Exhibit 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AGREEMENT made as of the 17th day of November, 2003, by and between
UNITED CAPITAL CORP., a Delaware corporation (the "Company"), having an office
at 0 Xxxx Xxxxx, Xxxxx Xxxx, Xxx Xxxx and X.X. XXXXXXXXXX, residing at 000 Xxxx
Xxxxx Xxxx, Xxxxx Xxxxx, Xxx Xxxx 00000 (the "Executive"). W I T N E S S E T H
WHEREAS, the Executive serves as the Company's Chairman of the Board,
President and Chief Executive Officer;
WHEREAS, the Executive and the Company previously entered into an
Employment Agreement dated as of January 1, 1990, as subsequently amended on
December 3, 1990 and June 8, 1993 (collectively, the "Initial Agreement");
WHEREAS, the Executive and the Company have agreed to restate and
amend certain of the terms and conditions of the Initial Agreement, all as
provided herein and the Executive desires to be employed by the Company upon the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs the Executive as its
Chairman of the Board, President and Chief Executive Officer, and the Executive
hereby accepts such employment, subject to the terms and conditions hereinafter
set forth.
2. TERM. The Executive's employment hereunder shall continue for a
period ending on December 31, 2003. This Agreement will be extended
automatically thereafter for successive one year terms unless either the Company
or the Executive gives the other written notice Forty-Five days prior to
December 31, 2003 or Ninety days prior to any subsequent anniversary date that
the Agreement is terminated on the applicable anniversary of that date.
3. DUTIES. The Executive agrees that he will render his services to
the Company as the Chairman of the Board, President and Chief Executive Officer
of the Company, and shall perform the duties and services incident to his
position which shall be substantially similar to those duties and services
previously performed by him for the Company. The Executive shall perform his
services at the Company's offices at 0 Xxxx Xxxxx, Xxxxx Xxxx, Xxx Xxxx, or the
then principal executive offices of the Company as agreed to by the Executive,
subject to his taking such trips as are required to perform his services
hereunder. The Executive agrees that he will not, during the term of this
Agreement, engage in any other business activity which materially interferes
with the performance of his obligations under this Agreement, except for
services, from time to time, to the subsidiaries and divisions of the Company.
The Company acknowledges that the Executive's employment as Chairman of the
Board, President and Chief Executive Officer of Prime Hospitality Corp does not
materially interfere with the performance of his obligations under this
Agreement.
4. COMPENSATION.
4.01. SALARY. In consideration of the services to be rendered by
the Executive hereunder, including, without limitation, any services rendered by
him as an officer or director of the Company or of any parent, subsidiary or
affiliate of the Company, the Company agrees to pay the Executive the base
salary of $750,000 per annum, which may be increased from time to time by the
Compensation and Stock Option Committee of the Board of Directors of the
Company. The Executive shall also be entitled to bonuses as determined from time
to time by the Compensation and Stock Option Committee of the Board of Directors
of the Company.
4.02. BENEFITS. The Executive shall also be entitled to
vacations, sick leave and fringe benefits, including, but not limited to, group
health and term life insurance and pension plans and the grant of stock options
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and similar rights, in accordance with the Company's policies and plans from
time to time in effect for executive officers of the Company, and shall receive
such additional benefits and compensation as the Compensation and Stock Option
Committee of the Board of Directors may determine from time to time. The
foregoing shall not in any way limit the Company's ability, in its discretion,
to modify or discontinue any such plans which are from time to time in effect.
4.03. REIMBURSEMENT. The Executive shall be entitled to
reimbursement for all reasonable and necessary travel, entertainment and other
business expenses incurred or expended by him incident to the performance of his
duties as an officer of the Company, subject to a periodic accounting reasonably
satisfactory to the Company.
4.04. DISABILITY. Except as hereinafter provided in Section
5.03(b) hereof, the Company shall pay Executive, for any period during which he
is unable fully to perform his duties because of physical or mental disability
or incapacity, an amount equal to the fixed compensation due him for such period
less the aggregate amount of all income disability benefits which he may receive
or to which he may be entitled under or by reason of (i) any group health
insurance plan; (ii) any applicable compulsory state disability law; (iii) the
Federal Social Security Act; (iv), any applicable workmen's compensation law or
similar law; and (v) any plan toward which the Company or any parent, subsidiary
or affiliate of the Company has contributed or for which it has made payment
deductions, such as group accident or health policies. The foregoing shall not
in any way limit the Company's ability, in its discretion, to modify or
discontinue any such plans which are from time to time in effect.
5. TERMINATION FOLLOWING CHANGE IN CONTROL
5.01. DEFINITIONS. For purposes of this Agreement, the terms
listed below shall be defined as follows:
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(a) "Acts of Default" shall mean:
(i) A willful breach by the Executive in any material
respect of any of his obligations set forth in this Agreement;
provided, however, that the Company shall first have informed the
Executive in writing, and in reasonable detail, as to the manner in
which the Executive has breached his obligations hereunder and the
Executive, within a reasonable period of time thereafter, shall have
failed to cure such failure or breach; or
(ii) the conviction of the Executive of a crime constituting
a felony; or
(iii) the commission by the Executive of any material act of
dishonesty or breach of trust against the Company, its parents,
subsidiaries and/or affiliates.
(b) "Approved Director" shall mean any director whose election by
the Board or nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors on the date hereof or who were themselves Approved
Directors. The term "Approved Director" shall not include a director or
directors designated by a person who has entered into an agreement with the
Company which, if consummated, would constitute a "change in control of the
Company," as defined herein.
(c) "A change in control of the Company" shall be deemed to have
occurred if:
(i) any "person" or "group" (as used in this Agreement,
"person" and "group" shall have the meanings given such terms in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), other than (A) the Executive or a
person controlled by him, (B) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or (C) a
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as the shares of the
Company are currently held, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 25% or more of the
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combined voting power of the Company's then outstanding securities and
representing a greater percentage of the combined voting power of the
Company's then outstanding securities than the voting power of the
securities of the Company of which the Executive or a person
controlled by him [or family members of the Executive] is then the
beneficial owner;
(ii) individuals who constitute the Board, on the date
hereof, and Approved Directors shall cease for any reason to
constitute a majority of the Board; or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
(d) "Good Reason" shall mean, without the Executive's express
written consent, any of the following circumstances unless, in the case of
paragraphs (i), (v) or (vi), such circumstances are fully corrected prior to the
date of termination specified in the notice of termination, given in respect
thereof:
(i) the assignment to the Executive of any duties
inconsistent with his status as the Chairman of the Board of
Directors, President and Chief Executive Officer of the Company
or a substantial adverse alteration in the nature or status of
his responsibilities from those in effect immediately prior to a
change in control of the Company;
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(ii) a reduction by the Company in the Executive's annual
base salary as in effect on the date hereof or as the same may be
increased from time to time except for across-the-board salary
reductions similarly affecting all senior executives of the
Company and all senior executives of any person in control of the
Company;
(iii) the failure by the Company to pay to the Executive any
portion of his current compensation except pursuant to an
across-the-board compensation deferral similarly affecting all
senior executives of the Company and all senior executives of any
person in control of the Company, or the failure by the Company
to pay to the Executive any portion of an installment of deferred
compensation under any deferred compensation program of the
Company, within seven (7) days of the date such compensation is
due;
(iv) the failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this
Agreement;
(v) any purported termination of the Executive's employment
which is not effected pursuant to the terms of this Agreement; or
(vi) the Executive shall at any time be required to report
to any person or entity other than the Board of Directors of the
Company.
5.02. TERMINATION.
(a) In the event the Company elects to terminate the employment
of the Executive under this Agreement as permitted herein, the Company shall
send written notice to such effect to the Executive, which notice shall describe
in reasonable detail the actions of the Executive constituting the Act of
Default, and the Executive's employment under this Agreement, and this Agreement
shall thereupon terminate as of a date to be specified in such notice, which
date shall be not less than thirty (30) days after the sending of such notice.
For purposes of this Agreement, purported terminations not complying with
provisions of this Section 5 shall not be effective.
(b) If any of the events described in Section 5.01(c) hereof
constituting a change in control of the Company shall have occurred at any time
during the term of this Agreement and the Executive shall have Good Reason to
terminate his employment hereunder, the Executive shall be entitled to terminate
his employment hereunder and shall be entitled to the benefits provided in
Section 5.03(b) hereof upon such termination for Good Reason. Moreover, the
Executive shall be entitled to the benefits provided in Section 5.03(b) hereof
upon termination of his employment hereunder by the Company at any time
following a change in control unless such termination is initially (i) because
of his death or disability or (ii) after an Act of Default.
(c) Notwithstanding the foregoing, the Executive shall be
entitled to terminate his employment for Good Reason at any time during the term
of this Agreement, irrespective of whether a change in control of the Company
shall have occurred. The Executive's right to terminate his employment pursuant
to this Subsection shall not be affected by his incapacity due to physical or
mental illness.
5.03. Compensation Upon Termination. Following termination of the
Executive's employment hereunder, the Executive shall be entitled to the
following benefits:
(a) If the Executive's employment shall be terminated by the
Company after an Act of Default or by the Executive other than for Good Reason,
disability or death, the Company shall pay to the Executive his full base salary
through the date of termination at the rate in effect at the time Notice of
Termination is given, plus all other amounts to which he is entitled under any
compensation plan of the Company at the time such payments are due, and the
Company shall have no further obligations to the Executive under this Agreement.
(b) If the Executive's employment by the Company shall be
terminated following a change in control of the Company (i) by the Company other
than after an Act of Default, or for disability or death, or (ii) by the
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Executive for Good Reason, then he shall be entitled to the benefits provided
below:
(A) the Company shall pay the Executive his full base salary
through the date of termination at the rate in effect at the time
Notice of Termination is given, plus all other amounts to which
he is entitled under any compensation plan of the Company, at the
time such payments are due except as otherwise provided below;
(B) In lieu of any further salary payments to the Executive
for periods subsequent to the date of termination, the Company
shall pay as severance pay to the Executive a lump sum severance
payment (the "Severance Payment") equal to the greater (i) of
three (3) years salary or (ii) the salary for the remainder of
the initial term of this Agreement;
(C) In addition to the Severance Payment, and in lieu of
shares of the Company's Common Stock, $.10 par value (the
"Company's Shares") issuable upon exercise of outstanding options
(including options under Section 422A of the Internal Revenue
Code of 1986, as amended (the "Code")) granted on or before the
date of termination of this Agreement ("Options"), if any, to the
Executive including, without limitation, Options granted under
the Company's 1988 Joint Incentive and Non-Qualified Stock Option
Plan and Incentive and Non-Qualified Stock Option Plan (which
Options shall be cancelled upon the making of the payment
referred to below), the Executive shall receive an amount in cash
equal to the product of (i) the excess of the higher of the price
of the Company's Shares on the American Stock Exchange (or if not
so listed, then the last sales price on the national securities
exchange on which such shares are listed, or if not listed on any
exchange, the last sales prices on the NASDAQ System) on the Date
of Termination (or if no such prices are reported on the Date of
Termination, then on the last day prior to the Date of
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Termination on which such prices are reported) and the highest
per share price for the Company's Shares actually paid in
connection with a change in control of the Company over the per
share exercise price of each option held by the Executive
(whether or not then fully exercisable), times (ii) the number of
the Company's Shares covered by each such option; and
(D) The Company shall also pay to the Executive all legal
fees and expenses incurred by him as a result of such termination
(including all such fees and expenses, if any, incurred in
contesting or disputing any such termination provided, that his
claims or defenses are upheld, in whole or in part, whether by
judgment, settlement or otherwise, or in seeking to obtain or
enforce any right or benefit provided by this Agreement or in
connection with any tax audit or proceeding pertaining to this
Agreement).
(c) If the Executive shall terminate his employment hereunder for
Good Reason in the absence of a change in control of the Company, or if the
Company shall terminate his employment on account of disability or death, then
he shall be entitled to the benefits provided in Section 5.03(b) above other
than the Severance Payment.
(d) All amounts payable under this Section 5.03 shall be paid to
the Executive no later than fifteen (15) days after the date of termination of
his employment.
(e) The Executive shall not be required to mitigate the amount of
any payment provided for in this Section 5 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 5 be reduced by any compensation earned by him as the result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owing by him to the Company, or otherwise except as
specifically provided in this Section 5.
(f) In addition to all other amounts payable to the Executive
under this Section 5, he shall be entitled to receive all benefits payable to
him under all other plans or agreements relating to retirement benefits.
6. TERMINATION FOR CAUSE. The Company shall have the right, by thirty
(30) days prior written notice to the Executive, to terminate the employment of
the Executive under this Agreement, as well as any and all compensation to which
the Executive would otherwise be entitled hereunder (except for any benefits
referred to in Section 4.02 hereof in which the Executive has a vested right
under the terms and conditions of the plan or program pursuant to which such
benefits were granted), if the Executive shall commit an Act of Default.
7. TERMINATION IN CASE OF DISABILITY OR DEATH.
(a) If the Executive, due to physical or mental injury, illness,
disability or incapacity, is unable fully to perform his duties hereunder for a
consecutive period of six months, or an aggregate of eight months in any twelve
month period, the Company may, at its option, terminate this Agreement and the
Executive's employment hereunder by written notice to the Executive, and the
Executive's employment shall thereupon terminate as of a date to be specified in
such notice, which date shall not be less than fifteen days after the sending of
such notice.
(b) If the Executive shall die during the term of this Agreement,
this Agreement and the Executive's employment hereunder shall terminate
immediately upon the Executive's death. The estate of the Executive shall be
entitled to receive, as a death benefit, an amount equal to (i) $2,000000,
payable within 45 days after the death of the Executive and (ii) three month's
salary payable in three consecutive monthly installments, commencing on the 1st
day of the month following such death.
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8. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION AND NON-COMPETITION.
8.01. NON-DISCLOSURE. (a) The Executive acknowledges that he has
been informed that it is the policy of the Company to maintain as secret and
confidential all information (i) relating to the products, processes, designs
and/or systems used by the Company and (ii) relating to the customers, employees
and suppliers of the Company (all such information is hereafter referred to as
"confidential information"), and the Executive further acknowledges that such
confidential information is of great value to the Company. The parties recognize
that the services to be performed by the Executive are special and unique, and
that by reason of his employment by the Company, he has and will acquire
confidential information as aforesaid. The parties confirm that it is reasonably
necessary to protect the Company's goodwill that the Executive agree, and
accordingly the Executive does agree, in consideration of the premises set forth
in this Agreement, that he will not directly or indirectly (except where
authorized by the Board of Directors of the Company for the benefit of the
Company):
(A) divulge to any persons, firms or corporations, other
than the Company (hereinafter referred to collectively as "third
parties"), or use or cause to authorize any third parties to use,
any such confidential information, or any other information
regarded as confidential and valuable by the Company which he
knows or should know is regarded as confidential and valuable by
the Company (whether or not any of the foregoing information is
actually novel or unique or is actually known to others); or
(B) solicit or cause or authorize directly or indirectly to
be solicited for employment, for or on behalf of himself or third
parties, any persons who were at any time within one year prior
to the cessation of his employment hereunder, employees of the
Company; or
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(C) employ or cause or authorize directly or indirectly to
be employed, for or on behalf of himself or third parties, any
such employees of the Company.
(b) The restrictions in Paragraphs (A) through (C) shall apply
(i) during the term of the Executive's employment hereunder, and (ii) for one
(1) year thereafter if the employment is terminated pursuant to Section 6, and
(iii) shall not survive the term of the Executive's employment if the employment
is terminated other than pursuant to Section 6.
8.02. REMEDIES. The Executive agrees that any breach or
threatened breach by him of any provision of this Section 8 shall entitle the
Company, in addition to any other legal remedies available to it, to apply to
any court of competent jurisdiction to enjoin such breach or threatened breach.
The parties understand and intend that each restriction agreed to by the
Executive hereinabove shall be construed as separable and divisible from every
other restriction, and that the unenforceability, in whole or in part, of any
other restriction will not affect the enforceability of the remaining
restrictions and that one or more of all of such restrictions may be enforced in
whole or in part as the circumstances warrant.
8.03. COMPANY. For purposes of this Section 8, the term "Company"
shall mean and include any and all subsidiaries, parents and affiliated
corporations of the Company in existence from time to time.
9. LIFE INSURANCE. The Executive agrees that the Company may
apply for and purchase one or more life insurance policies on his life, and the
Executive acknowledges that the Company has an insurable interest in his life.
The Executive agrees to take all actions reasonably necessary to enable the
Company to procure such policies, including without limitation, the execution of
any consents or applications and the undergoing of one or more physical
examinations.
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10. REPRESENTATIONS. The Company hereby represents and warrants
to the Executive that the execution by the Company of this Agreement has been
authorized by all necessary corporate action.
11. NOTICES. All notices, requests, demands or other
communications hereunder shall be deemed to have been given if delivered in
writing, personally or by registered mail, to each party at the address set
forth below, or at such other address as any party may hereafter designate in
writing to the other: If to the Company:
United Capital Corp.
0 Xxxx Xxxxx
Xxxxx Xxxx, Xxx Xxxx 00000
Attn: Secretary
If to the Executive:
X.X. Xxxxxxxxxx
000 Xxxx Xxxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
12. SEVERABILITY. In the event that any one or more of the
provisions of this Agreement shall be declared to be illegal or unenforceable
under any law, rule or regulation of any government having jurisdiction over the
parties hereto, such illegality or unenforceability shall not affect the
legality and enforceability of the other provisions of this Agreement.
13. WAIVER. No waiver by the Company of any default by the
Executive or breach by him of his covenants under this Agreement shall be deemed
a waiver of any future breach or default, whether or not such breach or default
is of the same nature.
14. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof,
supersedes any prior agreement between the parties and may not be changed or
terminated orally. No change, termination or attempted waiver of any of the
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provisions hereof shall be binding unless in writing and signed by the party
against whom the same is sought to be enforced; provided, however, that the
Executive's compensation may be increased at any time by the Company without in
any way affecting any of the other terms and conditions of this Agreement, which
in all other respects shall remain in full force and effect.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the respective heirs, legal representatives,
successors and assigns of the parties hereto.
16. HEADINGS. The headings in this Agreement are for convenience
only and shall not be deemed to constitute a part hereof, nor shall they affect
the construction or interpretation of any provision of this Agreement.
17. GOVERNING LAW. All matters concerning the validity and
interpretation of and performance under this Agreement shall be governed by the
laws of the State of New York. IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written.
UNITED CAPITAL CORP.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx
Vice President & Chief Financial Officer
/s/ X.X. Xxxxxxxxxx
-------------------------------------------------
X.X. Xxxxxxxxxx
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