EMPLOYMENT AGREEMENT
Exhibit 10.13
This
EMPLOYMENT AGREEMENT (the "Agreement")
is made effective as of October 23, 2006 (the "Effective
Date") by and between Xxxxxxx Xxxxxx, Inc. (the "Company"),
Xxxxxxx Xxxxxx Properties, LP (the "Partnership"),
and Xxxxxxx Xxxxx ("Executive")
with respect to the following facts and circumstances:
WHEREAS,
the Company desires to engage Executive as the Chief Financial Officer of the
Company, during the Agreement Term (as defined below), on the terms and
conditions and for the consideration set forth herein.
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties agree as
follows:
1. Effectiveness;
Term of Employment. Subject to the provisions of
Section 8 of this Agreement, Executive shall be employed by the Company on
the terms and subject to the conditions set forth in this Agreement for a period
commencing on the Effective Date and ending on December 31, 2010.
Commencing on January 1, 2011 and on each January 1 thereafter (each
an "Extension
Date"), the Agreement Term shall be automatically extended for an
additional one-year period unless either the Company or Executive provides the
other party hereto sixty (60) days' prior written notice before the next
Extension Date that the Agreement Term shall not be so extended (the "Agreement
Term").
2. Position;
Duties. During the Agreement Term, Executive shall
serve as Chief Financial Officer of the Company and the Partnership. In such
position, Executive shall have such duties and authority commensurate with such
position as shall be determined from time to time by the Board of Directors of
the Company (the "Board")
including such duties and responsibilities with respect to any subsidiary,
affiliate or joint venture of the Company (each a "Subsidiary").
Executive's duties will be principally performed at the Company's headquarters,
which will be located within the West Side of Los Angeles, with such travel as
may be required to perform his duties hereunder as reasonably requested by the
Company.
3. Base
Salary. During the Agreement Term, the Company
shall pay Executive a base salary at the annual rate of $575,000, payable in
regular installments in accordance with the Company's usual payment practices.
Executive's salary shall be reviewed at least annually by the Compensation
Committee of the Board (the "Committee")
and Executive shall be entitled to such increases in Executive's base salary, if
any, as may be determined from time to time in the sole and absolute discretion
of the Committee. Executive's annual base salary, as in effect from time to
time, is hereinafter referred to as the "Base
Salary."
4. Annual
Bonus. With respect to each full fiscal year
commencing during the Agreement Term, Executive shall be eligible to earn an
annual bonus award (the "Annual
Bonus") based upon reasonable criteria to be reasonably established not
later than the first thirty (30) days of that fiscal year by the
Compensation Committee of the Board in consultation with Executive. The amount
of the bonus shall equal the following percentages of Executive's Base Salary
during that fiscal year:
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Threshold
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Target
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Superior
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Outperformance
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50%
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80%
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100%
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120%
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Unless
otherwise approved by the Board in its discretion, no bonus will be payable to
Executive for any year if Executive does not meet the Threshold criteria
established for that year. The Company will pay any Annual Bonus earned by
Executive with respect to a given fiscal year in accordance with the terms and
conditions of the Company's annual bonus plan, but no later than the earlier of
(i) the fifteenth day of the third month following the end of such fiscal
year or (ii) the date that other senior executives are paid similar
bonuses.
5. Long-Term
Incentive Compensation.
5.1. Option
Award. As of the Effective Date, Executive shall
be granted an option to purchase 386,667 shares of Company stock (the "Option
Award") pursuant to a separate written Non Qualified Stock Option
Agreement under the Company's 2006 Omnibus Stock Incentive Plan (the "Plan").
The Option Award shall be subject to the terms and conditions of that agreement
and the Plan.
5.2. LTIP
Award. As of the Effective Date, Executive shall
be granted 101,500 LTIP Units (the "LTIP
Award") pursuant to a separate written LTIP Unit Award Agreement under
the Plan. The LTIP Award shall be subject to the terms and conditions of that
agreement and the Plan.
6. Employee
Benefits. During the Agreement Term, Executive
shall be entitled to participate in the Company's employee welfare and
retirement benefit plans and perquisite programs as in effect, and subject to
such modification as the Company may determine necessary or appropriate, from
time to time (collectively "Employee
Benefits"), on the same basis as those benefits are generally made
available to other senior executives of the Company, plus (i) $1,200 per
month for the purchase of health insurance benefits during any period in which
he is not participating in the Company's health plan and (ii) a car
allowance of $500 per month. During the Agreement Term,
Executive shall have the right (i) to participate in any future
compensation plans implemented for executives of the Company on a basis
commensurate with his position and (ii) to be indemnified by the Company
for all actions taken as an officer, director or agent of the Company or its
Subsidiaries to the full extent provided under law or pursuant to the
Indemnification Agreement of even date herewith. Subject to the policies and
procedures of the Company, in addition to any accrued personal time off ("PTO")
accrued with respect to service to the predecessors of the Company, Executive
shall be entitled to accrue twenty five (25) paid days of PTO per year
during the Agreement Term.
7. Business
Expenses. During the Agreement Term, the Company
shall reimburse Executive for all reasonable business expenses incurred by
Executive in the performance of Executive's duties hereunder in accordance with
the Company's policies as in effect from time to time.
8. Termination. Notwithstanding
any other provision of this Agreement, the provisions of this Section 8
shall exclusively govern Executive's rights upon termination of employment with
the Company. Following Executive's termination of employment, except as set
forth in this Section 8, Executive (and Executive's legal representative
and estate) shall have no further rights to any compensation or any other
benefits under this Agreement.
8.1. Definitions.
"Accrued
Rights" means the sum of the following: (i) any accrued but unpaid
Base Salary through the date of termination; (ii) a payment in respect of
all unpaid, but accrued and unused PTO through the date of termination;
(iii) any Annual Bonus earned but unpaid as of the date of termination for
any previously completed fiscal year (i.e., not for the year of
employment termination); (iv) reimbursement for any unreimbursed business
expenses properly incurred by Executive in accordance with Company policy
through the date of termination; (v) such rights, if any, under the Option
Award, the LTIP Award and other compensation programs and Employee Benefits to
which Executive may be entitled upon termination of employment according to the
documents governing such benefits; and (vi) any existing rights to
indemnification for prior acts through the date of termination.
"Cause"
means any of the following: (i) any act or omission by Executive which
constitutes intentional misconduct or a willful violation of law; (ii) an
act of fraud, conversion, misappropriation or embezzlement by Executive or
conviction of, indictment for (or its procedural equivalent) or entering a
guilty plea or plea of no contest with respect to a felony, the equivalent
thereof or any crime involving any moral turpitude with respect to which
imprisonment is a common punishment; or (iii) any other failure (other than
any failure resulting from incapacity due to physical or mental illness) by
Executive to perform his material and reasonable duties and responsibilities as
an employee, director or consultant of the Company or
any Subsidiary which continues for ten (10) days following written notice
from the Company or any Subsidiary (except in the case of a willful failure to
perform his duties or a willful breach, which shall require no notice). For
purposes of the foregoing sentence, no act, or failure to act, on Executive's
part shall be considered "willful" unless the Executive acted, or failed to act,
in bad faith or without reasonable belief that his act or failure to act was in
the best interest of the Company or any Subsidiary.
"Change of
Control" shall be deemed to have occurred if
(i) there
shall be consummated (a) any consolidation or merger of the Company, other
than a merger or consolidation of the Company in which (1) the holders of
the Company's common stock immediately prior to the merger or consolidation have
at least fifty one percent (51%) ownership of the total voting power of the
surviving entity immediately after the merger or consolidation, and (2) no
person (other than an Exempted Holder as defined below) beneficially owns (as
such term is defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, 20% or more of the total voting power of the surviving entity or
(b) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets of
the Company, or
(ii) the
shareholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company, or
(iii) any
person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange
Act")) other than an Exempted Holder (as defined below) shall become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
of twenty percent (20%) or more of the Company's common stock. "Exempted
Holder" means (a) the Company or any majority-owned Subsidiary
(provided that this
exclusion applies solely to the ownership levels of the Company or the
majority-owned Subsidiary); (b) any trustee, fiduciary or other person or
entity holding securities under any employee benefit plan or trust sponsored or
maintained by the Company or any Subsidiary; (c) any underwriter or
placement agent temporarily holding securities pursuant to an offering of such
securities; or (d) Xxx Xxxxxx, Xxxxxx Xxxxxx or Xxx Xxxxxx, their immediate
family members and family trusts or family-only partnerships and any charitable
foundations, any entities in which they and their families beneficially own a
majority of the voting interests, and any "group" (as described in
Rule 13d-5(b)(i) under the Exchange Act) including them. However, a
Change in Control shall not be deemed to have occurred if a person's percentage
interest increases over twenty percent (20%) solely as a result of a decrease in
the outstanding stock because of an acquisition of securities by the Company;
provided, however, that a "Change in
Control" shall be deemed to have occurred on any subsequent acquisitions of the
Company's common stock by that person (other than pursuant to a stock split,
stock dividend, or similar transaction) at a time when that person beneficially
owns twenty percent (20%) or more of the Company's outstanding common stock,
or
(iv) the
Board shall cease for any reason to have a majority of Uncontested Directors.
"Uncontested
Directors" means directors who were initially elected or initially
nominated (a) by a vote of at least two-thirds of the then Uncontested
Directors and (b) not as a result of an actual or threatened election
contest with respect to directors or as a result of any other actual or
threatened solicitation of proxies or consents by or on behalf of any person
other than the Board, including by reason of agreement intended to avoid or
settle any such actual or threatened contest or solicitation.
"Disability"
means physical or mental incapacity whereby Executive is unable with or without
reasonable accommodation for a period of six (6) consecutive months or for
an aggregate of nine (9) months in any twenty-four (24) consecutive
month period to perform the essential functions of Executive's duties.
"Good
Reason" shall be present where Executive gives notice to the Board of his
voluntary resignation (a) within one hundred and twenty (120) days
after the occurrence of any of the following, without Executive's written
consent: (i) the failure of the Company to pay or cause to be paid
Executive's Base Salary or Annual Bonus, when due hereunder, subject to a ten
(10) day cure period by the Company (except in the case of a willful
failure which shall require no notice); (ii) diminution in Executive's
status, including, title, position, duties, authority or responsibility, subject
to a thirty (30) day cure period by the Company (except in the case of a
willful breach, which shall require no notice); (iii) relocation of the
Company's executive offices to a location outside of the West Side of Los
Angeles; or (iv) the failure of the Company to obtain the express written
assumption of this Agreement pursuant to Section 11.5 hereof (unless such
Agreement is assumed by operation of law); (b) within eighteen
(18) months after the occurrence of a Change of Control.
8.2. Termination
by the Company for Cause or By Executive's Resignation without Good
Reason. The Agreement Term and Executive's
employment hereunder may be terminated by the Company for Cause and shall
terminate upon Executive's resignation without Good Reason, and in either case
Executive shall be entitled to receive only his Accrued Rights.
8.3. Death/Disability. The
Agreement Term and Executive's employment hereunder shall terminate upon
Executive's death or Disability. Upon termination of Executive's employment
hereunder due to death or Disability, Executive's legal representative or estate
(as the case may be) shall be entitled to receive (i) the Accrued Rights
plus (ii) an
amount equal to a pro-rated portion of the Annual Bonus Executive otherwise
would have been paid for the fiscal year in which such termination of employment
occurs, payable when the Annual Bonus would otherwise have been paid to
Executive pursuant to Section 4, based upon (a) actual performance for
such fiscal year, as determined at the end of such fiscal year and (b) the
percentage of such fiscal year that shall have elapsed through the date of
Executive's termination of employment; plus (iii) continued
medical benefits for Executive and Executive's spouse and eligible dependents
who at the time of Executive's termination are enrolled in the Company's medical
plan. Such benefits shall be substantially identical to the
benefits
maintained for other senior executives of the Company and shall be provided for
a period of twelve (12) months following Executive's termination of
employment. Executive acknowledges that such benefit continuation is intended,
and shall be deemed, to satisfy the obligations of the Company and any of its
subsidiaries and affiliates to provide continuation of benefits under
Section 4980B of the Internal Revenue Code of 1986, as amended ("COBRA")
for such period and that the Company may satisfy such obligation by paying any
applicable COBRA premiums.
8.4. Termination
by the Company without Cause or Resignation by Executive for Good
Reason. The Agreement Term and Executive's
employment hereunder may be terminated by the Company without Cause at any time
and for any reason or by Executive's resignation for Good Reason at any time
upon thirty (30) days written notice by the terminating party, although the
Company may waive services during that period. If Executive's employment is
terminated by the Company without Cause (other than by reason of death or
Disability) or if Executive resigns for Good Reason, Executive shall be entitled
to receive (i) the Accrued Rights, plus (ii) provided that
Executive first executes and returns to the Company (and does not revoke) a
release of all claims that is in form and substance reasonably satisfactory to
the Company, and subject to Executive's continued compliance with the provisions
of Section 9 of this Agreement (to the extent expressly applicable after
the Agreement Term):
8.4.1. an
amount, payable in a lump sum without discount within 30 days of the date
of termination, equal to two (2) times the average of Executive's
compensation over the last three full calendar years ending prior to the
termination date including (i) the Base Salary; (ii) the Annual Bonus
and (iii) the value (based on a Black Scholes formula in the case of
options and value of the underlying grants in the case of LTIP or outperformance
plans) of any equity (including stock, LTIPs and options) or other compensation
plans granted or awarded to Executive. In the event that there are less than
three full calendar years completed after the execution of this Agreement, the average shall be based on (i) 2006 (including
compensation paid by the predecessor of the Company) and (ii) any other
full completed years prior to the date of termination.
8.4.2. continued
medical and dental benefits for Executive, Executive's spouse and Executive's
eligible dependents, who at the time of Executive's termination are enrolled in
the Company's benefits plans provided for a period of two (2) years
following Executive's termination of employment. Such benefits shall be
substantially identical to the benefits maintained for other senior executives
of the Company. Executive acknowledges that such benefit continuation is
intended, and shall be deemed, to satisfy the obligations of the Company and any
of its subsidiaries and affiliates to provide continuation of benefits under
COBRA for such period and that the Company may satisfy such obligation by paying
any applicable COBRA premiums or causing such premiums to be paid.
8.5. Notice
of Termination. Any purported termination of
employment by the Company or by Executive (other than due to Executive's death)
shall be communicated by written notice to the other party, which indicates the
specific termination provision in this Agreement relied upon and sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated and the date of
employment termination.
8.6. Employee
Termination and Officer Resignation. Upon
termination of Executive's employment for any reason, Executive's employment
with each of the Company and each Subsidiary shall be terminated and Executive
shall be deemed to resign, as of the date of such termination and to the extent
applicable, as an officer of the Company and any Subsidiary. Executive shall
confirm such resignation(s) in writing to the Company.
9. Covenants.
9.1. Confidentiality. Executive
acknowledges that, in his employment hereunder, he will occupy a position of
trust and confidence with the Company and its Subsidiaries. Executive agrees
that Executive shall not during the Agreement Term and for two (2) years
thereafter, except (i) as may be required to perform his duties hereunder
or as required by applicable law or (ii) until such information shall have
become public other than by Executive's unauthorized disclosure or
(iii) with the prior written consent of the Company, use, disclose or
disseminate any trade secrets, confidential information or any other information
of a secret, proprietary, confidential or generally undisclosed nature relating
to the Company and/or any Subsidiary, or their respective businesses, contracts,
projects, proposed projects, revenues, costs, operations, methods or
procedures.
9.2. Non-solicitation. Executive
agrees that, for a period of one (1) year immediately following the end of
Executive's employment with the Company, except acting on behalf of the Company
during the Employment Term, Executive shall not, either directly or indirectly,
solicit or participate in the solicitation of any employee or consultant of the
Company to terminate or materially alter his, her or its relationship with the
Company or any Subsidiary. This restriction shall not apply to Executive's
assistant.
9.3. Full
time; Non competition. During the Agreement Term,
Executive will devote Executive's full business time and best efforts to the
performance of Executive's duties hereunder and will not engage in any other
business, profession or occupation for compensation or otherwise which would
conflict or interfere with the rendition of such services either directly or
indirectly; except that nothing herein shall preclude Executive from accepting
appointment to or continuing to serve on any board of directors or trustees of
any business entity, trade organization or any charitable organization or
engaging in any activities or managing his investments and affairs so long as
such activities in the aggregate do not interfere with the performance of
Executive's duties hereunder or conflict with this Section 9.3 herein.
During the Agreement Term, without the prior approval of the Board, Executive
shall not in any city, town, county, parish where the Company and/or any
Subsidiaries directly or indirectly engages in business
or is actively contemplating engaging in business: (i) engage in a
competing business for Executive's own account; (ii) enter the employ of,
or render any consulting or any other services to, any entity that competes with
the Company and/or any of its affiliates; or (iii) become interested in any
such competing entity in any capacity, including, without limitation, as an
individual, partner, shareholder, officer, director, principal, agent, trustee
or consultant; provided, however, Executive may own, directly or indirectly,
solely as a passive investment, 5% or less of any class of securities of any
entity traded on any national securities exchange and any assets acquired in
compliance with this Section. A business shall not be deemed a "competing
business" if it does not invest in or deal with the same basic product type as
the Company does from time to time. At this time the basic product type of the
Company is large and mid-size office buildings and multi-family properties in
Los Angeles County and Hawaii (larger than 50,000 sq. ft. for office properties
and 50 units for apartment buildings).
9.4. Company
Policies. During the Agreement Term, Executive
shall also be subject to and shall abide by all written reasonable policies and
procedures of the Company provided to him, including regarding the protection of
confidential information and intellectual property and potential conflicts of
interest, except to the extent that such policies and procedures conflict with
the other provisions of this Agreement, in which case this Agreement shall
control. Executive acknowledges that the Company may amend any such policies and
guidelines from, time to time, and that Executive remains at all times bound by
their most current version to the extent made known to him and reasonable in
scope.
9.5. Intellectual
Property. Except as permitted in Section 9.3
and as provided under Section 2870 of the California Labor Code, the
Company shall be the sole owner of all the products and proceeds of Executive's
services hereunder including, without limitation, all materials, ideas,
concepts, formats, suggestions, developments, and other intellectual properties
that Executive may acquire, obtain, develop or create in connection with his
services
hereunder
and during the Agreement Term, free and clear of any claims by Executive (or
anyone claiming under Executive) of any kind or character whatsoever (other than
Executive's rights and benefits hereunder). Executive shall, at the request of
the Company, execute such assignments, certificates or other instruments as the
Company may from time to time deem necessary or desirable to evidence,
establish, maintain, perfect, protect, enforce or defend the Company's right,
title and interest in and to any such products and proceeds of Executive's
services hereunder. Notwithstanding the above, Executive shall not be considered
to be in breach of this Section 9.5 in connection with any property or
other material of a type described in this Section 9.5 which does not
become the property of the Company, so long as Executive does not, directly or
indirectly, have or obtain any personal interest in such property or
material.
9.6. General. Executive
and the Company intend that: (i) this Section 9 concerning (among
other things) the exclusive services of Executive to the Company and/or its
Subsidiaries shall be construed as a series of separate covenants; (ii) if
any portion of the restrictions set forth in this Section 9 should, for any
reason whatsoever, be declared invalid by an arbitrator or a court of competent
jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected; and (iii) Executive
declares that the territorial and time limitations set forth in this
Section 9 are reasonable and properly required for the adequate protection
of the business of the Company and/or its Subsidiaries. In the event that any
such territorial or time limitation is deemed to be unreasonable by an
arbitrator or a court of competent jurisdiction, Executive agrees to the
reduction of the subject territorial or time limitation to the area or period
which such arbitrator or court shall have deemed reasonable. All of the
provisions of this Section 9 are in addition to any other written
agreements on the subjects covered herein that Executive may have with the
Company and/or any of its Subsidiaries and are not meant to and do not excuse
any additional obligations that Executive may have under such
agreements.
9.7. Specific
Performance. Executive acknowledges and agrees
that the confidential information, non-solicitation, intellectual property
rights and other rights of the Company referred to in Section 9 of this Agreement are each of substantial value to the Company
and/or its subsidiaries and affiliates and that any breach of Section 9 by
Executive would cause irreparable harm to the Company and/or its Subsidiaries,
for which the Company and/or its Subsidiaries would have no adequate remedy at
law. Therefore, in addition to any other remedies that may be available to the
Company and/or any of its Subsidiaries under this Agreement or otherwise, the
Company and/or its Subsidiaries shall be entitled to obtain temporary
restraining orders, preliminary and permanent injunctions and/or other equitable
relief to specifically enforce Executive's duties and obligations under this
Agreement, or to enjoin any breach of this Agreement, without the need to post a
bond or other security and without the need to demonstrate special damages.
Furthermore, Executive agrees that any damages suffered by the Company and/or
its Subsidiaries as a result of Executive's breach of Executive's duties and
obligations under this Agreement shall entitle the Company and/or its
Subsidiaries to offset such damages against any payments to be made pursuant to
this Agreement, to the extent permitted by applicable law.
10. Excise
Tax Gross-Up Payments. Company agrees to pay
Executive the amount or amounts specified in Schedule B, at such time or
times as specified in Schedule B, as an excise tax Gross-Up Payment as
provided in Schedule B. In connection therewith, the Company and Executive
agree to the provisions of Schedule B, which are incorporated herein by
this reference.
11. Miscellaneous.
11.1. Governing
Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California,
without regard to conflicts of laws principles or rules thereof.
11.2. Entire
Agreement; Amendment. This Agreement (and the
Option Award and the LTIP Award) represents the entire agreement and
understanding between the parties and, except as expressly stated in this
Agreement, supersedes any prior agreement, understanding or negotiations
respecting such subject. No change to or modification of this Agreement shall be
valid or binding unless it is in writing and signed by Executive and a duly
authorized director of the Company.
11.3. No
Waiver. Failure to insist upon strict compliance
with any of the terms, covenants, or conditions hereof shall not be deemed a
waiver of such term, covenant, or condition, nor shall any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right
or power hereunder at any one or more times be deemed a waiver or relinquishment
of such right or power at any other time or times. No waiver of any breach of
any term or provision of this Agreement shall be construed to be, nor shall be,
a waiver of any other breach of this Agreement. No waiver shall be binding
unless in writing and signed by the party waiving the breach.
11.4. Severability;
Invalid Provision. In the event that any one or
more of the provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby. The
parties understand and agree that if any provision of this Agreement shall, for
any reason, be adjudged by any court or arbitrator of competent jurisdiction to
be invalid or unenforceable, such judgment shall not affect, impair, or
invalidate the remainder of this Agreement, but shall be confined in its
operation to the provision of this Agreement directly involved in the
controversy in which such judgment shall have been rendered.
11.5. Assignment. This
Agreement and all of Executive's rights and duties hereunder, shall not be
assignable or delegable by Executive. Any purported assignment or delegation by
Executive in violation of the foregoing shall be null and void ab initio and of no force and
effect. This Agreement may be assigned by the Company to a successor in interest
to substantially all of the business operations of the Company. Upon such
assignment, the rights and obligations of the Company hereunder shall become the
rights and obligations of such affiliate or successor person or entity. The
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place (except to the extent such assumption would occur by operation
of law). It is anticipated that the Executive's employer of record and salary
and bonus payor may be the Partnership or another Subsidiary, but the Company
and the Partnership will be jointly and severally liable for all amounts payable
to Executive hereunder.
11.6. Set
Off. The Company's obligation to pay Executive the
amounts provided and to make the arrangements provided hereunder shall be
subject to set-off, counterclaim or recoupment of amounts owed by Executive to
the Company or its Subsidiaries to the extent permitted by applicable
law.
11.7. Successors;
Binding Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties' respective personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
11.8. Notice. Any
and all notice given hereunder shall be in writing and shall be deemed to have
been duly given when received, if personally delivered; when transmitted, if
transmitted by telecopy, or electronic or digital transmission method, upon
receipt of telephonic or electronic confirmation; the day after the notice is
sent, if sent for next day delivery to a domestic address using a generally
recognized overnight delivery service (e.g., FedEx); and upon
receipt, if sent by certified or registered mail, return receipt requested. In
each case notice will be sent as follows:
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If
to the Company:
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Xxxxxxx
Xxxxxx, Inc.
000
Xxxxxxxx Xxxx., Xxxxx 000, Xxxxx Xxxxxx, XX 00000
Attention:
Chief Executive Officer
Telephone:
(000) 000-0000
|
|
If
to Executive:
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Xxxxxxx
Xxxxx
000
Xxxxxxxx Xxxx., Xxxxx 000, Xxxxx Xxxxxx, XX 00000
Telephone:
000 000 0000
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Either
party may change its address and/or facsimile number for notice purposes by duly
giving notice to the other party pursuant to this Section.
11.9. Executive's
Representations. Executive hereby represents to
the Company that the execution and delivery of this Agreement by Executive and
the Company and the performance by Executive of Executive's duties hereunder
shall not constitute a breach of, or otherwise contravene, the terms of any
employment agreement or other agreement or policy to which Executive is a party
or otherwise bound. Executive represents and warrants that he is not subject to
any employment agreement, nondisclosure agreement, common law nondisclosure
obligation, fiduciary duty, noncompetition agreement, restrictive covenant or
any other obligation to any former employer or to any other person or entity in
any way relating to the right or ability of Executive to be employed by and/or
perform services for the Company and its Subsidiaries. Executive further
represents and warrants that he has not brought to or disclosed to the Company
or to its Subsidiaries, and covenants that he will not bring to or disclose to
the Company or to its Subsidiaries or use in connection with his employment with
the Company, any trade secrets or proprietary information from any of his prior
employers or from any other person or entity.
11.10. Cooperation
in Third-Party Disputes. At the request of the
Company, Executive shall cooperate with the Company and/or its Subsidiaries and
each of their respective attorneys or other legal
representatives (collectively referred to as "Attorneys")
in connection with any claim, litigation, or judicial or arbitral proceeding
which is now pending or may hereinafter be brought against the Company and/or
any of its Subsidiaries or affiliates by any third party. Executive's duty of
cooperation shall include, but shall not be limited to, (a) meeting with
the Company's and/or its Subsidiaries' Attorneys by telephone or in person at
mutually convenient times and places in order to state truthfully Executive's
knowledge of the matters at issue and recollection of events; (b) appearing
at the Company's and/or its Subsidiaries' and/or their Attorneys' request (and,
to the extent possible, at a time convenient to Executive that does not conflict
with the needs or requirements of Executive's then-current employer or personal
commitments) as a witness at depositions, trials or other proceedings, without
the necessity of a subpoena, in order to state truthfully Executive's knowledge
of the matters at issue; and (c) signing at the Company's request
declarations or affidavits that truthfully state the matters of which Executive
has knowledge. Such services will be without additional compensation if
Executive is then employed by the Company or any Subsidiary and for reasonable
compensation and subject to his reasonable availability if he is not so
employed. The Company shall promptly reimburse Executive for Executive's actual
and reasonable travel or other out-of-pocket expenses that Executive may incur
in cooperating with the Company and/or its Subsidiaries under this
Section 11.10.
11.11. Withholding
Obligations. The Company, or any other entity
making a payment, may withhold and make such deductions from any amounts payable
under this Agreement such federal, state and local taxes as may be required to
be withheld or deducted from time to time pursuant to any applicable law,
governmental regulation and/or order. The amount of compensation payable to
Executive pursuant to this Agreement shall be "grossed up" as necessary (on an
after-tax basis) to compensate for any additional social security withholding
taxes due as a result of Executive's shared employment by the any
Subsidiary.
11.12. Counterparts. This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. A facsimile signature shall be deemed to be the same as an original
signature.
11.13. Interpretation. Executive
understands that this Agreement is deemed to have been drafted jointly by the
parties and that the parties had a reasonable opportunity to retain legal
counsel for such purpose. Any uncertainty or ambiguity shall not be construed
for or against any party based on attribution of drafting to any
party.
11.14. Headings. Titles
or captions of Sections contained in this Agreement are inserted only as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provisions
hereof.
11.15. Survival
of Provisions. All other rights and obligations of
the parties hereto, other than those applicable by their express terms only
during the Agreement Term, shall survive any termination or expiration of this
Agreement or of Executive's employment with the Company, and shall be fully
enforceable thereafter.
11.16. Arbitration
of Disputes. Except as is necessary for Executive
and the Company to preserve their respective rights under this Agreement by
seeking necessary equitable relief (including, but not limited to, the Company's
rights under Section 9 of this Agreement) from a court of competent
jurisdiction, the Company and Executive agree that any and all disputes based
upon, relating to or arising out of this Agreement (including, but not limited
to, any breach or alleged breach of this Agreement, or any dispute concerning
the formation of this Agreement, or the validity, scope and/or enforceability of
this arbitration provision), Executive's employment relationship with the
Company and/or the termination of that relationship, and/or any other dispute by
and between the Company and Executive, including any and all claims Executive
may at any time attempt to assert against the Company, shall be submitted to
binding arbitration in Los Angeles, California, in accordance with the rules of JAMS, provided that the arbitrator shall allow
for discovery sufficient to adequately arbitrate any alleged claims, including
access to essential documents and witnesses, and otherwise in accordance with
California Code of Civil Procedure § 1283.05. The party prevailing in any action
shall be entitled to its reasonable attorneys' fees in enforcing its rights
hereunder. In any event, the Company shall pay any expenses that Executive would
not otherwise have incurred if the dispute had been adjudicated in a court of
law, rather than through arbitration, including the arbitrator's fee, any
administrative fee and any filing fee in excess of the maximum court filing fee
in the jurisdiction in which the arbitration is commenced. Judgment in a court
of competent jurisdiction may be had on any decision and award of the
arbitrator. For these purposes, the parties agree to submit to the jurisdiction
of the state and federal courts located in Los Angeles County,
California.
11.17. Section 409A
of the Code. This Agreement is intended to comply
with Section 409A of the Code. Each party to this Agreement intends and
agrees that this Agreement shall be interpreted and modified to the minimum
extent necessary and to provide as near as possible the same economic benefit to
the Executive provided hereunder in the absence of such modification, as
mutually agreed by counsel for both parties, so as to avoid the imposition of
any excise tax under Section 409A of the Internal Revenue Code and the
regulations thereunder.
|
Xxxxxxx
Xxxxxx, Inc.
|
Executive
|
|||
|
/S/ JORDAN X. XXXXXX
|
/S/ XXXXXXX XXXXX
|
|||
|
By:
|
Jordan X.
Xxxxxx
|
Xxxxxxx
Xxxxx
|
||
|
Title:
|
Chief Executive Officer and President
|
|||
|
Xxxxxxx
Xxxxxx Properties, LP
|
||||
|
By:
|
Xxxxxxx Xxxxxx Management, Inc.
|
|||
|
Its:
|
General Partner
|
|||
|
/S/ JORDAN X. XXXXXX
|
||||
|
By:
|
Jordan X.
Xxxxxx
|
|||
|
Title:
|
Chief Executive Officer and President
|
|||
Schedule A
CALIFORNIA
LABOR CODE SECTION 2870
INVENTION
ON OWN TIME-EXEMPTION FROM AGREEMENT
"(a) Any
provision in an employment agreement which provides that an employee shall
assign, or offer to assign, any of his or her rights in an invention to his or
her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer's equipment,
supplies, facilities, or trade secret information except for those inventions
that either:
(1) Relate
at the time of conception or reduction to practice of the invention to the
employer's business, or actually or demonstrably anticipated research or
development of the employer; or
(2) Result
from any work performed by the employee for the employer.
(b) To
the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable."
Excise
Tax Gross Up
I.
Subject
to the following provisions of this Schedule B, but otherwise anything in
this Agreement to the contrary notwithstanding, in the event that Executive
shall become entitled to payments and/or benefits provided by this Agreement or
any other amounts in the "nature of compensation" (whether pursuant to the terms
of this Agreement or any other plan, arrangement or agreement with the Company,
any person whose actions result in a change of ownership or effective control
covered by Section 280G of the Code or any successor provision or any
person affiliated with the Company or such person) as a result of such change in
ownership or effective control, but determined without regard to any additional
payments required under this Schedule B (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the 1986
Internal Revenue Code, as amended (the "Code"), or
any interest or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise
Tax"), the Company shall make a payment (a "Gross-Up
Payment") to Executive in an amount such that, after payment by Executive
of all income or other taxes (and any interest and penalties imposed with
respect thereto) and Excise Taxes imposed on the Gross-Up Payment, Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed on the
Payments.
II.
Subject
to the provisions of Paragraph III of this Schedule B, all
determinations required to be made under this Schedule B, including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall be
made by a certified public accounting firm designated by Executive (the "Executive
Accounting Firm") which shall provide detailed supporting calculations
both to the Company and to Executive within fifteen (15) business days of
the receipt of notice from Executive that there has been a Payment, or such
earlier times as is requested by Executive. If Executive Accounting Firm
determines that no Excise Tax is payable by Executive, it shall, upon the
written request of Executive, furnish Executive with a written opinion that
failure to report the Excise Tax on Executive's applicable federal income tax
return would not result in the imposition of a negligence or similar penalty.
The calculations prepared by Executive Accounting Firm shall be reviewed on
behalf of the Company by the Company's independent auditors (the "Company
Accounting Firm") which shall provide its conclusions, together with
detailed supporting calculations, both to the Company and Executive within
fifteen (15) business days after receipt of the calculations and supporting
materials prepared by Executive Accounting Firm. In the event of a dispute
between the Company Accounting Firm and Executive Accounting Firm, such firms
shall, within five (5) business days of receipt of the conclusions and
supporting materials prepared by the Company Accounting Firm, jointly select a
third nationally recognized certified public accounting firm (the "Third Accounting
Firm") to resolve the dispute. The Third Accounting Firm shall submit its
conclusions to the Company and Executive within fifteen (15) business days
after receipt of notice of its appointment hereunder and the decision of the
Third Accounting Firm shall be final, binding and conclusive upon Executive and
the Company subject to any determination by the Internal Revenue Service. All
fees and expenses of all such accounting firms shall be borne solely by the
Company. Any Gross-Up Payment shall be paid by the Company to Executive within
five (5) business days after the earlier of acceptance by the Company of
the calculations prepared by Executive Accounting Firm or the Company's receipt
of the Third Accounting Firm's determination.
III.
As a
result of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination of whether any Gross-Up Payment should be
made hereunder, it is possible that a Gross-Up Payment will have been due but
not made by the Company (an "Underpayment"),
consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant this
Schedule B and Executive thereafter is required to make a payment of any
Excise Tax, Executive Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Company to or for the benefit of Executive.
IV.
Executive
shall notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of the Gross-up
Payment. Such notification shall be given as soon as practicable (but not later
than ten (10) business days after Executive is informed in writing of such
claim) and shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the thirty (30) day period following the date on
which it gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies Executive in writing prior to the expiration of such period
that it desires to contest such claim, Executive shall:
1.
Give the
Company any information reasonably requested by it relating to such
claim;
2.
Take such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company and acceptable to Executive;
3.
Cooperate
with the Company in good faith in order effectively to contest such claim;
and
4.
Permit
the Company to participate in any proceedings relating to such
claim.
V.
The
Company shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with a contest of a claim under
Paragraph IV of this Schedule B and shall indemnify and hold Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Schedule B, the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and xxx for a refund
or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine. If the Company directs Executive to pay such claim and
xxx for a refund, the Company shall advance the amount of such payment to
Executive on an interest-free basis and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance, provided
that if any such advance would be in violation of the Xxxxxxxx-Xxxxx Act the
Company shall pay, rather than advance, the amounts to Executive. Any extension
of the statute of limitations relating to payment of taxes for the taxable year
of Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.
VI.
If, after
the receipt by Executive of an amount advanced by the Company pursuant to this
Schedule B, Executive becomes entitled to receive any refund with respect
to such claim, Executive shall (subject to the
Company's complying with the requirements of this Schedule B) promptly pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by
Executive of an amount advanced by the Company pursuant to this Schedule B,
a determination is made that Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify Executive in writing of
its intent to contest such denial of refund prior to the expiration of thirty
days after such determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be
paid.
