EXHIBIT 99.1
EMPLOYMENT AGREEMENT
This employment agreement ("Agreement") is made and entered into as of this 1st
day of February 2002 by and between The First Connecticut Capital Corporation, a
corporation duly organized under the laws of the State of Connecticut (the
"Company" or the "Employer"), and XXXXXXXX X. XXXXXX, an individual residing at
000 X Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 ("Employee").
WHEREAS, Employer and Employee desire that the term of this Agreement shall
begin on February 1, 2002 ("Effective Date").
WHEREAS, Employer desires to employ Employee as its President and Chief
Executive Officer, and Employee is willing to accept such employment by
Employer, on the terms and subject to the conditions set forth in this
Agreement.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
SECTION 1. DUTIES. During the term of this Agreement, Employee agrees to be
employed by and to serve Employer as its President and Chief Executive Officer,
and Employer agrees to employ and retain Employee in such capacities. Employee
shall devote substantially all of his business time, energy, and skill to the
affairs of the Employer and at all times during the term of this Agreement shall
have powers and duties at least commensurate with his position as President and
Chief Executive Officer.
SECTION 2. TERM OF EMPLOYMENT.
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2.1 DEFINITIONS. For the purposes of this Agreement the following terms
shall have the following meanings:
A. "Termination For Cause" shall mean termination by Employer of
Employee's employment by reason of Employee's willful dishonesty towards, fraud
upon, or deliberate injury or attempted injury to, Employer or by reason of
Employee's willful, malicious and material breach of this Agreement that has
resulted in material injury to Employer.
B. "Termination Other Than For Cause" shall mean termination by
Employer of Employee's employment by Employer (other than in a Termination for
Cause matter) and shall include constructive termination of Employee's
employment by reason of material breach of this Agreement by Employer (including
but not limited to a substantial change in Employee's duties or decrease in
Employee's authority), such constructive termination to be effective upon notice
from Employee to Employer of such constructive termination and which in no event
may be deemed a Termination For Cause.
C. "Voluntary Termination" shall mean termination by Employee of
Employee's employment by Employer other than (i) constructive termination as
described in subsection 2.1(B); (ii) "Termination Upon a Change in Control"; or
(iii) termination by reason of Employee's death as described in Section 2.5.
D. "Termination Upon a Change in Control" shall mean a termination
by Employee of his employment within 360 days following a "Change in Control."
E. "Change in Control" shall mean (i) the time that Employer first
determines that any person and all other persons who constitute a group (within
the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) have acquired direct or indirect beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of twenty
percent (20%) or more of Employer's outstanding securities or (ii) the first day
on which a majority of the members of the Employer's Board of Directors are not
"Continuing Directors."
F. "Continuing Directors" shall mean, as of any date of
determination, any member of the Board of Directors of Employer who (i) was a
member of that Board of Directors on December 1, 2001, (ii) has been a member of
that Board of Directors for the two years immediately preceding such date of
determination, or (iii) was nominated for election or elected to the Board of
Directors with the affirmative vote of the greater of (x) a majority of the
Continuing Directors who were members of the Board at the time of such
nomination or election or (y) at least 2 Continuing Directors.
2.2 INITIAL TERM. The term of employment of Employee by Employer shall be for a
period of three (3) years beginning on the Effective Date ("Initial Term"),
unless terminated earlier pursuant to this Section. At any time prior to the
expiration of the Initial Term, Employer and Employee may by mutual written
agreement extend Employee's employment under the terms of this Agreement for
such additional periods as they may agree.
2.3 TERMINATION FOR CAUSE. Termination for Cause may be effected by Employer at
any time during the term of this Agreement and shall be effected by written
notification to Employee. Upon Termination for Cause, Employee shall promptly be
paid all accrued salary, bonus compensation to the extent earned, vested
deferred compensation (other than pension plan or profit sharing plan benefits
which will be paid in accordance with the applicable plan), any benefits under
any plans of the Employer in which Employee is a participant to the full extent
of Employee's rights under such plans, accrued vacation pay and any appropriate
business expenses incurred by Employee in connection with his duties hereunder,
all to the date of termination, but Employee shall not be paid any other
compensation or reimbursement of any kind, including without limitation,
severance compensation.
2.4 TERMINATION OTHER THAN FOR CAUSE. Notwithstanding anything else in this
Agreement, Employer may effect a Termination Other Than for Cause at any time
upon giving written notice to Employee of such termination. Upon any Termination
Other Than For Cause, Employee shall promptly be paid all accrued salary, bonus
compensation to the extent earned, vested deferred compensation (other than
pension plan or profit sharing plan benefits which will be paid in accordance
with the applicable plan), any benefits under any plans of the Employer in which
Employee is a participant to the full extent of Employee's rights under such
plans (including accelerated vesting, if any, of awards granted to Employee
under the Employer's stock option plan), accrued vacation pay and any
appropriate business expenses incurred by Employee in connection with his duties
hereunder, all to the date of termination, and all severance compensation
provided in Section 4.2, but no other compensation or reimbursement of any kind.
In addition, Employee would be bound by the covenant not to compete as it is
discussed in this Agreement.
2.5 DEATH. In the event of Employee's death during the term of this Agreement,
Employee's employment shall be deemed to have terminated as of 90 days after the
date on which his death occurs, and Employer shall promptly pay to his estate or
such beneficiaries as Employee may from time to time designate all accrued
salary, bonus compensation to the extent earned, vested deferred compensation
(other than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any plans of the
Employer in which Employee is a participant to the full extent of Employee's
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by Employee in connection with his duties hereunder, all to
the date of termination, but Employee's estate shall not be paid any other
compensation or reimbursement of any kind, including without limitation,
severance compensation.
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2.6 VOLUNTARY TERMINATION. In the event of a Voluntary Termination, Employer
shall promptly pay all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of the Employer in which Employee is a participant to
the full extent of Employee's rights under such plans, accrued vacation pay and
any appropriate business expenses incurred by Employee in connection with his
duties hereunder, all to the date of termination, but no other compensation or
reimbursement of any kind, including without limitation, severance compensation.
In addition, Employee would be bound by the covenant not to compete as defined
in this Agreement.
2.7 TERMINATION UPON A CHANGE IN CONTROL. In the event of a Termination Upon a
Change in Control, Employee shall immediately be paid all accrued salary, bonus
compensation to the extent earned, vested deferred compensation (other than
pension plan or profit sharing plan benefits which will be paid in accordance
with the applicable plan), any benefits under any plans of the Employer in which
Employee is a participant to the full extent of Employee's rights under such
plans (including accelerated vesting, if any, of any awards granted to Employee
under Employer's Stock Option Plan), accrued vacation pay and any appropriate
business expenses incurred by Employee in connection with his duties hereunder,
all to the date of termination, and all severance compensation provided in
Section 4.1, but no other compensation or reimbursement of any kind.
2.8 TERMINATION BY EMPLOYEE FOR CAUSE. Termination for Cause may be effected by
Employee at any time during the term of this Agreement and shall be effected by
written notification to Employer. Upon Termination for Cause, Employee shall
promptly be paid all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension pay or profit sharing plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of the Employer in which Employee is a participant to
the full extent of Employee's rights under such plans, accrued vacation pay and
any appropriate business expenses incurred by Employee in connection with his
duties hereunder, all to the date of termination, but Employee shall not be paid
any other compensation or reimbursement of any kind, including without
limitation, severance compensation. Additionally, Employee will be bound by the
covenant not to compete from the date that his Termination becomes effective
until the end of the Employment term.
2.9 NOTICE OF TERMINATION. Employer may effect a termination of this Agreement
pursuant to the provisions of this Section upon giving thirty (30) days' written
notice to Employee of such termination. Employee may effect a termination of
this Agreement pursuant to the provisions of this Section upon giving thirty
(30) days' written notice to Employer of such termination.
2.10 COVENANT NOT TO COMPETE. The Company and Employee hereby covenant and agree
that for a period one (1) year from the date of his termination from the
Company, Employee will not own any interest in, manage, be employed by, or
operate a business primarily engaged in the commercial construction mortgage
lending business within Fairfield, New Haven and Middlesex Counties,
Connecticut. Employee may, however, own five percent or less of the stock in a
publicly traded entity which does engage in such business, may be employed by
the federal government, any of its agencies, the government of any state, or any
agency or political subdivision thereof, even though such governmental entity is
engaged in such business.
2.11 CONSIDERATION FOR COVENANT. As consideration for the Company's and the
Employee's covenants as set forth in Section 2.10, the Company hereby agrees to
pay Employee the severance package as discussed in Section 4 of this Agreement.
2.12 ENFORCEMENT. It is recognized that damage in the event of breach of the
covenants of the Company and Employee will be difficult if not impossible to
ascertain. It is therefore agreed that the Company, in addition to or without
limiting any other remedy or right that it might have, shall have the right to:
A. an injunction against the Employee issued by a court of competent
jurisdiction enjoining such breach; and
B. any other remedy provided by law which is not inconsistent with the
remedy set forth above.
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SECTION 3. SALARY, BENEFITS AND BONUS COMPENSATION.
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3.1 BASE SALARY. As payment for the services to be rendered by Employee as
provided in Section 1 and subject to the terms and conditions of Section 2,
Employer agrees to pay to Employee an annual "Base Salary" payable in equal
semi-monthly installments during the Initial Term as follows:
February 1, 2002 through January 31, 2003: $125,000, with annual increases
thereafter of the greater of the Consumer Price Index for Fairfield County,
Connecticut or 5%.
The Company may further increase, but in no event decrease, these amounts from
time to time as part of its compensation review process.
3.2 BONUSES. Employee shall be eligible to receive a bonus for each year (or
portion thereof) during the Initial Term and any extensions or renewals thereof,
as determined by the compensation committee of the board of directors.
3.3 ADDITIONAL BENEFITS. During the term of this Agreement, Employee shall be
entitled to the following additional benefits:
A. EMPLOYEE BENEFITS. Employee shall be eligible to participate in
such of Employer's benefits and deferred compensation plans as are now generally
available or later made generally available to executive officers of the
Employer, including, without limitation, Employer's Stock Option Plan, profit
sharing plans, annual physical examinations, dental and medical plans, personal
catastrophe and disability insurance, financial planning, retirement plans and
supplementary executive retirement plans, if any. For purposes of establishing
the length of service under any benefit plans or programs of Employer,
Employee's employment with the Employer will be deemed to have commenced on
January 15, 1970.
Notwithstanding the general availability of the foregoing benefit plans to the
Employer's executive officers, Employer will in any event provide to Employee
during the Initial Term and any extensions or renewals thereof:
(i) Medical Insurance coverage for the Employee and his wife; and
(ii) Non-statutory options to purchase that number of shares of the
Employer's common stock as may be approved by the Employer's Board of Directors
for each year that this agreement is in effect, at an exercise price equal to
the average market bid price for the thirty (30) day period preceding the date
of such options, to be granted by the Employer on or about the forty-fifth day
following the end of each year of the term hereof.
B. VACATION. Employee shall be entitled to vacation and other paid time off
in accordance with Employer's policy, but in no event will Employee be entitled
to less than four (4) weeks of paid vacation during each year during the term of
this Agreement and any extensions thereof, prorated for partial years.
C. REIMBURSEMENT FOR EXPENSES. During the Initial Term and any extensions
thereof, Employer shall reimburse Employee for reasonable and properly
documented out-of-pocket business and/or entertainment expenses incurred by
Employee in connection with his duties under this Agreement.
D. AUTOMOBILE ALLOWANCE. During the Initial Term and any extensions
thereof, Employer shall provide Employee with an allowance for in an amount
sufficient to permit the Employee to lease a new premium-class sedan or an
automobile of comparable value every three (3) years and, at Employee's request,
will assign to Employee any buy-out option with respect to such lease.
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SECTION 4. SEVERANCE COMPENSATION.
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4.1 SEVERANCE COMPENSATION IN THE EVENT OF A TERMINATION UPON A CHANGE IN
CONTROL. In the event Employee's employment is terminated in a Termination Upon
a Change in Control, Employer shall pay to Employee as severance compensation on
the dates specified in Section 3.1:
(a) His Base Salary (at the rate payable at the time of such
termination);
(b) A Bonus equal to the greater of (i) thirty three and thirty three
one hundredths percent (33.33 %) of the Employee's Base Salary and (ii) the
amount of the annual Bonus that Employer last paid to Employee, with the Bonus
amount to be paid out in equal semi-monthly installments at the same time as the
Base Salary and;
(c) All of the Additional Benefits described in Section 3.3
hereinabove; for a period equal to the greater of (i) the remaining portion of
the Initial Term and (ii) twelve (12) months from the date of such termination.
Employee is under no obligation to mitigate the amount owed Employee pursuant to
this Section by seeking other employment or otherwise. Notwithstanding anything
in this Section to the contrary, Employee may in Employee's sole discretion, by
delivery of a notice to Employer within thirty (30) days following a Termination
Upon a Change in Control, elect to receive Compensation in the form of a lump
sum severance payment by bank cashier's check equal to the present value of the
flow of cash payments that would otherwise be paid to Employee pursuant to this
Section discounted at the average of the last three months' federal funds rate
for the New York District as listed in the Wall Street Journal. Employee shall
also be entitled to an accelerated vesting of any awards granted to Employee
under the Employer's Stock Option Plan to the extent provided in the stock
option agreement entered into at the time of grant, if any. Employee shall
continue to accrue retirement benefits and shall continue to enjoy any benefits
under any plans of the Employer in which Employee is a participant to the full
extent of Employee's rights under such plans, including any perquisites provided
under this Agreement, through the remaining term of this Agreement.
4.2 SEVERANCE COMPENSATION IN THE EVENT OF A TERMINATION OTHER THAN FOR CAUSE.
In the event Employee's employment is terminated in a Termination Other Than for
Cause, Employer shall pay to Employee as severance compensation on the dates
specified in Section 3.1:
(a) His Base Salary (at the rate payable at the time of such
termination);
(b) A Bonus equal to the greater of (i) one third of the Employee's
Base Salary and (ii) the amount of the annual bonus that Employer last paid to
Employee, with the Bonus amount to be paid out in equal semi-monthly
installments at the same time as the Base Salary; and
(c) All of the Additional Benefits described in Section 3.3
hereinabove; for a period equal to the greater of (i) the remaining portion of
the Initial Term and (ii) twelve (12) months from the date of such termination,
Employee is under no obligation to mitigate the amount owed to the Employee
pursuant to this Section by seeking employment or other compensation. Employee
shall be entitled to an accelerated vesting of any awards granted to Employee
under Employer's Stock Option Plan to the extent provided in the stock option
agreement entered into at the time of grant, if any.
4.3 NO SEVERANCE COMPENSATION UPON OTHER TERMINATION. In the event of a
Voluntary Termination or Termination For Cause, Employee or his estate shall not
be paid any severance compensation.
4.4 LIMIT ON AGGREGATE COMPENSATION UPON A CHANGE IN CONTROL. Notwithstanding
anything else in this Agreement, solely in the event of a Termination Upon a
Change in Control pursuant to Section 2.7, the amount of severance compensation
paid to Employee under Section 2 and 4 or otherwise, but exclusive of any
payments to Employee in respect of any stock options then held by Employee (or
any compensation deemed to be received by Employee in connection with the
exercise of any stock options at any time) or by virtue of Employee's exercise
of a Limited Right under the Option Plan upon a Change in Control, shall not
include any amount that Employer is prohibited from deducting for federal income
tax purposes by virtue of Section 280G of the Internal Revenue Code or any
successor provision.
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SECTION 5. PAYMENT OBLIGATIONS. Employer's obligation to pay Employee the
compensation and to make the arrangements provided herein shall be
unconditional, and Employee shall have no obligation whatsoever to mitigate
damages hereunder. If litigation after a Change in Control shall be brought to
enforce or interpret any provision contained herein, Employer, to the extent
permitted by applicable law and the Employers' Articles of Incorporation and
Bylaws, hereby indemnifies Employee for Employee's reasonable attorneys' fees
and disbursements incurred in such litigation.
SECTION 6. INTENTIONALLY LEFT BLANK.
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SECTION 7. WITHHOLDINGS. All compensation and benefits to Employee hereunder
shall be reduced by all federal, state, local and other withholdings and
similar taxes and payments required by applicable law.
SECTION 8. INDEMNIFICATION. In addition to any rights to indemnification to
which Employee is entitled to under the Employer's Articles of Incorporation and
Bylaws, Employer shall indemnify Employee at all times during and after the term
of this Agreement to the maximum extent permitted under any applicable state
law, and shall pay Employee's expenses in defending any civil or criminal
action, suit, or proceeding in advance of the final disposition of such action,
suit or proceeding, to the maximum extent permitted under such applicable state
laws.
SECTION 9. NOTICES. Notice under this Agreement shall be in writing, sent by
mail, national overnight delivery service or facsimile and shall be effective
when actually delivered. If mailed, notice shall be deemed effective 48 hours
after mailing as registered or certified mail, postage prepaid, directed to the
other party at the address set forth below or such other address as the party
may indicate by written notice to the other:
To Employer:
The First Connecticut Capital Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxxxx Xxxxxxxx
With a copy to:
Xxxxx X. Xxxxxx, Esq.
Lev & Berlin, P. C.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
To Employee:
Xx. Xxxxxxxx X. Xxxxxx
000 X Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
SECTION 10. WAIVER. Failure of either party at any time to require performance
of any provision of this Agreement shall not limit the party's right to enforce
the provision, nor shall any waiver of any breach of any provision be a waiver
of any succeeding breach of any provision or a waiver of the provision itself
for any other provision.
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SECTION 11. ASSIGNMENT. Except as otherwise provided within this Agreement,
neither party hereto may transfer or assign this Agreement without prior written
consent of the other party.
SECTION 12. LAW GOVERNING. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut.
SECTION 13. ARBITRATION. If at any time during the term of this Agreement any
dispute, difference, or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter in Fairfield
County, Connecticut, agreed upon by the parties, or if no single arbiter can be
agreed upon, an arbiter or arbiters shall be selected in accordance with the
rules of the American Arbitration Association and such dispute, difference, or
disagreement shall be settled by arbitration in accordance with the then
prevailing commercial rules of the American Arbitration Association, and
judgment upon the award rendered by the arbiter may be entered in any court
having jurisdiction thereof.
SECTION 14. ATTORNEY FEES. In the event an arbitration, suit or action is
brought by any party under this Agreement to enforce any of its terms, or in any
appeal therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
SECTION 15. TITLES AND CAPTIONS. All article, section and paragraph titles or
captions contained in this Agreement are for convenience only and shall not be
deemed part of the context nor affect the interpretation of this Agreement.
SECTION 16. ENTIRE AGREEMENT. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
SECTION 17. AGREEMENT BINDING. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
SECTION 18. FURTHER ACTION. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of this Agreement.
SECTION 19. COUNTERPARTS. This Agreement may be executed in several counterparts
and all so executed shall constitute one Agreement, binding on all the parties
hereto even though all the parties are not signatories to the original or the
same counterpart.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first set forth above.
EMPLOYER
The First Connecticut Capital Corporation
/S/ XXXXX XXXXXXXX
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By: Xxxxx Xxxxxxxx
Its: Chairman
EMPLOYEE
Xxxxxxxx X. Xxxxxx
/S/ XXXXXXXX X. XXXXXX
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