Exhibit 10.19
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated November 14, 1997 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.
Xxxxxxx, an individual residing at 00000 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxx 00000
(the "Employee").
W I T N E S S E T H
WHEREAS, the Company desires that Employee be employed by it and render
services to it, and Employee 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 Employee, 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
Employee's term of employment under this Agreement shall commence on
November 17, 1997 (the "Commencement Date") and shall continue for a period of
thirty-six months (36) months plus one day thereafter, terminating on November
17, 2000 (the "Expiration Date"), unless earlier terminated under the terms and
conditions herein (the "Employment Term").
3. Duties
(a) Employee's responsibilities shall be to manage and direct the
financial affairs of the Company as shall from time to time be designated by the
Board of Directors or the Co-Chief Executive Officers ("CCEO") of the Company,
or such other executives or employees of the Company as may be designated by the
Board of Directors or the CCEO, as the case may be. Employee shall be based in
Nassau or Suffolk counties during the Employment Term and shall have the title
of Senior Vice President, Treasurer, and Chief Financial and Accounting Officer.
(b) Employee 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
Employee 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
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(a) Base Salary. Commencing on the Commencement Date, the
Employee 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 and Forty-Five Thousand Dollars ($145,000),
subject to all required federal, state and local payroll deductions. Effective
upon the one year anniversary of the Commencement Date, the Employee's Base
Salary shall be increased to One Hundred and Fifty-two Thousand and Two Hundred
and Fifty Dollars ($152,250) and effective upon the second anniversary of the
Commencement Date, the Employee's Base Salary shall be increased to One Hundred
and Sixty Thousand Dollars ($160,000).
(b) Incentive Compensation. The Employee shall receive Incentive
Compensation equal to Two Percent (2%) of the net pre-tax earnings of the
Company as calculated and reported in the Company's Annual Report on Form
10-KSB, and payable no later than upon the date that the Company's Form 10-KSB
is filed with the Securities and Exchange Commission. The Board of the Directors
of the Company may, at its sole discretion, award the Employee additional
Incentive Compensation should the Board believe that the Employee's performance
has not been adequately compensated.
(c) The Employee shall be granted a stock option under the
Company's 1995 Incentive Stock Plan (the "Plan") with the right to purchase up
to 120,000 shares of the Company's common stock (the "Stock Option"). The Stock
Option shall be granted at a price equal to the price of the Company's common
stock as quoted on the Nasdaq OTC Bulletin Board on the date on which the
Employee commences employment with the Company. The Stock Option shall become
exercisable in one-third increments upon the first, second and third anniversary
of the Stock Option grant. Should the Employee be terminated Without Cause, then
this Stock Option shall become fully exercisable, to the extent not previously
exercised, and may thereafter be exercised by the Employee for a period not to
exceed three (3) months from the date of termination of employment. The Company
will provide the Employee 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
Employee shall be reimbursed for only those business expenses incurred
by him (a) which are reasonable and necessary for Employee to perform his duties
under this Agreement in accordance with policies established from time to time
by the Company, and (b) for which Employee has submitted vouchers and/or
receipts. The Employee shall be issued a corporate credit card that he shall use
solely for business expenses which are reasonable and necessary for the Employee
to perform his duties under this Agreement in accordance with policies
established from time to time by the Company
7. Employee Benefits
During the Employment Term, Employee 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). Employee will not be covered under the
Company's health insurance until the Employee has been employed by the Company
for more than ninety (90) days. The Employee 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 Employee is covered under the
Company's health insurance plan.
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The Company shall reimburse the Employee for the actual cost of moving
his family and personal effects to the New York metropolitan area in an amount
not to exceed Twelve Thousand Dollars ($12,000) ("Moving Expenses"). The Company
shall reimburse the Employee for such Moving Expenses upon the Employee
submitting verifiable actual paid receipts for such expenses.
8. Vacation and Sick Leave
Employee 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 Company and Employee. The Employee 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 Employee's
death, in which event Employee's salary payable pursuant to Paragraph 5 and any
accrued vacation, through the date of Employee's death, shall be paid to his
estate. Employee'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, Employee, 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, 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
Employee 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, Employee shall be
entitled to receive his salary payable pursuant to Paragraph 5 through the date
of termination. Employee 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 Employee 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 Employee the unpaid prorated salary
pursuant to Paragraph 5 earned or accrued up through the day on which Employee
is terminated.
(b) The Company may terminate the employment of Employee 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 Employee the unpaid prorated salary
pursuant to Paragraph 5 earned or accrued up through the day on which Employee
is terminated, in addition to Fifty Percent (50%) of the Base Salary
("Termination Payment") that would have been paid the Employee from the date
employment is terminated through the Expiration Date, but in no case shall the
Termination Payment be less than a sum equal the Base Salary for a period of six
(6) months. Additionally, should the Employee be terminated Without Cause, then
the Employee shall receive Incentive Compensation for the fiscal year in which
the Termination Without Cause occurred, as calculated in Paragraph 5(b),
multiplied by the fraction where the numerator shall be the number of months of
the current fiscal year that have elapsed, and the denominator shall be twelve.
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(c) As used herein, the term "For Cause" shall mean:
(i) any material breach of this Agreement by Employee
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 Employee, setting forth in reasonable detail
the nature of such breach;
(ii) Employee's failure to perform his duties and
services hereunder to the reasonable satisfaction of the Board of Directors or
CCEO 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 Employee, setting forth
in reasonable detail the nature of such failure;
(iii) any material act, or material failure to act, by
Employee in bad faith and to the material detriment of the Company; or
(iv) commission by Employee 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 Employee 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 Employee's
employment for any reason other than For Cause, Death or Disability.
(e) Should this Agreement expire on the Expiration Date and the
Employee no longer remains in the employment of the Company or any of its
subsidiaries and/or affiliated companies, than the Employee shall receive a
severance payment equal to three (3) months of his Base Salary on the Expiration
Date.
11. Disclosure of Information and Restrictive Covenant
(a) Employee 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 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"). Employee 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)
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(i) Employee will not, at any time prior to the
Expiration Date, or if the Employee's employment shall terminate prior to the
Expiration Date, then for a period of one (1) year after the Employee 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 Employee 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 Employee ceases to be employed by the
Company, solicit or cause or authorize directly or indirectly to be solicited,
for or on behalf of the Employee or third parties, any business from persons,
firms, corporations or other 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 Employee ceases to be employed by the
Company, accept or cause or authorize directly or indirectly to be accepted, for
or on behalf of the Employee 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 Employee 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 Employee 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 Employee ceases to be employed by the
Company, employ or cause or authorize directly or indirectly to be employed, for
or on behalf of the Employee 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 Employee 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) Employee 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 Employee 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
Employee 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 provisions reasonable and/or enforceable, as the case may
be. Employee 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.
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12. Company Property
(a) Any patents, inventions, discoveries, applications, processes
or designs, devised, planned, applied, created, discovered or invented by
Employee in the course of Employee'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 Employee 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 Employee 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, Employee shall
promptly return to the Company all property of the Company in his possession.
Employee 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. Employee 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 Employee'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 Employee, 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 addition to damages the Company may be entitled to
recover. Nothing herein shall be deemed to restrict any remedy available to
Employee for breach of the Agreement by the Company.
14. Representations and Warranties of Employee and the Company
(a) In order to induce the Company to enter into this Agreement,
Employee hereby represents and warrants to the Company as follows: (i) Employee
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 Employee 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 Employee is a party or by which he is or may be bound or subject; and
(iii) Employee 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 Employee, 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.
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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 Employee 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 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 Employee's rights, powers, duties or
obligations hereunder, may be assigned by Employee. This Agreement shall be
binding upon and inure to the benefit of Employee 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
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.
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21. Jurisdiction and Venue
It is hereby irrevocably agreed that all actions, suits or proceedings
between the Company and Employee 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
Employee 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date written below.
FIRST PRIORITY GROUP, INC. XXXXXX X. XXXXXXX
By: By:
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Title: Dated:
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Dated:
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