EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of this 22nd day of August, 2001, is between
West Coast Realty Investors, Inc., a Delaware corporation (the "Company"), and
Xxxxx X. Xxxxxxxx (the "Executive").
R E C I T A L S:
WHEREAS, the Company desires to employ the Executive and the Executive has
indicated his willingness to provide his services, on the terms and conditions
set forth herein:
NOW, THEREFORE, on the basis of the foregoing premises and in consideration of
the mutual covenants and agreements contained herein, the parties hereto agree
as follows:
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Employment. The Company hereby agrees to employ the Executive and the Executive
hereby accepts employment with the Company, on the terms and subject to the
conditions hereinafter set forth. Subject to the terms and conditions contained
herein, the Executive shall serve as the Company's President and Chief Executive
Officer and Chairman of the Board of Directors of the Company (the "Board") and
shall have such duties as are typically performed by a president, chief
executive officer and chairman of the board of a corporation.
Term. Unless terminated pursuant to Section 6 hereof, the Executive's employment
hereunder shall commence on the date hereof (the "Effective Date"), and shall
continue during the period ending on the third anniversary of the Effective Date
(the "Initial Term") and shall continue thereafter for one-year terms unless
either party provides notice of termination ninety (90) days in advance of the
end of the Initial Term or any subsequent one-year term (the "Employment Term").
The Employment Term shall terminate upon any termination of the Executive's
employment pursuant to Section 6.
Compensation. During the Employment Term, the Executive shall be entitled to the
following compensation and benefits:
Salary. As compensation for the performance of the Executive's services
hereunder, the Company shall pay to the Executive during the Initial Term a
salary (the "Salary") of $200,000 per year. The Salary shall be payable in
accordance with the payroll practices of the Company as the same shall exist
from time to time. After the Initial Term, the salary shall be negotiable.
Bonus Plan. The Executive shall be eligible to receive an annual cash bonus
("Bonus") in an amount determined by the Board on an annual basis in accordance
with the Company's annual incentive program if such program is established by
the Board and with such terms as may be established by the Board in its sole
discretion.
Benefits. In addition to the Salary and Bonus, if any, the Executive shall be
entitled to full participation in the various group health and medical insurance
and other benefit plans of the Company as are adopted from time to time at not
less than the level at which other senior executives of the Company participate;
provided that until the Company adopts a group health plan, the Company shall
reimburse the Executive for the costs, if any, of maintaining the Executive's
coverage under his spouse's group health plan or under an individual health
insurance policy.
Stock Options. No later than November 1, 2001, the Executive shall be granted an
option to purchase 200,000 shares of Company common stock, subject to the terms
of a stock option agreement, at an exercise price of $6.41 per share, with
100,000 shares vesting after completion of one year of service, and the
remaining 100,000 shares vesting on a quarterly basis over a 12-month period
thereafter.
Automobile. The Company shall pay the Executive at the mileage rate established
by the Internal Revenue Service for the use by the Executive of his personal car
in connection with his duties hereunder.
Indemnification and Insurance. The Company shall indemnify the Executive as
required by the Company's Bylaws, and may maintain customary insurance policies
providing for indemnification of the Executive.
Vacation, Holiday Pay and Sick Days. The Company shall provide Executive with
vacation days, holiday pay and sick days in accordance with Company's policy for
key employees, provided that Executive shall receive a minimum per annum of
twenty (20) accrued vacation days and six (6) sick days.
Exclusivity. During the Employment Term, the Executive shall devote his full
time (customary and reasonable personal time excepted) to the business of the
Company, shall faithfully serve the Company, shall in all respects conform to
and comply with the lawful, ethical and reasonable directions and instructions
given to him by the Board in accordance with the terms of this Agreement, shall
use his best efforts to promote and serve the interests of the Company and shall
not engage in any other business
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activity, whether or not such activity shall be engaged in for pecuniary profit,
except that the Executive may (i) participate in the activities of professional
trade organizations related to the business of the Company and (ii) engage in
personal investing activities, provided that activities set forth in these
clauses (i) and (ii), either singly or in the aggregate, do not interfere in any
material respect with the services to be provided by the Executive hereunder.
Reimbursement for Expenses. The Executive is authorized to incur reasonable
expenses in the discharge of the services to be performed hereunder, including
expenses for travel, entertainment, lodging and similar items in accordance with
the Company's expense reimbursement policy, as the same may be modified by the
Company from time to time. The Company shall reimburse the Executive for all
such proper expenses upon presentation by the Executive of itemized accounts of
such expenditures in accordance with the financial policy of the Company, as in
effect from time to time.
Termination and Default.
Death. The Executive's employment shall automatically terminate upon his death
and upon such event, the Executive's estate shall be entitled to receive the
amounts, if any, due to him pursuant to Section 6(f) below.
Disability. If the Executive is unable to perform the duties required of him
under this Agreement because of illness, incapacity, or physical or mental
disability for an aggregate of one hundred twenty (120) days (whether or not
consecutive) during any twelve (12) month period during the term of this
Agreement, in which event the Company may terminate Executive's employment;
provided, however, that if at such time the Executive is not covered by a
long-term disability plan of the Company, then the Executive's employment shall
terminate six months following such event.
Cause. The Company may terminate the Executive's employment for Cause if the
event, conduct or condition that may result in termination for Cause is not
cured by the Executive within thirty days after written notice is delivered to
the Executive from the Company. In the event of termination pursuant to this
Section 6(c) for Cause, the Company shall deliver to the Executive written
notice setting forth the basis for such termination, which notice shall
specifically set forth the nature of the Cause which is the reason for such
termination. For purposes of this Agreement, "Cause" shall mean: (i) commission
of material fraud or conduct amounting to gross negligence in the conduct of the
Executive's duties; (ii) conduct for which a criminal conviction of a felony is
obtained; (iii) material violation of Company policies; or (iv) willful and
material violation of an employment agreement, employee agreement,
non-disclosure or confidentiality agreement, inventions agreement,
noncompetition agreement, nonsolicitation agreement or other similar
agreement(s) between the Executive and the Company. No act or failure to act
shall be considered "willful" unless it is done, or omitted to be done, without
a good faith belief that the action or omission was in the best interest of the
Company. In the event corrective action is not satisfactorily taken by the
Executive, in each case as determined by the Board, as described above, a final
written notice of termination shall be provided to the Executive by the Company.
Resignation. The Executive shall have the right to terminate his employment at
any time by giving thirty (30) days prior written notice to the Company of his
resignation.
Severance. Termination of the Executive by the Company for any reason other than
death, disability or Cause or voluntary resignation by the Executive for Good
Reason entitles the Executive to immediate full vesting of any stock options
granted to the Executive at any time, a lump sum payment equal to 100% of the
Executive's then-current annual base salary and average bonus over the last
three years of employment, and one year of continued participation for the
Executive, his spouse and dependents in the Company's group insurance plans on
the same terms as if actively employed by the Company during such period of
time. "Good Reason" shall mean that the Executive has either: incurred a
material reduction in title, status, authority or responsibility at the Company;
or
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been required to report to any one other than the Board; or
failed to be re-elected to the Board and continue as the CEO, President and
Chairman and been able to nominate one officer to the Board; or
incurred a reduction in base compensation from the Company; or
been notified that the Executive's principal place of work will be relocated by
a distance of fifty (50) miles or more; or
been required to work more than ten (10) days per month outside of the
Executive's principal offices for a six (6) month continuous period.
All lump sum severance pay under this Section shall be paid to the Executive no
later than three (3) business days following the effective date of his
termination or resignation, as the case may be. The Executive shall not be
required to mitigate the amount of any payment contemplated by this Section
(whether by seeking new employment or in any other manner), nor shall any such
payment be reduced by any earnings that the Executive may receive from any other
source.
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Payments. In the event that the Executive's employment terminates for any
reason, the Company shall pay to the Executive, in addition to any other amounts
or benefits due to the Executive under this Section 6, all amounts accrued but
unpaid hereunder through the date of termination in respect of Salary or
unreimbursed expenses.
Change in Control. In the event of the Executive's resignation or termination
within one (1) year of a Change in Control of the Company, all stock options
granted to the Executive at any time shall immediately become 100% vested and
the Executive shall be paid a lump payment equal to the sum of 100% of the
Executive's then-current base salary and the Executive's average bonus in last
three years, such lump sum payment to be made no later than three (3) business
days following the date of such resignation or termination. "Change in Control"
is defined as (i) any "person" or "group" of such persons, without the consent
of the Board, is or becomes a "beneficial owner," directly or indirectly, of
securities of the Company representing thirty-five percent (35%) or more of the
combined voting power of the Company's then outstanding securities (as such
terms are defined in the Securities Exchange Act of 1934 and regulations
thereunder); (ii) a merger, consolidation or other combination the result of
which persons who were shareholders of the Company immediately prior to the
merger, consolidation or other combination own less than seventy-five percent
(75%) of the voting power of the securities of the resulting or acquiring entity
having the power to elect a majority of the board of directors of such entity;
(iii) the sale, transfer or disposition of assets of Company in excess of fifty
percent (50%) of the gross assets of the Company as shown on the Company's then
most recent audited financial statements; or (iv) a change in the composition of
the Board occurs, as a result of which fewer than one-half of the incumbent
directors are directors who either (A) had been directors of the Company on the
date of the Agreement, or (B) were elected, or nominated for election, to the
Board with the affirmative votes of at least a majority of the aggregate of the
original directors who were still in office at the time of the election or
nomination and the directors whose election or nomination was previously so
approved.
Survival of Operative Sections. Upon any termination of the Executive's
employment, the provisions of Sections 6(e), 6(f) and 7 through 16 of this
Agreement shall survive to the extent necessary to give effect to the provisions
thereof.
Proprietary Information and Inventions Agreement. The Executive shall enter into
the Employee's Proprietary Information and Inventions Agreement attached hereto
in the form of Exhibit A (the "Proprietary Agreement").
Arbitration Agreement. The Executive shall enter into the Arbitration Agreement
attached hereto in the form of Exhibit B (the "Arbitration Agreement").
Successors and Assigns; No Third-Party Beneficiaries. The Company shall require
any successor (whether direct or indirect and whether by purchase, lease,
merger, consolidation, liquidation or otherwise) to all or substantially all of
the Company's business and/or assets, by an agreement in substance and form
satisfactory to the Executive, to assume this Agreement and to agree expressly
to perform this Agreement in the same manner and to the same extent as the
Company would be required to perform it in the absence of a succession. The
Company's failure to obtain such agreement prior to the effectiveness of a
succession shall be a breach of this Agreement and shall entitle the Executive
to all of the compensation and benefits to which he would have been entitled
hereunder if the Company had involuntarily terminated his employment without
Cause immediately after such succession becomes effective. For all purposes
under this Agreement, the term "Company" shall include any successor to the
Company's business and/or assets which executes and delivers the assumption
agreement described in this Section 9 or which becomes bound by this Agreement
by operation of law. This Agreement and all rights of the Executive hereunder
shall inure to the benefit of, and be enforceable by, the Executive's personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
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Waiver and Amendments. Any waiver, alteration, amendment or modification of any
of the terms of this Agreement shall be valid only if made in writing and signed
by the parties hereto; provided, however, that any such waiver, alteration,
amendment or modification is consented to on the Company's behalf by the Board.
No waiver by either of the parties hereto of their rights hereunder shall be
deemed to constitute a waiver with respect to any subsequent occurrences or
transactions hereunder unless such waiver specifically states that it is to be
construed as a continuing waiver.
Severability and Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
Notices.
All communications under this Agreement shall be in writing and shall be
delivered by hand or facsimile or mailed by overnight courier or by registered
or certified mail, postage prepaid:
if to the Executive, at 0000 X. Xxxxxxx Xxxx., 0xx Xxxxx, Xxx Xxxxxxx, XX 00000
(Fax: (000) 000-0000), marked for the attention of Xxxxx X. Xxxxxxxx or at such
other address as the Executive may have furnished the Company in writing, and
if to the Company, at 0000 X. Xxxxxxx Xxxx., 0xx Xxxxx, Xxx Xxxxxxx, XX 00000
(Fax: (000) 000-0000), marked for the attention of the Chief Financial Officer,
or at such other address as it may have furnished in writing to the Executive.
Any notice so addressed shall be deemed to be given: if delivered by hand or
facsimile, on the date of such delivery; if mailed by courier, on the first
business day following the date of such mailing; and if mailed by registered or
certified mail, on the third business day after the date of such mailing.
Section Headings. The headings of the sections and subsections of this Agreement
are inserted for convenience only and shall not be deemed to constitute a part
thereof, affect the meaning or interpretation of this Agreement or of any term
or provision hereof.
Entire Agreement. This Agreement constitutes the entire understanding and
agreement of the parties hereto regarding the subject matter hereof. This
Agreement supersedes all prior negotiations, discussions, correspondence,
communications, understandings and agreements between the parties relating to
the subject matter of this Agreement.
Severability. In the event that any part or parts of this Agreement shall be
held illegal or unenforceable by any court or administrative body of competent
jurisdiction, such determination shall not effect the remaining provisions of
this Agreement which shall remain in full force and effect.
Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which together shall be
considered one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
WEST COAST REALTY INVESTORS, INC.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Director
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Director
By: /s/ Xxxxx X. Xxxxx
----------------------------
Name: Xxxxx X. Xxxxx
Title: Director
By: /s/ Xxxx X. Xxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxx
Title: Director
EXECUTIVE
/s/ Xxxxx X. Xxxxxxxx
----------------------------
Xxxxx X. Xxxxxxxx
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