EXHIBIT 10.6
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement"), is made and entered into as of June 18,
2001, between XXXXX & XXXXX COMPANY, a Delaware corporation (the "Company"), and
XXX X. XXXXX (the "Executive").
1. POSITION AND DUTIES. The Executive shall have the title and
position of Chief Financial Officer of the Company. Subject to control of the
Board of Directors of the Company (the "Board"), the Executive shall have such
duties and responsibilities commensurate with his title and position, and shall
report to the Chief Executive Officer of the Company.
2. LOCATION OF EMPLOYMENT. Executive's principal place of employment
shall be New York, New York.
3. PERIOD OF CONTRACT EMPLOYMENT. The term "Period of Contract
Employment," as used in this Agreement, means the period beginning on June ___,
2001 and ending on the earlier of June 30, 2004 or, subject to the terms hereof,
upon termination of the Executive's employment with the Company.
4. ANNUAL BASE SALARY. During the Period of Contract Employment, the
Company agrees to pay the Executive a base salary (the "Base Salary") in the
annual amount of $275,000 for the first year of the Period of Contract
Employment, $302,500 for the second year of the Period of Contract Employment,
and $332,750 for the third year of the Period of Contract Employment. The Base
Salary shall be payable as current salary, in installments (not less frequently
than monthly) subject to all applicable withholding and deductions, in
accordance with the Company's customary payroll practices.
5. BONUS COMPENSATION. During the Period of Contract Employment, the
Executive shall receive annual bonus compensation ("Bonus Compensation") as
follows:
PERIOD BONUS COMPENSATION
Sign On Bonus $27,500
June ___, 2001 through June 30, 2002 $110,000 guaranteed
Annually thereafter through the end Targeted bonus of 40% of
of the Period of Contract Employment Base Salary; maximum bonus
of 80% of Base Salary
Except during the first year of the Period of Contract Employment,
Bonus Compensation shall be based upon the performance of both the Executive and
the Company of goals to be established by the Chief Executive Officer of the
Company, in consultation with the Executive, within three (3) months of the
Executive's commencement of employment. All Bonus Compensation shall be payable
after June 30th of the year to which the Bonus Compensation is applicable in one
lump sum, subject to all applicable withholding and deductions, in accordance
with the Company's customary payroll and bonus payment practices.
6. STOCK OPTIONS. Pursuant to the Company's 2000 Stock Option Plan
(referred to throughout this Agreement as the "Plan"), subject to the approval
of the Compensation Committee of the Board, on the date of commencement of the
Executive's employment, the Board shall grant the Executive a stock option (the
"Option") to purchase an aggregate of one hundred thousand (100,000) shares of
the Company's common stock, $.01 par value per share (the "Common Stock"), at an
exercise price, pursuant to the terms of the Plan, equal to the closing price of
the Common Stock on The New York Stock Exchange on the trading day next
preceding the date of grant. Additional Options may be granted to the Executive
by the Compensation Committee of the Board in its absolute discretion. The terms
of the Options shall be set forth in an agreement between the Company and the
Executive, which shall reflect the terms hereof and the terms and conditions set
forth in the Company's standard form of option agreement (the "Option
Agreement"). The Options shall become exercisable twenty percent (20%) one year
from the date of grant, an additional twenty percent (20%) two years from the
date of grant, and the remaining sixty percent (60%) three years from the date
of grant and shall expire ten (10) years after the date of grant; provided,
however, that in the event that the Executive's employment with the Company is
terminated by the Company without cause or the Executive resigns for Good
Reason, the Executive shall have the right to exercise vested Options (i.e.,
Options which are exercisable as of the termination date) for a period of six
(6) months after such termination date. Notwithstanding the foregoing, (i) in
the event of a "Change of Control" as defined in the Plan, or (ii) if the
Executive terminates his employment for "Good Reason" as defined herein, or
(iii) if the Executive is terminated by the Company other than for "Cause" as
defined herein, then, in any of such events, all unvested Options shall
immediately vest and become exercisable and remain so for a period of six (6)
months unless otherwise cancelled or assumed following a Change of Control as
provided by the terms of the Plan.
7. BENEFITS. During the Period of Contract Employment, and in the
event of a termination under Section 10(a) or 10(d) of this Agreement during the
Severance Period (as defined below), as applicable, the Executive shall be
entitled to participate in or receive benefits equivalent to any employee
benefit plan or other arrangement, including but not limited to any medical,
dental, retirement, disability, life insurance, sick leave and vacation plans or
arrangements, generally made available by the Company to its employees having a
title and position equivalent to Executive's, subject to or on a basis
consistent with the terms, conditions and overall administration of such plans
or arrangements; PROVIDED, that such plans and arrangements are made available
at the discretion of the Company and nothing in this Agreement establishes any
right of the Executive to the availability or continuance of any such plan or
arrangement. Provided that the Executive is insurable at commercially reasonable
rates, the Company shall purchase during the Period of Contract Employment, a
$1,000,000 term life insurance policy for the Executive, naming his estate or
designated beneficiary as the beneficiary thereof. The Company shall reimburse
the Executive for up to five thousand dollars ($5,000) in attorneys' fees
expended in the negotiation of this Agreement.
8. TERMINATION. The following termination provisions and benefits are
in lieu of the benefits available under the Company's Executive Change of
Control Plan. Executive agrees that his termination provisions and benefits
shall not be governed by such Plan.
(a) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may
terminate the Executive's employment under this Agreement without Cause
at any time
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by giving written notice to the Executive. Such termination will become
effective upon the date specified in such notice (the "Effective Date"),
provided that such date is at least 30 days after the date of such
notice. Upon any such termination, the Company will pay the Executive,
within five days of the Effective Date of termination and subject to the
Executive's execution and delivery of such documents of release as the
Company may reasonably request: (i) all earned but unpaid Base Salary and
vacation pay through the Effective Date, payable in a lump sum within
five (5) days after the Effective Date; and (ii) all Base Salary payable
in accordance with the Company's customary payroll practices, and
benefits for a period (the "Severance Period") of either twelve (12)
months following the Effective Date or through the end of the Contract
Period of Employment, whichever period is shorter (the "Severance
Benefit").
(b) TERMINATION BY THE COMPANY FOR CAUSE. The Company may
immediately terminate the Executive's employment at any time for Cause by
giving written notice to the Executive. Upon any such termination for
Cause, the Executive shall have no right to compensation under Section
8(a)(ii), including, without limitation, and except as required by law,
to participate in any employee benefit programs under Section 7 for any
period subsequent to the date of termination. For purposes of this
Section 8(b), "Cause" shall mean: (i) the Executive is convicted of or
pleads guilty or nolo contendere to a felony; (ii) the Executive, in
carryout out his duties hereunder, commits acts involving dishonesty or
fraud or is guilty of gross negligence or willful misconduct; or (iii)
the Executive refuses to comply with any lawful directive of the Board
that is commensurate with the Executive's titles within 15 days after
written notice has been given to the Executive by the Company.
(c) DEATH OR DISABILITY. This Agreement and the obligations of
the Company hereunder will, upon the Company's election in writing to the
Executive within 30 (thirty) days thereafter, terminate upon the death or
disability of the Executive. For purposes of this Section 8(c),
"disability" shall mean that for a period of more than three (3) months
the Executive is unable to perform the essential functions of his duties
because of physical, mental or emotional incapacity resulting from
injury, sickness or disease.
(d) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive
may terminate his employment under this Agreement at any time for Good
Reason by giving written notice to the Company. For purposes of this
Section 8(d), "Good Reason" shall mean: (i) there is a Change of Control;
(ii) the Executive's principal place of employment is moved to a location
other than in New York City; (iii) the Executive suffers a reduction in
title or is required to report to other than the Chief Executive Officer
of the Company; or (iv) a material breach of the Agreement by the Company
that is not cured fifteen (15) days after written notice of the breach
has been given to the Company by the Executive. In the event of such a
termination, the Executive shall be entitled to the Severance Benefit set
forth in Section 8(a) and benefits set forth in Section 7 during the
Severance Period.
(e) TERMINATION BY THE EXECUTIVE WITHOUT GOOD REASON. The
Executive may terminate his employment under this Agreement at any time
by giving written notice to
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the Company. Such termination will become effective upon the date
specified in such notice, provided that such date is at least 30 days
after the date of delivery of the notice. Upon any such termination, the
Company shall be relieved of all of its obligations under this Agreement,
except for payment of salary and the provision of benefits through the
effective date of termination.
9. NO SOLICTATION. The Executive hereby covenants and agrees that
during the Period of Contract Employment and for one (1) year following the
expiration or termination of employment with the Company, he will not, for
himself or any third party, directly or indirectly: (i) divert or attempt to
divert from the Company any business of any kind in which the Company is
engaged; or (ii) solicit for employment or otherwise solicit as a consultant or
independent contractor any individual employed by the Company, engaged by the
Company as an independent contractor or otherwise associated with the Company
during the period of such individual's employment, engagement or association.
10. CONFIDENTIALITY. The Executive hereby covenants and agrees, for a
period of five (5) years from the date hereof (the "Restricted Period"), he will
not, directly or indirectly, make use of or divulge to any other person, firm or
corporation any trade or business secret, process, method or means or any other
confidential information concerning the business or policies of the Company or
any subsidiary thereof. The Executive's obligations shall not apply to any
information which (i) is known publicly; (ii) is in the public domain or
hereafter enters the public domain without the fault of the Executive; (iii) is
known to the Executive prior to his receipt of such information from the Company
or any of its subsidiaries, as evidenced by the Executive's written records; or
(iv) is disclosed to the Executive by a third party not under an obligation of
confidence to the Company.
11. SEVERABILITY, ENFORCEABILITY. In the event that the provisions of
the Section captioned "No Solicitation" or "Confidentiality", or any portion
thereof, should ever be adjudicated by a court of competent jurisdiction in
proceedings to which the Company is a proper party to exceed the time or
geographic or other limitations permitted by applicable law, then such
provisions will be deemed reformed to the maximum time or other limitations
permitted by applicable law, as determined by such court in such action, the
parties hereby acknowledging their desire that in such event such action be
taken. Without limiting the foregoing, the covenants contained herein will be
construed as separate covenants covering their respective subject matters,
including, without limitation, with respect to (a) each business now conducted
by the Company or its successors, and (b) the Company and its successors
separately. In addition to the above, all provisions of this Agreements are
severable, and the invalidity or unenforceability of any provision or provisions
of this Agreement or portions or aspects thereof will not affect the validity or
enforceability of any other provision, or portion of this Agreement, which will
remain in full force and effect as if executed with the unenforceable or invalid
provision or portion or aspect thereof modified, as set forth above.
12. GOVERNING LAW. This Agreement is being made and executed in and is
intended to be performed in the State of New York and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of New York, without regard to the conflict of laws principles
thereof.
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13. ENTIRE AGREEMENT. This Agreement and the Option Agreement comprise
the entire agreement between the parties hereto relating to the subject matter
hereof and, as of the date hereof, supersede, cancel and annul all previous
employment agreements between the Company (and/or its predecessors) and the
Executive, as the same may have been amended or modified, and any right of the
Executive thereunder other than for compensation accrued thereunder as of the
date hereof, and supersede, cancel and annul all other prior written and oral
agreements between the Executive and the Company or any predecessor to the
Company. The terms of this Agreement and the Option Agreement are intended by
the parties to be the final expression of their agreement with respect to the
employment of the Executive by the Company and may not be contradicted by
evidence of any prior or contemporaneous agreement. The parties acknowledge that
the award of Options is a material inducement to Executive in entering into this
Agreement with the Company.
14. DISPUTES. Any dispute or controversy arising under, out of, in
connection with or in relation to this Agreement shall be finally determined and
settled by arbitration. Arbitration shall be initiated by one party making
written demand upon the other party and simultaneously filing the demand
together with required fees in the office of the American Arbitration
Association in New York, New York. The arbitration proceeding shall be conducted
in New York, New York by a single arbitrator in accordance with the Expedited
Procedures of the Employment Dispute Resolution Rules required by the
arbitrator, the parties shall have no obligation to comply with discovery
requests made in the arbitration proceeding. The arbitration award shall be a
final and binding determination of the dispute and shall be fully enforceable as
an arbitration award in any court having jurisdiction and venue over such
parties.
15. NOTICES. Any notice, request, claim, demand, document and other
communication hereunder to any party will be effective upon receipt (or refusal
of receipt) and will be in writing and delivered personally or sent by telecopy
or certified or registered mail, postage prepaid, as follows: if to the Company,
addressed to the attention of its General Counsel at 0000 Xxxxxxx Xxxx, Xxxxx
000, Xxxxxxxxxx, XX 00000; and if to the Executive, at:
Xxx X. Xxxxx
00 Xxxxx Xxxx
Xxxxxxx, XX 00000
Either party may change the notice address by notifying the other party
in writing.
16. AMENDMENTS; WAIVERS. This Agreement may not be modified, amended,
or terminated except by an instrument in writing, approved by the Board and
signed by the Executive and the Company. By an instrument in writing similarly
executed, the Executive or the Company may waive compliance by the other party
with any provision of this Agreement that such other party was or is obligated
to comply with or perform; provided, that such waiver shall not operate as a
waiver of, or estoppel with respect to, any other or subsequent failure. No
failure to exercise and no delay in exercising any right, remedy or power
hereunder shall preclude any other or further exercise of any other right,
remedy or power provided herein or by law or in equity.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
XXXXX & XXXXX COMPANY
By: /s/ XXXXX X. XXXXXXXX /s/ XXX X. XXXXX
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Xxxxx X. Xxxxxxxx Xxx X. Xxxxx
Chief Executive Officer and President
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