EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of January
1, 1998 (the "Effective Date") between Xxxxx X. Xxxxx ("Employee") and AmeriVest
Properties, Inc., a Delaware corporation (the "Company"). For purposes of this
Agreement, each of Employee and the Company is individually referred to as a
"Party", and Employee and the Company are referred to collectively as the
"Parties".
Recital
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The Company desires to retain the services of Employee and Employee has
offered to provide services to the Company pursuant to the terms of this
Agreement.
Agreement
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In consideration of the premises and of the mutual covenants included in
this Agreement, the Parties agree as follows:
1. Services. The Company retains Employee and Employee shall perform
services for the Company as set forth in this Agreement on behalf of the Company
for the period and under the terms and conditions set forth in this Agreement.
2. Term. Unless terminated earlier as provided for in Section 7, the term
of this Agreement shall be for a three(3) years, commencing on the Effective
Date and ending on December 31, 2000 (the "Term"). Thereafter, this Agreement
shall continue in full force and effect until terminated by either Party upon at
least ninety (90) days' prior written notice to the other party. If the
employment relationship is terminated by either Party, Employee agrees to
cooperate with the Company and the Company's new management with respect to the
transition of the new management in the operations previously performed by
Employee.
3. Duties. Employee shall perform the following services for the Company:
3.1 Employee shall serve as President, Chief Executive and Chief
Financial Officer of the Company, or in such other position as determined
by the Company's Board of Directors (the "Board"), and in that capacity
shall work with the Company to pursue the Company's plans as directed by
the Board.
3.2 Employee shall perform duties with the functions of a President,
Chief Executive and Chief Financial Officer, subject to the direction of
the Board of Directors of the Company.
3.3 During the term of this Agreement, Employee shall devote all of
Employee's business time to the performance of Employee's duties under this
Agreement. Without limiting the foregoing, Employee shall perform services
on behalf of the Company for at least 40 hours per week and Employee shall
be available at the request of the Company at other times, including
weekends and holidays, to meet the needs and requests of the Company's
customers.
3.4 During the term of this Agreement, Employee will not engage in any
other activities or undertake any other commitments that conflict with or
take priority over Employee's responsibilities and obligations to the
Company and the Company's customers, including without limitation those
responsibilities and obligations incurred pursuant to this Agreement.
4. Compensation. The Company shall pay Employee for the performances of
services pursuant to this Agreement as follows:
4.1 Commencing as of the Effective Date and continuing until December
31, 2000, the Company shall pay Employee for the performance of services
pursuant to this Agreement a salary at an annual rate of $115,000 (the
"Base Salary"). Commencing January 1, 1999 and on the 1st day of January
thereafter throughout the Term, Employee's Base Salary shall be increased
by five percent (5%) over the previous year's Base Salary.
4.2 The Company shall consider the Employee for a bonus semi-annually
each year based on overall performance of the Company. Any bonus paid under
this section 4.2 shall be determined by the Board and payable at such time
as the Board directs.
4.3 Any payments that the Company is required to make to the Employee
pursuant to this Agreement shall be reduced by (i) such amounts as are
required to be withheld with respect to those amounts under and for the
purposes of any of the applicable tax and other laws or regulations, and
(ii) such amounts as Employee may owe to the Company at any time and from
time to time.
4.4 Employee shall be eligible for participation in any present or
future incentive compensation, bonus profit sharing, pension, retirement,
stock option, or stock purchase plan of the Company of which other
employees of the Company are generally eligible. It is understood, however,
that entitlements that may accrue to the Employee pursuant to such
arrangements may differ from those that accrue to other employees, such
differences based on the discretion of the Board of Directors.
5. Reimbursement Of Expenses. Employee shall be reimbursed for reasonable
expenses incurred on behalf of the Company in the performance of Employee's
duties and services pursuant to this Agreement.
6. Additional Benefits. Employee shall be entitled to the following:
6.1 During each 12-month period commencing on the Effective Date,
Employee shall be entitled to fifteen (15) days of paid vacation in
accordance with the policies and practices of the Company. Employee's
salary shall accrue during the time of Employee's vacation taken in
accordance with this Section 6.1. Employee must utilize vacation days
within 30 days following the end of the 12-month period for which those
vacation days have accrued pursuant to this Agreement; otherwise those
vacation days will expire without payment, unless prior approval is
received from the Board. In the event that Employee takes more than the
allowable days of vacation, pursuant to the terms as set forth in this
Agreement, Employee's salary shall not accrue during any such excess
vacation or leave time, and the Company shall not be obligated to pay any
salary to Employee for those excess days. Employee shall not be entitled to
utilize vacation days on days on which Employee's services are required by
the Company to meet the needs of the Company's customers or where the
Employee's absence will otherwise have a material effect on the operations
or business of the Company. The use by Employee of a vacation day in
violation of the prior sentence shall be a material breach of this
Agreement and, in addition to any other rights that the Company may have,
the Company shall not be obligated to pay any salary to Employee for that
vacation day. Employee shall be entitled to receive such additional
vacation, personal, and sick leave days as are provided to all other
management members or directors of the Company.
6.2 Employee and Employee's family, if any, shall be entitled to
receive such benefits under medical insurance plans, life and disability
insurance and otherwise, as are provided to all other salaried employees of
the Company. Until such time that the Company has adopted a medical
insurance plan for which Employee and Employee's family would be eligible,
the Company shall reimburse Employee for up to an aggregate of $12,000
annually for premiums and fees actually paid by Employee for medical, life,
dental and orthodontia, and disability insurance coverage for Employee
and/or Employee's family.
6.3 If Employee becomes disabled (i.e., unable to perform a
substantial portion of Employee's duties hereunder because of sickness or
injury), then Employee shall be paid on amount equal to Employee's regular
salary for a calendar period not exceeding ninety (90) days for each such
occurrence.
7. Termination.
7.1 Employee may terminate this Agreement at any time without further
liability or obligation hereunder if the Company has breached a material
provision of this Agreement or the Company has otherwise materially
breached any other obligation to Employee, such termination to be effected
by Employee's giving the Company written notice of termination at least 90
days prior to the date for termination and the Company's failing to cure
the breach prior to the date set for termination in that notice.
7.2 At the option of the Company, this Agreement may be terminated for
cause, with such termination to be effected by the Company's giving
Employee written notice of termination. The term "for cause" shall include
termination of employment as a result of any of the following: (i) a breach
by Employee of a material provision of this Agreement; or (ii) a breach by
Employee of any other material obligation of Employee to the Company; or
(iii) as a result of a determination by the Board, acting reasonably, that
the Employee has (A) committed a criminal act or an act constituting moral
turpitude, or (B) committed any fraudulent act, or (C) breached the
Employee's fiduciary duty to the Company. If the Employee shall dispute the
determination by the Board, the issue shall be submitted promptly to a
single arbitrator, mutually acceptable to each party, pursuant to the rules
of the American Arbitration Association whose decision as to whether
"cause" existed justifying termination of Employee's employment under this
Section 7.2 shall be final and binding. The fees for this arbitrator and
any filing fees for the arbitration shall be paid one-half by the Company
and one-half by the Employee.
7.3 This Agreement shall terminate upon the death of Employee or if
Employee becomes disabled, in which case, Employee or Employee's family
shall be paid up to $1000 per month for twelve months to the extent
expenses are incurred for medical, dental, orthodontia, disability and life
insurance or medical expenses unless the Company at that time has in effect
a benefit plan covering a portion of medical expenses. Employee shall be
considered "disabled" if, and on the date on which, Employee has been
unable to perform a substantial and material portion of Employee's duties
hereunder, for a period of 90 continuous days, because of sickness, injury,
or disability.
7.4 In the event Employee's employment is terminated, then all
unaccrued salary obligations of the Company to Employee shall cease as of
the date of termination except as otherwise expressed herein.
7.5 If there is (i) a "Change In Control" of the company, as defined
below, and (ii) the Company or the acquiring company in the Change In
Control does not offer Employee a position in the Denver Metropolitan area
at a salary level equal to or exceeding Employee's salary immediately
preceding the Change In Control and Employee's employment is terminated by
Employee or the Company within ninety (90) days after the Change In
Control, then (a) the Company shall pay to Employee on or before ninety
(90) days after the consummation of the Change In Control an amount equal
to one (1) year's Base Salary, at the rate in effect immediately prior to
the Change In Control, (b) all outstanding stock options held by Employee
shall become exercisable upon the consummation of the Change In Control,
and (c) this Agreement shall terminate when the rights of the Employee and
the obligations of the Company, as set forth in this section have been
fulfilled. If the rights of the Employee and the obligations of the Company
as set forth in this section are not fulfilled and satisfied within the
stated 90-day period, the Company will remain liable to the Employee for
those obligations until they are satisfied. Notwithstanding the foregoing,
no new rights or obligations shall accrue or be incurred during the period
that this Agreement is not terminated because of the failure of the Company
to satisfy its obligations. A Change In Control shall mean the sale,
liquidation, dissolution, consolidation, merger or other business
combination of or involving the Company, or the change in ownership of more
than 30 percent of the Company, or the transfer of all or substantially all
of the Company's assets.
8. Corporate Data And Information. Employee understands that Employee has
access to certain information concerning the Company and its business that is
provided solely in connection with Employee's employment with the Company. Any
other use of this information at any time during or after the term of this
Agreement is prohibited. Further, Employee understands that the Company may
become a publicly traded company and it is important for the Company to protect
the rights of its shareholders. Employee understands that applicable federal
securities laws impose significant restrictions concerning the use or disclosure
of certain non-public information in general and in buying or selling, or
discussing with others the possibility of buying or selling, the Company's stock
by persons who have access to material information concerning the Company which
is not generally available to members of the general public. Employee
understands that Employee is or will become subject to these restrictions and
Employee agrees that Employee will not, and that Employee will insure that any
persons having access to such non-public information through Employee will not,
buy or sell the Company's stock, or discuss with others any material non-public
information concerning the Company or the possibility or advisability of buying
or selling the Company's stock, at any time that Employee possesses material
non-public information concerning the Company. During and after Employee's
employment, Employee agrees that Employee will not at any time disclose, to any
person or entity for any reason or purpose whatsoever, nor use for Employee's
own personal benefit or the benefit of any person or entity, any information
concerning the financial or business or other operations of the Company that is
not publicly known, provided that this restriction shall not apply to
information required to be disclosed under applicable laws, regulation, court
order or subpoena to which the Employee is subject. Upon the termination of the
Employee's employment under this Agreement for any reason, the Employee hereby
agrees to return to the Company all data and information relating to the
business of the Company or any of its subsidiaries or affiliates that the
Employee obtained during or prior to the time of Employee's employment. It is
expressly agreed that the terms and conditions of this Paragraph 8 shall apply
after any termination, whether voluntary or involuntary, of the Employee's
employment under this Agreement.
9. Non-Compete. Employee acknowledges and recognizes the highly competitive
nature of the Company's business and that Employee's duties hereunder justify
restricting Employee's further employment following any termination of
employment. The Employee agrees that so long as the Employee is employed by the
Company, (i) for a period of two years following the termination of this
Agreement, Employee, except when acting on behalf of or for the benefit of the
Company, will not induce customers, agents or other sources of distribution of
the Company's business under contract or doing business with the Company to
terminate, reduce, alter or divert business with or from the Company, and (ii)
for a period of one year following the termination of this Agreement, Employee
will not compete, within the State of Colorado, with the Company, or participate
as an officer or a principal in any business that includes part or all of the
Company's Area Of Business, as defined below. The covenant set forth under (ii)
above shall not apply if Employee's employment is terminated within 90 days of a
Change In Control as defined in Section 7.6 of this Agreement. Ownership by
Employee, for investment purposes only, of less than five percent of any class
of securities of a corporation if said securities are listed on a national
securities exchange or registered under the Securities Exchange Act of 1934, as
amended, shall not constitute a breach of the covenant set forth under (ii)
above. The Company's Area Of Business includes the acquisition and operation of
real estate properties with specific focus of investment and acquisition
activities in the office/industrial sector. It is the desire and intent of the
Parties that the provisions of this Section 9 be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular portion of Section 9
shall be adjudicated to be invalid or unenforceable, Section 9 shall be deemed
amended to apply in the broadest allowable manner and to delete therefrom the
portion adjudicated to be invalid or unenforceable, such amendment and deletion
to apply only with respect to the operation of Section 9 in the particular
jurisdiction in which that adjudication is made.
10. Representations And Warranties.
10.1 The Company represents and warrants to Employee as follows: (i)
the Company has been duly formed as a corporation under the laws of the
State of Delaware; and (ii) the execution of this Agreement has been duly
authorized by the Company and does not require the consent of or notice to
any party not previously obtained or given.
10.2 Employee represents and warrants to the Company that the
execution of this Agreement and the performance of Employee's obligations
hereunder does not require the consent of or notice to any party not
previously obtained or given, and there is nothing that prohibits or
restricts the execution by Employee of this Agreement or his performance of
the obligations hereunder.
11. Covenants. Each of Employee and the Company covenants to diligently and
skillfully do and perform the acts and duties required herein.
12. Miscellaneous.
12.1 Entire Agreement. This Agreement constitutes the entire Agreement
between the Parties with respect to the subject matter of this Agreement
and supersedes all prior and contemporaneous agreements between the Parties
with respect to the subject matter of this Agreement.
12.2 Notice. All notices, requests, demands, directions and other
communications ("Notices") concerning this Agreement shall be in writing
and shall be mailed or delivered personally or sent by telecopier or
facsimile to the applicable Party at the address of such Party set forth
below in this Section 12.2. When mailed, each such Notice shall be sent by
first class, certified mail, return receipt requested, enclosed in a
postage prepaid wrapper, and shall be effective on the fifth business day
after it has been deposited in the mail. When delivered personally, each
such Notice shall be effective when delivered to the address for the
respective Party set forth in this Section 12.2. When sent by telecopier or
facsimile, each such Notice shall be effective on the day on which it is
sent provided that it is sent on a business day and further provided that
it is sent prior to 5:00 p.m., local time of the Party to whom the Notice
is being sent, on that business day; otherwise, each such Notice shall be
effective on the first business day occurring after the Notice is sent.
Each such Notice shall be addressed to the Party to be notified as shown
below:
The Company: AmeriVest Properties, Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0
Xxxxxx, Xxxxxxxx 00000
Facsimile No. (000) 000-0000
Employee: Xxxxx X. Xxxxx
00000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Either Party may change its address for purposes of this Section 12.2 by
giving the other Party written notice of the new address in the manner set forth
above.
12.3 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, and if any provision of this Agreement shall be or become
prohibited or invalid in whole or in part for any reason whatsoever, that
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remaining portion of that provision or
the remaining provisions of this Agreement.
12.4 Non-Waiver. The waiver of either Party or a breach or violation
of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach or violation of any provision of this
Agreement.
12.5 Amendment. No amendment or modification of this Agreement shall
be deemed effective unless and until it has been executed in writing by the
parties to this Agreement. No term or condition of this Agreement shall be
deemed to have been waived, nor shall there be any estoppel to enforce any
provision of this Agreement, except by a written instrument that has been
executed by the Party charged with such waiver or estoppel.
12.6 Inurement. This Agreement shall be binding upon, and inure to the
benefit of Employee and the Company, and their respective heirs, successors
and assigns. Notwithstanding the foregoing, this Agreement shall not be
assignable by either Party. There are no third party beneficiaries to this
Agreement.
12.7 Headings. The headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its
interpretation.
IN WITNESS WHEREOF, this Agreement is executed on the dates set forth below
to be effective as of the Effective Date.
EMPLOYEE:
Date: 1/2/98 /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, individually
AMERIVEST PROPERTIES, INC.:
Date: 1/8/98 By: /s/ Xxxxxx X. XxXxxx
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Xxxxxx X. XxXxxx, Secretary
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