise revised, the determination of increased compensation
under this Section 4 and/or retirement compensation under Section 12 shall be
made with the use of such conversion factor, formula or table for converting the
Index as may be published by the Bureau of Labor Statistics or, if said Bureau
shall not publish the same, then with the use of such conversion factor, formula
or table as may be published by Xxxxxxxx-Xxxx, Inc., or any other nationally
recognized publisher of similar statistical information. If the Index ceases to
be published, and there is no successor thereto, such other index as Executive
and Company shall agree upon in writing shall be substituted for the Index. If
Executive and Company are unable to agree as to such substituted index, such
substituted index shall be that determined by arbitration in accordance with the
procedures of the American Arbitration Association.
In the event that the Index is not available for any month provided for
above, the next available Index shall be used instead, and if the next available
index is available following a payment for which an adjustment should have been,
then a retroactive adjustment shall also be made.
(iii) Executive's compensation shall be payable in equal
installments in arrears, in the same frequency as other senior officers of
Company are paid, but in any event not less frequent than twenty-six (26)
bi-weekly installments.
(b) As compensation for Executive's services during the Consulting
Term, Company shall pay consulting fees at the annual rate of 50% of the salary
which was in effect under Section 4(a)(ii) on the day preceding the
commencement of the Consulting Term plus the Cost of Living Adjustment Factor
as provided in Section 4(a)(ii), less any deductions required by law. Such fees
shall be payable in equal installments in arrears, in the same frequency as
senior officers of Company are paid, but in any event not less frequently than
twenty-six (26) biweekly installments. Such fees for the second and third years
of the Consulting Term shall likewise be adjusted for the Cost of Living
Adjustment Factor as provided in Section 4(a)(ii).
5. Indemnification. The Indemnification Agreements previously executed
by Executive and Company shall remain in full force and effect during the Term
of this Agreement including the Employment Term and the Consulting Term.
6. Vacations. Executive shall be entitled during the Employment Term of
this Agreement to four weeks vacation annually at full compensation.
7. Fringe Benefits.
(a) During the Employment Term of this Agreement, Executive shall be
entitled to the extent permitted by applicable law and the applicable plans and
agreements providing the benefits, at Company's expense, to participate in (a)
the following benefit programs which Company now maintains for its employees:
(i) its Defined Benefit Pension Plan, (ii) its Section 125 cafeteria plan, (iii)
its Section 401 (k) plan if any, (iv) its health insurance plan for employees
only, (v) its disability insurance plan, and (vi) its group life insurance plan;
and (b) all benefit programs that Company hereafter establishes and makes
available to either employees in general or to other senior executive management
(without intending to provide duplicate coverage to Executive if Company makes
such available to both employees in general and to senior executive management).
(b) During the Consulting Term Executive shall be entitled to the
extent permitted by applicable law and the applicable plans and agreements
providing the benefits, at Company's expense, to participate in the following
benefit programs which Company now maintains to the extent available for its
consultants: (i) its health insurance plans; (ii) its disability insurance
plans; and (iii) its group life insurance plans.
(c) If obtainable during the Term and at Executive's option and, if
exercised, at Executive's sole cost and expense, Company shall include
Executive's spouse and children under the health insurance plan maintained by
Company for Executive.
(d) In addition, during the Employment Term of this Agreement, (i)
Company shall also pay for the premiums on Executive's existing life insurance
policy up to a maximum of $12,075 per annum and (ii) Company shall pay and be
responsible for all costs of ownership attributable to the automobile which
Company currently owns and provides Executive for its use, and for any
replacement automobile leased or purchased by Company pursuant to Section 9
below.
(e) In addition, during the Term and subject to Executive providing
proper documentation, Company shall reimburse Executive for reasonable travel,
entertainment and other expenses incurred by Executive in providing services
hereunder on behalf of Company, including pre-approved expenses during the
Consulting Term.
(f) Following any termination of the Employment Term, to the extent
permitted by law and the party providing such benefits, Executive may, at his
sole cost and expense, continue any fringe benefits, if obtainable, then being
provided to Executive which are not provided by Company during the Consulting
Term under (b) above.
8. Bonus.
(a) Subject to paragraph (b) of this Section 8, in addition to the
compensation set forth above, Executive shall be entitled to a bonus payable
with respect to each calendar year occurring during the Employment Term of this
Agreement (for purposes of this Section 8 each a "Bonus Year") in an amount
equal to 7.5% of the product of (i) the amount by which the Per Share Net Cash
From Operations (as hereinafter defined) for such Bonus Year exceeds $.57 per
share for calendar years 2004, 2005 and 2006, $.60 per share for calendar years
2007, 2008 and 2009, and $.63 per share for calendar years 2010 and 2011 to the
extent any aforesaid year is a Bonus Year and (ii) the number of shares
outstanding at the end of such Bonus Year. Notwithstanding the foregoing, the
bonus in any Bonus Year shall not exceed 33 1/3% of the salary compensation set
forth in Section 4 for such year (prorated if any partial year is involved or
prorated through the date of any merger of Company or the sale or liquidation
of all or substantially all of its assets, as the case may be). The term Per
Share Net Cash from operations shall mean the Net Income for such Bonus Year
(as shown on Company's Audited Financial Statements), with the following
adjustments, divided by the number of shares outstanding at the end of such
Bonus Year.
(i) the addition back of any extraordinary deductions to income;
(ii) the addition back of depreciation of non-rental property,
depreciation on rental real estate and amortization of mortgage and organization
costs;
(iii) with respect to the sales of property and investments,
including foreclosed property, recognized in any Bonus Year (x) there shall be
deducted from net gain or loss, any discount or deferred gain, and (y) any
depreciation taken on the sold property during the periods that it was owned by
Company shall be added back before calculating the amount of the net loss or net
gain.
(iv) the subtraction of all "amortization of discounts on notes
and fees" which are included in Net Income.
The Compensation Committee of Company shall calculate the Per Share Net
Cash from Operations in accordance with the formula set forth above, subject to
such adjustments for extraordinary or unforeseen transactions, including but not
limited to capital gains transactions, as in the reasonable judgment of the
Compensation Committee are fair and equitable to Company and Executive. Said
calculations shall be made with respect to any Bonus Year without regard to the
bonus payable in accordance with this Agreement (or any other employment or
similar Agreement with senior management) attributable to said year and/or
attributable to a prior year or years but paid in said year.
The bonus for any Bonus Year shall be paid no earlier than January 1st
of the year following the Bonus Year and no later than December 31st of the year
following the Bonus Year; provided, however, that if by March 15th of any year,
the bonus for the prior Bonus Year has not been finally determined, then the
bonus shall be estimated and an amount equal to the estimated bonus will be paid
to Executive on March 15th and as soon as the actual bonus is finally
determined, the parties will make an appropriate adjustment, which shall be paid
on or before December 31st of the year following the Bonus Year.
Notwithstanding any other provisions of this Agreement, but subject to
paragraph (b) of thus Section 8, in the event of any changes in Company's
outstanding common stock by reason of a stock dividend, recapitalization,
merger, consolidation, reorganization, split up, extraordinary dividend,
combination or exchange of shares, or the like, Company and Executive shall, if
applicable, attempt in good faith to agree on appropriate adjustments to the
bonus calculation referred to in this paragraph so as to substantially carry out
the intention of this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary (i)
Executive shall not be entitled to a bonus on account of (w) any period
following the expiration of the Employment Term of this Agreement as set forth
in Section 3 above, (x) any Bonus Year in which his employment terminated
pursuant to Section 11(f) below or in which his employment is terminated for
cause, (y) any period following a merger of Company or the sale or liquidation
of all or substantially all of its assets, or (z) any Bonus Year occurring after
a Bonus Year or period described in clauses (w), (x) or (y) above, (whichever
first occurs), and (ii) if this Agreement is terminated by reason of the
Executive's Permanent Disability or pursuant to Section 11(d), Executive's
bonus for the Bonus Year in which such termination occurs shall be paid (x) to
the extent provided in Section 11(b) as of the date on which compensation is no
longer payable under said Sections 11(b) and (y) in the case of termination
pursuant to Section 11(d) as of the end of the calendar year in which such
notice of termination is given. In calculating Per Share Net Cash from
Operations to any such date (if it is not the last day of a calendar year) the
parties shall adjust (by projection to said date or as of said date, as the
case may be) based on the Net Income for the period ending on March 31, June 30,
September 30 or December 31 of such Bonus Year, whichever of said dates is
closest to the date with respect to which the Bonus is calculated.
9. Purchase of Replacement Automobile. During the Employment Term, upon
the request of Executive made subsequent to (i) July 1, 2007, and (ii)
thereafter, made subsequent to not less than 36 months from the previous request
made by Executive pursuant to this Section 9, Company shall make available to
Executive a new automobile for Executive's use, said automobile to be of a make
and model reasonably acceptable to Executive. Said automobile shall, at
Company's option, be either leased by Company or purchased by Company (title to
remain in Company's name). With respect to the first such request made by
Executive pursuant to this Section 9, the purchase price of said automobile
(exclusive of taxes), regardless of whether said automobile is purchased or
leased by Company, shall not exceed $47,000; provided, however, that Executive
may select a car costing more than $47,000 if Executive pays for the increased
costs to purchase or lease such automobile. With respect to any subsequent
request made by Executive pursuant to this Section 9, the aforesaid figure of
$47,000 shall be increased to $50,000, subject to such other reasonable
increases as Company's Compensation Committee may approve. Company shall be
responsible for all costs of ownership attributable to said vehicle, including
but not limited to insurance, gas, oil, maintenance, repairs, etc. On the
termination of the Employment Term and Executive's employment as an employee,
if Company has purchased the vehicle, Executive may at any time within three
(3) weeks following the effective date of termination, purchase the vehicle from
Company at a price equal to the then "blue book" value of the vehicle times a
fraction, the numerator of which is the amount paid for said vehicle by Company,
including sales tax, "dealer prep", etc., but excluding any contributions made
by Executive, and the denominator of which is the amount (the "Total Purchase
Price") paid for said vehicle, including sales tax, "dealer prep", etc. and any
contributions made by Executive. In the event Executive does not timely purchase
the vehicle and Executive has made any contributions towards the purchase
thereof, if Company desires to retain ownership of the vehicle Company shall,
within three weeks following the earlier of (i) the expiration of the
aforementioned three (3) week period, or (ii) receipt of notice from Executive
that he shall not purchase said vehicle, pay to Executive the "blue book value"
of the vehicle, times a fraction, the numerator of which is the amount
contributed towards the purchase of said vehicle by Executive and the
denominator of which is the Total Purchase Price. If (i) Executive does not
timely purchase the vehicle, and (ii) Company does not desire to retain
ownership and Executive has contributed towards the purchase thereof, Company
shall promptly sell the vehicle and the parties shall divide the actual net
sales proceeds (after sales taxes and advertising costs, if any), with Executive
receiving a fraction (being the same fraction described in the immediately
preceding sentence) thereof and Company receiving the balance. Executive agrees
that on Company providing the Executive with a new automobile pursuant to this
Section 9, the automobile then owned or leased by Company and theretofore
utilized by Executive, and for which Company pays the expenses pursuant to
Section 7 above, may be retained or sold by Company and Executive shall have no
interest therein.
10. [Reserved.]
11. Termination; Termination Benefits. The Employment Term and/or the
Consulting Term hereunder shall be terminated as follows:
(a) The Employment Term and the Consulting Term, as the case may be,
shall terminate as provided in Section 3(a) of this Agreement.
(b) The Employment Term and the Consulting Term, as the case may be,
shall terminate upon Executive's death or Executive's Permanent Disability. The
term "Permanent Disability" shall mean Executive is either (i) unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months or
(ii) Executive is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under an
accident and health plan of Company.
(i) If the Term is terminated during the Employment Term because
of Executive's Permanent Disability, Company shall pay, when the same would
otherwise have been payable in accordance with this Agreement, to Executive or
his representative, until thirty-six (36) months after the date of determination
of Executive's Permanent Disability (unless a shorter period is set forth
herein) the following payments and or benefits: (i) Executive's salary described
in Section 4 above, as then in effect, less any disability benefits payable to
Executive from policies maintained by Company, (ii) the bonus described in
Section 8 above, subject to paragraph (b) thereof, plus (iii) Executive's fringe
benefits as described in Section 7 (but not as described in Section 9 if the
automobile in question had not yet been delivered to Executive as of the date
of determination by the Board), until that day which is the last day of
Executive's second taxable year following the taxable year of Executive in
which the Employment Term is terminated due to Executive's Permanent Disability,
provided that the period during which the reimbursements for such fringe
benefits must be paid may not extend beyond the third taxable year of Executive
following the taxable year in which such termination occurred; further provided,
however, that subsequent to that day which is six (6) months after the date of
determination of Executive's Permanent Disability, the payments set forth in
subparagraphs (i) and (ii) above shall be reduced to 50% of such amounts, less
100% of any disability payments payable to Executive from policies maintained by
Company. The above provisions of this Section 11(b) shall not apply to the
Consulting Term and if the Consulting Term is terminated because of Executive's
Permanent Disability, Company's only obligation shall be payment of Executive's
consulting fees pursuant to Section 4(b) through the date of termination of the
Consulting Term.
(ii) If the Employment Term is terminated because of Executive's
death, Company shall pay, when the same would otherwise have been payable in
accordance with this Agreement, to Executive's beneficiary or beneficiaries
designated in writing to Company, or to Executive's estate in the absence or
lapse of such designation, (i) Executive's salary described in Section 4 above,
as then in effect and (ii) the bonus described in Section 8 above, (again
subject to paragraph (b) of Section 8 with respect to any payment pursuant to
said Section 8), in each case for a period of one (1) year following Executive's
death, whether or not the term of employment would have terminated pursuant to
Section 3(a) prior to the end of such one (1) year period.
(iii) Notwithstanding the foregoing, if the Employment Term is
terminated for reasons specified above in Section 11(b) prior to the
commencement of the Consulting Term there will be no Consulting Term, and if the
Consulting Term is terminated because of Executive's death, Company's only
obligation shall be payment of Executive's consulting fees pursuant to Section
4(b) through the date of termination of the Consulting Term.
(c) Executive's employment being terminated by the Board "for cause"
pursuant to Section 3(b) of this Agreement or by reason of Company's Bankruptcy.
If Executive's employment is terminated during the Employment Term for cause or
by reason of Company's Bankruptcy, there will be no Consulting Term and
Company's only obligation to Executive shall be payment of Executive's salary as
described in Section 4 above and fringe benefits as described in Section 7 above
(but not the bonus compensation set forth in Section 8 above for any period in
the year in which such termination occurs), as in effect at the date of
termination, through the date of such termination. If Executive's retention as a
consultant and the Consulting Term is terminated for cause or by reason of
Company's Bankruptcy, Company's only obligation to Executive shall be payment of
Executive's consulting fees pursuant to Section 4 above as in effect at the date
of termination through the date of such termination. Any termination of
Executive's employment or retention as a consultant under this Section 11(c)
shall not affect Company's obligation to make the Retirement Payments set forth
in Section 12(b) below.
(d) Executive's employment may be terminated by the Company effective
December 31 of any year occurring during the Employment Term of this Agreement,
upon written notice to Executive given at any time prior to any such December 31
date, if the Board of the Directors of the Company in its sole discretion
determines in good faith that Executive has not diligently performed his duties
as Executive Vice President and Chief Financial Officer of the Company to the
satisfaction of the Board of Directors. If Executive's employment is terminated
pursuant to this paragraph (d) of Section 11, Executive shall be entitled to
receive Executive's salary per Section 4 above and fringe benefits per Section 7
above but not per Section 9 above (unless the automobile described in said
Section 9 was delivered to Executive prior to said termination without cause),
which he would but for such termination have received hereunder during or with
respect to the period ending ninety (90) days after the end of the calendar year
in which Executive's employment is terminated pursuant to this Section 11(d)
(and at the times provided in Section 4 hereof in the case of compensation
pursuant to said Section). Any termination of Executive's employment under this
Section 11(d) shall not affect the Employer's obligation to make the Retirement
Payments set forth in Section 12(b) below.
(e) Executive's employment being terminated by the Board "without
cause". Termination "without cause" shall mean termination of the Employment
Term on any basis other than those provided in paragraphs (a), (b), (c), (d) or
(f) of this Section 11. In addition, Executive may undertake a Separation from
Service for "good reason" within six (6) months of the occurrence of any of the
following without Executive's consent: (1) a material diminution in Executive's
base salary; (2) a material diminution in Executive's authority, duties, or
responsibilities; (3) the requirement that Executive report to a corporate
officer or employee instead of reporting directly to the Board of Directors; (4)
a material diminution in the budget over which Executive retains authority; (5)
a material change in geographic location at which the Executive must perform the
services; or (6) any other action or inaction that constitutes a material breach
of the terms of this Agreement; provided, however, that "good reason" shall not
exist unless Executive provides written notice to Company of the existence of
any of the foregoing within ninety (90) days of its initial occurrence and
Company fails to cure such "good reason" within thirty (30) days of notice from
Executive. In the event Executive has a Separation from Service for "good
reason" as set forth above or Executive is terminated "without cause", Executive
shall be entitled to receive Executive's salary per Section 4 above, fringe
benefits per Section 7 above but not per Section 9 above (unless the automobile
described in said Section 9 was delivered to Executive prior to said termination
without cause), and all other compensation (including the bonus compensation set
forth in Section 8 above, without regard to the provisions of Section 8(b)
above) which he would have received hereunder but for such separation or
termination in respect of the unexpired portion of the Employment Term
(disregarding the effect on the Employment Term of 3(a)(iv) above) (in the
amounts and at the times provided in Sections 4 and 8 hereof in the case of
compensation pursuant to said Sections). Any such notice shall also be deemed to
constitute the three (3) year notice described in Section 3(a)(i) of this
Agreement. Any termination of Executive's employment "without cause" or for
"good reason" shall not affect Company's obligation to make the Retirement
Payments set forth in Section 12(b) below. Such termination right "without
cause" or for "good reason" shall not be applicable to or affect the Consulting
Term except the Consulting Term shall commence on the day following Executive's
Separation from Service.
(f) Upon Executive voluntarily resigning his employment or consulting
engagement hereunder. If Executive's employment or consulting engagement is
terminated because Executive voluntarily resigns his employment or consulting
engagement hereunder, Company's only obligation to Executive with respect to the
Employment Term or Consulting Term, as the case may be, shall be the payment of
Executive's salary or fees pursuant to Section 4 above and fringe benefits
pursuant to Section 7 above (but not the bonus provided by Section 8 above) as
in effect at the date of such termination through the effective date of such
termination. Any termination resulting from Executive's voluntary resignation
from his employment hereunder or consulting engagement shall not affect
Company's obligation to make the Retirement Payments set forth in Section 12(b)
below.
(g) Executive has a Separation from Service as defined in Section 3
(a).
(h) Notwithstanding anything in this Agreement to the contrary,
Company shall delay the payment of any benefits payable under this Agreement to
the extent necessary to comply with Section 409A(a)(2)(B)(i) of the Internal
Revenue Code of 1986, as amended (the "Code") (relating to payments made to
certain "specified employees" of certain publicly-traded companies) and in such
event, any such amount to which Executive would otherwise be entitled during
the six (6) month period immediately following Executive's Separation from
Service will be paid on the first business day following the expiration of such
six (6) month period.
12. The Retirement Period.
(a) The "Retirement Period" shall commence on the first day following
Executive's Separation from Service. The Retirement Period shall end on the day
of Executive's death.
(b) Commencing in the fourth calendar year following the year that
includes Executive's Separation from Service, Company agrees to pay to
Executive, until the expiration of the Retirement Period, in equal monthly
installments, the sum of $29,000 per annum (the "Retirement Payments");
provided, however, that the $29,000 annual payment shall be increased annually
after the first full year of such payments to an amount equal to the product
derived by multiplying the payment in what is then the immediately preceding
year by the lesser of (i) one (1) plus 50% of the "fraction" forming a part of
the definition of the Cost of Living Adjustment Factor (as heretofore defined)
for the period in question, and (ii) 1.05.
(c) Executive's right to receive the payments provided for in this
Section 12 (i) shall not be contestable by Company for any reason whatsoever
and (ii) shall be in lieu of any right of Executive to receive retirement
payments under any previous agreement with Company, except with respect to
Company's Defined Benefit Plan, and Executive hereby waives and relinquishes
any such rights.
(d) During the Retirement Period Company shall, without duplication,
maintain in full force and effect, Group Life policies and Major Medical and/or
"medigap" policies, which (together with Medicare or other benefits which may
otherwise then be available to Executive without cost to Executive), shall
provide Executive with benefits substantially similar to those existing for
senior employees of Company at the time of Executive's retirement. Executive
shall continue to be responsible for any and all premiums attributable to
Executive's spouse and children. The amount of the benefits provided (or the
amounts eligible for reimbursement, as applicable) under this Section 12(d)
during any taxable year of Executive may not affect the benefits to be provided
in any other taxable year of Executive. To the extent Executive is reimbursed
for expenses incurred to replicate the benefits provided by this Section 12(d),
such reimbursement must be made on or before the last day of Executive's taxable
year following the year in which the expense was incurred. In addition, the
provision of benefits or the reimbursement of expenses incurred to replicate
such benefits, shall, in all respects, be structured to comply with the
provisions of Treasury Regulation Section 1.409A-3(i)(1)(iv).
13. Entire Agreement; Amendment; Termination. This Agreement contains
the entire agreement between the parties hereto with respect to the subject
matter contained herein: This Agreement may be amended, modified or supplemented
only by written agreement of Company and Executive expressly setting forth the
amendment. This Agreement amends, restates, supersedes, and replaces in its
entirety that certain Employment Agreement dated as of January 1, 2004 by and
between Executive and Company. Executive and Company agree that, notwithstanding
any other provision of the Agreement, the Agreement may be terminated and
liquidated to the extent provided in Treasury Regulation Sections
1-409A-3(j)(4)(ix) (A) (relating to terminations in connection with certain
corporate dissolutions), (B) (relating to terminations in connection with
certain change of control events), and (C) (relating to general terminations)
(any such termination and liquidation, a "Liquidation"). In the event of a
Liquidation, provided all the elements of the relevant regulations are met, the
value of any unpaid compensation and benefits under the Agreement (determined in
good faith by agreement of Company and Executive) shall be paid within the time
frame permitted under the regulations. Executive and Company acknowledge that
Executive and Company intend that the compensation arrangements set forth in
this Agreement either are not governed by or are in compliance with Section 409A
of the Code; however, owing to the uncertain application of Code Section 409A,
Executive and Company agree to cooperate with one another, to the extent
reasonably requested by the other party, to restructure any compensation set
forth in this Agreement in a manner, if possible and without any increase in
cost to Company, such that no earlier and/or additional taxes to Executive or
Company or will arise under Code Section 409A.
14. Waiver of Compliance. Any failure of either party to comply with any
obligation, covenant, agreement or condition on its part contained herein may be
expressly waived in writing by the other party, but such waiver or failure to
insist upon strict compliance shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party, such consent shall be given in
writing.
15. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed given if
delivered by hand or five days after having been mailed, certified or registered
mail with postage prepaid:
if to Company, to:
Presidential Realty Corporation
000 Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Chairman of the Board of Directors
With a copy to:
Chairman, Compensation Committee
if to Executive, to:
Xxxxxx Xxxxxxx
000 Xxxx 00xx Xxxxxx Xxx. 00X
Xxx Xxxx, Xxx Xxxx 00000
16. Assignment. This Agreement shall inure to the benefit of Executive
and Company and be binding upon the successors and general assigns of Company.
Except as expressly provided herein, this Agreement and Executive's duties
hereunder shall not be assigned or delegated.
17. Invalid Provisions. If any provision hereof is held to be illegal,
invalid or unenforceable under present or future laws effective during the Term
hereof, such provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof; and the remaining provisions hereof shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom. In lieu of such
illegal, invalid or unenforceable provision there shall be added automatically
as a part hereof a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
18. Applicable Law. This Agreement shall be construed and enforced in
ccordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
COMPANY:
PRESIDENTIAL REALTY CORPORATION
By:/s/ Xxxxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman of the Board of Directors
EXECUTIVE:
/s/ Xxxxxx Xxxxxxx
------------------------------------------------
Xxxxxx Xxxxxxx
