EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of the 15th day of May, 2001, by and between
American Portfolios Financial Services Inc., a New York corporation (the
"Company"), and wholly owned subsidiary of American Portfolios Holding, Inc., a
Delaware corporation ("APH"), with offices located at 0000 Xxxxxxxx Xxxxxxxx
Xxx. Xxxxxxxx, XX 00000, and Xxxxxxx Xxxxxxxx, residing at 00 Xxxxxxxxxxx Xxxxx,
Xxxxxxx XX 00000 (the "Executive').
RECITAL:
The Company desires to retain the services of the Executive, and the
Executive desires to render services to the Company, on the terms and conditions
set forth herein.
NOW, THEREFORE, the Company and the Executive, intending to be legally
bound, agree as follows:
1. Employment. The Company hereby employs the Executive and the Executive
hereby accepts employment with the Company, all in accordance with the terms and
conditions hereof, for a term commencing on the date hereof and ending (subject
to the provisions of Section 5 hereof) three (3) years thereafter (the "Term").
The Term shall then extend automatically in one (1) year increments, subject to
termination by notice given by either party to the other not less than three (3)
months prior to the commencement of any one year extension.
2. Duties.
2.1. During the Term, the Executive shall be employed by the Company and
shall serve and shall perform such executive duties and have such powers
relating to the Company, as the Board of Directors may specify from time to
time, which shall be consistent with the position of the executive. The services
will be provided by the Executive primarily in Nassau County and Suffolk County,
New York area, and the Executive will travel as necessary for meetings outside
of such area.
2.2. During the Term, the Executive shall devote his full business time,
attention and energy to the business and affairs of the Company and shall not
engage, directly or indirectly, in any other business, employment or occupation.
2.3. The Executive shall not commit any action, which adversely affects, or
is likely to adversely affect the licenses for the Company's business by any
governmental authorities.
3. Compensation.
3.1. As compensation for his services and undertakings pursuant to the
terms of this Agreement, the Executive shall receive base salary ("Base Salary")
at the rate of $90,000 for the first 12 months of the term, $94,500 for the
second year of the Term and $99,225 for the third and any following years of the
Term. The salary shall be payable at such regular times and intervals as the
Company customarily pays its employees from time to time.
3.2. The Executive will participate in the companies stock option program
which will be operational before the end of 2001. The executive will receive 10
year options to purchase common stock of American Portfolios Holdings, Inc. -
The options will be exercisable at $1.00 per share with the minimum number of
shares equal to 10% of the executive's annual compensation.
3.3. The Executive shall have the right to participate, on the same basis
as executive employees of APH, in the APH's employee benefit programs,
including, without limitation, group life, health, accident and hospitalization
insurance programs covering the Executive and his dependents and disability
insurance similar in coverage to that currently provided. The Executive shall be
entitled to paid vacation of three (3) weeks per year. The Executive shall
schedule such vacation so as not to adversely impact the operations of the
Company. Any unused vacation time will carry forward and be added to the
following year.
3.4. The Company shall deduct from the Executive's compensation any
Federal, state or city withholding taxes, social security contributions and any
other amounts which may be required to be deducted or withheld by the Company
pursuant to any federal, state or city laws, rules or regulations.
3.5. The Company shall reimburse the Executive, or cause him to be
reimbursed, for all reasonable out-of-pocket expenses incurred by him in the
performance of his duties hereunder or in furtherance of the business and/or
interests of the Company; provided, however, that the Executive shall furnish to
the Company an itemized account, in substantiation of such expenditures.
3.6. The executive will participate in a Deferred Compensation plan, which
will be established before year- end 2002.
4. Indemnification. The Company undertakes, to the extent permitted by law,
to indemnify and hold the Executive harmless from and against all claims,
damages, losses and expenses, including reasonable attorneys' fees and
disbursements, arising out of the performance by the Executive of his duties
pursuant to this Agreement, in furtherance of the Company's business and within
the scope of his employment.
5. Termination.
5.1. If the Executive dies or becomes disabled during the Term, his Base
Compensation and all other rights under this Agreement except for rights under
Section 3.3 shall terminate at the end of the month during which death or
disability occurs. For purposes of this Agreement, the Executive shall be deemed
to be "disabled" if he has been unable to perform his duties for ninety (90)
consecutive days or one hundred twenty (120) days in any twelve (12) month
period, all as reasonably determined in good faith by the Board of Directors of
the Company.
5.2. The Company shall, in the manner described in the last paragraph of
Section 5.3, have the right to terminate the employment of Executive under this
Agreement and Executive shall forfeit the right to receive any and all further
payments hereunder, other than the right to receive any compensation then due
and payable to Executive pursuant to Section 3 hereof through to the date of
termination, if Executive shall have committed any material breach of any of the
provisions or covenants of this Agreement.
5.3. If the Company elects to terminate this Agreement as set forth above,
it shall deliver notice of such intention to the Executive, describing with
reasonable detail, the action or omission of the Executive constituting the act
of default (the "Termination Notice"), and prior to any termination by the
Company of the Executive's employment, the Executive shall first have an
opportunity to cure or remedy such act of default within forty-five (45) days
following the Termination Notice, and if the same is cured or remedied within
such period, such notice shall become null and void.
5.4. In the event the employment of the Executive is terminated by the
Company other than pursuant to Sections 5.1, 5.2 and 5o3 hereof, which shall
include a material failure of the Company to comply with its obligations
hereunder (provided the Company shall first have an opportunity to cure or
remedy such act of default within forty-five (45) days following notice from the
Executive, and if the same is cured or remedied within such period, such notice
shall become null and void), the Company shall continue to be obligated to pay
to Executive the Base Salary set forth herein at the rate on the termination
date for the remaining Term of this Agreement and to pay a quarterly sum for the
remaining Term of this Agreement equal to the bonuses awarded to the Executive
during the twelve (12) months preceding termination divided by four (4). The
Executive shall have the right as to him and the Company, to retain his
accounts.
6. Restrictive Covenants.
6.1. Confidential Information; Covenant not to Disclose. The Executive
covenants and undertakes that he will not at any time during or after the
termination of his employment hereunder reveal, divulge, or make known to any
person, firm, corporation, or other business organization (other than the
Company, APH or their affiliates, if any), or use for his own account any
customer lists, trade secrets, or any secret or any confidential information of
any kind used by the Company during his employment by the Company, and made
known (whether or not with the knowledge and permission of the Company, whether
or not developed, devised, or otherwise created in whole or in part by the
efforts of the Executive, and whether or not a matter of public knowledge unless
as a result of authorized disclosure) to the Executive by reason of his
employment by the Company. The Executive further covenants and agrees that he
shall retain such knowledge and information which he has acquired or shall
acquire and develop during his employment respecting such customer lists, trade
secrets, and secret or confidential information in trust for the sole benefit of
the Company, its successors and assigns.
6.2. Covenant Not to Compete; Non-Interference.
6.2.1. The Executive covenants and undertakes that, during the period of
three (3) years from the date hereof, and without regard to termination of the
Term, he will not, without the prior written consent of the Company, directly or
indirectly, and whether as principal, agent, officer, director, employee,
consultant, or otherwise, alone or in association with any other person, firm,
corporation, or other business organization, carry on, or be engaged, concerned,
or take part in, or render services to, or own, share in the earnings of, or
invest in the stock, bonds, or other securities of any person, firm,
corporation, or other business organization (other than the Company or its
affiliates, if any) engaged in a business in the Continental United States which
is in competition with any of the businesses carried on by the Company or APH (a
"Similar Business") except in the course of his employment hereunder; provided,
however, that the Executive may invest in stock, bonds, or other securities of
any Similar Business (but without otherwise participating in the activities of
such Similar Business) if (i) such stock, bonds, or other securities are listed
on any national or regional securities exchange or have been registered under
Section 12(g) of the Securities Exchange Act of 1934; and (ii) his investment
does not exceed, in the case of any class of the capital stock of any one
issuer, 5% of the issued and outstanding shares, or in the case of bonds or
other securities, 5% of the aggregate principal amount thereof issued and
outstanding. The obligations of the Executive under this Section 6.2.1 shall
terminate when the employment of the Executive terminates, unless such
termination is pursuant to Section 5.2 hereof, in which event such obligation
shall continue for the three (3) year period set forth above.
6.2.2. The Executive covenants and undertakes that during the Term and for
a period of one (1) year thereafter he will not, whether for his own account or
for the account of any other person, firm, corporation or other business
organization, interfere with the Company's relationship with, or endeavor to
entice away from the Company or APH, any person, firm, corporation or other
business organization who or which at any time during the Term, was an employee,
consultant, agent, supplier, or a customer of, or in the habit of dealing with,
the Company or APH. Notwithstanding anything to the foregoing, the Executive
shall have the right, as to him and the Company, to retain his accounts.
6.2.3. If any provision of this Article 6.2 is held by any court of
competent jurisdiction to be unenforceable because of the scope, duration or
area of applicability, such provision shall be deemed modified to the extent the
court modifies the scope, duration or area of applicability of such provision to
make it enforceable.
7. Injunction. It is recognized and hereby acknowledged by the Executive
that a breach or violation by the Executive of any of the covenants or
agreements contained in this Agreement may cause irreparable harm and damage to
the Company hereto, the monetary amount of which may be virtually impossible to
ascertain. As a result, the Executive recognizes and acknowledges that the
Company shall be entitled to an injunction, without posting any bond or security
in connection therewith, from any court of competent jurisdiction enjoining and
restraining any breach or violation of any of the restrictive covenants
contained in Section~6 of this Agreement by the Executive or his associates,
partners or agents, either directly or indirectly, and that such right to
injunction shall be cumulative and in addition to whatever other rights or
remedies the Company may possess. Nothing contained in this Section 7 shall be
construed to prevent the Company from seeking and recovering from the Executive
damages sustained as a result of any breach or violation by the Executive of any
of the covenants or agreements contained in this Agreement, and that in the
event of any such breach, the Company shall avail itself of all remedies
available both at law and at equity.
8. Compliance with Other Agreements. The Executive represents and warrants
to the Company that the execution of this Agreement by him and his performance
of his obligations hereunder will not, with or without the giving of notice, the
passage of time or both, conflict with, result in the breach of any provision of
or the termination of, or constitute a default under, any agreement to which the
Executive is a party or by which the Executive is or may be bound.
9. Miscellaneous.
9.1. Notices. Any notice or other communication to a party under this
Agreement shall be in writing, and shall be considered given when delivered
personally, or by a recognized overnight delivery company to the party at the
following address or at such other address as the party may specify by notice to
the other in the manner provided for herein:
(a) If to the Company at its address set forth above, with a copy to
Xxxxxxxx X Xxxx, Esq., 0000 Xxxxxxxx Xxxxxxxx Xxx. Xxxxxxxx, XX 00000; and
(b) If to the Executive: at his address set forth above.
Either party may change the address to which notice may be given by giving
10 days' notice of such change.
9.2. Benefit. This Agreement shall be binding upon and inure to the benefit
of the respective parties hereto and their legal representatives, successors and
assigns. Insofar as the Executive is concerned this Agreement, being personal,
cannot be assigned.
9.3. Validity. The invalidity or unenforceability of any provisions hereof
shall in no way affect the validity or enforceability of any other provision.
9.4. Entire Agreement. The Agreement constitutes the entire Agreement
between the parties, and supersedes all existing agreements between them. It may
only be changed or terminated by an instrument in writing signed by both
parties. The covenants of the Executive contained in Section 6 of this Agreement
shall survive the termination of this Agreement and the expiration of the Term.
9.5. New York Law to Govern. This Agreement shall be governed by, construed
and interpreted in accordance with the laws of the State of New York without
regard to its conflicts of law principles. Exclusive jurisdiction of any action
or proceeding arising hereunder shall reside in the Federal and New York State
courts located in Nassau County, State of New York. The party prevailing in the
dispute shall be entitled to be reimbursed for its reasonable counsel fees and
expenses for the party not prevailing.
9.6. Waiver of Breach. The failure of a party to insist on strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any term of this Agreement. Any waiver hereto must be in writing.
9.7. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.8. Paragraph Headings. Paragraph headings are inserted herein for
convenience only and are not intended to modify, limit or alter the meaning of
any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands and executed
this Agreement as of the day and year first above written.
American Portfolios Holding Inc.
By: /s/ Xxx X. Xxxxxx
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Xxx X. Xxxxxx, CEO
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx, Individually
