EMPLOYMENT AGREEMENT
This AGREEMENT, made as of _____, 1996, by and between
XXXX, XXXX
& CO., INC., a corporation organized under the laws of the
State of New
Jersey, with its principal office at 00 Xxxx Xxxxxx, Xxxx Xxxxxx,
Xxx Xxxxxx
00000 (hereinafter the "Company"), and XXXXXXX X.
XXXXX whose
address is 00 Xxxxxxxx Xxxxx, Xxxx Xxxxxx, Xxx Xxxxxx
00000 (hereinafter
the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is currently serving as an Executive
Vice President
of the Company; and
WHEREAS, the Company desires that the Executive continue
his employment
with the Company, and the Executive desires to continue his
employment
relationship in such a position;
NOW, THEREFORE, in consideration of the premises and the
mutual
covenants herein set forth, the parties agree as follows:
Employment and Duties.
(a) The Company shall continue to employ the Executive,
during the term of
this Agreement and subject to the terms and conditions
contained herein, as an
Executive Vice President. The Executive shall perform such
duties and services
as may from time to time be determined and assigned to the
Executive by the
Chief Executive Officer or the Board of Directors of the
Company.
(b) If elected or appointed as a corporate officer and/or director
of the
Company, the Executive shall also perform such duties and
services as are
prescribed for such position in the By-Laws of the Company
and such
additional related duties and services as may from time to time
be determined
and assigned to him by the Board of Directors.
(c) The Executive shall devote sufficient time, attention, and
energies to
properly perform his duties and services under this Agreement
(allowing for
reasonable vacation periods as established by the personnel
policies of the
Board of Directors) and shall not during the term of this
Agreement be engaged
in any other business activity which will impair his ability to
properly perform
his duties and services hereunder.
(d) The Executive agrees that he will not, without the prior
approval of the
Board of Directors, undertake any activity or position of
responsibility (i) which
conflicts with or competes with the business of Company; or (ii)
whether or not
it is related to the business of the Company, which will
materially inhibit the
performance of his duties hereunder.
1. Term.
The Executive's employment under this Agreement shall
commence as of
January 1, 1997 and, subject to the provisions herein regarding
resignation,
termination with or without cause, death, disability, and
liquidation (the
"Termination Provisions"), shall continue for an indefinite term.
2. Compensation.
(a) During the term of this Agreement, subject to the
Termination Provisions,
the Executive shall be entitled to receive, in equal bi-weekly
installments, an
amount equal to $187,500 per annum as advance payments (a
"Draw") against
the aggregate commissions payable to the Executive with
respect to the sale of
securities and other financial products by the Executive,
calculated based on
sales by the Executive within a twelve (12) month period
commencing
December 31 and ending November 30 (the "Commission
Year"). The
aggregate commissions payable during any Commission Year
are hereinafter
referred to as the "Commissions".
(b) Notwithstanding the actual amount of any such
Commissions, $120,000 of
such Draw shall be guaranteed to the Executive and the
Company shall not be
entitled to any reimbursement with respect thereto. To the
extent that the
Commissions payable to the Executive with respect to any
Commission Year
exceed $90,000 (the "Excess Commissions"), any such Excess
Commissions up
to an amount equal to $67,500 shall be credited against the
Draw. To the
extent that the credit with respect to such Excess Commissions
is less than
$67,500, the difference between $67,500 and the amount of
such credit shall be
payable to the Company on or before December 31 following
the close of a
Commission Year (the "Settlement Date"); provided, however,
that the
Company may, but is not obligated to, permit such difference to
deducted from
any future Draw. To the extent that any such Excess
Commissions exceed the
amount of $67,500, the difference between the amount of such
Excess
Commissions and $67,500 shall be payable to the Executive on
or before the
Settlement Date.
3. Death of the Executive.
(a) In the event of the Executive's death during the term of this
Agreement, the
Company shall pay to the Executive's designated beneficiary, or
if no
beneficiary has been designated then to the Executive's estate, in
addition to the
salary earned by the Executive but unpaid as of the date of
death, the amount of
$150,000. Said amount shall be paid in a lump sum, within
thirty (30) days
after the date of death.
(b) The Executive's entitlement to the accrual of profit-sharing
under the
Company's profit-sharing plan shall terminate upon his death.
Any unpaid
profit-sharing benefits to which the Executive is entitled at the
time of his death
shall be paid to the Executive's designated beneficiary or estate
no later than
one (1) month following the Executive's death.
4. Disability of the Executive.
(a) If the Executive is unable to perform his regular duties and
services by
reason of illness or incapacity for a period of up to six (6)
months, the
Company shall continue to pay his salary at his then current rate
during such
period of illness or incapacity, less the amount of any disability
insurance
benefits paid directly to the Executive from any policy or
policies the premiums
for which have been paid by the Company.
(b) If the Executive's disability continues for more than six (6)
months, the
Executive's employment under this Agreement shall terminate,
and the
Company shall assign to the Executive at no cost to him all
rights which the
Company may then have in any disability income insurance
policies on the
Executive, which shall become the property of the disabled
Executive.
(i) If such termination occurs and the Executive is receiving
disability income
from such insurance policies, then the Company shall pay
severance pay to the
Executive in the amount of $150,000, provided he executes a
notice of
resignation from any position(s) he holds with the Company, a
confidentiality
agreement, and a mutual release with the Company (concerning
its subsidiaries
and affiliates, and its present and former officers, directors, and
employees), in
the form attached hereto with blanks appropriately completed.
Such severance
pay shall be paid in a lump sum, within thirty (30) days after the
effective date
of termination.
(ii) If such termination occurs but the Executive shall not be
receiving, or shall
not be eligible to receive, disability income from insurance
policies provided by
or through the Company, then the Company shall continue to
pay
compensation to the Executive at a per annum rate of $75,000,
for an
additional period of six (6) months. Following the end of such
additional six
(6) month period, the Company shall pay severance pay to the
Executive in the
amount of $150,000, provided he executes a notice of
resignation from any
position(s) he holds with the Company, a confidentiality
agreement, and a
mutual release with the Company (concerning its subsidiaries
and affiliates,
and its present and former officers, directors and employees), in
the form
attached hereto with blanks appropriately completed. Such
severance pay shall
be paid in a lump sum, within thirty (30) days after the date of
the end of the
term of the Agreement.
(c) If within three (3) months after returning to full-time
employment from a
period of disability of less than six (6) months' duration, the
Executive again
becomes disabled, the subsequent disability shall be considered
as part of the
original disability for the purpose of calculating the maximum
six (6) month
period during which the Executive's employment shall be
continued while he is
disabled.
(d) The parties agree that the within provisions will serve as
general guidance
in situations not specifically contemplated hereby and the
Company reserves
the right to review each occurrence of disability on a case-by-
case basis to
determine in its discretion the applicability of the policy to
situations where, for
example, the Executive is partially disabled or has multiple
periods of
disability.
(e) If the Company and the Executive disagree as to the
Executive's status of
disability or fitness and there is in force a disability income
insurance policy on
Executive (whether paid for by the Executive or the Company),
then the
Executive shall be deemed to be disabled for purposes of this
Agreement if any
such policy pays benefits because of the Executive's disability.
If no such
insurance is in force and there is a disagreement, the Executive
shall be
examined by a physician appointed jointly by a physician for the
Company and
a physician for the Executive, and the decision of such physician
jointly chosen
shall be binding upon the Company and the Executive. The fees
and expenses
of the physician so jointly selected shall be paid by the
Company. In the event
that the physician for the Company and the Executive cannot
mutually agree on
an examining physician, then such physician shall be chosen by
the Essex
County (New Jersey) Medical Society. The fees and expenses
of the physician
so chosen shall be paid by the Company.
(f) The Executive agrees to submit annually, at the request of
the Company, to a
general physical examination to be conducted at the Company's
expense by a
physician acceptable to the Company and the Executive. The
Executive further
agrees to authorize said physician to release medical
information to the Board
of Directors if, in the opinion of the physician, the physical
examination reveals
a condition relevant to the performance by the Executive of his
duties under
this Agreement.
5. Termination and Severance Pay.
This Agreement may be terminated during its term as follows:
(a) Voluntary Resignation.
(i) The Executive may terminate this Agreement without cause
by voluntary
resignation upon thirty (30) days' written notice to the
Company.
(ii) In that event, the Company shall pay severance pay to the
Executive in the
amount of $150,000. Such severance pay shall be paid in a
lump sum, within
thirty (30) days after the effective date of termination of the
Executive's
employment.
(iii) In the event of such voluntary resignation, the Executive's
entitlement to
the accrual of profit-sharing under the Company's profit-sharing
plan shall
terminate upon the effective date of termination of the
Executive's employment.
Any unpaid profit-sharing benefits to which the Executive is
entitled as of such
date shall be paid to the Executive no later than one (1) month
thereafter.
(iv) Following such termination of the Executive's employment,
the Company
shall continue indefinitely to provide to the Executive all
medical benefits to
which he would be entitled if he were still an employee of the
Company, upon
the same terms and conditions as such benefits are provided to
other employees
of the Company and subject to any changes in the terms and
conditions of such
benefits as the Company may institute from time to time;
provided, however,
that the provision of such benefits shall cease upon the
occurrence of either (A)
the liquidation of the Company, or (B) the Executive's
employment by another
company or other business organization (not including,
however, self-
employment) which provides medical benefits for which the
Executive is
eligible.
(b) Involuntary Termination Without Cause.
(i) The Company may terminate this Agreement without cause
upon thirty (30)
days' written notice to the Executive.
(ii) In that event, the Company shall pay severance pay to the
Executive in the
amount of $150,000. Such severance pay shall be paid in a
lump sum, within
thirty (30) days after the effective date of termination.
(iii) In the event of such termination, the Executive's entitlement
to the accrual
of profit-sharing under the Company's profit-sharing plan shall
terminate upon
the effective date of termination. Any unpaid profit-sharing
benefits to which
the Executive is entitled as of such date shall be paid to the
Executive no later
than one (1) month thereafter.
(iv) Following such termination of the Executive's employment,
the Company
shall continue indefinitely to provide the Executive all medical
benefits to
which he would be entitled if he were still an employee of the
Company, upon
the same terms and conditions as such benefits are provided to
other employees
of the Company and subject to any changes in the terms and
conditions of such
benefits as the Company may institute from time to time;
provided, however,
that the provision of such benefits shall cease upon the
occurrence of either (A)
the liquidation of the Company, or (B) the Executive's
employment by another
company or other business organization (not including,
however, self-
employment) which provides medical benefits for which the
Executive is
eligible.
(c) Involuntary termination for cause.
(i) In the event that the Executive engages in willful misconduct
or gross
negligence in his performance of the services contemplated by
this Agreement,
or engages in conduct which is otherwise materially detrimental
to the
Company's interest, including but not limited to the commission
of a felony or
perpetration of a common law fraud, the Company may
terminate this
Agreement for cause by giving written notice to the Executive
stating that it is
the Company's intention to terminate the Agreement effective
immediately, and
the Agreement shall so terminate.
(ii) In that event, the Company shall pay severance pay to the
Executive in the
amount of $75,000. Such severance pay shall be paid in a lump
sum, within
thirty (30) days after the effective date of termination.
(iii) In the event of such termination, the Executive's entitlement
to the accrual
of profit-sharing under the Company's profit-sharing plan shall
terminate upon
the effective date of termination. Any unpaid profit-sharing
benefits to which
the Executive is entitled as of such date shall be paid to the
Executive no later
than one (1) month thereafter.
(iv) Following such termination of the Executive's employment,
the Company
shall continue to provide such medical and other benefits to
Executive as it is
required by law to provide and such other benefits as called for
pursuant to the
Company's then current plans and policies, if any.
(d) Liquidation of the Company.
(i) In the event that the Board of Directors votes to liquidate
the Company, the
Executive shall not be guaranteed employment with the
Company for more
than one (1) month from the date of the vote to liquidate the
Company, and his
employment and this Agreement shall terminate after said one
(1) month,
unless the Board of Directors decides that the Executive's
employment should
be continued to assist in the orderly liquidation of the Company,
in which case
the Executive's employment shall continue subject to
termination at any time
thereafter by the Board of Directors. In no event shall any such
continuation
extend for a period of more than four (4) months from the date
of the vote to
liquidate.
(ii) When the Executive's employment is terminated as a result
of the
liquidation of the Company, the Company shall pay severance
pay to the
Executive in the amount of $150,000. Such severance pay shall
be paid in a
lump sum on the effective date of termination.
(e) Notice of Resignation. Notwithstanding anything contained
herein to the
contrary, the right of the Executive to receive any payment or
benefit under this
Section 6 shall be conditioned upon the execution by the
Executive of (i) a
notice of resignation from any position(s) he holds with the
Company,
including, without limitation, as a member of the Board and (ii)
a
confidentiality agreement and a mutual release with the
Company (concerning
its subsidiaries and affiliates, and its present and former officers,
directors, and
employees), each in the form attached hereto with blanks
appropriately
completed,
6. Notice.
Any notice to be given by either party under this Agreement
shall be in writing,
mailed by certified mail with return receipt requested, and
addressed to the
other party at the address stated herein or such other address as
may
subsequently have been furnished by such other party in writing.
Any such
notice shall be deemed to have been given on the date of
mailing. Notices to
the Company shall be sent to its National
Headquarters/Northeast at:
00 Xxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxxxx 00000;
and notices to the Executive shall be sent to him at:
00 Xxxxxxxx Xxxxx
Xxxx Xxxxxx, Xxx Xxxxxx 00000.
7. Governing Law.
This Agreement has been executed and delivered in the State of
New Jersey and
shall in all respects be governed by and construed and enforced
in accordance
with the laws of New Jersey, including all matters of
construction, validity, and
performance.
8. Entire Agreement.
This Agreement constitutes the entire agreement of the parties
with respect to
the Executive's employment and his compensation therefor,
specifically
superseding all prior employment agreements between the
Executive and the
Company and any modifications thereof prior to the date of this
Agreement;
provided, however, that this Agreement shall not limit or in any
way affect the
rights, duties, or obligations that the Executive may have under
any benefit
plan of the Company, including, but not limited to, any pension
plan, profit-
sharing plan, or medical or health plan, except as may
specifically be set forth
herein.
9. Modifications, etc.
No modification, amendment, or waiver of any of the provisions
of this
Agreement shall be effective unless in writing specifically
referring to this
Agreement and signed by both parties.
10. Enforcement of Agreement.
The failure of either party at any time to enforce any of the
provisions of this
Agreement or to require performance by the other party of any
of the provisions
hereof shall not operate as or be construed as a waiver of such
provisions or to
affect either the validity of this Agreement, or any part hereof,
or the right of
either party thereafter to enforce each and every provision in
accordance with
the terms of this Agreement.
11. Severability.
The invalidity or unenforceability of any particular provision of
this Agreement
shall not affect the other provisions hereof, and this Agreement
shall be
construed in all respects and to the fullest extent permitted by
law as if such
invalid or unenforceable provision were omitted.
12. Binding Agreement; Assignment.
This Agreement shall be binding upon and shall inure to the
benefit of the
Company and any legal successor to the Company shall be
deemed to be
substituted for the Company under the provisions hereof.
This Agreement shall also be binding upon and shall inure to the
benefit of the
Executive, his heirs, executors, legal representatives and
assigns.
Other than as set forth above in this Section 13, neither the
Company nor
Executive shall have the right to assign its or his obligations or
duties
hereunder. However, notwithstanding anything to the contrary
contained in
Section 6 hereof, in the event that the Company proposes to
Executive, in
connection with a sale of all or a substantial portion of the
assets of the
Company to an entity with tangible net equity equal to or
greater than that of
the Company as of such date, that the Executive consent to the
assignment of
the Company's obligations and duties hereunder (and the right
to Executive's
services hereunder) to such Purchaser, and Executive does not
give such
consent, then the Company shall have the right in its discretion,
effective upon
the consummation of the above-referenced sale, to terminate
this Agreement. If
the Company so terminates, the Executive shall have such rights
as provided
for in Section 6(d) above.
13. Arbitration.
Any claims, controversies, demands, disputes or differences
between or among
the parties hereto or any persons bound hereby arising out of,
or by virtue of, or
in connection with, or otherwise relating to this Agreement shall
be submitted
to and settled by arbitration conducted in Newark, New Jersey
before one or
three arbitrators, each of whom shall be knowledgeable in the
fields of
employment law and investment banking. Such arbitration shall
otherwise be
conducted in accordance with the rules then obtaining of the
American
Arbitration Association. The parties hereto agree to share
equally the
responsibility for all fees of the arbitrators (provided, however,
that the
successful party shall be entitled to reimbursement of fees and
expenses from
the losing party in an amount not to exceed $50,000), abide by
any decision
rendered as final and binding, and waive the right to appeal the
decision or
otherwise submit the dispute to a court of law for a jury or non-
jury trial. The
parties hereto specifically agree that neither party may appeal or
subject the
award or decision of any such arbitrator(s) to appeal or review
in any court of
law or in equity or by any other tribunal, arbitration system or
otherwise.
Judgement upon any award granted by such an arbitrator(s)
may be enforced in
any court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be
executed by their duly authorized representatives on the day and
date first
above written.
ATTEST: XXXX,
XXXX &
CO., INC.
By:/s/Xxxxx X. Xxxxxx
XXXXX X. XXXXXX, President and Chief Executive Officer
WITNESS:
XXXXXXX X. XXXXX
DESIGNATION OF BENEFICIARY
For purposes of the payment of death benefits in accordance
with paragraph 4
of the within Amended and Restated Employment Agreement, I
hereby
designate __________________ as my beneficiary to receive
such payments,
subject to any conditions imposed by law.
WITNESS:
XXXXXXX X. XXXXX
DATED:
