EMPLOYMENT AGREEMENT
AGREEMENT made as of this 1st day of January, 1998, by and
between HOSPITALITY WORLDWIDE SERVICES, INC., a New York corporation with its
principal office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Corporation"), and XXXXXXX XXXXXX, residing at 0000 Xxxxx Xxxxx, Xxxxx Xxxxxx,
Xxxxxxx 00000 ("Executive").
W I T N E S S E T H :
WHEREAS, Executive has heretofore been employed pursuant to an
employment agreement dated as of January 9, 1997 between The Xxxxxxx Xxxxxx
Company and Executive (the "Prior Agreement");
WHEREAS, Executive and the Corporation desire to enter into a
new employment agreement that supersedes and replaces the Prior Agreement;
WHEREAS, the Corporation desires to continue to employ
Executive, and Executive is willing to undertake such employment, upon the terms
and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. Employment of Executive. The Corporation hereby employs
Executive as its President, to perform the duties and responsibilities incident
to such offices, subject at all times to the control and direction of the Board
of Directors of the Corporation (the "Board of Directors") and the Chief
Executive Officer of the Corporation (the "CEO").
2. Acceptance of Employment; Time and Attention. Executive
hereby accepts such employment and agrees that throughout the Term (as
hereinafter defined), he will devote his full time, attention, knowledge and
skills, faithfully, diligently and to the best of his ability, in furtherance of
the business of the Corporation, and will perform the duties assigned to him
pursuant to Section 1 hereof, subject, at all times, to the direction and
control of the Board of Directors and the CEO. As the President, Executive shall
perform such specific duties and shall exercise such specific authority as may
be assigned to Executive from time to time by the Board of Directors and the
CEO. Executive shall at all times be subject to, observe and carry out such
rules, regulations, policies, directions and restrictions as the Corporation
shall from time to time establish. During the Term, Executive shall not, without
the written approval of the Board of Directors first had and obtained in each
instance, directly or indirectly, accept employment or compensation from, or
perform services of any nature for, any business enterprise other than the
Corporation and its subsidiaries. During the Term, Executive shall not be
entitled to additional compensation for rendering employment services to
subsidiaries of the Company or for serving in any office of the Corporation or
any of its subsidiaries to which he is elected or appointed.
3. Term. Except as otherwise provided herein, Executive's
employment hereunder shall be for a two (2) year term commencing as of January
1, 1998 (the "Initial Term"), which may be
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renewed for such one (1) year periods as the Corporation and Executive may
mutually agree during the ninety (90) day period immediately prior to the
expiration of the Initial Term or any renewal thereof (the Initial Term and any
such renewal thereof are hereinafter collectively referred to as the "Term").
4. Compensation. The Corporation shall pay to the Executive,
commencing as of January 1, 1998, for the first year of his employment,
compensation at the rate of two hundred fifty thousand ($250,000) dollars per
year ("Base Salary"). For each year thereafter, the Base Salary will be
increased by (i) the percentage increase in the consumer price index (the "CPI")
for the New York/Northeastern New Jersey region, published by the United States
Department of Labor, at January 1 of such year over the CPI at January 1 of the
prior year or (ii) such higher amount as shall be determined by the Board of
Directors. Such compensation shall be payable in equal monthly installments. In
addition, Executive shall be entitled to receive from the Corporation such bonus
(the "Bonus") as the Board of Directors shall in its sole discretion determine.
All compensation paid to Executive shall be subject to withholding and other
employment taxes imposed by applicable law.
5. Additional Benefits. (a) In addition to such Base Salary,
he (and his family) shall be entitled to participate, to the extent he is (and
they are) eligible under the terms and conditions thereof, in any
profit-sharing, pension, retirement, hospitalization, insurance, disability,
medical service, stock option, bonus or other employee benefit plan generally
available to
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the executive officers of the Corporation that may be in effect from time to
time during the Term, as well as any discretionary bonus pool of the
Corporation. The Corporation shall be under no obligation to institute or
continue the existence of any such employee benefit plan.
(b) The Corporation shall obtain and maintain in full force
and effect during the Term, at the Corporation's sole cost and expense, a policy
or policies of term insurance on the life of Executive in the aggregate face
amount of five hundred thousand ($500,000) dollars. Executive shall submit to
any physical examinations necessary to obtain such policies and shall otherwise
cooperate with the Corporation in obtaining such insurance coverage. Any
insurance policy maintained by the Corporation on the life of Executive pursuant
to this Section 5(b) shall be made payable to such beneficiary or beneficiaries
as Executive may designate by written notice to the Corporation and the
Corporation agrees, promptly upon receipt of such notice, to take all such
action as may be necessary so as to notify the appropriate insurance company of
any change of beneficiary.
6. Reimbursement of Expenses. The Corporation shall reimburse
Executive in accordance with applicable policies of the Corporation for all
expenses, including automobile expenses, reasonably incurred by him in
connection with the performance of his duties hereunder and the business of the
Corporation, upon the submission to the Corporation of appropriate receipts or
vouchers.
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7. Facilities and Personnel. Executive shall be provided a
private office, secretarial services and such other facilities, supplies,
personnel and services as shall be required or reasonably requested for the
performance of his duties hereunder.
8. Vacation. Executive shall be entitled to four (4) weeks'
paid vacation in respect of each twelve (12) month period during the Term, such
vacation to be taken at times mutually agreeable to Executive and the Board of
Directors and in accordance with the Corporation's vacation policy. Unused
vacation shall be carried over to the subsequent twelve (12) month period.
9. Restrictive Covenant. In consideration of the Corporation's
entering into this Agreement, Executive agrees that during the Term, he will not
(i) directly or indirectly own, manage, operate, join, control, participate in,
invest in, or otherwise be connected with, in any manner, whether as an officer,
director, employee, partner, investor or otherwise, any business entity that is
engaged in the business of hotel renovation, procurement of hotel furniture,
fixtures and equipment, procurement and reordering of hotel operating supplies
and equipment, the development of hotel properties or any other business which
the Corporation is then engaged in, (ii) for himself or on behalf of any other
person, partnership, corporation or entity, call on any customer of the
Corporation for the purpose of soliciting, diverting or taking away any customer
from the Corporation, or (iii) induce, influence, or seek to induce or
influence, any person
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engaged as an employee, representative, agent, independent contractor or
otherwise by the Corporation, to terminate his or her relationship with the
Corporation. Nothing herein contained shall be deemed to prohibit Executive from
investing his funds in securities of an issuer if the securities of such issuer
are listed for trading on a national securities exchange or are traded in the
over-the-counter market and Executive's holdings therein represent less than 1%
of the total number of shares or principal amount of the securities of such
issuer outstanding.
Executive acknowledges that the provisions of this Section 9
are reasonable and necessary for the protection of the Corporation, and that
each provision, and the period or periods of time, geographic areas and types
and scope of restrictions on the activities specified herein are, and are
intended to be, divisible. If any provision of this Section 9, including any
sentence, clause or part hereof, shall be deemed contrary to law or invalid or
unenforceable in any respect by a court of competent jurisdiction, the remaining
provisions shall not be affected, but shall, subject to the discretion of such
court, remain in full force and effect and any invalid and unenforceable
provisions shall be deemed, without further action on the part of the parties
hereto, modified, amended and limited to the extent necessary to render the same
valid and enforceable.
10. Confidential Information. Executive shall hold in a
fiduciary capacity for the benefit of the Corporation all information, knowledge
and data relating to or concerned with its
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operations, sales, business and affairs, and he shall not, at any time for a
period of two (2) years after termination of his employment hereunder, use,
disclose or divulge any such information, knowledge or data to any person, firm
or corporation (unless the Corporation no longer treats such information as
confidential) other than to the Corporation or its designees and employees or
except as may otherwise be required in connection with the business and affairs
of the Corporation; provided, however, that Executive may disclose or divulge
such information, knowledge or data that (i) was known to Executive at the
commencement of his employment with the Corporation; (ii) is or becomes
generally available to the public through no wrongful act on Executive's part;
or (iii) becomes available to Executive from a person or entity other than the
Corporation; and provided, further, that the provisions of this Section 10 shall
not apply to Executive's know-how to the extent utilized by him in subsequent
employment otherwise than in breach of this Agreement.
11. Intellectual Property. Any idea, invention, design,
written material, manual, system, procedure, improvement, development or
discovery conceived, developed, created or made by Executive alone or with
others, during the Term and applicable to the business of the Corporation,
whether or not patentable or registrable, shall become the sole and exclusive
property of the Corporation. Executive shall disclose the same promptly and
completely to the Corporation and shall, during the Term and at any time and
from time to time hereafter (i) execute all documents
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requested by the Corporation for vesting in the Corporation the entire right,
title and interest in and to the same, (ii) execute all documents requested by
the Corporation for filing and prosecuting such applications for patents,
trademarks, service marks and/or copyrights as the Corporation, in its sole
discretion, may desire to prosecute, and (iii) give the Corporation all
assistance it reasonably requires, including the giving of testimony in any
suit, action or proceeding, in order to obtain, maintain and protect the
Corporation's right therein and thereto.
12. Equitable Relief. The parties hereto acknowledge that
Executive's services are unique and that, in the event of a breach or a
threatened breach by Executive of any of his obligations under this Agreement,
the Corporation shall not have an adequate remedy at law. Accordingly, in the
event of any such breach or threatened breach by Executive, the Corporation
shall be entitled to such equitable and injunctive relief as may be available to
restrain Executive and any business, firm, partnership, individual, corporation
or entity participating in such breach or threatened breach from the violation
of the provisions hereof. Nothing herein shall be construed as prohibiting the
Corporation from pursuing any other remedies available at law or in equity for
such breach or threatened breach, including the recovery of damages and the
immediate termination of the employment of Executive hereunder.
13. Termination for Cause. (a) The Corporation may at
any time dismiss Executive for "Cause." For purposes of this
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Agreement, the following shall constitute "Cause": (i) the death of Executive;
or (ii) the failure of Executive, as a result of illness, physical or mental
disability or other incapacity to render the services provided in this Agreement
for a period of one hundred eighty (180) consecutive days or one hundred eighty
(180) days during any one (1) year period ("Disability"); or (iii) the breach by
Executive of a fiduciary duty in the performance of his duties hereunder or a
breach of a material term of this Agreement, including (x) theft, embezzlement,
fraud, misappropriation of funds, other acts of dishonesty or the violation of
any law relating to Executive's employment; (y) Executive shall have entered a
plea of guilty or nolo contendre to, or have been found by a court of competent
jurisdiction to be guilty of a felony or other crime involving moral turpitude;
and (z) the breach by Executive of any other material provision of this
Agreement, which breach is not cured to the Corporation's reasonable
satisfaction within thirty (30) days after written notice thereof; or (iv) the
failure by Executive to carry out any reasonable directive of the Board of
Directors commensurate with Executive's duties hereunder, which failure shall
continue for thirty (30) days after written notice thereof.
(b) In the event of Executive's Disability, he shall be
entitled to receive so much of the Base Salary payments due under Section 4
hereof during the period of his Disability and for a period of eighteen (18)
months thereafter.
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(c) In the event of termination of Executive's employment
hereunder by reason of his death, the Corporation shall pay a benefit (the
"Benefit Payment") to such person or persons as Executive shall, at his option,
from time to time designate by written instrument delivered to the Corporations,
each subsequent designation to revoke all prior designations, or if no such
designation is made, to Executive's estate (the "Payment Beneficiary"). The
Benefit Payment shall be in an amount equal to one and one-half times
Executive's then current Base Salary, and shall be payable to the Payment
Beneficiary in equal quarterly installments over a period of one and one-half
years, provided that if the Corporation then maintains a life insurance policy
on the life of Executive under which it is the beneficiary, the amount of the
death benefit payable thereunder, to a maximum amount equal to the Benefit
Payment, less installments of the Benefit Payment theretofore paid, shall be
paid to the Payment Beneficiary on the Benefit Payment installment payment date
next succeeding the date on which the Corporation receives such death benefit
proceeds, and the remainder of the Benefit Payment, if any, shall be paid in
equal quarterly installments as provided above.
14. Change of Control. (a) If prior to termination of this
Agreement, there should be a "Change of Control," as defined in Section 14(b)
below, and thereafter (i) Executive's services should be terminated for any
reason other than Executive's voluntary withdrawal or Cause, or (ii) Executive
is placed in any position of lesser stature than that of a senior executive
officer
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of the Corporation; is assigned duties inconsistent with a senior executive
officer or duties which, if performed, would result in a significant change in
the nature or scope of powers, authority, functions or duties inherent in such
position on the date hereof; is assigned performance requirements or working
conditions which are at variance with the performance requirements and working
conditions in effect immediately prior to the Change of Control; or is accorded
treatment on a general basis that is in derogation of his status as a senior
executive officer; (iii) any breach of Sections 4 through 8, inclusive, of this
Agreement; or (iv) any requirement of the Corporation that the location at which
Executive performs his principal duties for the Corporation be outside a radius
of 30 miles from the location at which Executive performed such duties
immediately prior to the Change of Control, then the Executive may terminate his
employment and this Agreement and upon such termination, the Corporation will
pay to Executive, as liquidated damages, a lump sum cash payment equal to 2.99
times Base Salary (unless Base Salary is greater than the "base amount" of
Executive's compensation, in which case the amount paid to Executive hereunder
shall be 2.99 times the "base amount" of Executive's compensation). For purposes
hereof, "base amount" shall have the meaning provided in Section 280G(b)(3)(A)
of the Internal Revenue Code of 1986, as amended, and the Proposed Regulations
thereunder.
(b) "Change of Control" shall be deemed to have taken
place if (i) any person, including a group, becomes the beneficial
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owner of shares of the Corporation having 50% or more of the total number of
votes that may be cast for the election of directors of the Corporation; or (ii)
there occurs any cash tender or exchange offer for shares of the Corporation,
merger or other business combination, sale of assets or contested election, or
any combination of the foregoing transactions, and as a result of or in
connection with any such event persons who were directors of the Corporation
before the event shall cease to constitute a majority of the Board of Directors
of the Corporation or any successor to the Corporation. As used herein, the
terms "person" and "beneficial owner" have the same meaning as such terms under
Section 13 (d) of the Securities Exchange Act of 1934, as amended, and the rules
and regulations hereunder.
15. Insurance Policies. The Corporation shall have the right
from time to time to purchase, increase, modify or terminate insurance policies
on the life of Executive for the benefit of the Corporation, in such amounts as
the Corporation shall determine in its sole discretion. In connection therewith,
Executive shall, at such time or times and at such place or places as the
Corporation may reasonably direct, submit himself to such physical examinations
and execute and deliver such documents as the Corporation may deem necessary or
desirable.
16. Entire Agreement; Amendment. This Agreement constitutes
the entire agreement of the parties hereto, and any prior agreement between the
Corporation and Executive is hereby superseded and terminated effective
immediately and shall be
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without further force or effect. No amendment or modification shall be valid or
binding unless made in writing and signed by the party against whom enforcement
thereof is sought.
17. Notices. Any notice required, permitted or desired to be
given pursuant to any of the provisions of this Agreement shall be deemed to
have been sufficiently given or served for all purposes if delivered in person
or by responsible overnight delivery service or sent by certified mail, return
receipt requested, postage and fees prepaid as follows:
If to the Corporation, at its address set
forth above, with copies to:
Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
If to Executive, at his address set forth above.
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Section 17. The date of the giving of any notice hand delivered
or delivered by responsible overnight carrier shall be the date of its delivery
and of any notice sent by mail shall be the date five days after the date of the
posting of the mail.
18. No Assignment; Binding Effect. Neither this Agreement, nor
the right to receive any payments hereunder, may be assigned by Executive. This
Agreement shall be binding upon
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Executive, his heirs, executors and administrators and upon the Corporation, its
successors and assigns.
19. Waivers. No course of dealing nor any delay on the part of
the Corporation in exercising any rights hereunder shall operate as a waiver of
any such rights. No waiver of any default or breach of this Agreement shall be
deemed a continuing waiver or a waiver of any other breach or default.
20. Governing Law. This Agreement shall be governed,
interpreted and construed in accordance with the laws of the State of New York,
except that body of law relating to choice of laws.
21. Invalidity. If any clause, paragraph, section or part of
this Agreement shall be held or declared to be void, invalid or illegal, for any
reason, by any court of competent jurisdiction, such provision shall be
ineffective but shall not in any way invalidate or affect any other clause,
paragraph, section or part of this Agreement.
22. Further Assurances. Each of the parties shall execute such
documents and take such other actions as may be reasonably requested by the
other party to carry out the provisions and purposes of this Agreement in
accordance with its terms.
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IN WITNESS WHEREOF, the parties hereto have caused this
Employment Agreement to be duly executed as of the day and year first above
written.
HOSPITALITY WORLDWIDE SERVICES, INC.
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Chairman of the Board
and Chief Executive
Officer
/s/ XXXXXXX XXXXXX
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XXXXXXX XXXXXX
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