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EXHIBIT 10.9
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
as of the 1st day of January, 1997, by and between XXXXXXX-XXXXXX, INC., a
Delaware corporation, with its principal office located in Santa Monica,
California (the "Company"), and XXXXXXX XXXXXX, an individual ("Employee").
RECITALS:
A. Company is a diversified real estate company, whose activities
include real estate brokerage activities and auction-marketing services, and
which operates its business throughout the United States and the world.
B. Employee is an experienced executive in the real estate
brokerage and investment industry who has been employed as an executive with
Company since 1993.
C. Company desires to continue to employ Employee and Employee
desires to continue to be employed by Company.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties herein, the parties hereby agree as follows:
1. Employment. Company hereby employs Employee and
Employee hereby accepts employment to perform the duties described in Section 2
below, on the terms, conditions and covenants set forth in this Agreement.
2. Services Provided to the Company. During the term of
this Agreement, Employee shall devote one hundred percent (100%) of his working
hours in the employ of the Company, of Xxxxxxx-Xxxxxx International, a
California corporation ("KWI California") or Company's other subsidiaries
(collectively referred to herein as the Companies") to advance the business and
welfare of the Companies. Employee shall be President, Xxxxxxx-Xxxxxx
Commercial during the term hereof, and shall have such powers and duties as may
from time to time be prescribed by the Chairman and Chief Executive Officer of
the Company, which duties may, in the Company's reasonable discretion, be
changed in any legal manner from time to time. Additionally, Employee is
presently serving (and shall continue to serve for the remainder of the term
hereof at the request and in the discretion of the Company) as a director of
the Company. The duties of Employee shall include, without limitation, moving
to the greater New York Metropolitan Area no later than January 1, 1997, to
open a New York office of the Company, and to
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promote, develop and manage the business of the Tokyo, Hong Kong and Indonesia
offices (covering all of the Company's activities throughout Asia as well as
West Coast and New York offices) under the direction of the Company's senior
management. Employee shall provide the Companies with the benefit of his best
judgment and efforts in performing his duties hereunder. Employee shall be
based in Company's New York office for the entire term of this Agreement and
the performance of the Employee's duties hereunder. Employee shall report to
the Chairman and Chief Executive Officer unless and until otherwise directed by
the Company.
3. Term. Employee shall be employed by the Company
pursuant to this Agreement for a term (the "Term") beginning on January 1, 1997
and continuing through to, and terminating at the close of business on December
31, 1998 (unless earlier terminated pursuant to Section 11).
4. Commitment to the Company.
(a) During the Term, Employee shall not be
involved, individually or as an employee, principal, officer, general partner,
director or shareholder, in any real estate development activities without
first obtaining the consent and approval of a majority of the Company's Board
of Directors. The limitation contained in this Section 4 shall not apply,
however, to the ownership of no more than one percent (1%) of the capital stock
of any publicly held corporation or to participation in real estate development
activities as a limited partner. For purposes of this Section 4, Employee
shall be deemed the owner of any interests held by Employee, Employee's spouse,
or any other unemancipated minor member of Employee's family.
(b) Employee shall, at all times during the Term,
strictly adhere to and comply with all of Company's policies, rules and
procedures as they currently exist and as they may be changed by the Company.
Employee agrees that to the best of his ability and experience he will at all
times loyally and conscientiously perform all of the duties and obligations
required of him expressly or by implication by the terms of this Agreement.
5. Compensation to Employee. During the Term, the
Company shall pay to Employee compensation, subject to such deductions and
withholdings as Company may from time to time be required to make pursuant to
applicable law, governmental regulation or order (the "Compensation") and
Employee agrees to accept such Compensation as payment in full for all services
rendered by him to or for the benefit of the Companies in any capacity, as
provided in this Section 5.
(a) Employee shall be paid an annual salary equal
to $225,000 per annum, payable on such basis as is the normal pay-
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ment pattern of the Company, not to be less frequently than monthly;
(b) Employee will be eligible for a discretionary
salary review on or about January 1, 1998, based on his performance in fiscal
1997;
(c) Effective January 1, 1997, the Company shall
grant to Employee under the Company's 1992 Incentive and Non-Statutory Stock
Option Plan non-transferable incentive and non-statutory options to purchase an
aggregate of 10,000 shares of Common Stock at an exercise price equal to the
price of the Common Stock on the date the grant of such options are approved on
such terms and subject to such conditions as are set forth in the Stock Option
Agreement between the Company and Employee. The Company shall also grant
non-transferable incentive or non-statutory options to purchase an aggregate of
shares of common stock on December 31, 1997 in the following amounts based on
the "Net Profits" of Xxxxxxx-Xxxxxx Commercial:
"10,000 options at $2,000,000 "net profit" for 1997
prorated to 20,000 options at $3,000,000 "net
profits" for 1997."
The Company shall also grant non-transferable incentive or non-statutory
options to purchase an aggregate of shares of Common Stock on December 31, 1998
in the following amounts based on "net profits" of Xxxxxxx-Xxxxxx Commercial:
"5,000 options at $2,000,000 "net profit" for 1998
prorated to 15,000 options at $4,000,000 "net
profits" for 1998."
The shares of Common Stock options are at an exercise price equal to the
price of the Common Stock on the date of such grant and subject to such
conditions as are set forth in the Stock Option Agreement between the Company
and the Employee. Employee acknowledges that all such option grants are
subject to formal award by a committee of the Company's Board of Directors.
(d) In addition to the foregoing, Employee shall
be entitled to an annual incentive award based on the "net profits" of the
Xxxxxxx-Xxxxxx Commercial as follows:
$0 to $3,000,000 net profit 12-1/2% Bonus
$3,000,001 to $5,000,000 net profit 15% Bonus
$5,000,001 and over net profit 20% Bonus
"Net Profits" shall mean the gross revenue realized by Xxxxxxx-Xxxxxx
Commercial during the applicable fiscal year less costs and expenses properly
charged to such gross revenue according to generally acceptable accounting
principles as determined in the
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commercially reasonable judgment of Company's Chief Financial Officer,
including without limitation Employee's salary and benefits, and the salaries,
bonuses and benefits of all employees of the Commercial Division, and a charge
for general corporate overhead.
6 . Expenses. Employee shall be entitled to reimbursement from
the Company for any out-of-pocket expenses, including travel expenses
(excluding all personal automobile expenses) incurred by Employee in the
ordinary course of providing his services hereunder. Such reimbursement shall
be made by the Company within thirty (30) days after receipt of a statement
therefor from Employee setting forth in reasonable detail the expenses for
which reimbursement is requested, accompanied by customary documentation
evidencing such expenses.
(a) Employee shall be entitled to reimbursement for the
actual reasonable costs incurred in relocating to New York from Tokyo,
including moving costs, airfare, and room and board during the move for
Employee's family. Additionally, Company shall pay directly or reimburse
Employee for two months rental of an apartment at the Bristol Plaza in New York
City, and $12,000 for closing costs and associated fees for acquired real
estate for Employee's personal and family residence.
(b) Company shall provide Employee with consulting
services of a Big 6 Accounting firm to structure personal tax issues of
Employee arising under this Agreement. Annual cost of such tax advice shall
not exceed $1,500 per annum.
(c) In addition to the foregoing, Company will reimburse
Employee, or pay directly, for the following expenses:
(1) Car allowance of $500 per month;
(2) Initiation fees for a Country Club
membership of up to $40,000 based on Club
selection subject to Employee using his best
efforts to secure a junior membership and
Company and Employee agreeing on the terms of
how Company will provided the initiation fee
following Employee's selection of a Country
Club and a review of such Country Club's
membership rules, and provided, that monthly
dues and assessments will be the
responsibility of Employee, and employee will
arrange to have the certificate of membership
rest in the name of Xxxxxxx-Xxxxxx
International; and
(3) Four weeks paid vacation time in each of
calendar years 1997 and 1998.
7. Staff. The New York office of the Company shall be staffed
and operated in accordance with the budget and guidelines established by the
Chairman and Chief Executive Officer from time to time.
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8. Insurance Coverage and Benefits. During the Term, the Company
will provide Employee with coverage under the major medical, hospital and other
insurance programs maintained by the Company for its other employees generally.
In addition, Employee shall receive during the Term all other Company-provided
benefits which are, from time to time, made available by the Company to its
officers, including without limitation, the K-W Profit Sharing and 401(K) Plan,
to the extent the Company elects to make contributions to such Plan from time
to time.
9. Non-Competition Covenant.
(a) During the Term hereof and, only in the event of
Employee's voluntary resignation during the Term, for period of three (3) years
thereafter, Employee will not, directly or indirectly:
(1) in any manner induce, attempt to induce, or
assist others to induce or attempt to induce any employee, partner, joint
venturer, independent contractor, agent or customer of the Company to terminate
its, his or her association with the Company, or do anything to interfere with
the relationship between the Company and such person or entity or other persons
or entities dealing with the Company; or
(2) in any capacity (whether as an individual,
promoter, proprietor, general partner, joint venturer, employee, agent,
consultant, director, officer, manager, shareholder or otherwise) work for, act
as a consultant or advisor to, own any interest in, or otherwise be connected
in any manner with the ownership, management, operation or control of
(collectively, "Associated With"), any person or entity which, at any time
during the Term, engages in the same businesses or similar businesses engaged
in by the Company during the Term, including without limitation the real estate
auction-marketing business, without the consent of the Board of Directors of
the Company. Employee acknowledges that the Company's existing services are
marketed internationally and that its business plans include marketing
throughout the entire world either directly or through others. Accordingly,
the restrictions in this Section 9 shall extend to operations in any part of
the world, during the Term thereof.
(b) Nothing in this Section 9 shall restrict Employee
from owning not more than one percent (1%) of the outstanding shares of any
class of securities of a publicly-held issuer subject to the public reporting
requirements of the Securities Exchange Act of 1934, as amended, or any limited
partner interest in a limited partnership or similar passive investment
interest so long as the nature of such investment prevents, pursuant to
applicable law, Employee's control of the management of the issuer of such
investment interest.
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(c) The parties hereto intend that the covenants and
agreements contained in this Section 9 shall be deemed to be a series of
separate covenants and agreements, one for each and every country, county,
state, city and other jurisdiction in the world with respect to which the
Company's business has been or is hereafter carried on. If any of the
foregoing is determined by any court of competent jurisdiction to be invalid or
unenforceable by reason of such agreement extending for too great a period of
time or over too great a geographical area, or by reason of its being too
extensive in any other respect, such agreement shall be interpreted to extend
only over the maximum period of time and geographical area and to the maximum
extent enforceable, all as determined by such court in such action. Any
determination that any provision hereof is invalid or unenforceable, in whole
or in part, shall have no effect on the validity or enforceability of any
remaining provision hereof.
(d) Notwithstanding the foregoing, nothing herein shall
prevent Employee, following the termination of his employment or the end of the
Term, whichever is later, from being Associated With any person or entity
engaged in any real estate activities or matters other than real estate auction
activities or other activities which constitute a primary line of business of
the Company at the time of such termination. Employee represents and warrants
that he is not restricted or prohibited in any way from entering into this
Agreement or performing services hereunder at any time, whether by
non-competition, covenant, or otherwise, and shall indemnify, defend and hold
the Company harmless from and against any damages, claims, costs (including
attorneys' fees) or liabilities as a result of the incorrectness of such
representation and warranty.
10. Confidential and proprietary Information. Employee recognizes
that he will occupy a position of trust with respect to business information of
a confidential or proprietary nature which is the property of the Companies and
which has been and will be imparted to him from time to time in the course of
the performance of his duties under this Agreement. Employee agrees that:
(a) he shall not at any time, whether during the Term or
thereafter, use, divulge or disclose directly or indirectly any confidential or
proprietary information of the Companies to any person, except that he may use
and disclose to other Company personnel such confidential and proprietary
information in the course of the performance of his duties hereunder or when
legally required to do so in connection with any pending litigation or
administrative inquiry; and
(b) he shall return promptly upon the termination of this
Agreement or otherwise upon the request of the Company any and all copies of
any documentation or materials containing any confidential or proprietary
information of the Companies.
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For purposes of this Agreement, the term "confidential or
proprietary information" of the Companies shall include all information which
is owned by the Companies and which is not at the time publicly available or
generally known to persons engaged in businesses similar to that of the
Companies, including practices, procedures and methods and other facts relating
to the business of the Companies; practices, procedures and methods and other
facts related to sales, marketing, advertising, promotions, financial matters,
clients, client lists or the Companies and similar information of a
confidential and proprietary nature. Employer agrees that his breach of this
Section 10 will cause irreparable harm to the Company. Employee agrees that
the remedy at law for any breach by him of this Section 10 will be inadequate
and, in addition to any other remedy available to the Company, the Company
shall be entitled to injunctive relief for any actual or threatened breach of
this Section 10 without proof that any actual damages have been caused by such
breach, and without any need to post bond or similar security.
11. Termination.
(a) This Agreement and Employee's employment by
the Companies shall terminate upon the death or incapacity of Employee.
Incapacity shall mean the inability to perform the services due hereunder for a
consecutive ninety (90) calendar day period.
(b) This Agreement and Employee's employment by
the Companies may also be terminated by the Company:
(1) in the event of a material breach of
this Agreement by Employee which is not corrected within ten (10) days after
the Company's written notice of the material breach to Employee where such
material breach can be cured immediately or, if such material breach cannot be
corrected within ten (10) days of such notice, Employee fails to diligently and
continually pursue a correction which is effected as soon as possible; provided
that the Company shall be deemed to have waived its right to terminate Employee
pursuant to this Section 11(b) (1) with respect to any particular material
breach by Employee if Employee cures such material breach, even after the
10-day cure period for material breaches that can be cured immediately or the
extended period for material breaches not able to be immediately cured, prior
to the Company acting to terminate Employee; and
(2) for cause which shall mean only
Employee's violation of criminal law, material wrongful act or omission,
malfeasance or gross negligence which causes or can reasonably be anticipated
to cause material damage to the business or reputation of the Companies.
(c) This Agreement may also be terminated by
mutual agreement in writing by the Company and Employee.
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(d) This Agreement may be terminated by Employee
at any time, provided that such termination shall have the effect set forth in
Section 11(e) below.
(e) Termination of this Agreement pursuant to
this Section 11 shall not relieve Employee of his obligations to comply with
Section 10 hereof, which provisions shall survive the termination of this
Agreement. If and only if, Employee resigns due to the Company's material
breach of this Agreement which is not corrected within ten (10) days after the
Employee's written notice of the breach to the Company, then Employee shall be
relieved of his obligations under Section 10 hereof. If Employee resigns for
any other reason then his obligations under Section 10 hereof will continue to
apply. Upon the termination of this Agreement by the Company pursuant to
Section 11(b) or upon the resignation of Employee during the Term other than
following an uncured material breach by the Company hereunder, any further
compensation to Employee shall terminate on the date this Agreement is so
terminated by the Company or Employee resigns and Employee shall be entitled to
receive only the Compensation that he has accrued but is unpaid as of the date
of termination. In all other cases, Employee, or his estate, will receive all
salary, bonuses and fringe benefits (or if such fringe benefits cannot be
provided pursuant to the terms of the applicable plans, comparable benefits)
due hereunder and remaining to be paid during the Term in the ordinary course,
provided that the payment of fringe or comparable benefits shall be subject to
the availability of such benefits following Employee's termination of
employment at no additional cost above what was previously being paid by the
Company. Employee agrees to cooperate with the Company to provide for a smooth
transition upon Employee's termination.
12. General Provisions.
(a) Notices. Any notice to be given pursuant to
this Agreement shall be in writing and, in the absence of receipted hand
delivery, shall be deemed duly given when mailed, if the same shall be sent by
certified or registered mail, return receipt requested, or by a nationally
recognized overnight courier and the mailing date shall be deemed the date from
which all time periods pertaining to a date of notice shall run. Notices shall
be addressed to the parties at the following addresses:
If to the Company, to: Xxxxxxx-Xxxxxx, Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Chairman and
Chief Executive Officer
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If to Employee, to: Mr. Xxxxxxx Xxxxxx
c/x Xxxxxx Family
00 Xxxx Xxxxxxx
Xxxxxxxx, XX 00000
With a copy to: Xxxxxx X. Xxxxxx, Esq.
White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Either party can change its address for receipt or notices by a notice given in
accordance with the foregoing.
(b) Successors and Assigns. This Agreement shall
be binding upon and shall inure to the benefit of the Company and any
successors whether by merger, consolidation, transfer of substantially all
assets or similar transaction, and it shall be binding upon and shall inure to
the benefit of Employee and his heirs and legal representatives. This
Agreement is personal to Employee and shall not be assignable by Employee.
(c) Waiver of Breach. The waiver by the Company
or Employee of a breach of any provision of this Agreement by the other shall
not operate or be construed as a waiver of any subsequent breach by the other.
(d) Entire Agreement/Modification. This
Agreement shall constitute the entire agreement between the parties hereto with
respect to the subject matter hereof, and shall supersede all previous oral and
written and all contemporaneous oral negotiations, commitments, agreements and
understandings relating hereto. Any modification of this Agreement shall be
effective only if it is in writing and signed by the parties to this Agreement.
(e) Severability. Any provision of this
Agreement which is deemed invalid, illegal or unenforceable in any jurisdiction
shall, as to that jurisdiction and subject to this paragraph be ineffective to
the extent of such invalidity, illegality or unenforceability, without
affecting in any way the remaining provisions hereof in such jurisdiction or
rendering that or any other provisions of this Agreement invalid, illegal, or
unenforceable in any other jurisdiction. If any covenant should be deemed
invalid, illegal or unenforceable because its scope is considered excessive,
such covenant shall be modified so that the scope of the covenant is reduced
only to the minimum extent necessary to render the modified covenant valid,
legal and enforceable.
(f) Counterparts. This Agreement may be executed
in a number of identical counterparts, each of which shall be deemed an
original for all purposes.
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(g) Attorneys' Fees. If any action be commenced
(including an appeal thereof) to enforce any of the provisions of this Agreement
or to enforce a judgment, whether or not such action is prosecuted to judgment
("Action") , the unsuccessful party therein, shall pay all costs incurred by
the prevailing party therein, including reasonable attorneys' fees and costs,
court costs and reimbursements for any other expenses incurred in connection
therewith. The right to recover post-judgment attorneys' fees and costs shall
not be deemed waived if not included in any judgment, shall survive the final
judgment in any Action, and shall not be deemed merged into such judgment.
This Section 12 (g) shall survive the termination of this Agreement.
(h) Choice of Law. This Agreement is entered
into in California and the parties stipulate that the validity of this
Agreement and the interpretation and performance of all of its terms shall be
governed by and construed in accordance with the laws of the State of
California.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
"EMPLOYEE:
/s/XXXXXXX XXXXXX
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XXXXXXX XXXXXX
"Company"
XXXXXXX-XXXXXX, INC.,
a Delaware corporation
By: /s/XXXXXXX X. XXXXXXXX
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Xxxxxxx X. XxXxxxxx
Chairman and Chief Executive
Officer
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