AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement ("Agreement"), is entered
into as of January 1, 1998, by and between Insignia Financial Group, Inc., a
Delaware corporation with an office at One Insignia Financial Plaza, Greenville,
South Carolina (the "Company"), and Xxxxxx Xxxxxx, an individual with an office
at One Insignia Financial Plaza, Greenville, SC 29062 (the "Executive").
Background
The Company and the Executive have previously entered into an Employment
Agreement, which agreement has been previously amended. The Company desires to
assure itself of the services of the Executive for the additional period
provided in this Agreement, and the Executive is willing to serve in the employ
of the Company for such period upon the terms and conditions provided in this
Agreement.
Statement of Agreement
In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts such employment, in each case upon the terms
and conditions set forth herein, for a period commencing on January 1, 1998 (the
"Commencement Date") and ending on December 31, 2000 or such earlier date as
provided herein (the "Expiration Date") (such period, as it may be so
terminated, being referred to herein as the "Employment Period").
Section 2. Duties and Services.
(a) Offices. During the Employment Period, the Executive shall serve as
Chief Operating Officer and Treasurer of the Company and, at the Company's
request, as an officer or director of one or more of its subsidiaries. In the
performance of his duties hereunder, the Executive shall report to and shall be
responsible only to the Chief Executive Officer and the Board of Directors of
the Company. The Executive agrees to his employment as described in this Section
2, and agrees to devote substantially all of his working time and efforts to the
performance of his duties hereunder. The Executive shall be available to travel
as the needs of the business of the Company reasonably require.
(b) Location of Office. During the Employment Period, the Executive's
office shall be located at One Insignia Financial Plaza, Greenville, SC 29062 or
at such other location as the Company and the Executive shall mutually agree.
The Company will provide the Executive with his current office, an executive
secretary reasonably acceptable to him, and other reasonable support appropriate
to his duties hereunder.
(c) Primary Responsibilities. Subject to Section 2(a), during the
Employment Period, the Executive shall have such responsibilities as are
assigned to him by the Chief Executive Officer and the Board of Directors of the
Company. The Executive shall comply with all written policies and procedures of
the Company.
(d) Consulting. If the Executive's title, powers or duties within the
Company have been diminished after or in connection with an Extraordinary
Transaction (as defined in Section 4(d)) or a Material Asset Disposition (as
defined in Section 4(e)), other than as a result of a Termination For Cause (as
defined in Section 7(a)(iv)), without the prior written consent of Executive,
then Executive can elect in writing to convert this Agreement into a consulting
agreement. Under the terms of the consulting agreement, the Executive shall
consult with respect to the assets and liabilities of the Company as they
existed immediately before the Extraordinary Transaction or the Material Asset
Disposition. Such consultation shall be at the reasonable times convenient to
the Executive on no less than five business days' notice, the parties
recognizing that the Executive during the consulting period likely will have
significant other business interests. The terms and conditions of this Agreement
(including all rights hereunder of the Executive as to salary, bonus, payments
and benefits) shall continue unabridged during the period of consulting. The
other provisions of this Agreement also shall remain in effect except for
Section 2 as modified by this Section 2(d) and except that Section 7(a)(iv)(B)
and Section 7(a)(iv)(C) shall be deleted. The "Employment Period" shall be
deemed to include the period during which the Executive is obligated to provide
consulting services hereunder and therefore, to the extent permitted by law, the
conversion shall not be deemed a termination for any purpose and, if the law
requires that the conversion be treated as a termination, then the Company must
provide the Executive with benefits equivalent to those he would have received
had there been no termination.
Section 3. Key Man Life Insurance. The Company shall have the right to
place a "key man" life insurance policy, providing a death benefit of up to
$15,000,000 upon the life of the Executive, for which the Company is the
beneficiary. In connection therewith, the Executive hereby authorizes the
Company, at its sole cost and expense, to purchase and maintain upon the life of
the Executive such insurance policy, and agrees to submit to such reasonable
medical examinations, and to provide and/or consent to the release of such
medical information, as may be necessary or desirable in order to secure the
issuance thereof. Except as may be required in order to obtain insurance
coverage as described in this Section 3, any and all information about
Employee's health or medical records shall be kept confidential by the Company
and shall not be disclosed by the Company to any party without the Executive's
prior written consent.
Section 4. Compensation. As full compensation for his services hereunder,
the Company shall pay, grant, issue or give, as the case may be, to the
Executive the compensation and benefits specified below:
(a) Base Salary. Subject to the provisions of Section 7, a base salary
at the rate of $400,000 per annum ("Base Salary"), which Base Salary shall
be paid to the Executive in accordance with the customary executive payroll
policy of the Company as in effect from time to time; provided, however,
that the Base Salary, as in effect at any time and from time to time, may
be further increased by action of the Board of Directors; and further
provided, however, that in no event shall the Base Salary be decreased at
any time or from time to time without the prior consent of the Executive,
which consent may be granted or withheld in the Executive's sole
discretion.
(b) Annual Discretionary Bonus. An annual discretionary bonus
("Discretionary Bonus"), the amount of which, if any, shall be determined
by the Board of Directors of the Company in its sole and absolute
discretion, which shall be paid to the Executive, with respect to any
fiscal year of the Company, before the expiration of 74 days after the end
of such fiscal year. In making bonus determinations, the Company shall
evaluate the Executive's performance in accordance with the standard bonus
guidelines used by the Company for executives of the Company in the same or
a similar position as the Executive. In the event of an Extraordinary
Transaction, as defined herein, in any year, then the Company shall,
promptly after the Extraordinary Transaction, pay an amount equal to the
discretionary bonus the Executive received with respect to the year prior
to the year in which the Extraordinary Transaction occurred multiplied by a
fraction the numerator of which is the number of days between the beginning
of the year and the occurrence of the Extraordinary Transaction and the
denominator of which is 365.
(c) Loan. The Company will, upon written request from the Executive,
provide a loan to the Executive in a principal amount not to exceed
$500,000 (the "Loan"). Interest on the Loan shall accrue at a rate of 6.5%
per annum and shall be payable at maturity. The Loan shall mature on
January 6, 2003. Subject to the other terms of this paragraph, the loan
will be forgiven pro-rata over five years beginning January 1, 1998. All
accrued interest on the Loan shall be forgiven on the same basis as set
forth in this Section 4(c). In the event of a Death Termination Event or a
Disability Termination Event (both as hereinafter defined), all outstanding
principal of and accrued interest on the Loan shall be forgiven. In the
event of a Termination for Cause of the Executive or the voluntary
resignation by Executive prior to December 31, 2000, any and all amounts
outstanding under the Loan, including accrued and unpaid interest, shall be
due and payable to the Company within 20 business days of such event. In
the event the Executive is Terminated Without Cause or remains employed by
the Company through December 31, 2000, the Loan will continue thereafter to
be forgiven as provided above over such five-year period.
(d) Extraordinary Transaction. In the event of an Extraordinary
Transaction, whether or not the Executive elects to convert this Agreement
into a consulting agreement, the Company shall, in addition to remaining
obligated under the terms of this Agreement, immediately after the
Extraordinary Transaction pay the Executive a payment equal to (i) the
difference between the discretionary bonus the Executive received from the
Company with respect to the year prior to the year in which the
Extraordinary Transaction occurred and the amount paid pursuant to the last
sentence of Section 4(b), since the Executive may be forfeiting the right
to receive the balance of such bonus, and (ii) $33,333 per month for each
month or part thereof after June 30, 1998 in which the Extraordinary
Transaction occurs. Thus should an Extraordinary Transaction occur on
August 15, 1998, the payment pursuant to Section 4(d)(ii) would be $66,666.
An "Extraordinary Transaction" as used herein means the occurrence of
any one or more of the following:
(i) the Company ceases to be required to file reports under
Section 13 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor to that Section;
(ii) a majority of the members of the Board of Directors of the
Company are not persons who (a) had been directors of the Company for
at least the preceding 12 consecutive months or (b) when they
initially were elected to the Board (x) were nominated (if they were
elected by the stockholders) or elected (if they were elected by the
directors) with the affirmative vote of two-thirds of the directors
who were Continuing Directors at the time of the nomination or
election by the Board and (y) were not elected as a result of an
actual or threatened solicitation of proxies or consents by a person
other than the Board of Directors of the Company or an agreement
intended to avoid or settle such a proxy solicitation (the directors
described in clauses (a) and (b) being "Continuing Directors");
(iii) any "person," including a "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act, but excluding the
Company, any of its present affiliates (as such term is defined in
Rule 405 promulgated under the Securities Act of 1933, as amended)
("Affiliates"), or any employee benefit plan of the Company or any of
its present Affiliates) is or becomes the "beneficial owner" (as
defined in Rule 13(d) (3) under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of
the combined voting power of the Company's then outstanding
securities;
(iv) the purchase of Class A Common Stock of the Company ("Common
Stock") pursuant to any tender or exchange offer or otherwise made by
any "person," including a "group" (as such terms are used in Sections
13 (d) and 14 (d) of the Exchange Act), other than the Company, any of
its present Affiliates, or any employee benefit plan of the Company or
any of its present Affiliates, which results in "beneficial ownership"
(as so defined) of 30% or more of the outstanding Common Stock;
(v) the execution and delivery of a definitive agreement by the
Company that provides for a merger or consolidation, or a transaction
having a similar effect (unless such merger, consolidation or similar
action is with a subsidiary of the Company or with another company, a
majority of whose outstanding capital stock is owned by the same
persons or entities who own a majority of the Company's outstanding
Common Stock at such time), where (A) the Company is not the surviving
corporation, (B) the majority of the Common Stock of the Company is no
longer held by the persons who were the stockholders of the Company
immediately prior to the transaction, (C) the sale, lease, exchange or
other disposition of all or substantially all of the assets of the
Company but not the spin off of one division, the sale of one
division, or both (where "division" means the present residential
business (including IPT) and the present commercial business), and not
the trading of marketable securities held as portfolio securities or
(D) the Company's Common Stock is converted into cash, securities or
other property (other than the common stock of a company into which
the Company is merged), provided, however, that, in the event that the
contemplated merger, consolidation or similar transaction is not
consummated, then any rights that may arise under this paragraph (v)
by virtue of such Change of Control shall not apply; and
(vi) upon the consummation of any transaction requiring
stockholder approval for the acquisition of the Company by an entity
other than the Company or a subsidiary through purchase of assets, or
by merger, or otherwise but not the spin off of one division, the sale
of one division, or both.
(e) Material Asset Disposition Bonus. In the event of a Material Asset
Disposition, as defined below, in consideration of the services performed
by the Executive and consistent with the prior terms of the Executive's
employment, the Company (or, in the case of clause (iii) below, the
spin-off entity or, in default thereof, the Company) shall pay to the
Executive within 15 days of the consummation of such Material Asset
Disposition, a cash bonus equal to .25% of the consideration (valued as set
forth below) received by the Company or its shareholders as a result of
such Material Asset Disposition. A "Material Asset Disposition" as used
herein means, without duplication for the same matter: (i) a transaction
which results in a majority of the equity interest in the Company being
beneficially owned by any "person," including any "group" (as such terms
are used in Section 13(d) and 14(d) of the Exchange Act), other than any of
the Company's present affiliates; (ii) a sale or series of sales by the
Company of subsidiaries, divisions, assets (other than marketable
securities), or operating businesses representing in the aggregate 20% or
more of the Company's 1998 budgeted EBITDA and each such sale after such
threshold has been reached; (iii) a spin off, or series of spin offs, of
any of the Company's divisions, operating businesses or subsidiaries that
meet the 1998 budgeted EBITDA threshold set forth in (ii) above which is
followed by a subsequent Extraordinary Transaction (as defined above, but
with reference to the spun off entity rather than the Company) of the
subsidiary, division or business spun off within five years following such
spin off; or (iv) any transaction which results in any one or more of the
Company's divisions, subsidiaries or operating businesses, representing in
the aggregate 20% or more of the Company's EBITDA, being owned by a third
party. In the event a Material Asset Disposition is consummated in one or
more steps, including, without limitation, by way of second-step merger,
any additional consideration paid or to be paid in any subsequent step in
the Material Asset Disposition in respect of (x) subsidiaries, divisions,
assets (other than marketable securities), or operating businesses of the
Company and (y) capital stock of the Company (and any securities
convertible into, or options, warrants or other rights to acquire, such
capital stock) shall be included for purposes of calculating the bonus
payable pursuant to this Section 4(e). "Consideration" shall not include
the assumption, directly or indirectly, or repayment of indebtedness or
other liabilities of the Company but shall include the assumption, directly
or indirectly, or repayment of the Trust Convertible Preferred Securities
presently outstanding or any similar securities. If all or a portion of the
consideration paid in the Material Asset Disposition is other than cash or
securities, then the value of such non-cash consideration shall be the fair
market value thereof on the date the Material Asset Disposition is
consummated as mutually agreed upon in good faith by the Company's Board of
Directors and the Executive. If such non-cash consideration consists of
common stock, options, warrants or rights for which a public trading market
existed prior to the consummation of the Material Asset Disposition, then
the value of such securities shall be determined by the closing or last
sales price thereof on the date of the consummation of the Material Asset
Disposition; provided, however, that if such non-cash consideration
consists of newly-issued, publicly-traded common stock, options, warrants
or rights for which no public trading market existed prior to the
consummation of the Material Asset Disposition, then the value thereof
shall be the average of the closing prices for the 20 trading days
subsequent to the fifth trading day after the consummation of the Material
Asset Disposition. In such event, the portion of the bonus payable to the
Executive pursuant to this Section 4(e) attributable to such securities
shall be paid on the 30th trading day subsequent to consummation of the
Material Asset Disposition. If no public market exists for the common
stock, options, warrants or other rights issued in the Material Asset
Disposition, then the value of thereof shall be as mutually agreed upon in
good faith by the Company's Board of Directors and the Executive. If the
non-cash consideration paid in the Material Asset Disposition consists of
preferred stock or debt securities (regardless of whether a public trading
market existed for such preferred stock or debt securities prior to
consummation of the Material Asset Disposition or exists thereafter), the
value hereof shall be the face or principal amount, as the case may be. Any
amounts payable by a purchaser to the Company, any shareholder of the
Company or any Affiliate of either the Company or any shareholder of the
Company in connection with a non-competition, employment, consulting,
licensing, supply or other agreement shall be deemed to be part of the
consideration paid in the Material Asset Disposition. If all or a portion
of the consideration payable in connection with the Material Asset
Disposition includes contingent future payments, then the Company shall pay
to the Executive, upon consummation of such Material Asset Disposition, an
additional cash fee, determined in accordance with this Section 4(e) as,
when and if such contingency payments are received. However, in the event
of an installment purchase at a fixed price and a fixed time schedule, the
Company agrees to pay the Executive, upon consummation of the Material
Asset Disposition, a cash fee determined in accordance with this Section
4(e) based on the present value of such installment payments using a
discount rate of 6.5%.
(f) Fringe Benefit Programs. In addition to the other benefits
provided to the Executive hereunder and to the extent he satisfies the
eligibility requirements thereof and to the extent permitted by law,
participation in fringe benefit programs made available generally to
employees of the Company, including, without limitation, pension, profit
sharing, stock purchase, savings, bonus, disability, life insurance, health
insurance, hospitalization, dental, deferred compensation and other plans
and policies authorized on the date hereof or in the future.
(g) Expense Reimbursement. Reimbursement of the Executive for all
out-of-pocket expenses incurred by him in connection with the performance
of his duties hereunder, including professional activities and membership
fees and dues relating to professional organizations of which the Executive
currently is a member or is directed in writing to be a member by the Chief
Executive Officer of the Company and including, without limitation,
expenses required for professional licensing of the Executive, and business
related cell phone expense in accordance with the Company's written
policies and procedures, all upon the presentation of appropriate
documentation therefore in accordance with the then regular procedures of
the Company.
(h) Perquisites. In addition to the other benefits provided to the
Executive hereunder, and at the sole cost and expense of the Company except
as otherwise provided herein:
(i) A membership and annual dues at the city or country club of the
Executive's choice, subject to approval by the Chief Executive Officer of
the Company;
(ii) Reasonable consultations with financial and tax advisors or
counselors, including annual income tax preparation and audits relating to
the period during which the Executive was employed by the Company (whether
or not under this Agreement) and whether such audit expense is incurred
during or after the Employment Period;
(iii) The cost of term life insurance, providing a death benefit of up
to five million dollars ($5,000,000) upon the life of the Executive, the
beneficiaries and owner of which shall be designated by the Executive and
which term insurance shall be upon terms and conditions, and in form and
substance available at the time, and otherwise reasonably satisfactory to
the Executive in his sole discretion and which term life insurance shall be
paid for by the Company during the Employment Period at the Company's sole
cost and expense. If the Company is the owner of such policy, upon
termination of the Executive's employment by the Company, the ownership of
such term life insurance shall be transferred to the Executive or his
designee. At Executive's option, Executive may apply the cost of such a
policy to some other benefit of Executive's choice;
(iv) The Executive shall be entitled to reasonable business usage of
aircraft owned or leased by the Company as determined by the Chief
Executive Officer of the Company. With prior consent from the Chief
Executive Officer of the Company, the Executive may utilize such aircraft
for personal use and in such event the cost of such use shall be added to
and included in the Executive's compensation for federal, state and local
income tax purposes; and
(v) The Executive shall be entitled to an annual automobile allowance
of up to one thousand dollars ($1,000), payable monthly in arrears.
(i) Vacations, etc. Leaves-of-absence in accordance with the then regular
procedures of the Company governing senior executives, and four weeks of paid
vacation per year on a non-cumulative basis.
(j) Parachute Limit. Notwithstanding anything else herein, to the extent
the Executive would be subject to the excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), on such amounts or
benefits received from the Company required to be included in the calculation of
parachute payments for purposes of Sections 280G and 4999 of the Code (the
"Parachute Payments"), the amounts of any Parachute Payments shall be
automatically reduced as described herein to an amount one dollar less than an
amount that would subject the Executive to the excise tax under Section 4999 of
the Code (the "Parachute Limit"); provided, however, that this Section 4(j)
shall apply only if the reduced Parachute Payments received by the Executive
(after taking into account further reductions for applicable federal, state and
local income, social security and other taxes) would be greater than the
unreduced Parachute Payments to be received by the Executive minus (i) the
excise tax payable under Section 4999 of the Code with respect to such Parachute
Payments and (ii) all applicable federal, state and local income, social
security and other taxes on such Parachute Payments. The foregoing reduction
shall be applied to the Parachute Payments as follows: (i) first by reducing the
amounts payable under Section 4(d) (if such amounts are included in such
computation) until such amounts have been exhausted up to the Parachute Limit,
(ii) then by reducing any such other amounts and benefits (other than awards
described in (iii) below) as determined by the Company, and (iii)
notwithstanding anything contained herein or in an option, warrant or restricted
stock agreement, award or plan relating to the Executive then, on a pro-rata
basis up to the Parachute Limit, by failing to accelerate the vesting (without
affecting the right to vest) upon a change in ownership or effective control or
change in ownership of a substantial portion of assets (as described in Code
Section 280G(b)(2)(A)(i)) of any unvested awards of shares of restricted stock
of the Company previously granted to Executive and options or warrants to
purchase shares of the Company previously granted to Executive. Notwithstanding
the foregoing, the Company shall treat any of the amounts described in (i)
through (iii) above as a Parachute Payment solely to the extent required under
applicable law.
Section 5. Representations, Warranties and Covenants of the Executive. The
Executive represents and warrants to the Company as follows:
(a) He is under no contractual or other restriction or obligation
which is inconsistent with the execution of this Agreement, the performance
of his duties hereunder, or the other rights of the Company hereunder; and
(b) He is able to perform the essential functions of his duties
hereunder with or without reasonable accommodations.
Section 6. Non-Solicitation; Confidentiality.
(a) Non-Solicitation.
(1) In recognition of the close personal contact the Executive
has or will have with the Company's and its affiliates' trade secrets,
confidential information, records and business relationships, and the
position of trust in which the Company holds the Executive, the
Executive further covenants and agrees that while the Executive is
employed by the Company and for a period lasting for one (1) year
following the cessation of the Executive's employment with the
Company, the Executive will not, either for himself or an officer,
director, employee, agent, representative, independent contractor or
in any relationship to any person, partnership, corporation, or other
entity (except the Company or its Affiliates or subsidiaries),
solicit, directly or by assisting others, business from any of the
Company's customers or clients with whom the Executive has had
material contact (as defined below) during the twelve (12) month
period preceding the date of cessation of the Executive's employment
with the Company, for the purpose of providing goods or services to
said customers and clients. For purposes of this Agreement, "material
contact" exists between the Executive and any of the Company's
customers or clients (i) with whom the Executive actually dealt; or
(ii) whose dealings with the Company were handled, coordinated or
supervised by the Executive; or (iii) about whom the Executive
obtained confidential information in the ordinary course of business
through the Executive's association with the Company.
(2) The Executive covenants and agrees that, for a period ending
on the second anniversary of the date on which the Executive's
employment with the Company ceases, the Executive will not solicit,
employ, engage or in any manner encourage any employee, broker or
sales person of the Company, or any of its respective subsidiaries or
affiliates to leave their employ for the employ of a person or entity
which directly or indirectly competes with the Company, or any of its
respective subsidiaries or affiliates.
(3) The Executive covenants and agrees that, for a period ending
on the second anniversary of the date on which the Executive's
employment with the Company ceases, the Executive will not purchase
for his own account any limited partnership units of partnerships
that, on the date of purchase, are controlled directly or indirectly
by the Company, except that the provisions of this sentence shall not
be deemed breached merely because the Executive owns, immediately
after a purchase, not more than one percent of the outstanding units.
Should the Executive breach the foregoing sentence, all his options
issued by the Company or any of its subsidiaries shall be cancelled
and all of his restricted stock issued by the Company or any of its
subsidiaries (whether or not then vested) which he then owns shall be
forfeited. For purposes of this Section 6(a)(3), "purchase" shall mean
the payment of cash only for such limited partnership units and shall
not include payment of cash for interests in an entity whose assets
consist in whole or in part of such limited partnership units.
The Executive acknowledges that the foregoing provisions are
intended to protect the Company's and its subsidiaries' and
Affiliates' business and customer contacts, not to prevent the
Executive from pursuing a livelihood in the general area of his
previous training, and they should be interpreted accordingly.
(b) Confidentiality. All confidential information which the Executive
may now possess, may obtain during or after his employment with Company, or
may create prior to the end of his employment with the Company or otherwise
relating to the business of the Company or any of its subsidiaries or
affiliates or of any customer or supplier of any of them shall not be
published, disclosed, or made accessible by him to any other person, either
during or after the cessation of his employment, or used by him except
during his employment with the Company in the business and for the benefit
of the Company and its subsidiaries and Affiliates. In addition, the
Executive agrees not to disclose, publish or make accessible to any other
person, from and after the date of this Agreement, during the Employment
Period or at any time thereafter, any of the terms or provisions of this
Agreement, except the Executive's accountants who need such information to
advise him, prepare his tax returns, make required filings and the like;
provided, however, that the Executive will be responsible for causing any
such accountants to be aware of and to abide by the obligations contained
in this Section 6(b) and will be responsible for any breach of such
obligations by any of them. In the event that the Executive becomes legally
compelled to disclose any of the confidential information, the Executive
will provide the Company with prompt written notice so that the Company may
seek a protective order or other appropriate remedy and/or waive in writing
compliance with the provisions of this Section 6(b) and in the event that
such protective order or other remedy is not obtained, or should the
Company waive in writing compliance with the provisions of this Section
6(b), the Executive will furnish only that portion of the confidential
information which is so legally required. The Executive shall return all
tangible evidence of such confidential information to the General Counsel
of the Company prior to or at the cessation of his employment.
(c) Interpretation. Since a breach of the provisions of this Section 6
could not adequately be compensated by money damages, the Company shall be
entitled, in addition to any other right and remedy available to it, to an
injunction restraining such breach and the Company shall not be required to
post a bond in any proceeding brought for such purpose. The Executive
agrees that the provisions of this Section 6 are necessary and reasonable
to protect the Company in the conduct of its businesses. If any restriction
contained in this Section 6 shall be deemed to be invalid, illegal, or
unenforceable by reason of the extent, duration, or geographical scope
thereof, or otherwise, then the court making such determination shall have
the right to reduce such extent, duration, geographical scope, or other
provisions hereof, and in its reduced form such restriction shall then be
enforceable in the manner contemplated hereby. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies, at
law or in equity, for such breach or threatened breach.
Section 7. Termination.
(a) Definitions.
(i) Death Termination Event. As used herein, "Death Termination
Event" shall mean the death of the Executive.
(ii) Disability Termination Event. As used herein, "Disability
Termination Event" shall mean a circumstance where the Executive is
physically or mentally incapacitated or disabled or otherwise unable
to fully discharge his duties hereunder for a period of 185
consecutive days.
(iii) Estate. As used herein, "Estate" shall mean (A) in the
event that the last will and testament of the Executive has not been
probated at the time of determination, the estate of the Executive and
(B) in the event that the last will and testament of the Executive has
been probated at the time of determination, the legatees of the
Executive who are entitled under such will to the assets or payments
at issue.
(iv) Termination For Cause. As used herein, the term "Termination
For Cause" shall mean the termination by the Company of the
Executive's employment hereunder upon a good faith determination by a
majority vote of the members of the Board of Directors of the Company
that termination of this Agreement is necessary by reason of (A) the
Executive shall be convicted of a felony, (B) the Executive shall
commit any act or omit to take any action in bad faith and to the
material detriment of the Company and Executive shall not have cured
the same within 30 days after the Company sends written notice
thereof, or (C) Executive shall breach in a material way any material
term of this Agreement and fail to correct such breach within 30 days
after the Company sends written notice thereof.
(v) Termination Without Cause. As used herein, "Termination
Without Cause" shall mean any termination of the Executive's
employment by the Company hereunder that is not a Termination For
Cause, a Death Termination Event, or a Disability Termination Event
but not a conversion to a consulting agreement.
(b) Death Termination Event. Upon the occurrence of a Death
Termination Event, this Agreement will terminate automatically upon the
date that such Death Termination Event occurred (subject to the last
sentence of this Section 7), whereupon the Company shall continue to pay
the then current Base Salary to the Estate of the Executive for a period
equal to the remaining term of the Employment Period.
(c) Disability Termination Event. Upon the occurrence of a Disability
Termination Event, this Agreement shall terminate automatically upon the
date that such Disability Termination Event occurred (subject to the last
sentence of this Section 7), whereupon the Company shall continue to pay
the then-current Base Salary to the Executive for the period equal to the
remaining term of the Employment Period (determined on the assumption that
the Employment Period will not be terminated prior to December 31, 2000).
(d) Termination For Cause. The Executive and the Company agree that
the Company shall have the right to effectuate a Termination For Cause in
accordance with the terms of this Agreement at any time. Upon the
occurrence of a Termination For Cause, this Agreement will terminate upon
the date that such Termination For Cause occurs (subject to the provisions
of Section 9), whereupon (i) the Executive shall not be entitled to receive
any additional payments hereunder other than the Base Salary, as then in
effect, to and including the date that such Termination For Cause occurs
and (ii) the Company shall be entitled to any and all remedies and damages
available to it.
(e) Termination Without Cause. Upon the occurrence of a Termination
Without Cause, this Agreement shall terminate upon the date that such
Termination Without Cause occurs (subject to the provisions of Section 9),
whereupon the Executive shall continue to receive the consideration set
forth in Sections 4(a) through (e) and Section 4(h)(i), (ii), (iii) and (v)
through December 31, 2000.
In the event of a termination of Executive's employment for any reason
other than a Termination for Cause or voluntary termination by the
Executive, including, but not limited to a Death Termination Event,
Disability Termination Event, Termination Without Cause, all options,
warrants and restricted stock then held by and/or granted to the Executive
will immediately vest and be exercisable by the Executive but in the event
of the occurrence of an Extraordinary Transaction, no options, warrants or
restricted stock then held by and/or granted to the Executive will
immediately vest as a result thereof.
Section 8. Withholding. The Company shall be entitled to withhold from
amounts payable to the Executive hereunder such amounts as may be required by
applicable law to be so withheld.
Section 9. Survival. Notwithstanding anything in this Agreement to the
contrary, Section 6 of this Agreement shall survive any termination of this
Agreement or cessation of the Executive's employment hereunder for the periods
stated therein.
Section 10. Modification. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.
Section 11. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or delivered against receipt to the
party to whom it is to be given, at the address of such party set forth in the
preamble to this Agreement (or to such other address as such party shall have
furnished in writing in accordance with the provisions of this Section 11).
Notice to the Estate shall be sufficient if addressed to the Executive as
provided in this Section 11. Any notice or other communication given by
certified mail shall be deemed given at the time of certification thereof,
except for a notice changing a party's address which shall be deemed given at
the time of receipt thereof.
Section 12. Waiver. Any waiver by either party of a breach of any provision
of Agreement shall not operate as a waiver of any other breach of such provision
or of any breach of any other provision of this Agreement. The failure of a
party to insist upon strict adherence to any term of this Agreement on one or
more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement. Any waiver must be in writing.
Section 13. Binding Effect. The Executive's rights and obligations under
this Agreement shall not be transferable by assignment or otherwise, such rights
shall not be subject to commutation, encumbrance or the claims of the
Executive's creditors, and any attempt to do any of the foregoing shall be void.
The provisions of this Agreement shall be binding upon and inure to the benefit
of the Executive and his heirs and personal representatives, and shall be
binding upon and inure to the benefit of the Company and its successors.
Section 14. Headings. The headings in this Agreement are solely for
convenience of reference, and shall be given no effect in the construction or
interpretation of this Agreement.
Section 15. Enforcement. Should the Executive xxx to enforce any of his
rights under this Agreement and should the Executive prevail on any issue in
such suit, then the Company shall pay all the Executive's costs of such suit
(including attorneys fees and disbursements). If any taxes are imposed on such
payment, the Company shall make such additional payments to the Executive as may
be necessary, so that after deducting the taxes imposed on all payments made to
the Executive pursuant to this paragraph, the Executive is left on an after tax
basis with an amount equal to his claim for indemnification prior to the
payments described in this sentence.
Section 16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of South Carolina, without
reference to the conflict of law provisions thereof.
Section 18. Construction and Interpretation. Should any provision of this
Agreement require judicial interpretation, the parties hereto agree that the
court interpreting or construing the same shall not apply a presumption that the
terms hereof shall be more strictly construed against one party by reason of the
rule of construction that a document is to be more strictly construed against
the party that itself, or through its agent, prepared the same, and it is
expressly agreed and acknowledged that the Executive, the Company and their
respective attorneys and representatives have participated in the preparation
hereof.
Section 19. Waiver of Trial by Jury. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY DEALING BETWEEN OR AMONG THEM RELATING TO THE SUBJECT
MATTER OF THIS AGREEMENT AND THE RELATIONSHIPS BEING ESTABLISHED. THE SCOPE OF
THIS WAIVER IS INTENDED TO ENCOMPASS ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THIS AGREEMENT, AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY
HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO THE TRIAL BY THE
COURT.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.
INSIGNIA FINANCIAL GROUP, INC.
By: /s/Xxxxxx X. Xxxxxx
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Name: /s/Xxxxxx X. Xxxxxx
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Its: Chairman and Chief Executive Officer
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EXECUTIVE
/s/Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
