EMPLOYMENT AGREEMENT
AGREEMENT made and entered into on the 9th day of April , 1999, by and
between XXXXXXX FINANCIAL CORP., a New York corporation with an office in New
York, New York (the "Company"), and XXX XXXXXXXX, a resident of the State of New
York ("Xx. Xxxxxxxx").
1. EMPLOYMENT. The Company will employ Xx. Xxxxxxxx, and Xx. Xxxxxxxx
will be employed by the Company, upon the terms and conditions set forth in this
Agreement.
2. TERM OF EMPLOYMENT. The term of Xx. Xxxxxxxx'x employment under this
Agreement will begin on the date hereof and will continue through April 30,
2002. On each May 1 (beginning with May 1, 2000) prior to the termination of Xx.
Xxxxxxxx'x employment under Section 7, the term will be extended by one
additional year.
3. POSITION, DUTIES AND RESPONSIBILITIES. On May 3, 1999, Xx. Xxxxxxxx
will begin serving as a full-time senior executive officer of the Company with
the title of Vice-Chair. As soon as practicable after the date hereof, Xx.
Xxxxxxxx will be appointed to serve as a member of the Company's Board of
Directors ("Board"). Xx. Xxxxxxxx will report directly to, and will perform such
duties consistent with his position as are assigned to him by and at the
discretion of, the Company's Chair or the Board. The duties to be assigned to
Xx. Xxxxxxxx under this Agreement may cover any aspect of the Company's
business, including, for example, matters relating to acquisitions, contract
negotiation, operations planning and structure, strategic planning for Internet,
general business coordination, management, coordination and prioritization of
projects, administrative supervision, business and financial reporting, and
compensation planning and negotiation. Xx. Xxxxxxxx'x compensation will be
subject to annual review by the Compensation Committee of the Board. At the
request of the Chair or the Board, Xx. Xxxxxxxx will serve as a member of the
Executive Committee of the Board, and as an officer and director of the
Company's subsidiaries and other affiliates without additional compensation. Xx.
Xxxxxxxx will be a full-time employee of the Company; however, subject to
Company policies and industry standards, Xx. Xxxxxxxx may engage in incidental
personal, charitable, professional and investment activities to the extent such
activities do not conflict or interfere with his obligations to, or his ability
to perform the duties of his employment by, the Company hereunder.
4. ANNUAL COMPENSATION. The Company will pay salary to Xx. Xxxxxxxx at
an annual rate of $185,000 in accordance with its regular payroll practices. The
Board, acting in its discretion, may award bonuses to Xx. Xxxxxxxx, applying
standards substantially similar to those used with respect to other senior
officers of the Company (other than the Chair). Xx. Xxxxxxxx'x compensation will
be subject to annual review by the Compensation Committee of the Board pursuant
to paragraph 3 above. The Board may increase (but may not decrease) the annual
rate of Xx. Xxxxxxxx'x salary in effect at any time.
-1-
5. EMPLOYEE BENEFITS. Xx. Xxxxxxxx will be entitled to participate in
such qualified and nonqualified employee pension plans, stock option or other
equity compensation plans, group health, long term disability and group life
insurance plans, and any other welfare and fringe benefit plans, arrangements,
programs and perquisites sponsored or maintained by the Company from time to
time for the benefit of its senior executive employees generally. Xx. Xxxxxxxx
will be entitled to receive a special stock option grant under the Company's
1997 Stock Option Plan for 20,000 shares of Company common stock, vesting in 20%
increments at the end of each of the first five years following the date hereof,
at the current fair market value exercise price prescribed by said Stock Option
Plan. A stock option agreement evidencing the 20,000 share option grant,
substantially in the form that is customarily used under the Company's stock
option plan, will be presented to Xx. Xxxxxxxx promptly after the execution of
this Agreement.
6. REIMBURSEMENT OF BUSINESS EXPENSES. Xx. Xxxxxxxx is authorized to
incur reasonable expenses in carrying out his duties and responsibilities under
this Agreement, and the Company will promptly reimburse him for all such
expenses that are so incurred upon presentation of appropriate vouchers or
receipts, subject to the Company's expense reimbursement policies applicable to
senior executive officers generally.
7. TERMINATION OF EMPLOYMENT.
(a) DEATH. If Xx. Xxxxxxxx'x employment with the Company terminates
before the end of the term by reason of his death, then, as soon as practicable
thereafter, the Company will pay to his estate an amount equal to his "Accrued
Compensation" (defined below). For the purposes of this Agreement, the term
"Accrued Compensation" means, as of any date, the amount of any unpaid salary
earned by Xx. Xxxxxxxx through that date, plus any additional amounts and/or
benefits payable in accordance with the provisions of any employee plan, program
or arrangement under which Xx. Xxxxxxxx is covered immediately prior to his
death.
(b) DISABILITY. If the Company terminates Xx. Xxxxxxxx'x employment by
reason of Xx. Xxxxxxxx'x "disability" (defined below), then Xx. Xxxxxxxx will be
entitled to (1) his Accrued Compensation through his employment termination
date, (2) continuing salary payments for one year, reduced by the amount, if
any, of long term disability income payments to which Xx. Xxxxxxxx becomes
entitled, and (3) continuing participation in the Company's group health plan(s)
at the same benefit level at which he and his covered dependent(s) participated
immediately before the termination of his employment for a period of at least
one year after such termination or, if longer, for the balance remaining in the
then current term of this Agreement at the time of such termination of
employment, and, thereafter, for such additional continuation period as may be
available under COBRA. For purposes of this Agreement, the term "disability"
shall have the same meaning ascribed thereto for purposes of the Company's long
term disability plan or, if there is no such plan, the inability of Xx. Xxxxxxxx
to substantially perform the customary duties of his employment for the Company
for a period of at least 120 consecutive days by reason of a physical or mental
incapacity which is expected to last indefinitely, or result in death.
-2-
(c) TERMINATION BY THE COMPANY FOR CAUSE OR VOLUNTARY TERMINATION BY
XX. XXXXXXXX. If the Company terminates Xx. Xxxxxxxx'x employment for "Cause"
(defined below) or if Xx. Xxxxxxxx terminates his employment voluntarily, then,
in either of such events, Xx. Xxxxxxxx will be entitled to receive his Accrued
Compensation through the date his employment terminates, and nothing more. For
the purposes hereof, the term "Cause"means (1) the commission of an act of
dishonesty or other misconduct for substantial personal enrichment to the
material detriment or expense of the Company or any of its affiliates, (2) the
commission of a felony or other indictable offense involving fraud, dishonesty,
deceit, theft embezzlement, obtaining property under false pretenses or similar
acts of misconduct, (3) a willful violation of Company policy which is not
remedied or discontinued within 30 days' written notice thereof by the Company,
(4) an act which causes substantial harm to the ability of the Company or of any
of its affiliates to conduct its business by reason of Xx. Xxxxxxxx'x being
named as a defendant in an injunctive action brought by a regulatory agency
alleging violation of applicable securities law, (5) any other willful conduct
or misconduct which causes substantial harm to the reputation or business of the
Company or any of its affiliates, or (6) wilful and repeated failure or refusal
by Xx. Xxxxxxxx to carry out the duties and responsibilities of his employment
which, if curable, is not cured within 30 days after receipt of written notice
by the Company.
(d) TERMINATION BY THE COMPANY WITHOUT CAUSE. If Xx. Xxxxxxxx'x
employment is terminated by the Company without Cause, then Xx. Xxxxxxxx will be
entitled to receive (1) Accrued Compensation through the termination date; (2)
continued salary for the Severance Term (defined below) at his annual rate of
salary in effect immediately prior to the termination date; and (3) continued
participation in the Company's group health plan(s) during the Severance Period
or cash payments equal to the premium cost of such coverage if and to the extent
he cannot be covered under the Company's plan by reason of his no longer being
an active employee, subject to such additional continuation coverage as may be
available under COBRA. For the purposes hereof, the term Severance Period means
three years if Xx. Xxxxxxxx'x employment ends within two years from the date
hereof, two years if Xx. Xxxxxxxx'x employment ends more than two but not more
than four years from the date hereof, and one year if Xx. Xxxxxxxx'x employment
ends more than four years from the date hereof.
(e) CHANGE IN CONTROL. A voluntary termination of employment by Xx.
Xxxxxxxx will be deemed to be a termination of Xx. Xxxxxxxx'x employment by the
Company without Cause for the purposes of this Agreement if such voluntary
termination occurs within six months after the occurrence of a Change in Control
(as defined below). For the purposes hereof, the term "Change in Control" means
any transaction or series of related transactions which, upon consummation,
results in a change of ownership, directly or indirectly, of more than 50% of
the voting control and value of the Company and its businesses and in Xx. Xxxxxx
Xxxxxxx'x not serving as the Chair or a co-Chair of the Company. Transfers of
Company stock by the Chair to one or more entities controlled by her or to
members of her family (or trusts for the benefit of any members of her family)
or to the Xxxxxx X. Xxxxxxx Foundation will be disregarded in determining
whether a Change in Control has occurred.
-3-
(e) MITIGATION. In the event of the termination of Xx. Xxxxxxxx'x
employment by the Company without Cause, Xx. Xxxxxxxx shall be under no
obligation to seek other employment in order to mitigate the Company's
obligations under subparagraph (d) of this paragraph 7; provided, however, that
amounts due Xx. Xxxxxxxx under said subparagraph (d) shall be offset by any
remuneration attributable to any subsequent employment that Xx. Xxxxxxxx may
obtain.
8. RESTRICTIVE COVENANTS.
(a) NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Xx. Xxxxxxxx
acknowledges that, during the course of his employment hereunder, he will have
access to confidential and proprietary information, documents and other
materials relating to the Company which are not generally known to persons
outside the Company (whether conceived or developed by Xx. Xxxxxxxx or others)
and confidential information, documents and other materials entrusted to the
Company by third parties, including, without limitation, financial information,
trade secrets, techniques, know-how, marketing and other business plans,
customer lists, data, strategies and forecasts, and the substance of
arrangements and agreements with customers, suppliers and others (collectively,
"Confidential Information"). Information known by Xx. Xxxxxxxx prior to his
employment with the Company will not be considered to be Confidential
Information hereunder. Any Confidential Information conceived or developed by
Xx. Xxxxxxxx during the period of his employment will be the exclusive property
of the Company. Except as specifically authorized by the Company, Xx. Xxxxxxxx
will not (during or after his employment hereunder) disclose Confidential
Information to any third person, firm or entity or use Confidential Information
for his own purposes or for the benefit of any third person, firm or entity
other than (1) as may be legally required in response to any summons, order or
subpoena issued by a court or governmental agency, or (2) Confidential
Information which is or becomes available to the general public through no act
or failure to act by Xx. Xxxxxxxx.
(b) COMPANY DOCUMENTS. Upon the termination of his employment,
Xx. Xxxxxxxx will deliver to the Company all documents in whatever form and
other tangible property containing Confidential Information which are then in
his possession or control.
(c) NON-SOLICITATION. During employment and for a period of
one year after the termination of his employment, Xx. Xxxxxxxx will not,
directly or indirectly, solicit, induce or otherwise attempt to influence any
employee of the Company or any subsidiary or other affiliate thereof to leave
employment therewith.
(d) REMEDIES. Xx. Xxxxxxxx acknowledges and agrees that
damages in an action at law for breach of any of the provisions of this Section
will be difficult to determine and will not afford a full and adequate remedy
and, therefore, agrees that the Company, in addition to seeking damages in an
action at law, may seek specific performance and such equitable or other
remedies as may be available for breach of this Section, including, without
limitation, the issuance of a temporary or permanent injunction, without the
necessity of a bond.
-4-
(e) SURVIVAL. The obligations set forth in this Section 8
shall survive the termination of Xx. Xxxxxxxx'x employment.
9. LITIGATION ASSISTANCE. Xx. Xxxxxxxx will cooperate with the Company,
during the term of his employment and thereafter (including following Xx.
Xxxxxxxx'x termination of employment for any reason), by making himself
reasonably available to testify on behalf of the Company or any subsidiary or
affiliate of the Company in any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, and to reasonably assist the Company
or any such subsidiary or affiliate in any such action, suit, or proceeding by
providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Company or any
such subsidiary or affiliate, as reasonably requested; PROVIDED, HOWEVER, that
the same does not materially interfere with his then current professional
activities. The Company will reimburse Xx. Xxxxxxxx, on an after-tax basis, for
all expenses reasonably incurred by him in connection with his provision of
testimony or assistance.
10. INDEMNIFICATION. To the extent permitted by its Certificate of
Incorporation and By-laws and subject to applicable law, the Company will
indemnify, defend and hold Xx. Xxxxxxxx harmless from and against any claim,
liability or expense (including reasonable attorneys' fees) made against or
incurred by Xx. Xxxxxxxx as a result of his employment with the Company or any
subsidiary or other affiliate of the Company, including service as an officer or
director of the Company or any subsidiary or other affiliate of the Company.
11. ASSIGNMENT; BINDING NATURE. The services and duties to be performed
by Xx. Xxxxxxxx hereunder are personal and may not be assigned. This Agreement
shall be binding upon and inure to the benefit of the Company, its successors
and assigns and Xx. Xxxxxxxx and his heirs and representatives.
12. NO IMPEDIMENT TO AGREEMENT. Xx. Xxxxxxxx covenants that he is not,
as of the date hereof, and will not be, during the period of his employment
hereunder, employed under contract, oral or written, by any other person, firm
or entity, and is not and will not be bound by the provisions of any other
restrictive covenant or confidentiality agreement, and is not aware of any other
circumstance or condition (legal, health or otherwise) which would constitute an
impediment to, or restriction upon, his ability to enter into this Agreement and
to perform the duties and responsibilities of his employment hereunder. Xx.
Xxxxxxxx will comply with any applicable registration or other regulatory
requirements that may be imposed in connection with the performance of his
duties under this Agreement.
13. AMENDMENT OR WAIVER. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by Xx. Xxxxxxxx and an
authorized officer of the Company. Except as set forth herein, no delay or
omission to exercise any right, power or remedy accruing to any party shall
impair any such right, power or remedy or shall be construed to be a waiver of
or an acquiescence to any breach hereof. No waiver by either party of any breach
by the
-5-
other party of any condition or provision contained in this Agreement to be
performed by such other party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by Xx. Xxxxxxxx or an authorized
officer of the Company, as the case may be.
14. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
15. SURVIVORSHIP. The respective rights and obligations of the parties
hereunder shall survive any termination of Xx. Xxxxxxxx'x employment to the
extent necessary to the intended preservation of such rights and obligations.
16. GOVERNING LAW. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of [New York] without reference to
principles of conflict of laws.
17. NOTICES. Any notice given to a party shall be in writing and shall
be deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, or express mail to
the recipient at his or its last known address.
18. ENTIRE AGREEMENT. This Agreement contains the entire understanding
and agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect thereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first above written.
XXXXXXX FINANCIAL CORP.
By: /s/Xxxxxx Xxxxxxx
------------------------------
Xxxxxx Xxxxxxx, Chair
/s/Xxx Xxxxxxxx
----------------------------------
Xxx Xxxxxxxx
