EXHIBIT 10(iii)(A)(1)
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EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is entered into as of May 14,
1997 by and between CB Commercial Real Estate Group, Inc., a Delaware
corporation (the "Company") and Xxxxxxx Xxxxx ("Employee").
RECITALS
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WHEREAS, the Company desires to have the benefits of Employee's knowledge
and experience as a full-time employee of the Company without distraction by
employment-related uncertainties and considers such employment an important
element to protecting and enhancing the best interests of the Company and
Employee desires to be employed by the Company on a full-time basis;
NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, the parties hereto agree as follows:
1. EFFECTIVE DATE. This Agreement shall become effective at the Effective Time
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of the Merger between CB Commercial Acquisition Subsidiary, Inc. and Xxxx
Real Estate Services.
2. TERM. The Company hereby agrees to employ Employee and Employee hereby
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agrees to be employed by the Company on a full-time basis for a period of
twenty-four (24) months commencing on the effective date of this Agreement
(the "Term"), except as and with the consequences provided in Section 6
hereof.
3. DUTIES. Employee shall service the Company in a senior executive capacity
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and in such capacity shall devote his full working time to the best
interests of the Company and to the performance of his duties hereunder.
Employee shall have the title Senior Executive Vice President and shall be
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subject to control and direction by the Chief Executive Officer of the
Company or one or more other senior executives designated by the Chief
Executive Officer or the Board of Directors of the Company who report to
the Chief Executive Officer. Employee's duties and authority shall be
established in writing from time to time by the Chief Executive Officer,
the Board of Directors or the senior executive or executives to whom
Employee reports. Initially Employee will have the responsibilities set
forth on Exhibit A to this Agreement.
4. COMPENSATION. The Company will compensate Employee for the services
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rendered under this Agreement as follows:
a. SALARY. Employee will be paid a base annual salary (the "Base Salary")
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in the amount of $325,000 payable in accordance with the customary
payroll practices of the Company with respect to senior executives.
This Base Salary will be reviewed from time to time by the Company to
determine whether it should be maintained, increased or decreased.
Reductions in Employee's Base Salary may be made (but not below the
initial Base Salary).
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b. CAR ALLOWANCE. Employee will be paid a car allowance of $1,000 per
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month payable in accordance with the Company's customary practices for
senior executives.
c. INCENTIVE COMPENSATION. Employee will be entitled to participate, in
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accordance with its terms, in any incentive compensation program
generally available to senior executives of the Company during the
Term of this Agreement. Employee's annual incentive compensation
potential under such programs shall not be less than one hundred per
cent of his salary although the actual incentive payable to Employee
may be greater or lesser than one hundred percent. For the period from
the Effective Date of this Agreement through December 31, 1997
Employee shall receive incentive compensation which is not less than
$175,000. multiplied by a fraction the numerator of which is the
number of days from the Effective Date to and including December 31,
1997 and the denominator of which is 365. For 1998 Employee shall
receive incentive compensation which is not less than $175,000
multiplied by a fraction the numerator of which is the number of days
from January 1, 1998 to the anniversary of the Effective Date of this
Agreement and the denominator of which is 365 (the minimum incentive
payments for 1997 and 1998 are herein referred to as the "Minimum
Incentive Payments"). Employee acknowledges that payments under the
Company's incentive compensation programs for senior executives are
based upon both the Company's financial performance for a year as well
as Employee's performance for such year in meeting specific goals set
during the first quarter of such year. Employee's performance goals
for the balance of 1997 are set forth in Exhibit B. The Company
reserves the right to amend or terminate any incentive compensation
program but no such amendment or termination shall affect Employee's
right to Minimum Incentive Payments.
d. EXPENSE REIMBURSEMENT. Employee will be entitled to reimbursement for
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all reasonable business expenses incurred on behalf of the Company
while on business, upon submission of appropriate documentation in
accordance with the Company's general policies, as they may be amended
from time to time during the Term of the Agreement.
e. OTHER EMPLOYEE BENEFITS. Employee shall be entitled to participate, in
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accordance with their terms, in all medical, disability, pension,
savings, vacation, deferred compensation, life insurance and other
employee benefit plans which generally are made available to senior
executives of the Company. Employee shall be entitled to five weeks of
vacation in accordance with the Company's policies for accruing and
taking vacation as in effect from time to time. For purposes of all
such plans (except to the extent prohibited by applicable law),
Employee's period of continuous employment with Xxxx Real Estate
Services and its subsidiaries prior to its acquisition by the Company
shall count as employment with the Company. The Company reserves the
right in its sole and absolute discretion to amend or terminate any
employee benefit plan.
f. STOCK OPTIONS. Employee has been granted a ten (10) year stock option
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for 100,000 shares of common stock of CB Commercial Real Estate
Services Group, Inc. at an exercise price of $22.75 per share. Such
option vests as to 33,333 shares on the third anniversary of the
Effective Date of this agreement, 33,333 shares on the fourth
anniversary and 33,334 shares on the fifth anniversary. If Employee's
employment terminates for any reason he will forfeit all shares not
then vested.
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With respect to the stock option previously granted to Employee by
Xxxx Real Estate Services and to be assumed by CB Commercial Real
Estate Services Group, Inc. if Employee's employment is terminated
without Cause he will be fully vested in such option and will have
until twelve (12) months after his termination within which to
exercise the option.
5. WAIVER OF CERTAIN RIGHTS. Effective as of the Effective Date of this
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Agreement Employee agrees to irrevocably relinquish and waive any rights he
has pursuant to any employment or other service arrangement or agreement
with Xxxx Real Estate Services, Xxxx Management Services, Inc. or any
wholly owned subsidiary of either of them (collectively the "Xxxx
Companies"), and each and every such arrangement or agreement shall be
deemed terminated as of the effective date of this Agreement other than
Employee's rights to purchase 25,000 shares of common stock of Xxxx Real
Estate Services pursuant to a subscription agreement, and any claims by
Employee for unpaid wages, unreimbursed business expenses or employee
benefits under employee benefit plans identified in that certain Agreement
and Plan of Reorganization dated May 14, 1997. Employee hereby resigns each
and every position and office which he holds with the Xxxx Companies as of
the Effective Date of this Agreement.
6. TERMINATION.
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a. Subject to the terms of this Section 6.
i. the Company may terminate Employee's employment with the Company
at any time for Cause,
ii. Employee may terminate Employee's employment with the Company at
any time, with or without Cause and
iii. the Company may terminate Employee's employment with the Company
with or without Cause at any time after the first anniversary of
the Effective Date of this Agreement.
In the event of any such termination and without regard to
whether the Company has acted in good faith Employee's sole claim
for compensation or damages, whether such claim is based upon
theories of contract, tort, fraud or otherwise shall be as set
forth in this Section 6 and Employee expressly waives any other
rights which he may have as a result of such termination.
b. In the event of termination of Employee's employment by the Company
without Cause (as defined in Section 6.e.) during the last twelve (12)
months of the Term or by Employee at anytime with Good Reason (as
defined in Section 6.f.) Employee shall be entitled to receive and the
Company agrees:
i. To pay Employee his Base Salary for the balance of the term of
this Agreement (determined without regard to such termination)
payable at the time plus the Minimum Incentive Payments less any
incentive payments paid pursuant to Section 4.c.;
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ii. To pay Employee all accrued but unpaid Base Salary and vacation
to the date of the termination plus any unpaid incentive
compensation for any prior year;
iii. To continue to include Employee in all medical, dental and life
insurance plans in which he was participating on the date of the
termination for a period of 90 days;
iv. To provide Employee all rights to which he is entitled under any
applicable law; and
v. To reimburse Employee for all pending reimbursable business
expenses incurred prior to the date of termination.
Except for the Minimum Incentive Payments Employee shall not be
entitled to any incentive compensation for the year in which his
employment terminates or any subsequent year. There shall be no
requirement on the part of Employee to mitigate damages and no amount
received by Employee from any third party shall be used to mitigate
damages. The amounts payable pursuant to this Section 6 shall be
subject to customary withholding and employment taxes. Subject to
Section 6.b.iii., Employee's right to participate in any medical,
dental or life insurance plan shall be subject to the terms and
conditions of the applicable plan. Any other provision of this
Agreement to the contrary notwithstanding, in the event of any
material violation by Employee of Section 7 hereof following
termination of Employee's employment, the Company shall have no
obligation to continue to make payments or provide benefits pursuant
to this Section 6.b. other than pursuant to Section 6.b.ii, iv. and v.
c. In the event Employee's employment terminates other than as provided
in Section 6.b. (including as a result of Employee's death or
Permanent Disability, Employee quitting without Good Reason or the
Company terminating Employee for Cause) Employee shall be entitled
only to:
i. payment of any accrued but unpaid Base Salary and vacation to the
date of death, termination or Permanent Disability together with
any unpaid incentive compensation for any prior year;
ii. payment of any benefits to which Employee is entitled under any
employee benefit plan as a result of such death, termination or
Permanent Disability;
iii. payment of any benefits or participation in any benefit plans to
which Employee is entitled under applicable law; and
iv. Reimbursement for all of Employee's pending reimbursable business
expenses incurred prior to the date of termination.
Employee shall not be entitled to any incentive compensation
(including Minimum Incentive Payments) for the year in which his
employment terminates or any subsequent year.
d. Regardless of the reason for Employee's termination or the termination
of this Agreement, the parties shall continue to be subject to the
provisions of Sections 6 through 15 inclusive.
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e. "Cause" for purposes of this Agreement shall mean:
i. Employee shall have been repeatedly or habitually intoxicated or
under the influence of drugs while on the premises of the Company
or while performing any of his duties or obligations herein;
ii. Employee shall have been convicted of a felony;
iii. Employee shall have stolen or embezzled any material property
belonging to the Company or intentionally damaged any of the
Company's material tangible or intangible property;
iv. Employee shall have materially breached one or more material
obligations hereunder;
v. Employee shall have on more than one occasion in any three month
period willfully refused to carry out any material lawful
direction given to him by the Chief Executive Officer, the Board
of Directors or the senior executive or executives to whom
Employee is reporting; or
vi. Employee shall have refused to accept new job responsibilities
which are consistent with his status as a senior executive and
which do not involve moving his office more than fifty (50) miles
from Newport Beach, California.
vii. Employee shall have failed to obtain within a reasonable period
of time or keep current any license which he is required to hold
to carry out his duties hereunder.
f. "Good Reason" for purposes of this Agreement shall mean,
i. assigning Employee duties which are inconsistent with his
position and status as a senior executive officer;
ii. a material breach by the Company of any provision of this
Agreement;
iii. Employee's relocation to an office which is more than fifty (50)
miles from Newport Beach, California.
g. "Permanent Disability" for purposes of this Agreement has the meaning
set forth in Section 22(e)(3) of the Internal Revenue Code of 1986.
7. PROPRIETARY INFORMATION.
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a. "Proprietary Information" includes all confidential information and
any confidential idea in whatever form, tangible or intangible,
pertaining in any manner to the business of the Company or any person
directly or indirectly controlled by, in control of or under common
control with the Company (collectively, the "CBC Group"), unless
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i. the information is or becomes publicly known through lawful
means,
ii. the information was rightfully in Employee's possession or part
of his general knowledge prior to his engagement by the Company
other than as a result of his relationship with the Company or,
iii. the information is subsequently disclosed to Employee by a third
party without breach of any agreement and without restriction of
its use. Employee acknowledges and agrees that he has acquired,
and is likely to continue to acquire by virtue of his employment
with the Company, extensive Proprietary Information regarding the
CBC Group's products, costs, finances, operations, business plans
and strategies, marketing strategies and methods, customer base
and prospective identities and roles of the key employees of the
CBC Group. Employee agrees to hold all Proprietary Information in
confidence and not to directly or indirectly disclose, use, copy,
publish, summarize or remove form CBC Group's premises any
Proprietary Information, except
(1) during the Term of this Agreement to any extent necessary to
carry out Employee's responsibilities under this Agreement,
including the use of Proprietary Information at Employee's
home, and
(2) after the termination of this Agreement as specifically
authorized in writing by the Chief Executive Officer of the
Company. In the event of any termination of Employee's
employment by the Company, Employee shall return immediately
to the Company all Proprietary Information held by Employee
wherever it may be located.
b. In consideration of the engagement of his services and the
compensation and benefits accorded him as described in this Agreement,
Employee covenants and agrees that, during his employment hereunder
and during the Restricted Period (as defined below) after his
employment terminates for any reason, he shall not, for himself or any
third party, directly or indirectly
i. solicit the business of or unlawfully interfere with the
Company's relationship with any person who on the date of the
termination was a customer of the Company or any person who
becomes a customer of the Company within thirty (30) days after
such termination and whose business Employee had solicited or
helped to solicit during the ninety day period preceding the
termination or
ii. solicit for employment any person employed by the CBC Group with
respect to such business on the date Employee's employment
hereunder terminates.
This Section 7.b. shall not be construed to limit Employee's
ability to accept employment which is competitive with the
business of the Company or to preclude any person by whom
Employee is hired from hiring the Company's employees provided
there is no solicitation of such employees.
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The term "Restricted Period" means the period determined
from the following chart:
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REASON FOR TERMINATION RESTRICTED PERIOD
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Any termination by Employee for The shorter of two (2) years from
Good Reason or as a result of the Effective Date of this
Permanent Disability. Agreement or Ninety (90) days
from the date of termination.
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Any other termination by Employee The balance of the Term.
or any termination by the Company
for Cause or after the first year of
the Agreement, with or without
Cause.
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Nothing in this Agreement, however, is intended to limit any
remedy of the Company or Employee under the California
Uniform Trade Secrets Act (California Civil Code Section
3426), or otherwise available under law.
8. INDEMNIFICATION. The Company agrees to the maximum extent permitted under
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Delaware law and, its By-Laws, to indemnify Employee against expenses,
judgment, fines, settlements and other amounts actually and reasonably
incurred in connection with any action, suit or proceeding which arises by
reason of the fact that, Employee is or was an officer or employee of the
Company.
9. ARBITRATION. All disputes or controversies arising under or in connection
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with this Agreement shall be settled exclusively by final and binding
arbitration in accordance with Exhibit C to this Agreement.
10. NOTICES. All notices, requests, demands and other communication called for
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or contemplated hereunder shall be in writing and shall be deemed to have
been duly given when delivered personally or three days after the date
mailed by United States certified or registered mail, postage prepaid,
addressed to the parties or their successors in interest at the following
addresses or such other addresses as the parties may designate by notice in
the manner aforesaid:
If to the Company: CB Commercial Real Estate Services Group, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn.: General Counsel
If to Employee: Xxxxxxx Xxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
11. LAW GOVERNING. This Agreement and the resolution of any disputes hereunder
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shall be governed by and construed in accordance with the laws of the State
of California without regard to the conflicts of law principles thereof.
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12. ENTIRE AGREEMENT. The terms of this Agreement are intended by the parties
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to be the final expression of their agreement with respect to Employee's
employment by the Company and may not be contradicted by evidence of any
prior or contemporaneous agreements, course of dealing or any former
employment agreements. The parties further intend that the Agreement shall
constitute the complete and exclusive statement of its terms and that no
extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding involving this Agreement.
13. VALIDITY. If any provision of this Agreement, or the application thereof to
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any person, place or circumstance, shall be held by a court of competent
jurisdiction to be invalid, unenforceable or void, the remainder of this
Agreement and such provision as applied to other person, places and
circumstances shall remain in full force and effect.
14. AMENDMENT. This Agreement may not be modified or amended except by an
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instrument in writing signed by the Employee and the Chief Executive
Officer of the Company.
15. EFFECT ON SUCCESSORS IN INTEREST; ASSIGNMENT. This Agreement shall inure to
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the benefit of and be binding upon the heirs, administrators, executors,
and successors of each of the parties hereto. This Agreement is personal to
and may not be assigned by Employee.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC.
By:
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EMPLOYEE
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