AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED AGREEMENT, dated January 20, 2005, by and between UNIVERSAL
SUPPLY GROUP, INC., a New York corporation with its principal office at 000
Xxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, (the "Company" or "USG") and XXXXXXX
XXXXX, residing at 00 Xxxxx Xxxx, Xxxxxxx, XX 00000, (the "Employee"). The
effective date of the Agreement shall be January 1, 2005 ("Effective Date").
ARTICLE I
EMPLOYMENT: TERM, DUTIES
1.01. EMPLOYMENT. Upon the terms and conditions hereinafter set
forth, the Company hereby employs the Employee, and the Employee hereby accepts
employment, as Chief Financial Officer of the Company.
1.02. Employee represents and warrants to the Company that he is free
to enter into this Agreement in accordance with the terms hereof and is under no
restriction, contractual or otherwise, which would interfere with his execution
hereof or performance hereunder.
1.03. TERM. The Employee's employment hereunder shall be for a term
(the "Term") commencing on the Effective Date (the "Commencement Date") and
terminating at the close of business on December 31, 2007.
1.04. DUTIES. During the Term, the Employee shall perform such
duties, consistent with his position hereunder, as may be assigned to him from
time to time by the Board of Directors of the Company, including but not limited
to, providing all accounting related matters on behalf of the Company and the
Affiliates of the Company. Affiliates mean Colonial Commercial Corp.
("Colonial"), the parent company of USG, and the wholly owned subsidiaries of
Colonial. The Employee shall devote his best efforts and his entire time,
attention and energies, during regular working hours, to the performance of his
duties hereunder and to the furtherance of the business and interests of the
Company, its subsidiaries and affiliate companies. Throughout the Term, Employee
shall engage in no other business activities other than the passive supervision
of his investments.
ARTICLE II
COMPENSATION
2.01 COMPENSATION. For all services rendered by the Employee
hereunder and all covenants and conditions undertaken by him pursuant to this
Agreement, the Company shall pay, and the Employee shall accept a salary at the
rate of $120,000 per annum. Compensation shall be payable not less frequently
than in bi-weekly installments. The Board of Directors may (but shall not be
obligated to), at any time and from time to time, grant to the Employee an
increase or increases in the compensation otherwise payable pursuant to this
Section 2.01, but such increase or increases, if any, shall not be deemed to
alter, modify, waive or otherwise affect any other term, covenant or condition
of this Agreement.
2.02 INCENTIVE COMPENSATION. For each of the calendar years 2005
through 2007, the Employee shall receive, as Incentive Compensation, a
percentage of the Incentive Compensation Base. Incentive Compensation Base shall
mean the Company's net earnings (as determined by the Company in accordance with
generally accepted auditing standards consistent with those used by Company's
parent company) which are included in the parent company's consolidated audited
financial statements, plus the amount of any deductions from net earnings which
are made in such statements for (i) interest paid or accrued in connection with
the acquisition of the Company, (ii) Federal income taxes, (iii) parent company
management fees or allocation of overhead from the parent company either paid or
accrued and (iv) Incentive Compensation under this Agreement. Earnings of
businesses acquired by the Company shall be included in determining Incentive
Compensation base. Incentive Compensation will be paid within 30 days following
receipt by the Company of the Independent Accountants' report for the year
involved and said report shall be binding and conclusive on the calculation of
net earnings and Incentive Compensation.
Portion Of Incentive Compensation Base Additional Compensation
Percentages
Up to $250,000 .25%
$ 251,000 to $500,000 .50%
$ 501,000 to $750,000 .75%
$ 751,000 to $1,000,000 1.00%
$1,001,000 to $1,250,000 1.25%
$1,251,000 to $1,500,000 1.50%
$1,501,000 to $1,750,000 1.75%
$1,751,000 to $2,000,000 2.00%
$2,001,000 and 2.25%
over
For example, if the Incentive Compensation Base is $2,000,000, the
additional compensation would be computed as follows:
Incentive Compensation Additional Compensation Incentive Compensation
Base Percentages
$250,000 .25% $625
$250,000 .50% $1,250
$250,000 .75% $1,875
$250,000 1.00% $2,500
$250,000 1.25% $3,125
$250,000 1.50% $3,750
$250,000 1.75% $4,375
$250,000 2.00% $5,000
-------- ------
$2,000,000 $22,500
Total Incentive Compensation in this example would be $22,500.
2.03. DEDUCTIONS. The Company shall deduct from the compensation
described in Section 2.01 and Section 2.02 any Federal, state or local
withholding taxes, social security contributions and any other amounts which may
be required to be deducted or withheld by the Company pursuant to any Federal,
state or city laws, rules or regulations.
2.04. DISABILITY ADJUSTMENTS. Any compensation otherwise payable to
the Employee pursuant to Section 2.01 during any Disability Period (as that term
is hereinafter defined) shall be reduced by any amounts payable to the Employee
for loss of earnings or the like under any insurance plan or policy the premiums
for which are paid for in their entirety by the company.
ARTICLE III
BENEFITS; EXPENSES
3.01 FRINGE BENEFITS. During the Term, the Employee shall be entitled
to participate, in amounts commensurate with the Employee's position hereunder,
in such group life, health, accident, disability or hospitalization insurance
plans, subject to underwriting requirements as the Company, or its parent, may
make available to its other executive employees.
3.02. EXPENSES. Upon presentation of an itemized account thereof,
with such substantiation as the Company shall require, the Company shall pay or
reimburse the Employee for the reasonable and necessary expenses directly and
properly incurred by the Employee in connection with the performance of his
duties hereunder, subject to guidelines established by the Board of Directors of
the Company.
3.03. VACATIONS. During the Term, the Employee shall be entitled to
paid holidays and paid vacations in accordance with the policy of the Company as
determined by the Board of Directors of the Company provided, however, that the
Employee shall be entitled to not less than four weeks paid vacation during each
year of the Term, to be taken at times convenient to the Employee and to the
Company.
3.04. LOCATION. Notwithstanding anything which may be contained
herein to the contrary, the Employee's office shall be located in the
northeastern New Jersey area and the performance of his duties hereunder shall
not require his continued presence outside of such area if the Employee shall
object thereto.
3.05 AUTOMOBILE. The Company shall provide Employee with an
automobile for the Employee to utilize related to his employment activities. The
automobile shall be of the make, model and type deemed appropriate by the
Company.
ARTICLE IV
TERMINATION
4.01. TERMINATION. The employment of the Employee, and the
obligations of the Employee and the Company hereunder, shall cease and terminate
(except as otherwise specifically provided in this Agreement) upon the first to
occur on the following dates (the "Termination Date") described in this Section
4.01:
(a) The date of expiration by its terms of the Term;
(b) The date of death of the Employee
(c) The date on which the Company gives to Employee a notice of
disability (a "Disability Notice"). The Company may give a
Disability Notice if the Employee shall become unable, by reason
of illness or incapacity, to perform the duties required of him
pursuant to this Agreement, for a period of ( i ) ninety (90)
consecutive days or (ii) for 180 (one hundred eighty) days in any
365 day period, (the "Disability Period").
(d) The date on which the Company by notice terminates Employee's
employment for cause in accordance with Article VI.
ARTICLE V.
RESTRICTIVE COVENANTS
5.01. NON-DISCLOSURE. During and after Employee's employment, and
whether or not employment is terminated for cause, without cause or otherwise,
the Employee shall not disclose or furnish to any other person, firm or
corporation (the "Entity") except in the course of the performance of his duties
hereunder, the following:
(a) any information relating to any process, technique or procedure
used by by the Company, including, without limitation, computer
programs and methods of evaluation and pricing and marketing
techniques; or
(b) any information relating to the operations or financial status of
the Company, including, without limitation, all financial data
and sources of financing, which is not specifically a matter of
public record; or
(c) any information of a confidential nature obtained as a result of
his prior, present or future relationship with the Company, which
is not specifically a matter of public record; or
(d) any trade secrets of the Company; or
(e) the name, address or other information relating to any customer
or debtor of the Company.
5.02. NON-COMPETITION. The Employee shall not, from the date hereof
and until six months following the termination of his employment with the
Company for whatever reason, whether with or without cause or otherwise (the
"Restriction Period"):
(a) in any manner, directly or indirectly, be interested in, employed
by, make any loan, guaranty or other financial accommodation for,
be engaged in or participate in the ownership, management,
operation or control of, or act in any advisory, brokerage,
finder or other capacity for any entity which, directly or
indirectly, then competes with the Company anywhere within the
Territory (as that term is hereinafter defined) provided,
however, that the Employee may invest in any entity which may be
deemed to be in competition with the Company hereunder, the
Common Stock of which entity is "publicly held", provided that
the Employee shall not own or control securities which constitute
more than four percent of the voting rights or equity ownership
of such entity. Without limiting the generality of the foregoing,
the Employee or any entity shall be deemed to compete with the
Company if at any time during the Restriction Period the Employee
or such entity engages in any aspect of the business of
distributing products or services for heating ventilation and air
conditioning ("HVAC") contractors. The term "Products" includes
without limitation heating and air conditioning equipment,
controls, parts, and accessories. The term "Services" includes
without limitation temperature control system design and panel
fabrication, technical field support and technical training.
(b) The Employee shall not during the Restriction Period:
(i) in any manner, directly or indirectly, attempt to seek
to cause any entity to refrain from dealing or doing
business with the Company or assist any entity in doing so
or attempting to do so;
(ii) employ or retain any person who was an employee or
consultant to the Company at any time during the preceding
two years; or
(iii) solicit the business of any person or entity who at
any time was a customer or active prospect of the Company
5.03 DEFINITIONS. As used in this Article V only: (a) the term
"Company" shall include any parent, subsidiary or affiliate of, or successor to,
the Company and (b) the term "Territory" shall mean any state (including the
District of Columbia), territory or possession of the United States within which
the Company presently or hereafter does business.
5.04 BREACH OF PROVISIONS. In the event that the Employee shall
breach any of the Provisions of this Article V, or in the event that any such
breach is threatened by the Employee, in addition to and without limiting or
waiving any other remedies available to the Company at law or in equity, the
Company shall be entitled to immediate injunctive relief in any court, domestic
or foreign, having the capacity to grant such relief, to restrain any such
breach or threatened breach to enforce the provisions of this Article V, without
posting bond or security. The Employee agrees and acknowledges that there is no
adequate remedy at law for any such breach or threatened breach and, in the
event that any action or proceeding is brought seeking injunctive relief, the
Employee shall not use a defense thereto that there is an adequate remedy at
law.
5.05. REASONABLE RESTRICTIONS; COURT MAY REFORM. The parties
acknowledge that the foregoing restrictions, the duration and the territorial
scope thereof as set forth in this Article V, are under all of the circumstances
reasonable and necessary for the protection of the Company and its business. The
courts enforcing this Agreement shall be entitled to modify the duration and
scope of any restriction contained herein to the extent such restriction would
otherwise be unenforceable, and such restriction as modified shall be enforced.
5.06. Extension of Restricted Period. All time periods in this
Article shall be computed by excluding from such computation any time during
which Employee is in violation of any provision of this Agreement and any time
during which there is pending in any court of competent jurisdiction any action
(including any appeal from any final judgment) brought by any person, whether or
not a party to this Agreement, in which action the Company seeks to enforce the
agreements and covenants in this Agreement or in which any person contests the
validity of such agreements and covenants or their enforceability or seeks to
avoid their performance or enforcement.
ARTICLE VI
TERMINATION FOR CAUSE
6.01. TERMINATION BY THE COMPANY FOR CAUSE. At any time during the
term of this Agreement, the Company may discharge the Employee for cause and
terminate this Agreement without any further liability hereunder to the Employee
or his estate, except to pay any accrued, but unpaid, salary but not Incentive
Compensation to him. In the event of such termination, Employee agrees he shall
also be deemed to have resigned from the Company and its Parent, as a President
and Employee, effective as of the date of such termination. For purposes of this
Agreement, a "discharge for cause" shall mean termination of the Employee upon
written notification to the Employee limited, however, to one or more of the
following reasons:
(i) Fraud, misappropriate or embezzlement by the Employee
in connection with the Company; or
(ii) Gross neglect of duties which has a detrimental effect
on the Company after notice to the Employee of the
particular details thereof and a period of thirty (30)
days to correct such mismanagement or neglect, if any;
or
(iii) Conviction or plea of "no contest" by a court of
competent jurisdiction in the United States of a felony
or a crime involving moral turpitude, including but not
limited to drug abuse, violence and sexual harassment,
or
(iv) Willful and unauthorized disclosure of confidential, or
proprietary trade secret information of the Company; or
(v) The Employee's breach of any material term or provision
of this agreement, after notice to the Employee of the
particular details thereof and a period of not less
than thirty (30) days thereafter within which to cure
such breach, if any.
ARTICLE VII
MISCELLANEOUS
7.01. ASSIGNMENT. This Agreement shall not be assigned by either
party, except that the Company shall have the right to assign its rights
hereunder to any parent, subsidiary and affiliate of, or successor to, the
Company.
7.02. BINDING EFFECT. This Agreement shall extend to and be binding
upon the Employee, his legal representatives, heirs and distributees, and upon
the Company, its successors and assigns.
7.03. NOTICES. Any notice required or permitted to be given under
this Agreement to either party shall be sufficient if in writing and if sent by
registered or certified mail, return receipt requested, to the address of such
party hereinabove set forth or to such other address as such party may hereafter
designate by a notice given to the other party in the manner provided in this
Section 7.03.
7.04 WAIVER. A waiver by a party hereto of a breach of any term,
covenant or condition of this Agreement by the other party hereto shall not
operate or be construed as waiver of any other or subsequent breach by such
party of the same or any other term, covenant or condition hereof.
7.05. PRIOR AGREEMENTS. Any and all prior agreements between the
Company and the Employee, whether written or oral, between the parties, relating
to any and all matters covered by, and contained or otherwise dealt within this
Agreement are hereby canceled and terminated.
7.06. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement between the parties with respect to the subject mater hereof and no
waiver, modification, change or amendment of any of its provisions shall be
valid unless in writing and signed by the party against whom such claimed
waiver, modification, change or amendment is sought to be enforced.
7.07. AUTHORITY. The parties severally represent and warrant that
they have the power, authority and right to enter into this Agreement and to
carry out and perform the terms; covenants and conditions hereof.
7.08. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. The Federal and
state courts in Nassau County, New York shall have exclusive jurisdiction on all
matters relating to this Agreement. TRIAL BY JURY IS WAIVED.
7.09. SEVERABILITY. In the event that any of the provisions of this
Agreement, or any portion thereof, shall be held to be invalid or unenforceable,
the validity and enforceability of the remaining provisions shall not be
affected or impaired, but shall remain in full force and effect.
7.10. TITLES. The titles of the Articles and Sections of this
Agreement are inserted merely for convenience and ease of reference and shall
not affect or modify the meaning of any of the terms, covenant or conditions of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and date first above written.
UNIVERSAL SUPPLY GROUP, INC.
By____________________________
Xxxxxxx Xxxxxx, President
By____________________________
Xxxxxxx Xxxxx, Employee
