EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), is entered into as of January 1,
1996, by and between INSIGNIA FINANCIAL GROUP, INC., a Delaware corporation with
an office at One Insignia Financial Xxxxx, Xxxx Xxxxxx Xxx 0000, Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000 ("Company"), and XXXX X. LINES an individual with an office
at One Insignia Financial Xxxxx, Xxxx Xxxxxx Xxx 0000, Xxxxxxxxxx, Xxxxx
Xxxxxxxx 00000 ("Executive").
Background
The Company desires to assure itself of the services of the Executive for
the 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, 1996, and
ending on June 30, 1997, subject to earlier termination as set forth herein
(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 General Counsel and Secretary of the Company. In the performance of his
duties hereunder, the Executive shall report to and shall be responsible to
the President of the Company's Financial Services Division. The Executive
agrees to his employment as described in this Section 2, and agrees to
devote substantially all of his time and efforts to the performance of his
duties hereunder and to Metropolitan Asset Enhancement, L.P. and its
subsidiaries. The Executive shall be available to travel as the needs of
the business of the Company require.
(b) Location of Office. During the Employment Period, the Executive's
office shall be located in offices of the Company located in Greenville,
South Carolina. The Company will provide the Executive with his current
office, use of an executive secretary, and other support appropriate to his
duties hereunder. The Executive will relocate, within a reasonable period
of time, to any location in the continental United States where the
Company's principal executive offices are relocated if there is at least
one year remaining in the Employment Period, and in connection therewith,
the Company shall pay for relocation expenses incurred in connection
therewith that are of the type customarily paid by the Company with respect
to relocations of executives holding a similar executive position.
(c) Primary Responsibilities. During the Employment Period, the
Executive shall have such responsibilities as are assigned to him by the
President of the Company's Financial Services Division.
Section 3. 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 following:
(a) Base Salary. Subject to the provisions of Sections 6 and 7, a base
salary at the rate of $160,000 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 increased by action of the Board of Directors.
(b) Annual Bonus. An annual bonus ("Bonus"), the amount of which shall
be determined by the Board of Directors of the Company, acting in its sole
discretion, and shall be paid to the Executive, with respect to any fiscal
year of the Company, before the expiration of sixty (60) days after the end
of such fiscal year.
(c) 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 introduced generally to senior
corporation officers of the Company or 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.
(d) 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 at The Commerce Club, Greenville, South
Carolina; and
(ii) Reasonable consultations with financial and tax advisors or
counselors, including annual income tax preparation.
(e) 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 to be a member by the President of the
Company's Financial Services Division, upon the
presentation of appropriate documentation therefor in accordance with the
then regular procedures of the Company.
(f) Vacations. Paid vacations and leaves-of-absence in accordance with
the then regular procedures of the Company governing executives, which
policy currently provides four (4) weeks of paid vacation per year on a
non-cumulative basis.
Section 4. 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 under no physical or mental disability that would hinder his
performance of duties under this Agreement.
Section 5. Non-Competition.
(a) In view of the unique and valuable services it is expected the
Executive will render to the Company, the Executive's knowledge of the
customers, trade secrets and other proprietary information relating to the
business of the Company and its customers and suppliers, and similar
knowledge regarding the Company it is expected the Executive will obtain,
the Executive agrees that during the Employment Period and for a period of
one (1) year thereafter, he will not compete with or be engaged in the same
business as, or Participate In (as hereinafter defined) any other business
or organization which, at the time of the cessation of the Employment
Period, competes with or is engaged in the same business as the Company,
with respect to any product or service sold or activity engaged in by the
Company in any geographical area which at the time of such cessation such
product or service is sold or activity is engaged in by the Company;
provided, however, that the provisions of this Section 5 shall not be
interpreted to preclude the Executive, at any time and from time to time,
from (a) Participating In any other person or organization if approved by a
majority of the independent Directors of the Company, or (b) to the extent
otherwise prohibited hereby, owning not more than five (5%) percent of the
outstanding capital stock of any publicly-traded person. The terms
"Participate In" and "Participating In" shall mean "directly or indirectly,
for his own benefit or for, with or through any other person, own or
owning, manage or managing, operate or operating, control or controlling,
loan money to or lending money to, or participate in or participating in,
as the case may be, the ownership, management, operation, or control of or
be connected or being connected, as the case may be, as a director,
officer, employee, partner, consultant, agent, independent contractor or
otherwise with, or acquiesce or acquiescing, as the case may be, in the use
of his name in". The Executive will not directly or indirectly employ any
person who, at any time up to such cessation, was an employee of the
Company, within a period of two (2) years after such person leaves the
employ of the Company.
(b) All confidential information which the Executive may now possess,
may obtain during or after the Employment Period, or may create prior to
the end of the Employment Period 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
termination of his employment, or used by him except during the Employment
Period in the business and for the benefit of the Company and its
subsidiaries and affiliates. The Executive shall return all tangible
evidence of such confidential information to the Company prior to or at the
termination of his employment hereunder.
(c) Since a breach of the provisions of this Section 5 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 seek an
injunction restraining such breach. The Executive agrees that the
provisions of this Section 5 are necessary and reasonable to protect the
Company in the conduct of its business. If any restriction contained in
this Section 5 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.
Section 6. 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
Executor 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
majority vote of the independent members of the Board of Directors of
the Company that termination of this Agreement is necessary by reason
of (A) the conviction of the Executive of a felony under state or
federal law, unless in any such case the Executive performed such act
in good faith and in a manner the Executive reasonably
believed to be in or not opposed to the best interests of the Company,
(B) the continued material breach by the Executive of any of the
material provisions of this Agreement for a period of thirty (30) days
after written notice of such breach is delivered to the Executive by
the Company, (C) failure by the Executive to comply with any material
directive of the Board of Directors of the Company, (D) the taking by
the Executive of any action on behalf of the Company without the
possession by the Executive of the appropriate authority to take such
action, (E) a violation of the provisions of Section 5 or 12 by the
Executive, (F) the taking by the Executive of actions in conflict of
interest with the Company, given the Executive's positions with the
Company and its subsidiaries and affiliates, or (G) the usurpation of
a corporate opportunity of the Company by the Executive.
(vi) Termination Without Cause. As used herein, "Termination
Without Cause" shall mean any termination of the Executive's
employment hereunder that is not a Termination For Cause, a Death
Termination Event or a Disability Termination Event.
(b) Death Termination Event. Upon the occurrence of a Death
Termination Event, this Agreement shall terminate automatically upon the
date that such Death Termination Event occurred (subject to the last
sentence of this Section 6), whereupon the Company shall continue to pay
the then-current Base Salary to the Estate for a period equal to the
remaining term of the Employment Period (determined upon the assumption
that the Employment Period will not be terminated prior to June 30, 1997).
(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 6).
(d) Termination For Cause. The Executive and the Company agree that
the Company shall have the right to effectuate a Termination For Cause
prior to June 30, 1997. Upon the occurrence of a Termination For Cause,
this Agreement shall terminate upon the date that such Termination For
Cause occurs (subject to the last sentence of this Section 6), whereupon
the Executive shall be entitled to receive the Base Salary, as then in
effect, to and including the date that such Termination For Cause occurs.
(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 last sentence of this
Section 6), whereupon the Company shall (A) in the event that such
Termination Without Cause is not a Change In Control Termination (as
defined in Section 7(b)), continue to pay the then-current Base Salary to
the Executive until June 30, 1997, and (B) in the event that such
Termination Without Cause is a Change In Control Termination, pay to the
Executive the Xxxxxx Termination Payment (as defined in Section 7(a)) in
accordance with the provisions of Section 7.
Notwithstanding anything in this Agreement to the contrary, (i) Sections
3(e), 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17 and 18 of this Agreement
shall survive any termination of this Agreement or of the Executive's employment
hereunder until the
expiration of the statute of limitations applicable hereto, and (ii) Section 5
of this Agreement shall survive any termination of this Agreement or of the
Executive's employment hereunder other than a Termination Without Cause, it
being understood and agreed by the parties hereto that in the event of a
Termination Without Cause, Section 5(a) of this Agreement shall be terminated in
its entirety as of the date of such Termination Without Cause.
Section 7. Xxxxxx Termination Event.
(a) Definitions.
(i) Code. As used herein, the term "Code" shall mean the Internal
Revenue Code of 1986, as amended on the date hereof and as
subsequently amended, modified or superseded.
(ii) Xxxxxx Termination Event. As used herein, the term "Xxxxxx
Termination Event" shall have the meaning ascribed to (A) the term
"Change in Control" pursuant to Section 7(a) of that certain
Employment Agreement, dated as of September 1, 1993, by and between
the Company and Xxxxxx Xxxxxxxx Xxxxxx, as amended from time to time
(the "Xxxxxx Employment Agreement"), (B) the term "Influence Change In
Control" pursuant to Xxxxxx Employment Agreement, and/or (C) the term
"Stock Change In Control" pursuant to Section 7(a) of the Xxxxxx
Employment Agreement. A copy of the definitions of such terms in the
Xxxxxx Employment Agreement is attached hereto as Schedule 1 and is
hereby made a part hereof.
(iii) Xxxxxx Termination Payment. As used herein, the term
"Xxxxxx Termination Payment", as determined at any time, shall mean
the Base Salary as in effect at such time, multiplied by three;
provided, however, that if at such time such payment, if made, would
be subject to an excise tax pursuant to Section 4999 of the Code, or
any successor law, rule or regulation, then such payment shall mean
the Base Salary as in effect at such time, multiplied by three, plus
an amount sufficient to pay such excise tax (taking into account the
fact that such additional amount may in and of itself be subject to
such excise tax).
(b) Xxxxxx Termination Event. Upon the occurrence of a Xxxxxx
Termination Event during the Employment Period, (i) this Agreement shall be
terminated as of the date of such Xxxxxx Termination Event (a "Change In
Control Termination"), (ii) the provisions of Section 6(e) of this
Agreement shall be in effect as of the date of such Xxxxxx Termination
Event, and (iii) the Company shall pay to the Executive, in immediately
available funds, the Xxxxxx Termination Payment on the date of the
occurrence of such Xxxxxx Termination Event; provided, however, that a
Xxxxxx Termination Event, and a Change In Control Termination, shall be
deemed to have not occurred hereunder in such event if, (x) in the case of
the disposition of the properties and business of the Company,
substantially as an entity, by merger, consolidation, sale of assets or
otherwise, the purchaser or surviving entity, as the case may be, and the
Executive mutually agree to continue the Executive's employment hereunder
for the remainder of the Employment Period at a Base
Salary equal to one hundred fifty (150%) percent of the then-current Base
Salary, or (y) in any other case, the Company and the Executive mutually
agree to continue the Executive's employment hereunder for the remainder of
the Employment Period at a Base Salary equal to one hundred fifty (150%)
percent of the then-current Base Salary.
Section 8. Indemnification. The Company has indemnified the Executive
pursuant to the terms of an Indemnification Agreement which was executed by the
Company and the Executive and delivered by the Company to the Executive and by
the Executive to the Company as of May 25, 1995.
Section 9. 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 10. Survival. The covenants, agreements, representations and
warranties contained in or made pursuant to this Agreement shall survive the
termination of this Agreement, irrespective of any investigation made by or on
behalf of any party hereto. All confidential information which the Executive may
now possess, may obtain during or after the Employment Period, or may create
prior to the end of the Employment Period 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 termination of his
employment, or used by him except during the Employment Period in the business
and for the benefit of the Company and its subsidiaries and affiliates. The
Executive shall return all tangible evidence of such confidential information to
the Company prior to or at the termination of his employment hereunder.
Section 11. 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 12. 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 2).
Notice to the Estate shall be sufficient if addressed to the Executive as
provided in this Section 13. 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 13. Waiver. Any waiver by either party of a breach of any provision
of this 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 14. Binding Effect. The Executive's rights and obligations under
this Agreement shall not be transferrable 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 15. 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 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.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.
INSIGNIA FINANCIAL GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Its: Executive Managing Director
/s/ Xxxx X. Lines
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Xxxx X. Lines
