Contract
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (the “Employment Agreement”), dated
October 16, 2018 (the “Contract Date”, by and between
KINGSTONE COMPANIES, INC., a
Delaware corporation (the “Company”), and XXXXX X. XXXXXXXXX (the
“Employee”).
RECITALS
WHEREAS, the Company and the Employee
entered into that certain employment agreement dated January 20,
2017, (the “Prior Employment Agreement”), which sets
forth the terms and conditions upon which the Employee is employed
by the Company and upon which the Company will compensate the
Employee for his services through December 31, 2018;
and
WHEREAS, the Company and the Employee
mutually desire to amend and restate the Prior Employment Agreement
effective January 1, 2019 (the “Effective Date”) and in
connection herewith, to provide for the continued services and
employment of the Employee by the Company, upon the terms and
conditions hereinafter set forth; and
WHEREAS, all amounts earned, and other
obligations, for periods prior to the Effective Date shall be
controlled by the Prior Employment Agreement without regard to this
Amendment and Restatement;
NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants hereinafter set forth, the
parties hereto hereby agree as follows:
1. EMPLOYMENT;
TERM
1.1 The Company will
employ the Employee in its business, and the Employee will work for
the Company therein, as its Executive Chairman of the Board and
President of COSI Agency, Inc. for a term commencing on the
Effective Date and terminating on December 31, 2021 (the
“Expiration Date”), subject to earlier termination as
hereinafter provided (the employment period, as earlier terminated
as provided for herein, being referred to as the
“Term”).
1.2 Upon the expiration
of the Term or the termination of the Employee’s employment
with the Company for any reason whatsoever, whether during or
following the Term, he shall be deemed to have resigned all of his
positions as an employee, officer and director of the Company and
of each and every subsidiary thereof.
2. DUTIES
2.1 During the Term,
the Employee shall serve as the Company’s Executive Chairman
of the Board and President of COSI Agency, Inc. and shall perform
duties of an executive character consisting of administrative and
managerial responsibilities on behalf of the Company of the type
and nature heretofore assigned to the Employee. As Executive
Chairman of the Company, the Employee shall represent and promote
the Company to the investment community and maintain relationships
with existing shareholders, investment bankers and analysts, and
the Employee shall work with the chief executive officer of the
Company, as needed, on strategy, financing, acquisitions, and such
further duties of an executive character as shall, from time to
time, be delegated or assigned to him by the Board of Directors of
the Company (the “Board”) consistent with the
Employee’s position. As President of COSI Agency, Inc.
(“Cosi”), the Employee shall seek to expand the
relationships of Cosi with other insurance carriers, national and
online agencies, and other intermediaries.
3. DEVOTION
OF TIME
3.1 During the Term,
the Employee shall expend substantially all of his working time for
the Company, shall devote his efforts, energy and skill to the
services of the Company and the promotion of its interests and
shall not take part in activities detrimental to the best interests
of the Company. Notwithstanding the foregoing, during the term of
the Amended and Restated Employment Agreement between Kingstone
Insurance Company (“KICO”) and the Employee, dated
October 16, 2018 (the “KICO Employment Agreement”), the
Employee shall be entitled to devote such time as is necessary to
the fulfillment of his duties and responsibilities as Executive
Chairman and Chief Investment Officer of KICO.
3.2 The Employee shall
be permitted to engage in the following activities: (a) charity,
social or civic work, (b) tend to personal financial and legal
affairs, (c) engage in any other business or business-related
activity, and (d) subject to the prior written consent of the
Company (following Board approval not to be unreasonably withheld),
serve on the Board of Directors of, or advisor to, other business
organizations (including up to two for-profit boards, in addition
to the Company and its related entities), in each case (i.e., (a)
through (d) above), provided that such activities do not interfere
or conflict with his substantially full-time services to the
Company.
4. COMPENSATION
4.1 For all services to
be rendered by the Employee during the Term, and in consideration
of the Employee’s representations and covenants set forth in
this Agreement, the Employee shall be entitled to receive from the
Company compensation as set forth in Sections 4.2, 4.3 and 4.4
below.
4.2 The Employee shall
be entitled to receive a salary at the rate of six hundred
thirty-six thousand five hundred dollars ($636,500) for the
calendar year 2019, and five hundred thousand dollars ($500,000)
for each of the calendar years 2020 and 2021 (the “Base
Salary”); provided, however, the Base Salary shall be reduced
on a dollar-for-dollar basis to the extent of the salary payable by
KICO to the Employee pursuant to the KICO Employment Agreement for
the same period (the “KICO Salary”).
4.3 (a) Subject
to the terms and conditions hereof, the Employee shall also be
entitled to receive from the Company, for each calendar year during
the Term, a bonus (the “Bonus”) equal to three percent
(3%) of the Company’s Net Income (as hereinafter defined) for
such calendar year, not to exceed two times the Base Salary (as
calculated prior to any KICO offset) (the “Bonus
Payments”); provided, however, that the Bonus amount payable
to the Employee for any calendar year pursuant to this Section
4.3(a) (the “Company Bonus”) shall be reduced on a
dollar-for-dollar basis to the extent of any bonus payable by KICO
to or for the benefit of the Employee for such calendar year (the
“KICO Bonus”), it being understood and agreed that, in
the event the amount of the KICO Bonus is greater than the amount
of the Company Bonus for any calendar year, the excess of the KICO
Bonus over the Company Bonus shall not be an offset against the
Base Salary payable to the Employee hereunder.
(b) For
purposes hereof, the term “Net Income” for any
particular calendar period shall mean the Company's consolidated
income from operations before taxes for such period determined in
accordance with generally accepted accounting principles
consistently applied, as audited and reported upon by the
independent auditors of the Company, except that any expense or
income attributable to the Employee’s LTC (as hereinafter
defined) shall be disregarded and the Company’s consolidated
net investment income (loss) and net realized gains (losses) on
investments shall be excluded.
(c) For
purposes hereof, in the event that this Agreement shall terminate
on a date other than December 31 of any calendar year and for such
calendar year, pursuant to the terms of this Agreement, the
Employee is entitled to receive a Bonus through the termination
date (the “Termination Date”), then the Company’s
Net Income for such calendar year shall be determined for the
period from the first day of such calendar year (the
“Termination Year”) until the Termination Date by
multiplying the Company’s Net Income for the period from the
first day of the Termination Year until the end of the calendar
quarter in which the Termination Date falls (the “Termination
Quarter”) by a fraction, the numerator of which shall be the
number of days from the first day of the Termination Year until the
Termination Date and the denominator of which shall be the number
of days from the first day of the Termination Year until the end of
the Termination Quarter. In the event the Termination Quarter shall
be other than the last calendar quarter of the Termination Year,
notwithstanding that the term “Net Income” shall have
the meaning ascribed to it by paragraph (b) hereof (as adjusted by
the provisions of this paragraph (c)), the application of such term
to this paragraph (c) shall not be subject to any adjustment based
upon an audit or report of the Company’s independent auditors
with respect to the Termination Year but instead shall be
calculated and paid as provided for in paragraph (d)
hereof.
(d) The
Bonus for any calendar year shall be payable in the following
calendar year within thirty (30) days following the receipt by the
Company of the report of its independent auditors, with regard to
the Company’s Net Income for such calendar year, calculated
in accordance with paragraph (b) hereof and otherwise consistent
with the consolidated financial statements of the Company for the
calendar year (the “Audited Financial Statements”), as
set forth in any Form 10-K filed by the Company with the Securities
and Exchange Commission (the “SEC”); provided, however,
that, in the event the Audited Financial Statements are not
available by February 28 of any calendar year, an interim Bonus
payment, if any, shall be made based upon the unaudited
consolidated financial statements of the Company for such calendar
year, as determined by the Company’s chief financial officer
and approved by the Company’s Compensation Committee.
Following receipt of the Audited Financial Statements, an
appropriate adjustment will be made to the Bonus amount, and the
Company will pay any underpayment, or the Employee will return any
overpayment, within fifteen (15) days of receipt of the Audited
Financial Statements. Notwithstanding the foregoing, with respect
to any Termination Year in which the Termination Quarter is other
than the last calendar quarter of the Termination Year, the Bonus
shall be payable within thirty (30) days following the
determination by the Company’s chief financial officer of the
Company’s Net Income through the end of the Termination
Quarter, if any, calculated in accordance with paragraph (c) hereof
and otherwise consistent with the consolidated financial statements
of the Company for the period ended with the end of the Termination
Quarter, as set forth in any Form 10-Q filed by the Company with
the SEC.
4.4 (a) In
order to compensate the Employee for the growth in the Company's
adjusted book value per share (“ABVPS”) during the
Term, subject to the terms and conditions hereof, the Employee
shall also be entitled to receive from the Company a one-time
long-term compensation ("LTC") bonus as hereinafter provided in
this Section 4.4 based upon threshold, target and maximum average
annual compounded percentage increases in ABVPS between December
31, 2016 and December 31, 2019 of eight percent (8%), eleven
percent (11%) and fourteen percent (14%),
respectively.
(b) For purposes
hereof, the term “2016 ABVPS” shall mean, as of
December 31, 2016, (i) the Company’s consolidated total
stockholders’ equity (exclusive of the Company’s
consolidated accumulated other comprehensive income
(“AOCI”)) divided by (ii) the number of shares of
Common Stock issued and outstanding.
(c) For purposes
hereof, the term “2019 ABVPS” shall mean, as of
December 31, 2019, (i) the Company’s consolidated total
stockholders’ equity (exclusive of the Company’s
consolidated AOCI, and without giving effect, for the years ending
December 31, 2017, 2018 and 2019, to any stock-based compensation
expense, any dividends declared and paid, any issuances of
securities, any treasury share purchases and any expense or income
attributable to the Employee’s LTC), divided by (ii) the
number of shares of Common Stock issued and
outstanding.
(d) In the event that
the 2019 ABVPS is eight percent (8%) (the “Threshold Annual
Percentage Increase”) greater, on an average per annum
compounded basis, than the 2016 ABVPS, the Employee shall be
entitled to receive an LTC payment of nine hundred forty-five
thousand dollars ($945,000) (the “Threshold LTC
Amount”).
(e) In the event that
the 2019 ABVPS is eleven percent (11%) (the “Target Annual
Percentage Increase”) greater, on an average per annum
compounded basis, than the 2016 ABVPS, the Employee shall instead
be entitled to receive an LTC payment of one million eight hundred
ninety thousand dollars ($1,890,000) (the “Target LTC
Amount”).
(f) In the event that
the 2019 ABVPS is at least fourteen percent (14%) (the
“Maximum Annual Percentage Increase”) greater, on an
average per annum compounded basis, than the 2016 ABVPS, the
Employee shall instead be entitled to receive an LTC payment of two
million eight hundred thirty-five thousand dollars ($2,835,000)
(the “Maximum LTC Amount”).
(g) In the event that
the percentage increase in the 2019 ABVPS, on an average per annum
compounded basis, over the 2016 ABVPS is greater than the Threshold
Annual Percentage Increase but less than the Target Annual
Percentage Increase, the Employee shall instead be entitled to
receive a sliding scale LTC payment equal to the
following:
$945,000 + ( X
. $945,000 )
Where X
= the difference between (i) the 2019 ABVPS and (ii) the 2019 ABVPS
which would result in the payment of the Threshold LTC Amount (the
“Threshold 2019 ABVPS”); and
Y = the
difference between (i) the 2019 ABVPS which would result in the
payment of the Target LTC Amount (the “Target 2019
ABVPS”) and (ii) the Threshold 2019 ABVPS.
(h) In the event that
the percentage increase in the 2019 ABVPS, on an average per annum
compounded basis, over the 2016 ABVPS is greater than the Target
Annual Percentage Increase but less than the Maximum Annual
Percentage Increase, the Employee shall instead be entitled to
receive a sliding scale LTC payment equal to the
following:
$1,890,000 + ( X
. $945,000 )
Where X
= the difference between (i) the 2019 ABVPS and (ii) the Target
2019 ABVPS; and
Y = the
difference between (i) the 2019 ABVPS which would result in the
payment of the Maximum LTC Amount (the “Maximum 2019
ABVPS”) and (ii) the Target 2019 ABVPS.
(i) For purposes
hereof, in the event that this Agreement shall terminate on a date
other than December 31, 2019, and, pursuant to the terms of this
Agreement, the Employee is entitled to receive an LTC payment
through the Termination Date, then all references in this Section
4.4 to “2019 ABVPS” shall instead refer to the ABVPS as
of the end of the Termination Quarter (calculated in the same
manner as the 2019 ABVPS) (the “Termination Quarter
ABVPS”) and the amount of any LTC payment due pursuant to the
Section 4.4 shall be equal to the amount otherwise payable
multiplied by a fraction, the numerator of which shall be the
number of days from the Effective Date until the Termination Date
and the denominator of which shall be the number of days from the
Effective Date until December 31, 2019.
(j) The LTC shall be
payable in the following calendar year within thirty (30) days
following the receipt by the Company of the report of its
independent auditors with regard to the consolidated financial
statements of the Company for the calendar year ending December 31,
2019, as set forth in any Form 10-K filed by the Company with the
SEC. Notwithstanding the foregoing, if the Termination Quarter is
other than the last calendar quarter of calendar year 2019, the LTC
amount shall be payable within thirty (30) days following the
determination by the Company’s chief financial officer of the
Termination Quarter ABVPS, calculated in accordance with paragraph
(c) hereof and otherwise consistent with the consolidated financial
statements of the Company for the period ended with the end of the
Termination Quarter, as set forth in any Form 10-Q filed by the
Company with the SEC.
4.5 Within 30 days
following January 1, 2020, the Company shall grant the Employee
Restricted Stock (as defined in the Kingstone Companies, Inc. 2014
Equity Participation Plan) equal to $436,500 divided by the fair
market value of the Company stock on the date of grant, vesting
fifty percent (50%) on December 31, 2020 and fifty percent (50%) on
December 31, 2021, based on service with the Company as an
employee, director or consultant. Within 30 days following January
1, 2021, the Company shall grant the Employee Restricted Stock
equal to $236,500, vesting in full on December 31, 2021, so long as
the Employee has continuously served the Company as an employee,
director or consultant. Such grants shall vest earlier upon the
Company’s termination of Employee as an employee without
Cause or for Disability, by Employee as an employee for Good
Reason, or as a result of Employee’s death.
5. REIMBURSEMENT
OF EXPENSES
5.1 Subject to Section
5.3 hereof, the Company shall pay directly, or reimburse the
Employee for, all reasonable and necessary expenses and
disbursements incurred by the Employee for and on behalf of the
Company in the performance of his duties during the
Term.
5.2 The Employee shall
submit to the Company, not less than once in each calendar month,
reports of such expenses and disbursements in a form normally used
by the Company, and receipts with respect thereto, and the
Company’s obligations under Section 5.1 hereof shall be
subject to compliance therewith. The Company acknowledges that the
Employee has complied with his obligations under this Section 5.2
through the day prior to the Contract Date.
5.3 During the Term,
the Employee shall be entitled to receive a monthly automobile
allowance of one thousand dollars ($1,000) for any and all expenses
related to the Employee’s automobile (i.e., lease payments,
insurance, gas, tolls, parking and the like). Except for
reimbursement of directly related automobile expenses (i.e.,
parking and tolls) incurred by the Employee while fulfilling his
duties and responsibilities to the Company, but which are outside
of the Employee’s normal day to day usage of his automobile,
the Employee will not be entitled to any additional or alternative
reimbursement for any other automobile related
expenses.
6. DISABILITY;
INSURANCE
6.1 If, during the
Term, the Employee, in the opinion of a majority of all of the
members of the Board (excluding the Employee if he is a member), as
confirmed by competent medical evidence, shall become physically or
mentally incapacitated to perform his duties for the Company
hereunder (“Disabled”) for a continuous period, then
for the first twelve (12) months of such period he shall receive
his full salary (subject to the following sentence, the
“Salary Continuation Period”). In no event, however,
shall the Employee be entitled to receive any payments under this
Section 6.1 beyond the expiration or termination date of this
Agreement. Effective with the date of his resumption of full
employment, the Employee shall be re-entitled to receive his full
salary. If such illness or other incapacity shall endure for a
continuous period of at least twelve (12) months or for at least
two hundred fifty (250) business days during any eighteen (18)
month period, the Company shall have the right, by written notice,
to terminate the Employee’s employment hereunder as of a date
(not less than thirty (30) days after the date of the sending of
such notice) to be specified in such notice. The Employee agrees to
submit himself for appropriate medical examination to a physician
of the Company’s designation as necessary for purposes of
this Section 6.1.
6.2 The obligations of
the Company under this Article 6 may be satisfied, in whole or in
part, by payments to the Employee under a disability insurance
policy provided by the Company and/or KICO.
6.3 Notwithstanding the
foregoing, in the event that, at the time of any apparent
incapacity, the Company has in effect a disability policy with
respect to the Employee, the Employee shall be considered Disabled
for purposes of Section 6.1 only if he is considered disabled for
purposes of the policy.
6.4 In the event of the
termination of the Employee’s employment based upon him
becoming Disabled, as severance, the Employee shall be entitled to
receive (a) the Bonus compensation to which he is entitled until
the expiration of the Salary Continuation Period pursuant to
Section 4.3 hereof (i.e., the Termination Date shall be considered
the last day of the Salary Continuation Period); and (b) the LTC
bonus compensation to which he is entitled to receive through the
Termination Date. The amount to be paid to the Employee pursuant to
this Section 6.4 shall constitute the sole and exclusive remedy of
the Employee, and the Employee shall not be entitled to any other
or further compensation, rights or benefits hereunder or otherwise,
including pursuant to Article 11.
7. RESTRICTIVE
COVENANTS
7.1 (a) The
services of the Employee are unique and extraordinary and essential
to the business of the Company, especially since the Employee shall
have access to the Company’s customer lists, producer lists,
trade secrets and other privileged and confidential information
essential to the Company’s business. Therefore, the Employee
agrees that, if the term of his employment hereunder shall expire
or his employment shall at any time terminate, with Cause (as
hereinafter defined) and with or without Good Reason (as
hereinafter defined), the Employee will not at any time during the
Restrictive Covenant Period (as hereinafter defined), without the
prior written consent of the Company, directly or indirectly,
whether individually or as a principal, officer, employee, partner,
shareholder, member, manager, director, agent of, or consultant or
independent contractor to, any person, corporation, limited
liability company, partnership, limited partnership or other entity
(collectively, “Person”):
(i) within any state in
which the Company has a license to operate on the date on which the
Employee ceases to be employed by the Company (the “Cessation
Date”), engage or participate in a business which, as of the
Cessation Date, is similar to or competitive with, directly or
indirectly, a business in which the Company is then engaged
(“Competitive Business”), and shall not make any
investments in any such Competitive Business, except that the
foregoing shall not restrict the Employee from acquiring up to one
percent (1%) of the outstanding voting stock of any Competitive
Business whose securities are listed on a stock exchange or
Nasdaq;
(ii) cause
or seek to persuade any director, officer, employee, customer,
client, account, agent, producer, reinsurer or supplier of, or
consultant or independent contractor to, the Company, or others
with whom the Company has a business relationship (collectively,
“Business Associates”), to discontinue or materially
modify the status, employment or relationship of such Person with
the Company, or to become employed in any activity similar to or
competitive with the activities of the Company; provided, however,
that nothing in this section shall restrict the Employee's ability
to cause or seek to persuade his daughter, Xxxxxx Xxxxxxxxx, to
alter her relationship with the Company;
(iii) cause
or seek to persuade any prospective customer, client, account or
other Business Associate of the Company (which at or about the
Cessation Date was then actively being solicited by the Company) to
determine not to enter into a business relationship with the
Company or to materially modify its contemplated business
relationship;
(iv) hire,
retain or associate in a business relationship with, directly or
indirectly, any director, officer or employee of the
Company;
(v) solicit or cause or
authorize to be solicited, or accept, for or on behalf of him or
any third party, any business from, or the entering into of a
business relationship with, (A) others who are, or were within one
(l) year prior to the Cessation Date, a customer, client, account
or other Business Associate of the Company, or (B) any prospective
customer, client, account or other Business Associate of the
Company which at or about the Cessation Date was then actively
being solicited by the Company; or
The
foregoing restrictions set forth in this Section 7.1(a) shall apply
likewise during the Term.
(vi) For
purposes hereof, the term “Restrictive Covenant Period”
shall mean the eighteen (18) month period commencing with the
Cessation Date; provided, however, that, in the event that the
Employee’s employment is terminated by the Employee for Good
Reason, the term “Restrictive Covenant Period” shall
mean the shorter of (i) the twelve (12) month period commencing
with the Cessation Date and (ii) the period commencing with the
Cessation Date and ending on the Expiration Date.
7.2 The Employee agrees
to disclose promptly in writing to the Board all ideas, processes,
methods, devices, business concepts, inventions, improvements,
discoveries, know-how and other creative achievements (hereinafter
referred to collectively as “discoveries”), whether or
not the same or any part thereof is capable of being patented,
trademarked, copyrighted, or otherwise protected, which the
Employee, while employed by the Company, conceives, makes,
develops, acquires or reduces to practice, whether acting alone or
with others and whether during or after usual working hours, and
which are related to the Company’s business or interests, or
are used by the Company, or arise out of or in connection with the
duties performed by the Employee. The Employee hereby transfers and
assigns to the Company all right, title and interest in and to such
discoveries (whether conceived, made, developed, acquired or
reduced to practice on or prior to the Effective Date or during his
employment with the Company), including any and all domestic and
foreign copyrights and patent and trademark rights therein and any
renewals thereof. On request of the Company, the Employee will,
without any additional compensation, from time to time during, and
after the expiration or termination of, the Term, execute such
further instruments (including, without limitation, applications
for copyrights, patents, trademarks and assignments thereof) and do
all such other acts and things as may be deemed necessary or
desirable by the Company to protect and/or enforce its right in
respect of such discoveries. All expenses of filing or prosecuting
any patent, trademark or copyright application shall be borne by
the Company, but the Employee shall cooperate, at the
Company’s expense, in filing and/or prosecuting any such
application.
7.3 (a) The
Employee represents that he has been informed that it is the policy
of the Company to maintain as secret all confidential information
relating to the Company, including, without limitation, any and all
knowledge or information with respect to secret or confidential
methods, processes, plans, materials, customer, producer and
reinsurer lists or data, or with respect to any other confidential
or secret aspect of the Company’s activities, and further
acknowledges that such confidential information is of great value
to the Company. The Employee recognizes that, by reason of his
employment with the Company, he has acquired and will acquire
confidential information as aforesaid. The Employee confirms that
it is reasonably necessary to protect the Company’s goodwill,
and, accordingly, hereby agrees that he will not, directly or
indirectly (except where authorized by the Board), at any time
during the Term or thereafter divulge to any Person, or use, or
cause or authorize any Person to use, any such confidential
information.
(b) The Employee agrees
that he will not, at any time, remove from the Company’s
premises any drawings, notebooks, software, data or other
confidential information relating to the business and procedures
heretofore or hereafter acquired, developed and/or used by the
Company, except where necessary in the fulfillment of his duties
hereunder.
(c) Notice Under Defend
Trade Secrets Act: Notwithstanding the requirements contained in
this Agreement, in accordance with the Defend Trade Secrets Act,
Employee will not be held criminally or civilly liable under any
federal or state trade secret law if Employee discloses a Trade
Secret in confidence to federal, state or local government
officials, to Employee’s attorney solely for the purpose of
reporting or investigating a suspected violation of law, or in a
sealed complaint or other document filed in a lawsuit or other
proceeding. Further, if Employee files a lawsuit alleging
retaliation by the Company for reporting a suspected violation of
law, Employee may disclose the Trade Secret to his attorney and use
the Trade Secret information in the court proceeding if Employee:
(i) files the document containing the Trade Secret in a sealed
court document; and (ii) does not disclose the Trade Secret, except
pursuant to court order. However, if Executive engages in conduct
otherwise prohibited by law, such as, but not limited to, accessing
Trade Secrets unlawfully or by unauthorized means, no immunity
shall apply and the Company reserves the right to pursue all
available remedies.
(d) The Employee agrees
that, upon the expiration or termination of this Agreement or the
termination of his employment with the Company for any reason
whatsoever, he shall promptly deliver to the Company any and all
drawings, notebooks, software, data and other documents and
material, including all copies thereof, in his possession or under
his control relating to any confidential information or
discoveries, or which is otherwise the property of the
Company.
(e) For purposes
hereof, the term “confidential information” shall mean
all information given to the Employee, directly or indirectly, by
the Company and all other information relating to the Company
otherwise acquired by the Employee during the course of his
employment with the Company (whether on or prior to the Effective
Date or hereafter), other than information which (i) was in the
public domain at the time furnished to, or acquired by, the
Employee, or (ii) thereafter enters the public domain other than
through disclosure, directly or indirectly, by the Employee or
others in violation of an agreement of confidentiality or
nondisclosure.
(f) This Article 7.3
shall not be construed to unreasonably restrict the
Employee’s ability to disclose confidential information in an
arbitration proceeding or a court proceeding in connection with the
assertion of, or defense against any claim of breach of this
Agreement in accordance with Articles 12 and 14. In addition,
nothing in this Agreement prohibits the Employee from reporting
possible violations of federal or state law or regulation to any
governmental agency or entity or making other disclosures that are
protected under the whistleblower provisions of federal or state
law or regulation.
7.1 For purposes of
this Article 7, the term “Company” shall mean and
include the Company and any and all subsidiaries and affiliated
entities of the Company in existence from time to
time.
7.2 In connection with
his agreement to the restrictions set forth in this Article 7, the
Employee acknowledges the benefits accorded to him pursuant to the
provisions of this Agreement, including, without limitation, the
agreement on the part of the Company to employ the Employee during
the Term (subject to the terms and conditions hereof). The Employee
also acknowledges and agrees that the covenants set forth in this
Article 7 are reasonable and necessary in order to protect and
maintain the proprietary and other legitimate business interests of
the Company and that the enforcement thereof would not prevent the
Employee from earning a livelihood.
8. VACATIONS;
LEAVE
8.1 The Employee shall
be entitled to an aggregate of four (4) weeks’ vacation time
for each twelve (12) month period during the Term, the time and
duration thereof to be determined by mutual agreement between the
Employee and the Board. Any vacation time not used by the end of
the Term shall be forfeited without compensation. In addition, the
Employee shall not be entitled to carry over or use any vacation
time that is unused as of the end of any twelve (12) month period
during the Term. Further, the Employee shall be entitled to the
number of sick, personal, family and other days off during each
twelve (12) month period of the Term as set forth in KICO’s
employee handbook. The Company acknowledges that the Employee has
complied with his obligations under this Section 8.1 through
October 16, 2018.
9. PARTICIPATION
IN EMPLOYEE BENEFIT PLANS; STOCK OPTIONS
9.1 The Employee shall
be accorded the right to participate in and receive benefits under
and in accordance with the provisions of any pension, profit
sharing, insurance, medical and dental insurance or reimbursement
(with spousal coverage) or other plan or program of the Company or
KICO, either in existence as of the Effective Date or thereafter
adopted for the benefit generally of its executive employees.
Additionally, in the event of termination of the Employee's
employment by the Company without Cause, or by the Employee for
Good Reason, the Company or KICO shall continue to provide to the
Employee health, dental, and vision insurance coverage at no cost
to the Employee (with spousal coverage) until the Expiration Date
or such time as the Employee becomes eligible for similar coverage,
whichever is sooner (provided that the cost of such coverage shall
be treated as taxable income to the Employee monthly to the extent
necessary to enable the health plan to continue to satisfy
applicable nondiscrimination requirements of Section 105(h) of the
Internal Revenue Code of 1986, as amended (the “Code”),
and the Patient Protection and Affordable Care Act (the
“Affordable Care Act”)).
9.2 The term life
insurance policy maintained on the Employee by the Company during
the Term under the Prior Employment Agreement, shall be promptly
transferred to the Employee without cost, it being understood that
the Employee shall be responsible for the payment of any and all
premiums thereafter due.
10. SERVICE
AS OFFICER AND DIRECTOR
10.1 During
the Term, the Employee shall, if elected or appointed, serve as (a)
an officer of the Company and/or any subsidiaries of the Company in
existence or hereafter created or acquired and (b) a director of
the Company and/or any such subsidiaries of the Company in
existence or hereafter created or acquired, in each case without
any additional compensation for such services. In the event the
Company has in effect during the Term a director and officer
liability insurance policy, the Company will include the Employee
therein as a named insured.
11. EARLIER
TERMINATION
11.1 The
Employee’s employment hereunder (a) shall automatically
terminate upon his death, (b) may terminate at any time during the
Term at the option of the Company upon written notice to the
Employee for Cause or without Cause, (c) may terminate at any time
during the Term at the option of the Employee upon written notice
to the Company for Good Reason or without Good Reason and (d) may
terminate at the option of the Company in the event the Employee
becomes Disabled, as provided for in Article 6.
11.2 As
used in this Agreement, “Cause” shall mean (a) the
Employee’s commission of any act in the performance of his
duties constituting common law fraud, a felony or other gross
malfeasance of duty, (b) the Employee’s commission of any act
involving moral turpitude which reasonably may have a material
adverse effect on the Company and its subsidiaries taken as a whole
(“Material Adverse Effect”), (c) any misrepresentation
by the Employee (including, without limitation, a breach of any
representation set forth in Section 13.1 hereof) which reasonably
may have a Material Adverse Effect, (d) any breach of any material
covenant on the Employee’s part herein set forth (which
breach, if curable, is not cured by the Employee within thirty (30)
days of the Employee’s receipt of written notice thereof from
the Company), or (e) the Employee’s engagement in other
intentional or grossly negligent misconduct which may reasonably
have a Material Adverse Effect. The parties agree that the term
“Material Adverse Effect” includes the loss or
suspension of any license for the Company or KICO to operate or any
disqualification or suspension for the Employee to serve as an
officer or director thereof under applicable law.
11.3 As
used in this Agreement, “Good Reason” shall mean (a)
any material breach of this Agreement on the Company’s part
(which breach, if curable, is not cured by the Company within
thirty (30) days of the Company’s receipt of written notice
thereof from the Employee), (b) a material diminution in the
Employee’s duties and responsibilities (other than following
an event constituting Cause) in his capacity as Executive Chairman
of the Board and President of COSI Agency, Inc., (c) a material
adverse change in the Employee's current reporting structure (other
than following an event constituting Cause), (d) a material
decrease in the compensation payable to the Employee from the
compensation payable pursuant to this Agreement, (e) the
Employee’s termination under the KICO Employment Agreement by
KICO other than for Cause; or (f) the relocation of the location of
the Company’s principal offices at which the Employee is to
provide his services to a location that is more than thirty (30)
miles from Valley Stream, New York (it being understood and agreed,
however, that the Employee shall be required to travel to Kingston,
New York as often as is reasonably required for him to perform his
duties as Executive Chairman of the Board and Chief Investment
Officer of KICO). Good Reason shall only exist if (i) notice is
given within ninety (90) days of the initial event, (ii) such event
is not cured within thirty (30) days of the giving of such notice,
and (iii) Employee terminates employment within sixty (60) days of
the end of the cure period. Notwithstanding the foregoing, Good
Reason prior to January 1, 2020 shall have the meaning and
procedural requirements set forth in the Prior
Agreement.
11.4 In
the event of the termination of the Employee’s employment by
the Company for Cause or by the Employee without Good Reason, the
Company shall have no further obligations to the Employee, and the
Employee shall be entitled to no further compensation from the
Company, except for any pro-rata amounts due to the Employee at
such date of termination, as provided for in Section 4.2 hereof,
and except, in the case of a termination of employment by the
Employee without Good Reason, for any Bonus amount for the
completed calendar year immediately preceding the date of
termination, as provided in Section 4.3 hereof. As an illustration
of the foregoing, in the event of a termination of employment by
the Employee without Good Reason on March 1, the Employee would be
entitled to receive the amount payable to him pursuant to Section
4.2 hereof to March 1 and the amount, if any, payable to him
pursuant to Section 4.3 hereof for the immediately preceding
calendar year ended December 31. In the event of the termination of
the Employee’s employment by the Company for Cause or by the
Employee without Good Reason, the amount to be paid to the Employee
pursuant to this Section 11.4 shall constitute the sole and
exclusive remedy of the Employee, and the Employee shall not be
entitled to any other or further compensation, rights or benefits
hereunder or otherwise.
11.5 In
the event of the termination of the Employee’s employment by
the Company without Cause or by the Employee for Good Reason, the
Employee shall be entitled to receive (a) the compensation to which
he would have been entitled until the expiration of the Term
pursuant to Section 4.2 hereof, (b) the Bonus compensation to which
he is entitled to receive through the expiration of the Term
pursuant to Section 4.3 hereof, and (c) the LTC to which he is
entitled to receive through December 31, 2019 pursuant to Section
4.4 hereof and, if thereafter, a payment of $260,000 multiplied by
a fraction, the numerator of which is 730 days minus the number of
days the Employee was employed by the Company after January 1,
2020, and the denominator of which is 730 days. The compensation
payable pursuant to (a) above shall be payable to the Employee in
accordance with the Company’s standard payroll practices as
if his employment had continued. The amount to be paid to the
Employee pursuant to this Section 11.5 shall constitute the sole
and exclusive remedy of the Employee, and the Employee shall not be
entitled to any other or further compensation, rights or benefits
hereunder or otherwise.
11.6 In
order to protect the Employee against the possible consequences and
uncertainties of a Change of Control of the Company and thereby
induce the Employee to remain in the employ of the Company, the
Company agrees that:
(a) If, during the
Term, the Employee’s employment is terminated within eighteen
(18) months subsequent to a Change of Control by the Company other
than for Cause or by the Employee for Good Reason, the Company
shall pay to the Employee an amount in cash equal to the sum of (i)
three (3) times the Base Salary (as reduced pursuant to Section
4.2) and (ii) if prior to December 31, 2019, the Target LTC Amount,
and if after December 31, 2019, and prior to its payment, the LTC
bonus, and (iii) the Bonus through the Termination Date, calculated
pursuant to Section 4.3(c) (the “Change of Control
Payment”). The Change of Control Payment shall be payable in
one lump sum payment within ten (10) days following the date of
termination of the Employee except for the Bonus through the
Termination Date, which shall be payable within thirty (30) days
following the determination by the Company’s chief financial
officer of the Company’s Net Income through the end of the
Termination Quarter, if any, and otherwise consistent with the
consolidated financial statements of the Company for the period
ended with the end of the Termination Quarter, as set forth in any
Form 10-Q filed by the Company with the SEC. In addition, in such
event, if the Employee is covered by the Company’s health,
dental or vision insurance, the Company shall continue to pay, on a
monthly basis, for the Employee's health insurance premiums,
including spousal coverage, for the remainder of the Term, and
thereafter the Employee and the Employee’s spouse shall
continue to be provided for the remainder of their lives, with the
same access to the Company’s health, dental, and vision
insurance to which the Employee was accorded during the Term, at
COBRA premium rates, which will be paid for by the Employee or the
Employee’s spouse (provided that the cost of such coverage
attributable to Employer contributions shall be treated as taxable
income to the Employee monthly to the extent necessary to enable
the health plan to continue to satisfy applicable nondiscrimination
requirements of Section 105(h) of the Code and the Affordable Care
Act). The Change of Control Payment shall be in lieu of the amount
payable to the Employee pursuant to Section 11.5 hereof; provided,
however, that the Employee may elect to receive the amount payable
pursuant to Section 11.5 hereof in lieu of the amount payable
pursuant to this Section 11.6. In addition, in such event,
following the Expiration Date, the Employee and the
Employee’s spouse shall continue to be provided for life with
the same access to the Company’s health, dental, and vision
insurance to which the Employee was accorded during the Term, at
COBRA premium rates which will be paid for by the Employee. The
amount to be paid to the Employee pursuant to this Section 11.6
shall constitute the sole and exclusive remedy of the Employee, and
the Employee shall not be entitled to any other or further
compensation, rights or benefits hereunder or
otherwise.
(b) As used in this
Section 11.6, a “Change of Control” shall be deemed to
have occurred if:
(i) any
“person” or “group of persons” (as such
terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “1934 Act”)
(other than the Employee or any “group of persons” that
includes the Employee), becomes the “beneficial owner”
(as defined in Rule 13d-3 promulgated under the 1934 Act), directly
or indirectly, of securities of the Company representing more than
thirty-three and one-third percent (33-1/3%) of the Company’s
then outstanding securities having the right to vote on the
election of directors (“Voting Securities”), except
that there shall be excluded from the calculation any Voting
Securities acquired from the Company with respect to which the
Employee gave his approval as a member of the Board;
(ii) when
individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
or
(iii) the
Company consummates (A) a reorganization, merger or consolidation
of the Company, with respect to which in each case all or
substantially all of the Persons who were the beneficial owners of
the Voting Securities of the Company immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own, directly
and indirectly, more than 50% of the then combined voting power of
the then outstanding voting securities entitled to vote generally
in the election of directors of the corporation or other Person
resulting from such reorganization, merger of consolidation, or (B)
the sale or other disposition of all or substantially all of the
assets of the Company.
Notwithstanding
the foregoing, no transaction or event shall constitute a Change of
Control hereunder unless such transaction or event also constitutes
a change in ownership or effective control of the Company within
the meaning of Treasury Regulation Section 1.409A-3(i)(5)(v) or
(vi)(A)(2).
11.1 In
the event of the death of the Employee during the Term, as
severance, the Employee’s estate (the “Estate”)
shall be entitled to receive (a) the Base Salary to which the
Employee is entitled until the date of death of the Employee
pursuant to Section 4.2; (b) the Bonus compensation to which the
Employee is entitled through the date of death (i.e., the
Termination Date shall be considered the date of death); and (c)
the LTC bonus compensation to which the Employee is entitled
through the Termination Date. The amount to be paid to the Estate
pursuant to this Section 11.7 shall constitute the sole and
exclusive remedy of the Estate and any beneficiaries thereof, and
neither the Estate nor any beneficiaries thereof shall be entitled
to any other or further compensation, rights or benefits hereunder
or otherwise, including pursuant this to Article 11.
11.2 The
termination or expiration of this Agreement shall not affect the
continuing operation and effect of Article 7 hereof, which shall
continue in full force and effect according to its terms. In
addition, the termination or expiration of this Agreement will not
result in a termination or waiver of any rights and remedies that
the Company may have under this Agreement and applicable
law.
12. INJUNCTIVE
RELIEF; REMEDIES
12.1 The
Employee acknowledges and agrees that, in the event he shall
violate or threaten to violate any of the restrictions of Article 3
or 7 hereof, the Company will be without an adequate remedy at law
and will therefore be entitled to enforce such restrictions by
temporary or permanent injunctive or mandatory relief in any court
of competent jurisdiction without the necessity of proving monetary
damages.
12.2 The
Employee agrees further that the Company shall have the following
additional rights and remedies:
(i) the right and
remedy to require the Employee to account for and pay over to the
Company all monies and other consideration derived or received by
him as the result of any transactions determined by an arbitrator
or a court of competent jurisdiction to be a breach of any of the
provisions of Section 7.1, and the Employee hereby agrees to
account for and pay over such monies and other consideration to the
Company; and
(ii) the
right to recover attorneys’ fees incurred in any action or
proceeding in which it seeks to enforce its rights under Article 7
hereof and is successful on any grounds; provided, however, that,
in the event the Employee is the prevailing party in any such
action or proceeding, the Company will pay to the Employee all
reasonable attorneys’ fees and costs incurred by the Employee
in defending such action or proceeding.
12.3 Each
of the rights and remedies enumerated above shall be independent of
the other, and shall be severally enforceable, and all of such
rights and remedies shall be in addition to, and not in lieu of,
any other rights and remedies available to the Company under law or
in equity.
12.4 The
parties hereto intend to and hereby confer jurisdiction to enforce
the covenants contained in Section 7.1 upon the courts of any
jurisdiction within the geographical scope of such covenants (a
“Jurisdiction”). In the event that the courts of any
one or more of such Jurisdictions shall hold such covenants
unenforceable by reason of the breadth of their scope or otherwise,
it is the intention of the parties hereto that such determination
not bar or in any way affect the Company’s right to the
relief provided above in the courts of any other Jurisdiction, as
to breaches of such covenants in such other respective
Jurisdictions, the above covenants as they relate to each
Jurisdiction being, for this purpose, severable into diverse and
independent covenants.
13. NO
RESTRICTIONS
13.1 The
Employee hereby represents that neither the execution of this
Agreement nor his performance hereunder will (a) violate, conflict
with or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both,
would constitute a default) under the terms, conditions or
provisions of any contract, agreement or other instrument or
obligation to which the Employee is a party, or by which he may be
bound, or (b) violate any order, judgment, writ, injunction or
decree applicable to the Employee. In the event of a breach hereof,
in addition to the Company’s right to terminate this
Agreement, the Employee shall indemnify the Company and hold it
harmless from and against any and all claims, losses, liabilities,
costs and expenses (including reasonable attorneys’ fees)
incurred or suffered in connection with or as a result of the
Company’s entering into this Agreement or employing the
Employee hereunder.
14. ARBITRATION
14.1 Except
with regard to Section 12.1 hereof and any other matters that are
not a proper subject of arbitration, all disputes between the
parties hereto concerning the performance, breach, construction or
interpretation of this Agreement or any portion thereof, or in any
manner arising out of this Agreement or the performance thereof,
shall be submitted to binding arbitration, in accordance with the
rules of the American Arbitration Association. The arbitration
proceeding shall take place at a mutually agreeable location in
Nassau County, New York or such other location as agreed to by the
parties.
14.2 The
award rendered by the arbitrator shall be final, binding and
conclusive, shall be specifically enforceable, and judgment may be
entered upon it in accordance with applicable law in an appropriate
court in the State of New York, with no right of appeal
therefrom.
14.3 Each
party shall pay its or his own expenses of arbitration, and the
expenses of the arbitrator and the arbitration proceeding shall be
equally shared; provided, however, that, if, in the opinion of the
arbitrator (or a majority of the arbitrators if more than one), any
claim or defense was unreasonable, the arbitrator(s) may assess, as
part of their award, all or any part of the arbitration expenses of
the other party (including reasonable attorneys’ fees) and of
the arbitrator(s) and the arbitration proceeding against the party
raising such unreasonable claim or defense; provided, further,
that, if the arbitration proceeding relates to the issue of Cause
for termination of employment, (a) if, in the opinion of the
arbitrator (or a majority of the arbitrators if more than one),
Cause existed, the arbitrator(s) shall assess, as part of their
award, all of the arbitration expenses of the Company (including
reasonable attorneys’ fees) and of the arbitrator(s) and the
arbitration proceeding against the Employee or (b) if, in the
opinion of the arbitrator (or a majority of the arbitrators if more
than one), Cause did not exist, the arbitrator(s) shall assess, as
part of their award, all of the arbitration expenses of the
Employee (including reasonable attorneys’ fees) and of the
arbitrator(s) and the arbitration proceeding against the
Company.
15.1 The
intent of the parties is that payments and benefits under this
Agreement comply with Section 409A of the Code (together with the
regulations and guidance promulgated thereunder, “Code
Section 409A”), and, accordingly, to the maximum extent
permitted, this Agreement shall be interpreted to be in compliance
therewith. To the extent that any provision hereof is modified in
order to comply with Code Section 409A, such modification shall be
made in good faith and shall, to the maximum extent reasonably
possible, maintain the original intent and economic benefit to the
parties hereto of the applicable provision without violating the
provisions of Code Section 409A. In no event whatsoever shall the
Company be liable for any additional tax, interest or penalty that
may be imposed on the Employee by Code Section 409A as a result of
the Company’s compliance with the terms of this
Agreement.
15.2 A
termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the
payment of any amounts or benefits constituting deferred
compensation under Code Section 409A upon or following a
termination of employment unless such termination of employment is
also a “separation from service” within the meaning of
Code Section 409A and, for purposes of any such provision of this
Agreement, references to a termination of employment or like terms
shall mean “separation from service.” If the Employee
is deemed on the date of termination to be a “specified
employee” within the meaning of that term under Code Section
409A(a)(2)(B), then with regard to any payment or the provision of
any benefit that is considered deferred compensation under Code
Section 409A payable on account of a “separation from
service,” such payment or benefit shall be made or provided
at the date which is the earlier of (i) the expiration of the six
(6) month period measured from the date of such “separation
from service” of the Employee, and (ii) the date of the
Employee’s death (the “Delay Period”). Upon the
expiration of the Delay Period, all payments and benefits delayed
pursuant to this Section 15.2 (whether they would have
otherwise been payable in a single sum or in installments in the
absence of such delay) shall be paid or reimbursed to the Employee
in a lump sum, and any remaining payments and benefits due under
this Agreement shall be paid or provided in accordance with the
normal payment dates specified herein.
15.3 All
expenses or other reimbursements under this Agreement shall be made
on or prior to the last day of the taxable year following the
taxable year in which such expenses were incurred by the Employee
(provided that if any such reimbursements constitute taxable income
to the Employee, such reimbursements shall be paid no later than
March 15th of the calendar year following the calendar year in
which the expenses to be reimbursed were incurred), and no such
reimbursement or expenses eligible for reimbursement in any taxable
year shall in any way affect the expenses eligible for
reimbursement in any other taxable year.
15.4 For
purposes of Code Section 409A, the Employee’s right to
receive any installment payments pursuant to this Agreement shall
be treated as a right to receive a series of separate and distinct
payments. Whenever a payment under this Agreement specifies a
payment period with reference to a number of days (e.g.,
“payment shall be made within sixty (60) days”),
the actual date of payment within the specified period shall be
within the sole discretion of the Company.
15.5 Notwithstanding
any other provisions of this Agreement to the contrary, in the
event that any payments or benefits received or to be received by
the Employee in connection with the Employee’s employment
with the Company (or termination thereof) would subject the
Employee to the excise tax imposed under Section 280G or 4999 of
the Code (the “Excise Tax”), and, if the net-after tax
amount (taking into account all applicable taxes payable by the
Employee, including any Excise Tax) that the Employee would receive
with respect to such payments or benefits does not exceed the
net-after tax amount the Employee would receive if the amount of
such payment and benefits were reduced to the maximum amount which
could otherwise be payable to the Employee without the imposition
of the Excise Tax, then, to the extent necessary to eliminate the
imposition of the Excise Tax, reduction shall occur in the
following order unless the Employee elects in writing a different
order to the extent permitted under Code Sections 409A, 280G and
4999: (i) severance payment based on multiple of Base Salary and/or
Bonus; (ii) other cash payments; (iii) any pro-rated Bonus or
pro-rated LTC paid as severance; (iv) acceleration of vesting of
stock options with an exercise price that exceeds the then fair
market value of stock subject to the option, provided such options
are not permitted to be valued under Treasury Regulations Section
1.280G-1 Q/A – 24(c); (v) any equity awards accelerated or
otherwise valued at full value, provided such equity awards are not
permitted to be valued under Treasury Regulations Section 1.280G-1
Q/A – 24(c); (vi) acceleration of vesting of stock options
with an exercise price that exceeds the then fair market value of
stock subject to the option provided such options are permitted to
be valued under Treasury Regulations Section 1.280G – 1 Q/A
– 24(c); (vii) acceleration of vesting of all other stock
options and equity awards; and (viii) within any category,
reductions shall be from the last due payment to the
first.
16. ASSIGNMENT
16.1 This
Agreement, as it relates to the employment of the Employee, is a
personal contract and the rights and interests of the Employee
hereunder may not be sold, transferred, assigned, pledged or
hypothecated.
17. NOTICES
17.1 Any
notice required or permitted to be given pursuant to this Agreement
shall be deemed to have been duly given when delivered by hand or
sent by certified or registered mail, return receipt requested and
postage prepaid, overnight mail or courier, e-mail, or fax as
follows:
If to
the Employee:
X.X.
Xxx 000
Xxxxxxx, Xxx Xxxx
00000
xxxxxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
Fax
Number: (000) 000-0000
If to
the Company:
Chairman,
Compensation Committee
Xxxxxxx
Xxxxxx
xxxxxxx@xxxxxxx.xxx
or at
such other address as any party shall designate by notice to the
other party given in accordance with this Section
17.1.
18. GOVERNING
LAW
18.1 This
Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York applicable to
agreements made and to be performed entirely in New York without
regard to conflicts of laws principles.
19. WAIVER
OF BREACH; PARTIAL INVALIDITY
19.1 The
waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any
subsequent breach. If any provision, or part thereof, of this
Agreement shall be held to be invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision
and not in any way affect or render invalid or unenforceable any
other provisions of this Agreement, and this Agreement shall be
carried out as if such invalid or unenforceable provision, or part
thereof, had been reformed, and any court of competent jurisdiction
or arbitrators, as the case may be, are authorized to so reform
such invalid or unenforceable provision, or part thereof, so that
it would be valid, legal and enforceable to the fullest extent
permitted by applicable law.
20. ENTIRE
AGREEMENT; AMENDMENT
20.1 This
Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and there are no
representations, warranties or commitments except as set forth
herein. This Agreement supersedes all prior agreements,
understandings, negotiations and discussions, whether written or
oral, of the parties hereto relating to the subject matter hereof,
including the Existing Employment Agreement with regard to the
Employee’s employment with the Company effective as of
January 1, 2019. This Agreement may be amended, and any provision
hereof waived, only by a writing executed by the party sought to be
charged. No amendment or waiver on the part of the Company shall be
valid unless approved by its Board.
21. COUNTERPARTS
21.1 This
Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which taken together
shall constitute one and the same instrument.
22. FACSIMILE
AND EMAIL SIGNATURES
22.1 Signatures
hereon which are transmitted via facsimile or email shall be deemed
original signatures.
23. EXPENSES
23.1 The
Company agrees to pay the reasonable fees and expenses of legal
counsel incurred by the Employee in connection with the drafting
and negotiation of this Agreement.
23.2 In
addition to the right to indemnification conferred in Article
Thirteenth of the Restated Certificate of Incorporation of the
Company, as amended (the “Certificate of
Incorporation”), and Article VII, Section 7 of the By-Laws of
the Company, as amended (the “By-Laws”), the Employee
shall have the right to have his expenses (including reasonable
attorneys’ fees) incurred in defending any action or
proceeding as to which the Employee is entitled to be indemnified
in advance of its final disposition advanced and paid promptly as
set forth below upon incurring such expenses; provided, however,
that an advancement of expenses incurred by the Employee shall be
made only upon delivery to the Company of an undertaking by the
Employee to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no
further right to appeal that the Employee is not entitled to be
indemnified for such expenses under the Certificate of
Incorporation or the By-Laws. The Company shall make advance
payments of such expenses (including reasonable attorneys' fees)
incurred within thirty (30) days of the Employee’s
presentation of an invoice for such expenses.
24. CONSTRUCTION
24.1 All
references in this Agreement to “includes” and
“including” shall be construed to include the words
“without limitation.
25. REPRESENTATION
BY COUNSEL; INTERPRETATION
25.1 The
Employee acknowledges that he has been represented by counsel in
connection with this Agreement. Accordingly, any rule of law or any
legal decision that would require the interpretation of any claimed
ambiguities in this Agreement against the party that drafted it has
no application and is expressly waived by the Employee. The
provisions of this Agreement shall be interpreted in a reasonable
manner to give effect to the intent of the parties
hereto.
26. HEADINGS
26.1 The
headings and captions under articles and sections of this Agreement
are for convenience of reference only and do not in any way modify,
interpret or construe the intent of the parties or affect any of
the provisions of this Agreement.
[Remainder
of page intentionally left blank. Signature page
follows.]
3330/38309-001
CURRENT/102633893v9
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year above written.
By:
Xxxxxxx
Xxxxxx
Chair,
Compensation Committee
Xxxxx
X. Xxxxxxxxx
3330/38309-001
CURRENT/102633893v9
