Exhibit 10.20
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated October 8, 1998 by and between
First Priority Group, Inc., a New York corporation with an address at 00 Xxxx
Xxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxx X. Xxxxxx,
residing at 00 Xxxxxxx Xxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "Executive").
W I T N E S S E T H
WHEREAS, the Company desires that Executive be employed by it and render
services to it, and Executive is willing to be so employed and to render such
services to the Company, all on the terms and subject to the conditions
contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Employment
Subject to and upon the terms and conditions contained in this Agreement,
the Company hereby employs Executive, for the period set forth in Paragraph 2
(subject to the terms and conditions of this Agreement), to render the services
to the Company, its affiliates and/or subsidiaries described in Paragraph 3.
2. Term
The Company and the Executive hereby agree to terminate the Employment
Agreement dated March 23, 1998 on the date hereof. Additionally, the Company and
the Executive agree to terminate all previously granted and unexercised stock
options. The Executive's term of employment under this Agreement shall commence
on July 1, 1998 (the "Commencement Date") and shall continue for a period of
thirty-six months (36) months, terminating on June 30, 2001 (the "Expiration
Date"), unless earlier terminated under the terms and conditions herein (the
"Employment Term").
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3. Duties
(a) Executive's responsibilities shall be to manage and direct the
operational affairs of the Company as shall from time to time be designated by
the Chief Executive Officer ("CEO") of the Company. Executive shall be based in
Nassau or Suffolk counties during the Employment Term and shall have the title
of President and Chief Operating Officer.
(b) Executive agrees to abide by all By-Laws and policies of the
Company promulgated from time to time by the Company.
4. Exclusive-Services and Best Efforts
Executive shall devote his entire working time, attention, best efforts and
ability exclusively to the service of the Company, its affiliates and
subsidiaries during the term of this Agreement.
5. Compensation
(a) Base Salary. Commencing on the Commencement Date, the Executive
shall receive an annual salary, payable pursuant to the Company's normal payroll
procedures in place from time to time, during the Employment Term, in the amount
of One Hundred Fifty Thousand Dollars ($150,000), subject to all required
federal, state and local payroll deductions. The Executive's Base Salary may be
increased upon the recommendation of the CEO and the approval of the Board of
Directors.
(b) Incentive Compensation. The Executive shall participate in the
Company's Corporate Compensation Program as approved and authorized by the Board
of Directors of the Company, subject to amendment by the Board of Directors or
the Compensation Committee of the Board of Directors of the Company.
(c) The Executive shall be granted a stock option under the Company's
1995 Incentive Stock Plan (the "Plan") with the right to purchase up to 300,000
shares of the Company's common stock (the "Stock Option"). The Stock Option
shall be granted at a price equal to the closing price of the Company's common
stock as quoted on The Nasdaq SmallCap Stock Market on the Commencement Date.
The Stock Option shall become exercisable in one-third increments upon the
first, second
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and third anniversary of the Stock Option grant. However, following a Change in
Control, as hereinafter defined, all stock options previously granted the
Executive shall become fully exercisable for the remaining term of such stock
option grant, regardless whether the Executive continues as an employee of the
Company. The Company will provide the Executive a Stock Option Contract for his
signature which will set out the terms of the option. This Stock Option shall be
subject to the terms of the Plan.
6. Business Expenses
Executive shall be reimbursed for only those business expenses incurred by
him (a) which are reasonable and necessary for Executive to perform his duties
under this Agreement in accordance with policies established from time to time
by the Company, and (b) for which Executive has submitted vouchers and/or
receipts. The Executive shall be issued a corporate credit card that he shall
use solely for business expenses which are reasonable and necessary for the
Executive to perform his duties under this Agreement in accordance with policies
established from time to time by the Company
7. Executive Benefits
During the Employment Term, Executive shall participate, to the extent he
is eligible under the terms and conditions thereof, in any health, life,
disability insurance, or 401(k) plan, or other employee benefit plans maintained
by Employer (but nothing herein shall obligate the Company to establish or
maintain any such benefit plan). Executive will not be covered under the
Company's health insurance until the Executive has been employed by the Company
for more than ninety (90) days. The Executive shall be reimbursed for any
payments he must make to continue his health insurance under the COBRA benefits
offered by his former employer, until the Executive is covered under the
Company's health insurance plan.
The Company shall pay the Executive a monthly automobile allowance of Six
Hundred Dollars ($600).
8. Vacation and Sick Leave
Executive shall be entitled to three (3) weeks of vacation per annum during
the Employment Term, to be taken at such times as may be mutually agreed upon by
the
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Company and Executive. The Executive shall be entitled to one (1) week of sick
leave per annum during the Employment Term.
9. Death and Disability
(a) The Employment Term shall terminate on the date of Executive's
death, in which event Executive's salary payable pursuant to Paragraph 5 and any
accrued vacation, through the date of Executive's death, shall be paid to his
estate. Executive's estate will not be entitled to any other compensation upon
termination of this Agreement pursuant to this Paragraph 9(a).
(b) If during the Employment Term, Executive, because of physical or
mental illness or incapacity, shall become substantially unable to perform the
duties and services required of him under this Agreement for a period of
forty-five (45) consecutive days or ninety (90) days in the aggregate in any one
calendar year, the Company may, upon at least ten (10) days' prior written
notice given at any time after the expiration of such 45 or 90-day period, as
the case may be, to Executive of its intention to do so, terminate this
Agreement as of such date as may be set forth in the notice. In case of such
termination, Executive shall be entitled to receive his salary payable pursuant
to Paragraph 5 through the date of termination. Executive will not be entitled
to any other compensation upon termination of this Agreement pursuant to this
Paragraph 9(b).
10. Termination
(a) The Company may terminate the employment of Executive For Cause
(as hereinafter defined). Upon such termination, the Company shall be released
from any and all further obligations under this Agreement, except that the
Company shall be obligated to pay Executive the unpaid prorated salary pursuant
to Paragraph 5 earned or accrued up through the day on which Executive is
terminated.
(b) The Company may terminate the employment of Executive Without
Cause (as hereinafter defined). Upon such termination, the Company shall be
released from any and all further obligations under this Agreement, except that
the Company shall be obligated to pay Executive the unpaid prorated salary
pursuant to Paragraph 5 earned or accrued up through the day on which Executive
is terminated,
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in addition to the lesser of (i) Base Salary and other employee benefits, as set
forth in Paragraph 7, for a twelve (12) month period from the date employment is
terminated, or (ii) the Base Salary and other employee benefits that would have
been paid the Executive from the date employment is terminated through the
Expiration Date.
(c) As used herein, the term "For Cause" shall mean:
(i) any material breach of this Agreement by Executive that, in the
case of a breach that may be cured or remedied, is not cured or remedied to the
reasonable satisfaction of the Company within 30 days after notice is given by
the Company to Executive, setting forth in reasonable detail the nature of such
breach;
(ii) Executive's failure to perform his duties and services
hereunder to the reasonable satisfaction of the CEO of the Company that, in the
case of any such failure that may be cured or remedied, is not cured or remedied
to the reasonable satisfaction of the Company within 30 days after notice is
given by the Company to Executive, setting forth in reasonable detail the nature
of such failure;
(iii) any material act, or material failure to act, by Executive in
bad faith and to the material detriment of the Company; or
(iv) commission by Executive of a material act involving moral
turpitude, dishonesty, unethical business conduct, or any other conduct which
significantly impairs the reputation of the Company, its subsidiaries or
affiliates.
(v) the conviction of the Executive of a felony, including the plea
of nolo contendere
(d) As used herein, the term "Without Cause" shall mean: (i)
Termination by the Company of the Executive's employment for any reason other
than For Cause, Death or Disability.
11. Disclosure of Information and Restrictive Covenant
(a) Executive acknowledges that, by his employment, he has been and
will be in a confidential relationship with the Company and will have access to
confidential information and trade secrets of the Company, its subsidiaries and
affiliates, including, but not limited to, confidential information or trade
secrets belonging or relating to the Company, its subsidiaries, affiliates,
customers and/or clients or proprietary processes or procedures of the Company,
its subsidiaries, affiliates, customers and/or clients. Proprietary processes
and procedures shall include, but shall not be limited to, all
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information which is known only to employees of the Company, its respective
subsidiaries and affiliates or others in a confidential relationship with the
Company or its respective subsidiaries and affiliates which relates to business
matters. Confidential information and trade secrets include, but are not limited
to, customer and client lists, price lists, marketing and sales strategies and
procedures, operational and equipment techniques, business plans and systems,
quality control procedures and systems, special projects and technological
research, including projects, research and reports for any entity or client or
any project, research, report or the like concerning sales or manufacturing or
new technology, employee compensation plans and any other information relating
thereto, and any other records, files, drawings, inventions, discoveries,
applications or processes which are not in the public domain (all the foregoing
shall be referred to herein as the "Confidential Information"). Executive agrees
that in consideration of the execution of this Agreement by the Company, he will
not use, or disclose to any third party, any of the Confidential Information,
other than as required to perform his services hereunder or as directed or
authorized by the Company's Board of Directors or President.
(b)
(i) Executive will not, at any time prior to the Expiration Date,
or if the Executive's employment shall terminate prior to the Expiration Date,
then for a period of one (1) year after the Executive ceases to be employed by
the Company, engage in or participate in any business activity, including, but
not limited to, acting as a director, officer, employee, agent, independent
contractor, partner, consultant, licensor or licensee, franchiser or franchisee,
proprietor, syndicate member, or shareholder that operates a business or
activity which competes with any business or activity engaged in by the Company.
(ii) Any time during his employment by the Company or after the
Executive ceases to be employed by the Company, divulge to any persons, firms or
corporations, other than the Company (hereinafter referred to collectively as
"third parties"), or use or allow or cause or authorize any third parties to
use, any such Confidential Information; and
(iii) At any time during his employment by the Company and for a
period of one (1) year after the Executive ceases to be employed by the Company,
solicit or cause or authorize directly or indirectly to be solicited, for or on
behalf of the Executive or third parties, any business from persons, firms,
corporations or other
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entities who were at any time within one (1) year prior to the cessation of his
employment hereunder, customers of the Company; and
(iv) At any time during his employment by the Company and for a
period of one (1) year after the Executive ceases to be employed by the Company,
accept or cause or authorize directly or indirectly to be accepted, for or on
behalf of the Executive or third parties, any business from any such customers
of this Company; and
(v) At any time during his employment by the Company and for a
period of one (1) year after the Executive ceases to be employed by the Company,
solicit or cause or authorize directly or indirectly to be solicited for
employment, for or on behalf of the Executive 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; and
(vi) At any time during his employment by the Company and for a
period of one year after the Executive ceases to be employed by the Company,
employ or cause or authorize directly or indirectly to be employed, for or on
behalf of the Executive or third parties, any such employees of the Company; and
(vii) At any time during his employment by the Company and for a
period of one (1) year after the Executive ceases to be employed by the Company,
compete with the Company in any fashion or work for, advise, be a consultant to
or an officer, director, agent or employee of or otherwise associate with any
person, firm, corporation or other entity which is engaged in or plans to engage
in a business or activity which competes with any business or activity engaged
in by the Company, or which is under development or in a planning stage by the
Company.
(c) Executive will not induce or persuade other employees of the
Company to join him in any activity prohibited by Paragraph 11 or 12.
(d) This Paragraph 11 and Paragraph 12, 13 and 14 shall survive the
expiration or termination of the Agreement for any reason.
(e) It is expressly agreed by Executive that the nature and scope of
each of the provisions set forth in Paragraphs 11 and 12 are reasonable and
necessary. If, for any reason, any aspect of these provisions as they apply to
Executive is determined by a court of competent jurisdiction to be unreasonable
or unenforceable, the provisions shall only be modified to the minimum extent
required to make the
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provisions reasonable and/or enforceable, as the case may be. Executive
acknowledges and agrees that his services are of a unique character and
expressly grants to the Company or any subsidiary, successor or assignee of the
Company, the right to enforce the provisions above through the use of all
remedies available at law or in equity, including, but not limited to,
injunctive relief.
12. Company Property
(a) Any patents, inventions, discoveries, applications, processes or
designs, devised, planned, applied, created, discovered or invented by Executive
in the course of Executive's employment under this Agreement and which pertain
to any aspect of the Company's or its respective subsidiaries' or affiliates'
businesses shall be the sole and absolute property of the Company, and Executive
shall make prompt report thereof to the Company and promptly execute any and all
documents reasonably requested to assure the Company the full and complete
ownership thereof.
(b) All records, files, lists, including computer generated lists,
drawings, documents, equipment and similar items relating to the Company's
business which Executive shall prepare or receive from the Company shall remain
the Company's sole and exclusive property. Upon termination of the Employment
Term, or, if earlier, upon demand by the Company, Executive shall promptly
return to the Company all property of the Company in his possession. Executive
further represents that he will not copy or cause to be copied, print out or
cause to be printed out any software, documents or other materials originating
with or belonging to the Company. Executive covenants that, upon termination of
his employment with the Company, he will not retain in his possession any such
software, documents or other materials.
13. Remedy
It is mutually understood and agreed that Executive's services are special,
unique, unusual, extraordinary and of an intellectual character giving them a
peculiar value, the loss of which cannot be reasonably or adequately compensated
in damages in an action at law. Accordingly, in the event of any breach of this
Agreement by Executive, including, but not limited to, the breach of the
nondisclosure, non-solicitation and non-compete clauses under Paragraphs 11 and
12 hereof, the Company shall be entitled to equitable relief by way of
injunction or otherwise in
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addition to damages the Company may be entitled to recover. Nothing herein shall
be deemed to restrict any remedy available to Executive for breach of the
Agreement by the Company.
14. Representations and Warranties of Executive and the Company
(a) In order to induce the Company to enter into this Agreement,
Executive hereby represents and warrants to the Company as follows: (i)
Executive has the legal capacity and unrestricted right to execute and deliver
this Agreement once to perform all of his obligations hereunder: (ii) the
execution and delivery of this Agreement by Executive and the performance of his
obligations hereunder will not violate or be in conflict with any fiduciary or
other duty, instrument, agreement, document, arrangement or other understanding
to which Executive is a party or by which he is or may be bound or subject; and
(iii) Executive is not a party to any instrument, agreement, document,
arrangement or other understanding with any person (other than the Company)
requiring or restricting the use or disclosure of any confidential information
or the provision of any employment, consulting or other services.
(b) The Company hereby represents and warrants to Executive, as
follows: (i) the execution, delivery, and performance of this Agreement has been
duly authorized by all necessary corporate action of the Company; and (ii) this
Agreement constitutes the valid and binding obligation of the Company,
enforceable in accordance with its terms, except that such enforcement may be
subject to any bankruptcy, insolvency, reorganization, fraudulent transfer or
other laws, now or hereafter in effect, relating to or limiting creditors'
rights generally.
15. Notices
All notices given hereunder shall be in writing and shall be deemed
effectively given when mailed, if sent by registered or certified mail, return
receipt requested, addressed to Executive at his address set forth on the first
page of this Agreement, and to the Company at its address set forth on the first
page of this Agreement, Attention: Xxxxx Xxxxxx, Chairman of the Board, with a
copy to Xxxxx & Meritz, P.C., Xxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxx Xxxx 00000,
Attention: Xxxxxxxx X. Xxxxx, or at such address as such party shall have
designated by a notice given in accordance
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with this Paragraph 15, or when actually received by the party for whom
intended, if sent by any other means.
16. Entire Agreement
This Agreement constitutes the entire understanding of the parties with
respect to its subject matter and no change, alteration or modification hereof
may be made except in writing signed by the parties hereto. Any prior or other
agreements, promises, negotiations or representations not expressly set forth in
this Agreement are of no force or effect.
17. Severability
If any provision of this Agreement shall be unenforceable under any
applicable law, then notwithstanding such unenforceability, the remainder of
this Agreement shall continue in full force and effect.
18. Waivers, Modifications, Etc.
No amendment, modification or waiver of any provision of this Agreement
shall be effective unless the same shall be in writing and signed by each of the
parties hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
19. Assignment
Neither this Agreement. nor any of Executive's rights, powers, duties or
obligations hereunder, may be assigned by Executive. This Agreement shall be
binding upon and inure to the benefit of Executive and his heirs and legal
representatives and the Company and its successors and assigns. Successors of
the Company shall include, without limitation, any corporation or corporations
acquiring, directly or indirectly, all or substantially all of the assets of the
Company, whether by merger, consolidation, purchase, lease or otherwise, and
such successor shall thereafter be deemed "the Company" for the purpose hereof.
20. Applicable Law
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This Agreement shall be deemed to have been made, drafted, negotiated and
the transactions contemplated hereby consummated and fully performed in the
State of New York and shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law rules
thereof. Nothing contained in this Agreement shall be construed so as to require
the commission of any act contrary to law, and whenever there is any conflict
between any provision of this Agreement and any statute, law, ordinance, order
or regulation, contrary to which the parties hereto have no legal right to
contract, the latter shall prevail, but in such event any provision of this
Agreement so affected shall be curtailed and limited only to the extent
necessary to bring it within the legal requirements.
21. Jurisdiction and Venue
It is hereby irrevocably agreed that all actions, suits or proceedings
between the Company and Executive arising out of, in connection with or relating
to this Agreement shall be exclusively heard and determined in, and the parties
do hereby irrevocably submit to the exclusive jurisdiction of, the Supreme Court
of the State of New York for Nassau or Suffolk County or the United States
District Court for the Eastern District of New York. The parties also agree that
a final judgment in any such action, suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The parties hereby unconditionally waive any objection
which either of them may now or hereafter have to the venue of any such action,
suit or proceeding brought in any of the aforesaid courts, and waive any claim
that any such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.
22. Full Understanding
Executive represents and agrees that he fully understands his right to
discuss all aspects of this Agreement with his private attorney, that to the
extent, if any, that he desired, he availed himself of this right, that he has
carefully read and fully understands all of the provisions of this Agreement,
that he is competent to execute this Agreement. that his agreement to execute
this Agreement has not been obtained by any duress and that he freely and
voluntarily enters into it, and that he has read this document in its entirety
and fully understands the meaning, intent and consequences of this document
which is that it constitutes an agreement of employment.
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23. Severance
(a) Severance Benefits. If the Executive's employment shall be
terminated by the Company within one (1) year after a Change in Control of the
Company, for reasons other than for Termination for Cause, Retirement, Death or
Disability, or terminated by the Executive for Good Reason within one (1) year
after a Change in Control of the Company, then, subject to the limitations set
forth in Subparagraph 23(c) below, the Executive shall be entitled to the
benefits provided below:
(i) the Company shall pay the Executive the Executive's full base
salary through the Date of Termination at the rate equal to the greater of the
rate in effect on the date prior to the Change in Control and the rate in effect
at the time Notice of Termination is given, plus all other amounts to which the
Executive is entitled under any compensation plan of the Company in effect on
the date, the payments are due, except as otherwise provided below;
(ii) in lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination, except as provided in Paragraph
23(c) below, the Company shall pay as severance pay to the Executive a lump sum
severance payment equal to 200% of the Executive's annual salary as determined
on the Date of Termination or the date on which a Change in Control occurs,
whichever is greater;
(b) Date Benefits Due. The payments provided for in Paragraph 23(a)
above shall be made not later than the fifth day following the Date of
Termination, provided, however, that if the amounts of such payments cannot be
finally determined on or before such day, the Company shall pay to the Executive
on such day an estimate, as determined in good faith by the Company, of the
minimum amount of such payments and shall pay the remainder of such payments
(together with interest at the rate provided in Section 7872(f)(2) of the Code)
as soon as the amount thereof can be determined but in no event later than the
thirtieth day after the Date of Termination. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to the Executive repayable on
the fifth day after demand by the Company (together with interest at the rate
provided in Section 7872(f)(2) of the Code).
(c) Reduction to Avoid Non-Deductibility. Any of the other provisions
of this Agreement notwithstanding, if any payment to be made by the Company
pursuant to this Agreement to the Executive or for the Executive's benefit (the
"Payments")
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otherwise would not be deductible by the Company for Federal income tax purposes
due to the provisions of the Code Section 280G, the aggregate present value
(determined as of the date of the Change in Control) of the Payments shall be
reduced (but not to a negative amount) to an amount expressed in the present
value as of such date (the "Reduced Amount") that maximizes the present value of
the Payments without causing any payment to be nondeductible by the Company due
to the Code Section 280G. The determination of the Reduced Amount and the
accompanying reduction in Payments shall be made by the independent certified
public accountants for the Company. Any such decrease in Payments shall be
applied to the amounts to be paid to the Executive or for the Executive's
benefit hereunder in the following order but only to the extent such amounts
would be taken into account in determining whether the Payments constitute
"parachute payments" within the meaning of the Code Section 280G(b)(2)(A): (i)
to decrease the amounts payable to the Executive pursuant to Subparagraph 5(c);
(ii) to decrease the amounts payable to the Executive pursuant to Subparagraph
23(a)(ii);
(d) Determination of Reduced Amount. The determination of the Reduced
Amount and of the reduction in the Payments shall be communicated to the
Executive in writing by the Company. If the Executive does not agree with such
determinations, the Executive may give written notice of such disagreement to
the Board within five (5) days of the Executive's receipt of the determination,
and within fifteen (15) days after the Executive's notice of disagreement, the
Executive shall deliver to the Board the Executive's calculation of the
reduction in Payments. If the Executive fails to give notice of disagreement or
to furnish the Executive's calculation in accordance with the provisions of the
immediately preceding sentence, the Executive shall be conclusively deemed to
have accepted the determinations made by the independent public accountants for
the Company. If the accountants for the Company and the Executive's accountants
are unable to agree upon the reduction of Payments within ten (10) days of the
receipt of the Board of the Executive's calculation, the determination of the
reduction in Payments shall be made by a third accounting firm picked by the
Company's accountants and the Executive's accountants (the "Arbiter") whose
determination shall be final and binding upon the Executive and the Company,
except to the extent provided below. The Company shall withhold for income tax
purposes all amounts that the Company's independent certified public accountants
believe that the Company is required to withhold.
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(e) Arbiter to Resolve Disputes. The Arbiter's and the Company's
accountant's fees shall be borne solely by the Company. The Executive's
accountant's fees shall be borne by the Executive.
(f) Final Payment. As promptly as practicable after the final
determination of the reduction in Payments, the Company shall pay to the
Executive or for the Executive's benefit the amounts determined to be payable.
(g) IRS Ruling. In the event there is a final determination by the
Internal Revenue Service or by a court of competent jurisdiction that any
portion of the Payments are not deductible by the Company by reason of Section
280G, then the amount of the Payments that exceeds the amount deductible by the
Company shall be deemed to be a loan by the Company to the Executive, which
shall be repaid by the Executive five (5) days after delivery of a demand by the
Company therefor together with interest from the date paid by the Company to the
date repaid by the Executive at the rate provided for a demand loan in Section
7872(f)(2) of the Code.
(h) Interpretation. The provisions of this Paragraph 23 shall be
interpreted in a manner that will avoid the disallowance of a deduction to the
Company pursuant to Section 280G and the imposition of excise taxes on the
Executive under Section 4899 of the Code.
(i) Definitions. For the purposes of this Agreement, the following
terms shall mean:
(i) "Incumbent Board" shall mean the members of the Board, who were
members of the Board prior to the date of this Agreement.
(ii) "Subsidiary" shall mean any corporation of which an amount of
voting securities sufficient to elect at least a majority of the directors of
such corporation is beneficially owned, directly or indirectly, by the Company,
or is otherwise controlled by the Company.
(iii) "Good Reason" shall mean, without the Executive's express
written consent, the occurrence of any of the following circumstances unless,
such circumstances are fully corrected prior to the Date of Termination
specified in the Notice of Termination, as defined in Paragraphs 23(i)(iv) and
(v), respectively, given in respect thereof:
(A) the assignment to the Executive of any duties inconsistent
with the Executive's status as President and/or Chief Operating Officer of the
Company, or a substantial adverse alteration in the nature or status of the
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Executive's responsibilities from those in effect immediately prior to a Change
in Control of the Company;
(B) 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;
(C) the relocation of the Company's principal executive offices
to a location which is not within the boundaries of New York, Queens, Nassau and
Suffolk counties within the State of New York or the Company requiring the
Executive to be based anywhere other than the Company's principal executive
offices, except for required travel on the Company's business to an extent
substantially consistent with the Executive's present business travel
obligations, or the adverse and substantial alteration of the office space or
secretarial or support services provided to the Executive for the performance of
the Executive's duties;
(D) the failure by the Company, without the Executive's consent,
to pay to the Executive any portion of the Executive's 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;
(E) the failure by the Company to continue in effect any
compensation plan in which the Executive participates that is material to the
Executive's total compensation, including but not limited to the Company's
Incentive Stock Option Plan, 401(k) plan, cafeteria or salary reduction plan, or
any other or substitute plans adopted prior to a Change in Control of the
Company, unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by the
Company to continue the Executive's participation therein (or in such substitute
or alternative plan) on a basis not materially less favorable, both in terms of
the amount of benefits provided and the level of the Executive's participation
relative to other participants, than the Executive's participation as it existed
at the time of a Change in Control of the Company;
(F) unless such action is pursuant to an across-the-board
reduction in benefits similarly affecting all senior executives of the Company
and all senior executives of any person in control of the Company, the failure
by the Company
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to continue to provide the Executive with benefits substantially similar to
those enjoyed by the Executive under any of the Company's pension, life
insurance, automobile reimbursement, Company credit card, medical, health and
accident, or disability plans, if any, in which the Executive was participating
at the time of a Change in Control of the Company, or the taking of any action
by the Company that would directly or indirectly materially reduce any of such
benefits or deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of a Change in Control of the Company, or the failure by
the Company to provide the Executive with the number of paid vacation or sick
days to which the Executive is entitled under this Agreement at the time of a
Change in Control of the Company;
(G) the failure of the Company to obtain a satisfaction agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Paragraph 5 hereof; or
(H) any purported termination of the Executive's employment that
is not affected pursuant to a Notice of Termination satisfying the requirements
of Subparagraph 8(c)(iv) below (and, if applicable, the requirement of Paragraph
6 above); for purposes of this Agreement, no such purported termination shall be
effective.
The Executive's right to terminate the Executive's employment pursuant
to this paragraph shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued employment shall not
constitute consent to, or a waiver of right with respect to, any circumstances
constituting Good Reason hereunder.
(iv) "Notice of Termination" shall mean a notice that shall indicate
the specific termination provision of this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated.
(v) "Date of Termination" shall mean (A) if employment is terminated
for Disability, thirty (30) days after Notice of Termination is given (provided,
that the Executive shall not return to the full-time performance of the
Executive's duties during such thirty (30) day period), or (B) if employment is
terminated due to Death of the Executive, upon receipt of Notice of Termination
or (C) if employment is terminated pursuant to any other provision in this
Agreement, the date specified in Notice of Termination (which, in the case of a
termination pursuant to any provision of this Agreement other than for
Disability and Death shall not be less than fifteen (15)
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nor more than sixty (60) days, respectively, from the date such Notice of
Termination is given).
Notwithstanding the above, provided, that if within fifteen (15) days
after any Notice of Termination is given to the Executive or prior to the Date
of Termination (as determined without regard to this provision) the Executive
receiving such Notice of Termination notifies the Company that a dispute exists
concerning such termination, that during the pendency of any such dispute, the
Company will continue to pay the Executive his full compensation in effect when
the notice giving rise to the dispute was given (including, but not limited to,
base salary) and continue the Executive as a participant in all compensation,
benefit, and insurance plans in which the Executive was participating when the
notice giving rise to the dispute was given, until the dispute is finally
resolved. However, should final resolution of the dispute result in the Notice
of Termination being affirmed in the forum, as set forth in Paragraph 21,
utilized for resolving said dispute, then the Executive shall be liable to the
Company for all compensation, benefit, and insurance plans paid and/or provided
to the Executive during the period that the Notice of Termination was in
dispute.
Amounts paid under this subparagraph are prior to all other amounts
due under this Agreement and shall not reduce any other amounts due under this
Agreement, which other amounts shall be in addition to, and shall not be offset
by, amounts due under this subparagraph.
Anything to the contrary herein notwithstanding, twenty-four hours
after written notice to the Executive, the Company may relieve the Executive of
authority to act on behalf of, or legally bind, the Company, provided, that any
such action by the Company shall be without prejudice to the Executive's right
to the compensation and benefits provided under this Agreement and the
Executive's right to termination hereunder under such circumstances and with the
compensation and benefits following such termination as provided in this
Agreement.
(vi) "Disability"- If the Executive, due to physical or mental illness
or incapacity, is unable fully to perform his duties herein for twelve (12)
consecutive months.
(vii) "Death"- If the Executive shall die during the term of this
Agreement.
(viii) ""Retirement"- Shall mean termination in accordance with the
Company's retirement policy, if any, including early retirement, generally
applicable to its salaried employees or in accordance with any retirement
arrangement established with the Executive's consent with respect to the
Executive.
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(ix) "Change in Control"- . No benefits shall be payable hereunder
unless an event as set forth below, shall have occurred (hereinafter called a
"Change in Control"):
(a) Any person including any individual, firm, partnership or other
entity, together with all Affiliates and Associates (as defined by ss.240.12b-2
of the regulations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") of such person, directly or indirectly acquires
securities of the Company's then outstanding securities representing twenty
percent (20%) or more of the voting securities of the Company, such person being
hereinafter referred to as an Acquiring Person; or, but excluding:
(A) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, or
(B) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of the Company, or
(C) the Company or any Subsidiary of the Company, is or becomes
the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act),or (D)a
person who acquires securities of the Company directly from the Company pursuant
to a transaction that has been approved by a vote of at least a majority of the
Incumbent Board, or
(b) Individuals who, on the date hereof, constitute the Incumbent
Board shall cease for any reason to constitute a majority of the Board; or
(c) The stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation
that 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 other 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.
24. Legal Fees
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The Company shall bear the cost of the Executive's legal fees regarding any
dispute or controversy arising under or in connection with this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date written below.
FIRST PRIORITY GROUP, INC. XXXXXX X. XXXXXX
By: By:
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Title: Dated:
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Dated:
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