EXHIBIT 10.12
XXXXXXX X. PRICE
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into as of
the 1st day of January, 1997 (the "Effective Date"), by and between CGA Group,
Ltd., a Bermuda corporation (the "Employer"), and Xxxxxxx X. Price (the
"Executive").
RECITALS
A. The Executive is currently serving as the President and Chief Executive
Officer of the Employer and the Employer's wholly-owned subsidiary corporation,
Commercial Guaranty Assurance, Ltd. ("CGA"), and
B. The Employer desires to continue to employ the Executive as an officer
of the Employer and CGA for a specified term, and the Executive is willing to
continue such employment upon the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter contained, it is covenanted and agreed upon by and
between the parties hereto as follows:
AGREEMENTS
1. Position and Duties. The Employer hereby employs Executive as the
President and Chief Executive Officer of the Employer and CGA or in such other
capacity as shall be mutually agreed upon between the Employer and the
Executive. During the period of the Executive's employment hereunder, the
Executive shall devote his best efforts and full business time, energy, skills
and attention to the business and affairs of the Employer and CGA; provided,
however, that the Executive shall perform on behalf of the Employer and CGA in
the United States of America (the "U.S.") only such duties that are of a
ministerial nature and the performance of which are in compliance with the
Operating Guidelines (as such term is defined in the Investment Units
Subscription Agreement dated as of June 4, 1997 by and among the Employer and
the other parties named therein (the "Subscription Agreement")). The Executive's
duties and authority shall consist of and include all duties and authority
customarily performed and held by persons holding equivalent positions with
business organizations similar in nature and size to the Employer, as such
duties and authority are, subject to the immediately preceding sentence,
reasonably defined, modified and delegated from time to time by the Board of
Directors of the Employer (the "Board"). The Executive shall have the powers
necessary to perform the duties assigned to him, and shall be provided such
supporting services, staff, secretarial and other assistance, office space and
accoutrements as shall be reasonably necessary and appropriate in light of such
assigned duties. The Executive shall perform his duties hereunder on a full time
basis in Bermuda and relocate his principal office to Bermuda no later than
September 30, 1997.
2. Compensation. As compensation for the services to be provided by the
Executive hereunder, the Executive shall receive the following compensation and
other benefits:
(a) Base Salary. The Executive shall receive an aggregate annual
minimum base salary ("Base Salary") at the rate of Three Hundred Thousand
dollars ($300,000) payable in installments in accordance with the regular
payroll practices of the Employer. Such Base Salary shall be subject to
review annually, commencing on the anniversary of the Effective Date, and
shall either be maintained at the then current amount or increased during
the term hereof in accordance with the discretion of the Board.
(b) Bonuses. The Executive shall receive a cash bonus ("Base Bonus"),
payable within thirty (30) days after the end of the 1997 calendar year, in
the amount of $160,274 dollars. The Executive may receive a discretionary
annual cash bonus ("Discretionary Bonus") based upon an annual incentive
plan approved by the compensation committee of the Board, which shall also
be payable within thirty (30) days after the end of each calendar year
during which this Agreement is in effect.
(c) Club Membership. The Executive shall be reimbursed for membership
dues at a local country club of his choice, in an amount to be mutually
agreed upon between the Executive and the Employer.
(d) Reimbursement of Expenses. In accordance with the expense
reimbursement policies of the Employer, the Executive shall be reimbursed,
upon submission of appropriate vouchers and supporting documentation, for
all travel, entertainment and other out-of-pocket expenses reasonably and
necessarily incurred by the Executive in the performance of his duties
hereunder.
(e) Moving and Interim Living Expenses. The Employer shall pay all
reasonable expenses related to the relocation to Bermuda from New Jersey of
the Executive and his family, including packing and shipping the
Executive's entire household and all furniture, belongings and effects. If
the Employer's relocation to Bermuda entails the sale of Executive's
primary residence in the U.S. and such sale occurs within twelve (12)
months of the relocation of Executive, the Employer shall reimburse the
Executive for real estate brokerage fees incurred in such sale up to a
maximum of seven percent (7%) of the sale price, together with all closing
costs, including reasonable attorney's fees. In addition, the Employer
shall pay the temporary living expenses of the Executive and his family in
Bermuda, in accommodations commensurate with the Executive's position, for
up to three (3)
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months. Such expenses shall be reasonable and commensurate with the
Executive's position.
(f) Housing Allowance. The Employer shall pay the Executive a housing
allowance of up to Ten Thousand U.S. Dollars (U.S. $10,000) each month
during the term of Employee's employment (or such greater monthly amount as
the compensation committee of the Board may approve based on local real
estate market conditions), plus electric utility costs; provided, however,
that such allowance shall not be paid during any month in which the
Executive is receiving temporary living expenses pursuant to Section 2(e)
above.
(g) Other Benefits. The Executive shall be entitled to all benefits
specifically established for him by the Board or a committee thereof and,
when and to the extent he is eligible therefor, to participate in all plans
and benefits generally accorded to senior executives of the Employer, under
and subject to all of the terms thereof, including, but not limited to, as
applicable, pension, profit-sharing, supplemental retirement, incentive
compensation, bonus, disability income, split-dollar life insurance, group
life, medical and hospitalization insurance, and similar or comparable
plans, and also to perquisites extended to similarly situated senior
executives of the Employer. Additionally, the Employer shall obtain for the
benefit of the Executive's estate a term life insurance policy with a value
of two times the Executive's Base Salary as determined under paragraph
2(a).
(h) Vacations. The Executive shall be entitled to annual vacation
leave in accordance with the operative vacation policy of the Employer in
effect from time to time, which vacation shall be taken at a time or times
mutually agreeable to the Employer and the Executive. In addition, each
calendar year the Company shall reimburse Executive for coach round-trip
airfare for each of the Executive's children to make four (4) trips to
Bermuda.
(i) Full Benefit of Allowances. If any of the compensation and
benefits provided in paragraphs (e), (f), the last sentence of paragraph
(h), and paragraphs (k), (l) and (m) shall be deemed taxable to the
Employee in the U.S., the Employer shall pay to the Employee that
additional amount necessary to "gross-up" the payment in question and fully
subsidize any U.S. tax consequences to the Employee.
(j) Withholding. The Employer shall be entitled to withhold, from
amounts payable to the Executive hereunder, any federal, state or local
withholding or other taxes or charges which it is from time to time
required to withhold and any amounts, pursuant to the Employer's policies,
required to be withheld pursuant to the Executive's participation in the
benefits described above. The Employer shall be entitled to rely upon the
opinion of its legal counsel with regard to any question concerning the
amount or requirement of any such withholding.
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(k) Immigration and Work Permits. The Employer shall be responsible
for and will pay all expenses related to obtaining all ordinary and
necessary immigration and work permit approvals on Executive's behalf with
respect to his employment in Bermuda. The Executive shall cooperate with
the Employer in obtaining such approvals.
(l) Tax Assistance. The Employer shall provide the Executive with
reasonable expatriates tax assistance, provided by the independent
accountants and tax counsel regularly engaged by the Employer.
(m) Automobile Expense. The Executive shall receive from Employer a
monthly auto expense assistance in the amount of $750.
3. Term and Termination.
(a) Basic Term. The Executive's employment hereunder shall be for a term of
three (3) years commencing as of the Effective Date, and shall automatically be
extended for one (1) year commencing on the third anniversary of the Effective
Date and on each anniversary thereafter, unless terminated by either party
effective as of the last day of the then current term by written notice to that
effect delivered to the other party not less than sixty (60) days prior to the
expiration of such term.
(b) Voluntary Termination by Executive. The Executive may voluntarily
terminate this Agreement, at any time, by written notice to that effect
delivered to the Employer not less than sixty (60) days prior to the effective
date of Executive's voluntary termination. Upon Executive's voluntary
termination, Executive shall have no obligations to the Employer other than as
provided for in Sections 4 and 5 hereof, together with an obligation to provide
Executive's reasonable transitional assistance to the Employer for a period of
not more than sixty (60) days in connection with matters for which the Executive
was responsible during the term of this Agreement and which were not concluded
prior to Executive's voluntary termination. Upon the Executive's voluntary
termination, no Base Bonus or Discretionary Bonus for the year in which such
termination occurs shall be payable to the Executive and no further payments
shall be due hereunder except for compensation and benefits accrued as of the
date of such termination.
(c) Premature Termination Without Cause; Constructive Termination and
Termination Upon Change in Control.
(i) In the event of the termination of the Executive's employment
under this Agreement prior to the last day of the then current term (A) by
the Employer for any reason other than a termination in accordance with the
provisions of paragraph 3(d), 3(e) or 3(f) or (B) by the Executive by
written notice to the Employer given within thirty (30) days of
Constructive Discharge (as hereinafter
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defined) effective as of ninety (90) days after such notice or (C) by the
Employer or its successor either in contemplation of or within one hundred
and eighty (180) days after a Change in Control (as defined below) for any
reason other than a termination in accordance with the provisions of
paragraphs 3(d), 3(e) or 3(f), the Employer shall for the remaining period
of the then current term of this Agreement: (x) pay the Executive the then
current Base Salary (but in no event less than six months of current Base
Salary) and if such termination occurs in the 1997 calendar year, the Base
Bonus, reduced by the amount of base salary payable by any new employer for
the period the Executive is entitled to payment pursuant to this sentence;
(y) continue to provide coverage for the Executive either under the medical
benefit program maintained by the Employer (if permitted to do so under
such program) or under a policy providing benefits at least as great as
those provided under such program; and (z) pay all expenses related to the
relocation of the Executive and the Executive's family to the U.S. location
of the Executive's choice, including packing and shipping Executive's
household effects, furniture and personal belongings; provided, however,
that, in the event of a termination pursuant to clause (C) above that
occurs during 1998 or any year thereafter, in addition to the payments and
benefits provided above in this Section 3(c)(i), the Executive shall be
entitled to receive a Discretionary Bonus (calculated based on the
bonus(es) payable to the Executive with respect to the immediately
preceding year) with respect to the year in which such termination occurs,
payable on a pro rata basis to the date of termination. The benefits
provided in paragraphs 2(f), (l) and (m) shall continue for 3 months,
provided, however, that such continuation shall not include any expenses
for temporary housing or accommodation in the U.S. The benefits described
in paragraphs 2(c) and 2(h) shall not continue following termination under
this paragraph 3(c).
(ii) Payments to the Executive under this paragraph 3(c) will be made
in accordance with the regular payroll practices of the Employer or, at the
election of the Employer, such payments may be made in a lump sum.
(iii) For purposes of this Agreement, the Executive shall be deemed
"Constructively Discharged" upon the occurrence of any one of the following
events:
(A) The Executive shall not be re-elected, or shall be removed,
from the positions with the Employer set forth in Section 1 hereof,
other than as a result of the Executive's election or appointment to
positions of substantially equal or not of materially inferior scope
and responsibility at a Base Salary of not less than the Base Salary
the Executive was receiving at the time of such election or
appointment; or
(B) The Employer shall cause a material reduction in the
Executive's powers or authority; or
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(C) Other than with the Executive's express written consent, the
Employer changes the primary employment location of the Executive to a
place that is outside of Bermuda; or
(D) The Employer otherwise commits a material breach of its
obligations under this Agreement which, if curable, is not cured
within thirty (30) days of written notice thereof.
(iv) For purposes of this Agreement, the term "Change in Control"
shall mean any of the following which occurs prior to the closing of a
Qualified Public Offering (as defined in the Employer's Bye-laws) by
Employer:
A. The consummation of the acquisition by any person (as such term
is defined in Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the 0000 Xxx)
of more than fifty percent (50%) of the combined voting power of
the then outstanding voting securities of the Employer; or
B. The cessation, for any reason, by the individuals who, as of the
Closing Date (as defined in the Subscription Agreement) are
members of the Board to constitute a majority of the Board,
unless the designation of any new individual as a director is
pursuant to the rights to designate a director granted to certain
Members under the Bye-laws of the Employer, and such new director
shall, for purposes of this Agreement, be considered as a member
of the Board; or
C. Approval by the stockholders of the Employer of: (1) a merger or
consolidation if the stockholders of the Employer immediately
before such merger or consolidation do not, as a result of such
merger or consolidation, own, directly or indirectly, more than
fifty percent (50%) of the combined voting power of the then
outstanding voting securities of the entity resulting from such
merger or consolidation; or (2) an agreement for the sale or
other disposition of all or substantially all of the assets of
the Employer other than an agreement for such a sale or
disposition to a corporation or other entity which, immediately
prior to such sale or disposition, is owned,
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directly or indirectly, by the stockholders of the Employer in
materially the same proportion as their ownership of stock
immediately prior to such sale or disposition.
(v) Notwithstanding anything to the contrary contained in clause (iv),
for purposes of this paragraph 3(c), the term "Change in Control" shall not
include the following:
A. an initial public offering of the capital stock of the Employer
consistent with the Employer's business plan as described in the
Amended and Restated Confidential Private Placement Memorandum
dated April 9, 1997;
B. a merger of the Employer with, or acquisition of the Employer by,
any other entity if such merger or acquisition, as applicable, is
approved by the board of directors of the Employer and any other
re-capitalization or change in capital structure, whether public
or private, of the Employer, in each case after which the
Executive holds the same position as set forth in Section 1
hereof, has the same chain of command, reports to the same
individual or individuals, and suffers no material change in
Executive's employment.
In addition, notwithstanding anything to the contrary contained in clause
(iv) above, a Change in Control shall not be deemed to occur solely because more
than fifty percent (50%) of the combined voting power of the then outstanding
securities is acquired by: (1) a trustee or other fiduciary holding securities
under one or more employee benefit plans maintained for employees of the
Employer; or (2) any corporation which, immediately prior to such acquisition,
is owned directly or indirectly by the stockholders of the Employer in the same
proportion as their ownership of stock immediately prior to such acquisition.
(d) Termination For Cause. Notwithstanding any other provision of this
Agreement, in the event of the termination of the Executive's employment under
this Agreement for cause, no further payments shall be due hereunder except for
Base Salary and other benefits accrued as of the date of such termination;
provided, however, that in no event shall the Executive's Base Bonus or
Discretionary Bonus, or any portion thereof, payable with respect to the
calendar year in which the termination occurs or, to the extent not yet paid,
the Executive's bonus for the prior year be paid to the Executive upon his
termination for cause. For purposes of this Agreement, "cause" shall mean: (i) a
material violation by the Employer, in which the Executive materially and
directly participated, of any law or regulation respecting the business of the
Employer or of CGA, other than a material violation which is a direct result of
the
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operation of the Employer and/or CGA in accordance with the Operating
Guidelines; (ii) the Executive being found guilty by a court of competent
jurisdiction or a plea of guilty or nolo contendere to a charge of (A) any
felony or (B) an act of dishonesty in connection with the performance of his
duties as an officer of the Employer or CGA, or which disqualifies the Executive
from serving as an officer or director of the Employer or CGA; (iii) the willful
or negligent failure of the Executive to perform his duties hereunder in any
material respect; or (iv) the failure of the Executive to (A) perform all of his
duties hereunder on a full time basis in Bermuda and (B) relocate his principal
office to Bermuda on or prior to September 30, 1997.
(e) Termination Upon Death. If the Executive dies during the term of this
Agreement, payment of any accrued compensation due to the Executive at the time
of death including the bonus payable with respect to the prior calendar year if
the termination occurs prior to the payment of such bonus shall be made to such
beneficiary as the Executive may designate in writing, or failing such
designation, to the executor, administrator or other representative of his
estate (provided, however, that the Executive's Base Bonus or Discretionary
Bonus (with such Discretionary Bonus calculated based on the bonus(es) payable
to the Executive with respect to the immediately preceding year) payable with
respect to the calendar year in which the termination occurs shall be payable on
a pro rata basis to the date of the Executive's death). Such payments shall be
in addition to any other death benefits of the Employer for the benefit of the
Executive and in full settlement and satisfaction of all payments provided for
in this Agreement, except for benefits provided for in sections 2(e) through
2(f) and 2(i) through 2(m), which shall continue for 3 months following the
Executive's death.
(f) Termination Upon Disability. The Employer may terminate the Executive's
employment after the Executive is determined to be disabled under the then
current Employer program, if such a program exists at the time the Executive is
disabled. If no such program exists, the Executive will be considered disabled
if the Executive suffers an illness or injury which results in the Executive's
inability to substantially perform his duties hereunder as determined by the
Board for a period of either six (6) consecutive months, or one hundred and
twenty (120) business days within a consecutive twelve (12) month period. If the
Employer terminates the Executive after it is determined that the Executive is
disabled, the Employer shall pay the Executive the compensation accrued through
the date of the Executive's termination of employment including the bonus
payable with respect to the prior calendar year if the termination occurs prior
to the payment of such bonus (provided, however, that the Executive's Base Bonus
or Discretionary Bonus (with such Discretionary Bonus calculated based on the
bonus(es) payable to the Executive with respect to the immediately preceding
year) payable with respect to the calendar year in which the termination occurs
shall be payable on a pro rata basis to the date of the Executive's
termination). In the event of a dispute regarding the Executive's disability,
such dispute shall be resolved through arbitration as provided in paragraph 8(d)
hereof,
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which arbitrator shall be a duly licensed medical doctor. The Executive shall be
entitled to the compensation and benefits provided for under this Agreement for
any period during the term of this Agreement and prior to the establishment of
the Executive's disability. Notwithstanding anything contained in this Agreement
to the contrary, until the date specified in a notice of termination relating to
the Executive's disability, the Executive shall be entitled to return to his
positions with the Employer as set forth in this Agreement, in which event no
disability of the Executive will be deemed to have occurred.
4. Confidentiality and Loyalty. The Executive acknowledges that during the
course of the Executive's employment the Executive will produce and have access
to material, records, data, trade secrets and information not generally
available to the public regarding the Employer and the CGA and their respective
subsidiaries and affiliates (collectively, "Confidential Information").
Accordingly, during and subsequent to termination of this Agreement, the
Executive shall hold in confidence and not directly or indirectly disclose, use,
copy or make lists of any such Confidential Information, except to the extent
that such information is or thereafter becomes lawfully available from public
sources, or such disclosure is authorized in writing by the Employer, required
by a law or any competent administrative agency or judicial authority, or
otherwise as reasonably necessary or appropriate in connection with the
Executive's performance of the Executive's duties hereunder. All records, files,
documents and other materials or copies thereof relating to the Employer's
business which the Executive shall prepare or use shall be and remain the sole
property of the Employer, shall not be removed from the Employer's premises
without its written consent other than in the ordinary course of business, and
shall be promptly returned to the Employer upon termination of the Executive's
employment hereunder. The Executive agrees to abide by the Employer's reasonable
policies, as in effect from time to time, respecting avoidance of interests
conflicting with those of the Employer.
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5. Non-Solicitation and Non-Competition Covenants.
(a) Restrictive Covenant. The Executive and the Employer have jointly
reviewed the operations of the Employer and have agreed that the covenants
contained in this Section 5 are an essential ingredient of this Agreement and
are made in consideration for the payment of the amounts described in Sections 2
and 3 hereof. The Executive hereby agrees that, except with the express prior
written consent of the Employer, following the termination of the Executive's
employment hereunder, with respect to clause (i) below, for any reason and, with
respect to clause (ii) below, for any reason other than a termination pursuant
to clause (A) or (B) of subsection (c)(i) of Section 3, for a period equal to
the greater of (x) the term of this Agreement that would be remaining had the
Executive's employment not been terminated, and (y) one (1) year after the
termination of the Executive's employment with the Employer (the "Restrictive
Period"), the Executive (i) will not solicit clients, customers or employees of
the Employer, CGA or any subsidiary or affiliate of the Employer or CGA and (ii)
will not directly or indirectly compete with the business of the Employer or CGA
or any subsidiary or affiliate of the Employer or CGA by directly or indirectly
being a shareholder or partner of or serving as an employee, officer or director
of or consultant to, or in any other capacity with, any person, firm,
partnership, corporation, subsidiary, division, joint venture, trust or other
entity, or any division, subsidiary or separate enterprise of any such entity,
which owns, manages or operates a business which is either: (A) an insurer or
reinsurer of asset backed securities, mortgage backed securities or commercial
mortgage backed securities; or (B) an investment company that is directly or
indirectly owned by, affiliated with, attached to or otherwise related to an
insurer or reinsurer of asset backed securities, mortgage backed securities or
commercial mortgage backed securities; or (C) an investment advisory firm or
insurance consulting firm that is directly or indirectly owned by, affiliated
with, attached to or otherwise related to an insurer or reinsurer of asset
backed securities, mortgage backed securities or commercial mortgage backed
securities (the "Restrictive Covenant"). If the Executive violates the
Restrictive Covenant and the Employer brings legal action for injunctive or
other relief, the Employer shall not, as a result of the time involved in
obtaining such relief, be deprived of the benefit of the full period of the
Restrictive Covenant. Accordingly, the Restrictive Covenant shall be deemed to
have the duration specified in this paragraph 5(a) computed from the date the
relief is granted but reduced by the time between the period when the
Restrictive Period began to run and the date of the first violation of the
Restrictive Covenant by the Executive. The Restrictive Covenant shall not
prohibit the Executive from owning directly or indirectly capital stock or
similar securities which are listed on a securities exchange or quoted on the
National Association of Securities Dealers Automated Quotation System which do
not represent more than five percent (5%) of the outstanding capital stock of
any business similar to that of the Employer or that of CGA or any subsidiary or
affiliate of the Employer or CGA.
(b) Remedies for Breach of Restrictive Covenant. The Executive
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acknowledges that the restrictions contained in Sections 4 and 5 of this
Agreement are reasonable and necessary for the protection of the legitimate
business interests of the Employer, that any violation of these restrictions
would cause substantial injury to the Employer and such interests, that the
Employer would not have entered into this Agreement with the Executive without
receiving the additional consideration offered by the Executive in binding
himself to these restrictions and that such restrictions were a material
inducement to the Employer to enter into this Agreement. In the event of any
violation of these restrictions, the Employer shall be relieved of all further
obligations under this Agreement and shall be entitled to any rights, remedies
or damages available to the Employer under this Agreement or otherwise at law or
in equity. In addition, in the event of any violation or threaten violation of
these restrictions, the Employer shall be entitled to preliminary and permanent
injunctive relief to prevent or restrain any such violation by the Executive and
any and all persons directly or indirectly acting for the Executive or with him,
as the case may be.
6. Intercorporate Transfers. If the Executive shall be transferred to an
affiliate of the Employer, such transfer shall not be deemed to terminate or
modify this Agreement and the employing corporation to which the Executive shall
have been transferred shall, for all purposes of this Agreement, be construed as
standing in the same place and stead as the Employer as of the date of such
transfer. For purposes hereof, an affiliate of the Employer shall mean any
corporation directly or indirectly controlling, controlled by, or under common
control with the Employer.
7. Interest in Assets. Neither the Executive nor the Executive's estate
shall acquire hereunder any rights in funds or assets of the Employer, otherwise
than by and through the actual payment of amounts payable hereunder; nor shall
the Executive or the Executive's estate have any power to transfer, assign,
anticipate, hypothecate or otherwise encumber in advance any of said payments;
nor shall any of such payments be subject to seizure for the payment of any
debt, judgment, alimony, separate maintenance or be transferable by operation of
law in the event of bankruptcy, insolvency or otherwise of the Executive.
8. General Provisions.
(a) Successors; Assignment. If accepted by any successor or assign of the
Employer, such successor or assign may be deemed the "Employer" hereunder. The
Executive may not assign this Agreement.
(b) Entire Agreement: Modifications. This Agreement constitutes the entire
agreement between the parties respecting the subject matter hereof, and
supersedes all prior negotiations, undertakings, agreements and arrangements
with respect thereto, whether written or oral. Except as otherwise explicitly
provided herein, this Agreement may not be amended or modified except by written
agreement signed by the Executive and the Employer.
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(c) Enforcement and Governing Law. The provisions of this Agreement shall
be regarded as divisible and separate; if any of said provisions should be
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remaining provisions shall not be affected
thereby. This Agreement shall be construed and the legal relations of the
parties hereto shall be determined in accordance with the laws of the State of
New York, without reference to the law regarding conflicts of law.
(d) Arbitration. The provisions of paragraph 5(b) shall supersede the
provisions of this paragraph 8(d) in the event of a simultaneous dispute between
the Employer and the Executive so as to afford the Employer with the remedy of
injunctive relief, without the necessity for arbitration. Subject to the
foregoing, any dispute or controversy arising under or in connection with this
Agreement or the Executive's employment by the Employer shall be settled
exclusively by arbitration, conducted by a single arbitrator sitting in New York
City, New York, in accordance with the rules of the American Arbitration
Association (the "AAA") then in effect. The arbitrator shall be selected by
mutual agreement between the Employer and the Executive. However, in the event
that the parties are unable to agree on an arbitrator within a period of one
week, the arbitrator shall be selected by the parties from a list of eleven (11)
arbitrators provided by the AAA, provided that no arbitrator shall be related to
or affiliated with either of the parties. If the parties mutually agree on an
arbitrator from such list, such arbitrator shall be selected. If the parties
cannot agree on the arbitrator within ten (10) days after the list of the
proposed arbitrators is received by the parties, then no later than twenty (20)
days after such list is received by the parties, the parties, or their
respective representatives, shall meet at a mutually convenient location in New
York City, New York, or telephonically. At that meeting, the party who sought
arbitration shall eliminate one (1) proposed arbitrator and then the other party
shall eliminate one (1) proposed arbitrator. The parties shall continue to
eliminate names from the list of proposed arbitrators in this manner until each
party has eliminated five (5) proposed arbitrators. The remaining arbitrator
shall arbitrate the dispute. Each party shall submit, in writing, the specific
requested action or decision it wishes to take, or make, with respect to the
matter in dispute, and the arbitrator shall be obligated to choose one (1)
party's specific requested action or decision, without being permitted to
effectuate any compromise position. The party whose requested action or decision
is not selected by the arbitrator shall bear the cost of all counsel, experts or
other representatives who are retained by both parties, together with all costs
of the arbitration proceeding, including, without limitation, the fees, costs
and expenses imposed or incurred by the arbitrator. Judgment may be entered on
the arbitrator's award in any court having jurisdiction; provided, however, that
the Executive shall be entitled to seek specific performance of the Executive's
right to be paid through the date of termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
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(e) Waiver. No waiver by either party at any time of any breach by the
other party of, or compliance with, any condition or provision of this Agreement
to be performed by the other party, shall be deemed a waiver of any similar or
dissimilar provisions or conditions at the same time or any prior or subsequent
time.
(f) Notices. Notices pursuant to this Agreement shall be in writing and
shall be deemed given when received; and, if mailed, shall be mailed by United
States registered or certified mail, return receipt requested, postage prepaid;
and if to the Employer, addressed to the principal headquarters of the Employer,
attention: Chairman; or, if to the Executive, to the address set forth below the
Executive's signature on this Agreement, or to such other address as the party
to be notified shall have given to the other.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
CGA Group, Ltd. Xxxxxxx X. Price
By: /s/ XXX X. XXXXXXX /s/ XXXXXXX X. PRICE
-------------------------------- ----------------------------------
Xxx X. Xxxxxxx ----------------------------------
Chairman of the Board of Directors ----------------------------------
(Address)
14
