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Exhibit 10(u)
FIRST AMENDMENT
TO
EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT is made as of
February 15, 1999, between Avatar Retirement Communities, Inc., a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is currently employed as President of
the Company pursuant to an Employment Agreement, dated as of October 6, 1997
(the "Agreement"), the term of which expires on October 6, 1999; and
WHEREAS, the Company acknowledges and recognizes the value of
the Employee's experience and abilities to the Company, and desires to continue
to retain and make secure for itself such experience and abilities through
October 6, 2002 and to reflect the increase in the Employee's annual base salary
to $275,000, effective retroactively as of October 6, 1997; and
WHEREAS, the Company and the Employee wish to provide for
certain further modifications to the Agreement, all upon the terms hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. Sections 1 and 4(d) of the Agreement are hereby amended to
delete the phrase "second anniversary of the Commencement Date" and substitute
therefor the phrase "fifth anniversary of the Commencement Date".
2. Section 2 of the Agreement is hereby amended to delete the
first sentence thereof and substitute the following sentence: "During the Term
of Employment, the Employee shall serve as the Company's President, and shall
perform such duties, functions and responsibilities as are customarily
associated with and incident to the position of President and as the Company
may, from time to time, require of him, including, but not limited to, the
performance of such functions and duties for the Company's subsidiaries and
affiliates as the Company may require, subject to the direction of the Company's
Board of Directors."
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3. Section 3(a) of the Agreement is hereby amended to (i)
delete the sum of "$200,000" and substitute therefor the sum of "$275,000", and
(ii) delete the second sentence thereof and substitute therefor the following
sentence: "On an annual basis or at such other times as the Company may
determine, the Employee's base salary shall be reviewed, and in the sole
discretion of the Board of Directors of the Company, the Company may increase
(but not decrease) the Employee's base salary."
4. Section 3(d) of the Agreement and all references thereto
(including, without limitation, those contained in Sections 6(c) and (d) of the
Agreement) are hereby deleted in their entirety. The Employee hereby
relinquishes any and all rights to incentive compensation pursuant to Section
3(d) of the Agreement and the Stock Appreciation Rights granted thereunder and
acknowledges that none of the Company, Avatar Holdings Inc. and their affiliates
shall have any further obligation with respect thereto.
5. Sections 4(a)(2) and 4(a)(3) of the Agreement are hereby
amended to delete the phrase "three years following the Date of Termination" and
substitute therefor the phrase "two years following the Date of Termination".
6. Section 5(b) of the Agreement is hereby amended to read in
its entirety as follows: "For purposes of this Agreement, the "Disability" of
the Employee shall mean the Employee's inability, because of mental or physical
illness or incapacity, whether total or partial, to perform one or more material
functions of the Employee's employment under this Agreement with or without
reasonable accommodation and which entitles the Employee to receive benefits
under a disability plan or program that is provided to the Employee pursuant to
Section 3(b)."
7. Section 6(c)(i) of the Agreement is hereby amended to read
in its entirety as follows: "If the Employee's employment hereunder is
terminated by the Company Without Cause pursuant to Section 5(a)(5), or due to
the Employee's resignation for Good Reason pursuant to Section 5(a)(6), the
Company shall continue to pay to the Employee, in lieu of any other payments or
benefits and on the regular payroll dates of the Company for a period of six (6)
months following Date of Termination his current base salary, at the rate
provided in Section 3(a) hereof; PROVIDED, HOWEVER, if the Employee's employment
hereunder is terminated by the Company Without Cause pursuant to Section 5(a)(5)
or due to Employee's resignation for Good Reason pursuant to Section 5(a)(6)
prior to the second anniversary of the Commencement Date, the Company shall
continue to pay to the Employee, through the second anniversary of the
Commencement Date and for a period of six (6) months following such second
anniversary, his current base salary, at the rate provided in Section 3(a)
hereof, in lieu of any other payments or benefits, and on the regular
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payment dates of the Company. The Company's obligation to make the payment
pursuant to this Section 6(c)(i) shall be subject to the provisions of Section
6(c)(ii) and conditioned upon the Company's prior receipt of an executed general
release of claims which the Employee may have against the Company, its
affiliates and their respective shareholders, directors, officers, employees and
agents, to the maximum extent permitted by law."
8. Section 13 of the Agreement is hereby amended to delete the
phrase "18-month anniversary of the Commencement Date" and substitute therefor
the phrase "54-month anniversary of the Commencement Date".
9. This amendment shall be effective February 15, 1999. Except
as modified by this amendment, the Agreement remains in full force and effect in
accordance with its terms.
10. This amendment may be signed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute one and the same instrument.
11. This amendment shall be governed by and construed and
enforced in accordance with the laws of the State of Florida.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
AVATAR RETIREMENT COMMUNITIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board
/s/ Xxxxxxxx X. Xxxxx
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Employee
Name: Xxxxxxx X. Xxxxx
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