Employment Agreement ("Agreement") made on and as of October 21,
1997, by ▇▇▇▇▇▇▇ Contracting, Inc., a Nevada corporation (the "Employer"), and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual resident in California (the "Executive").
Concurrently with the execution and delivery of this Agreement, Oak
Hill Sportswear Corporation, a New York corporation (the "Buyer"), is purchasing
from the Executive and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") all of the outstanding shares
of capital stock of the Employer, pursuant to a Stock Purchase Agreement, dated
October 21, 1997, between the Executive, ▇▇▇▇▇▇▇ and the Buyer (the "Stock
Purchase Agreement"). This is an "Employment Agreement" referred to in Section
2.4(a)(iii) of the Stock Purchase Agreement.
The Buyer desires the Executive's continued employment with the
Employer, and the Executive wishes to accept such continued employment, upon the
terms and conditions set forth in this Agreement, and the parties, intending to
be legally bound, agree as follows:
1. DEFINITIONS
For the purposes of this Agreement, all capitalized terms not
otherwise defined therein have the meanings assigned to them in the Stock
Purchase Agreement, and the following terms have the meanings specified in the
first paragraph and preamble thereof or specified or referred to in this Section
1.
"Agreement" --this Employment Agreement.
"Additional Incentive Compensation" --as defined in Section 3.2(b).
"Benefits" --as defined in Section 3.4.
"Board of Directors" --the Board of Directors of the Employer.
"Business" --the Company provides asbestos abatement, hazardous materials and
soil remediation, demolition, and services related thereto to a variety of
Persons, including private and governmental clients. Specific services include
removal of asbestos containing materials (ACM), lead paint, contaminated soils
and polychlorinated biphenyls (PCB). Contaminated soils remediation is related
to material excavation, which has been associated with removal of underground
storage tanks (UST). (The foregoing is referred to in this Agreement as the
"Business.").
"Confidential Information" --all Intellectual Property (as defined in the Stock
Purchase Agreement), and all of the following as such may exist at the date
hereof or at any time during the Initial Employment Period or Renewal Employment
Period (if any): all trade secrets and confidential information of the Employer,
including those concerning its service specifications,
1
data, know-how, methods, processes, forms and checklists, sketches, photographs,
graphs, drawings, samples, past, current, and planned service methods and
processes, the names and backgrounds of personnel, personnel training techniques
and materials, manuals, forms, checklists and similar materials used by the
Company in the Business (except those which are generally available to the
public) past current and prospective customer lists (except those which are
generally available to the public) and requirements, price lists, market
studies, business plans, computer software, programs (including object code and
source code), database and systems, historical financial statements and
information, financial projections and budgets, historical and projected sales,
capital spending and leasing budgets and plans, and all notes, analysis,
compilations, studies, summaries, and other material prepared by or for the
Employer containing or based, in whole or in part, on any information included
in or including any of the foregoing.
"Disability" --as defined in Section 6.2.
"Employer's Statement of Income"--(a) for any Fiscal Year for which the
statement of income of the Employer is consolidated by the Buyer with its
audited consolidated financial statements, the consolidating statement of income
of the Employer used for purposes of such consolidation; and (b) for any Fiscal
Year for which the statement of income of the Employer is not consolidated by
Buyer is with its audited consolidated financial statements, the statement of
income of the Employer as audited by the Employer's independent auditors.
"Fiscal Year" --the twelve month period ending December 31st.
"For Cause" --as defined in Section 6.3.
"For Good Reason" --as defined in Section 6.4.
"Initial Employment Period" --as defined in Section 2.2(a).
"Incentive Compensation" --as defined in Section 3.2(a).
"Person" --any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, or governmental body.
"Pre-tax Income" --the Employer's income from ordinary business operations
(which will not include capital gains and other extraordinary income or gains
and will be reduced by extraordinary losses), before federal and state income
taxes, as determined from the Employer's Statement of Income, calculated without
taking into account (i) the payment of Incentive Compensation or Additional
Incentive Compensation or (ii) the Buyer's corporate overhead.
"Proprietary Records" --as defined in Section 7.2(a)(iv).
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"Renewal Employment Period" --as defined in Section 8.1. 2.2(b).
"Renewal Offer"--as defined in Section 2.2(a)(ii).
"Salary" --as defined in Section 3.1(a).
"Territory" --the Company engages in its Business in California, New Mexico,
Hawaii and Nevada (subject, with respect to Nevada and California, to the
no-compete restriction described in the Asset Purchase Agreement between the
Company and LVI and the Stock Purchase Agreement between the Company and ▇▇▇▇▇
▇▇▇▇▇▇▇ referred to in the Disclosure Letter, Parts 3.17(a) and 3.17(c)). (The
foregoing is referred to in this Agreement as the "Territory.")
2. EMPLOYMENT TERMS AND DUTIES
2.1 Employment. The Employer hereby employs the Executive, and the
Executive hereby accepts employment by the Employer, upon the terms and
conditions set forth in this Agreement.
2.2 Term. (a) Subject to the provisions of Section 6, the term of
the Executive's employment under this Agreement will be the period beginning on
(i) November 1, 1997 and ending on December 31, 2000 (the "Initial Employment
Period"), and (ii) if the Employer gives the Executive an offer of renewal
("Renewal Offer") and the Executive gives the Employer an acceptance of renewal
pursuant to Section 2.2(b), beginning on January 1, 2001 and ending on December
31, 2003, (the "Renewal Employment Period").
(b) The term of the Executive's employment under this Agreement
will be renewed and continued under this Agreement for the Renewal Employment
Period if (i) the Employer, not later than October 1, 2000, gives the Executive
a written offer of renewal of his employment under this Agreement, and (ii) the
Executive, not later than November 1, 2000, gives the Employer written notice of
acceptance of renewal of his employment under this Agreement.
2.3 Duties. The Executive will have such duties as are assigned or
delegated to the Executive by the Board of Directors, and he will initially
serve as an executive officer, Responsible Party, and, if requested by the
Buyer, director of the Employer. In that capacity, Executive shall do and
perform all services, acts, or things necessary or advisable to fulfill the
duties of his position. The Executive will devote his entire business time,
attention, skill, and energy exclusively to the business of the Employer, will
use his best efforts to promote the success of the Employer's business, and will
cooperate fully with the Board of Directors in the advancement of the best
interests of the Employer. Nothing in this Section 2.3, however, will prevent
the Executive from engaging in additional activities in connection with personal
investments and community affairs that are not inconsistent with this Agreement
or in Section 5.4 of the Stock Purchase Agreement he is entering into
simultaneously herewith. If the Executive is elected as a director or officer of
the Buyer, or as a director or officer of any of its
3
affiliates, the Executive will fulfill his duties as such director or officer
without additional compensation. Executive's duties shall be carried out
substantially in the San Diego, CA area (subject to reasonable travel) and
Employer may not relocate Executive from the San Diego, CA area. Executive will
not be requested to perform any services that are not commensurate with his
position.
3. COMPENSATION
3.1 Salary. Subject to the provision of Section 6, the Executive
will be paid a salary for his services during the (i) Initial Employment Period
at the annual rate of $180,000, and (ii) the Renewal Employment Period (if any)
at an annual rate of $180,000 increased by a percentage equal to the percentage
of increase of the cost of living (COLA) from November 1, 1997 through December
31, 2000, as determined from the appropriate Federal report by the auditors
referred to under the definition Employer's Statement of Income in Section 1
(the "Salary").
3.2 Incentive and Additional Incentive Compensation. (a) Subject
to the provisions of Section 6 hereof, as incentive compensation (the "Incentive
Compensation") for his services during the Initial Employment Period and the
Renewal Employment Period (if any) the Executive will be paid with respect to
each Fiscal Year during such Period(s), commencing with respect to Fiscal Year
1998, an amount, in addition to the Salary, equal to five percent (5%) of the
Pre-tax Income of the Employer during such Fiscal Year in excess of $2,700,000.
(b) Additional Incentive Compensation. Subject to the provisions
of Section 6 hereof, as additional incentive compensation (the "Additional
Incentive Compensation") for his services during the Initial Employment Period
and the Renewal Employment Period (if any) the Executive will be paid with
respect to each Fiscal Year during such Period(s), commencing with respect to
Fiscal Year 1998, an amount, in addition to the Salary and Incentive
Compensation, equal to two and one-half (2.5%) of the Pre-tax Income of the
Employer for such Fiscal Year in excess of the greater of $2,700,000 or the
prior Fiscal Year's Pre-tax Income.
3.3 Payment --Subject to the provisions of Section 6, the Executive
will be paid (i) the Salary, subject to required deductions and withholdings, in
equal periodic installments according to the Employer's customary payroll
practices, but no less frequently than monthly, and (ii) the Incentive
Compensation and Additional Incentive Compensation, subject to required
deductions and withholdings, within three months after the end of the Fiscal
Year to which the Incentive Compensation or Additional Incentive Compensation
relates.
3.4 Benefits. (a) The Executive will, during the Initial Employment
Period and Renewal Employment Period (if any), be permitted to participate in
such pension, life insurance, health insurance, and other employee benefit plans
of the Employer that may be in effect from time to time, to the extent the
Executive is eligible and entitled to participate under the terms of those plans
(collectively, the "Benefits").
4
4. EXPENSES
4.1 Expenses. The Employer will promptly reimburse the Executive
for reasonable expenses incurred by the Executive on behalf of the Employer in
the performance of his duties pursuant to this Agreement, in accordance with the
Employer's reimbursement policies as established from time to time by the Board
of Directors. The Executive must file expense reports with respect to such
expenses, and, with respect to his non-business use of the automobile referred
to in Section 4.2, statements of non-business automobile use sufficient for the
Employer to prepare an Internal Revenue Service Form 1099.
4.2 Automobile. (a) The Company's present practice of leasing an
automobile for the Executive's business use in connection with his employment
under this Agreement will be continued during the Employment Period. The
Employer will maintain liability insurance on such automobile consistent with
its past practice; or,
(b) In the Executive's sole election, in lieu of
his rights under Section 4.2(a), the Company will pay to the Executive $1000.00
per month as an auto allowance. Executive will be required to pay all
maintenance and insurance on such vehicle in the event he so elects.
5. VACATIONS, ETC.
The Executive will be entitled to three weeks' paid vacation each
Fiscal Year and paid holidays and paid sick leave in accordance with the holiday
and paid sick leave policies of the Employer as established from time to time by
the Board of Directors. Holidays and paid sick leave during any Fiscal Year that
are not used by the Executive during such Fiscal Year may not be used in any
subsequent Fiscal Year. Vacation days may be accrued up to a maximum of 20 days.
Once the Executive has accrued 20 days, no more will accrue until Executive has
used some of his vacation days and reduced the number of available time below 20
days.
6. TERMINATION OF EMPLOYMENT TERM
6.1 Events of Termination. The Initial Employment Period or Renewal
Employment Period (if any) (but not this Agreement) will terminate:
(a) upon the death of the Executive;
(b) upon the Disability of the Executive, immediately upon notice
from either party to the other;
5
(c) For Cause, immediately upon notice from the Employer to the
Executive, or at such later time as such notice may specify; or
(d) For Good Reason, upon not less than thirty days' prior notice
from the Executive to the Employer.
6.2 Definition of "Disability". For purposes of Section 6.1, the
Executive will be deemed to have a "Disability" if, for physical or mental
reasons, the Executive is unable to perform the Executive's duties under this
Agreement for 90 consecutive days, or 120 days during any twelve month period,
as determined in accordance with this Section 6.2. The Disability of the
Executive will be determined by a medical doctor selected by written agreement
of the Employer and the Executive upon the request of either party by notice to
the other. If the Employer and the Executive cannot agree on the selection of a
medical doctor, each of them will select a medical doctor and the two medical
doctors will select a third medical doctor who will determine whether the
Executive has a Disability. The determination of the medical doctor selected
under this Section 6.2 will be binding on both parties. The Executive must
submit to a reasonable number of examinations by the medical doctor making the
determination of Disability under this Section 6.2, and the Executive hereby
authorizes the disclosure and release to the Employer of such determination and
all medical records that the medical doctor believes may be relevant. If the
Executive is not legally competent, the Executive's legal guardian or duly
authorized attorney-in-fact will act in the Executive's stead, under this
Section 6.2, for the purposes of submitting the Executive to the examinations,
and providing the authorization of disclosure, required under this Section 6.2.
6.3 Definition of "For Cause". For purposes of Section 6.1, the
phrase "For Cause" means: (a) the Executive's willful breach of this Agreement
or Section 5.4 of the Stock Purchase Agreement, (b) the Executive's failure to
adhere to any reasonable written Employer policy established by the Board of
Directors if the Executive has been given a reasonable opportunity for a ten day
period to comply with such policy or cure his failure to comply; (c) the
appropriation (or attempted appropriation) of a opportunity of the Employer,
including attempting to secure or securing any personal profit in connection
with any transaction entered into on behalf of the Employer or in the Employer's
line of business; (d) the misappropriation (or attempted misappropriation) of
any of the Employer's funds or property; (e) substance abuse; or (f) the
conviction of, the indictment for (or its procedural equivalent), or the
entering of a guilty plea or plea of no contest with respect to any crime with
respect to which imprisonment is a possible punishment.
6.4 Definition of "For Good Reason". For purposes of Section 6.1,
the phrase "For Good Reason" means: (a) the Employer's material breach of this
Agreement, unless cured within ten (10) days after written notice; or (b) the
requirement by the Employer that the Executive be based anywhere other than an
Employer's office in the Territory without the executive's written consent.
6
6.5 Termination Payment. Effective upon the termination of the
Employment Period pursuant to Section 6.1, the Employer will be obligated to pay
the Executive (or, in the event of his death, his designated beneficiary, as
specified in Section 6.5(f) below) only the amounts set forth in this Section
6.5, in lieu of all other amounts. Payments of such amounts will be deemed to be
in settlement and complete release of all claims the Executive may have against
the Employer under this Agreement or in connection with his employment by the
Employer.
(a) Termination by the Executive For Good Reason. If the Executive
terminates the Employment Period For Good Reason, the Employer will pay the
Executive (i) his Salary for the remainder of the calendar month in which such
termination is effective and for six months thereafter, and (ii) that portion of
the Executive's Incentive Compensation or Additional Incentive Compensation, if
any, for the Fiscal Year during which the termination is effective, prorated
through the date of the event which gave rise to the cause of termination.
Notwithstanding the preceding sentence, if the Executive obtains other
employment (including as a consultant) prior to the end of the six months
following the month in which the termination is effective, he must promptly give
notice thereof to the Employer, and the payments under Section 6.5(a)(i) for any
period after the Executive obtains other employment or consulting work will be
reduced by the amount of the compensation received and to be received by the
Executive from such other employment or consulting.
(b) Termination by the Employer For Cause. If the Employer
terminates the Employment Period For Cause, the Executive will be entitled to
receive his Salary only through the date of the event or failure which gave rise
to such termination, but he will not be entitled to any Incentive Compensation
or Additional Incentive Compensation for the Fiscal Year during which such
termination occurs or any subsequent Fiscal Year.
(c) Termination upon Disability. If the Initial Employment Period
or Renewal Employment Period (if any) is terminated by either party as a result
of the Executive's Disability, the Employer will pay the Executive his Salary
through the remainder of the calendar month during which such termination is
effective and for the lesser of (i)] two consecutive months thereafter or (ii)
the period until disability insurance benefits commence under any disability
insurance coverage furnished by the Employer to the Executive, and that portion
of the Executive's Incentive Compensation or Additional Incentive Compensation,
if any, for the Fiscal Year during which the termination is effective, prorated
through the date of the event which gave rise to the cause of termination.
(d) Termination upon Death. If the Initial Employment Period or
Renewal Employment Period (if any) is terminated because of the Executive's
death, the Executive will be entitled to receive his Salary through the date of
his death, and that part of the Incentive Compensation or Additional Incentive
Compensation, if any, for the Fiscal Year during which his death occurs,
prorated to the date on which his death occurs.
7
(e) Benefits. The Executive's accrual under, or participation in,
plans providing for, the Benefits will cease at the date of the termination of
the Initial Employment Period or Renewal Employment Period (if any), and the
Executive will be entitled to accrued Benefits pursuant to such plans only as
provided in such plans. The Executive will not receive, as part of his
termination pay pursuant to this Section 6.5, any payment or other compensation
for any vacation, holiday, sick leave, or other leave unused on the date
termination of the Initial Employment Period or Renewal Employment Period (if
any).
(f) Beneficiary: For purposes of this Section 6.5, the Executive's
designated beneficiary will be such individual beneficiary, as the Executive may
designate by notice to the Employer from time to time or, if the Executive fails
to give notice to the Employer of such a beneficiary, the Executive's personal
representative. The Employer will have no duty, in any circumstances, determine
whether any beneficiary designated by the Executive is alive or to ascertain the
address of any such beneficiary, to determine whether any person or entity
purporting to act as the Executive's personal representative is duly authorized
to act in that capacity, or to locate any beneficiary or personal
representative.
7. CONFIDENTIALITY COVENANTS
7.1 Acknowledgments by the Executive. The Executive acknowledges
that: (a) through acquiring all the outstanding shares of capital stock of the
Employer from him and ▇▇▇▇▇▇▇ under the Stock Purchase Agreement, Buyer paid for
and acquired the Business, good will and Confidential Information of the
Employer; (ii) he, as a principal executive officer and co-owner of the
Employer, became familiar with Confidential Information and participated in its
development for the Employer; (iii) the Employer's ownership benefits from the
Confidential Information will be materially impaired, and Buyer will be deprived
of the value of the Business and good will it bought through its acquisition of
his equity interest in the Employer, if he was permitted to use, other than as
authorized by this Agreement, or disclose any Confidential Information, or to
compete with the Employer; (iv) the Company's Business is marketed and provided
throughout the Territory; (v) the Employer competes with other businesses that
provide or could provide services similar to the Business in the Territory; and
(vi) the provisions of Sections 2 and 3 are of this Agreement essential to
protect the Employer's Business, good will and Confidential Information, and are
reasonable.
7.2 Confidentiality; No Use. In consideration of the compensation
and benefits to be paid or provided to the Executive by the Employer under this
Agreement, and in order to induce the Employer to give the Executive access to
Confidential Information developed during the course of his employment by the
Employer, the Executive covenants with the Employer and Buyer as follows:
8
(a) he will not, at any time, use any, and will at all times hold
in strict confidence all, Confidential Information and will not disclose any of
it to any Person, except as expressly permitted by this Agreement; and
(b) each trade secret of the Employer will be entitled to all of
the protections and benefits under the California Trade Secrets Act ,California
Civil Code Section 3426, and any other applicable law. If any information that
the Employer deems to be a trade secret is found by a court of competent
jurisdiction not to be a trade secret for purposes of this Agreement, such
information will, nevertheless, to the extent it constitutes Confidential
Information be considered Confidential Information for purposes of this
Agreement.
(c) Section 7.2 does not apply to any part of the Confidential
Information other than a trade secret that the Executive demonstrates was or
became generally available to the public in an integrated form other than as a
result of a disclosure by the Executive or in breach of this Agreement or
Employment Agreement with the Employer.
(d) The Executive will not remove from the Employer's premises
(except to the extent such removal is for purposes of the performance of the
Executive's duties at home or while traveling, or except as otherwise
specifically authorized by the Employer) any file, document, record, notebook,
plan, model, component, device, or computer software, programs, database,
systems, or code, whether embodied in a disk or in any other form all copies and
tangible embodiments thereof (collectively, the "Proprietary Records"). The
Executive recognizes that, as between the Employer and the Executive, all of the
Proprietary Records, whether or not developed by the Executive, are the
exclusive property of the Employer. Upon termination of this Agreement by either
party, or upon the request of the Employer during the Employment Period, the
Executive will return to the Employer all of the Proprietary Items in the
Executive's possession or subject to the Executive's control, and the Executive
shall not retain any copies, abstracts, sketches, or other physical embodiment
of any of the Proprietary Items.
(e) The Executive recognizes that should a dispute or controversy
arising from or relating to Section 7 of this Agreement be submitted for
injunctive relief pursuant to Section 8.1 or for confirmation of the
determination of an arbitrator pursuant to Section 8.10, or for any other
reason, the preservation of the confidentiality of Confidential Information will
be jeopardized unless all pleadings, documents, testimony, and records relating
thereto are be maintained in secrecy pursuant to a court order. The Executive
and the Employer consent to the entry of a court order providing that all such
pleadings, documents, testimony, and records will be closed to the public and
available to the Employer, Buyer, and the Executive, and to their respective
attorneys and experts. The Executive agrees to cause his attorneys and experts
to receive and maintain all information pleaded as Confidential Information in
secrecy. The Executive irrevocably authorizes the Employer to execute such
consent on his behalf, and to file it with the court.
9
(f) Notwithstanding any provision contained herein, Executive will
be allowed to use his know-how upon the termination of the No-Compete Period (as
defined in the Stock Purchase Agreement), or any No-Compete Advice.
7.3 Injunctive Relief. The Executive recognizes that, because of
the nature of the subject matter of Section 7, it would be impractical and
extremely difficult to determine the Employer's and Buyer's actual damages, and
that they would be harmed irreparably, in the event of the Executive's breach of
Section 7. Accordingly, if the Executive commits a breach, or threaten to commit
a breach, of any of the provisions of Section 7, the Employer and Buyer shall,
notwithstanding the provisions of Section 8.8, be entitled to have the
provisions of Section 7 specifically enforced by temporary and preliminary
injunctive relief, pending the final arbitration award, without the posting of
any bond, surety or other security, which the Executive herewith waives. Each of
the parties submits to the jurisdiction of the Los Angeles Superior Court,
sitting in Los Angeles, California, and waives any defense of inconvenient forum
to the maintenance of such action. The Executive appoints ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Esq. (and in the event of his unavailability, any member of said firm), ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the Company and Buyer appoint
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (and in the event of his unavailability, any member of said
firm) as their respective agents to receive on their respective behalfs service
of the summon, complaint, orders, and any other process that may be served in
such action.
7.4 Covenants of Section 7 are Essential and Independent Covenants.
(a) the Executive acknowledges that the covenants by the Executive in Section 7
are essential elements of this Agreement, and without the Executive's agreement
to comply with such covenants, the Buyer would not have purchased the
Executive's stock under the Stock Purchase Agreement and the Employer would not
have entered into this Agreement or employed or continued the employment of the
Executive. The Employer and the Executive have independently consulted their
respective counsel and have been advised in all respects concerning the
reasonableness and propriety of such covenants, with specific regard to the
nature of the business conducted by the Employer.
(b) The Executive's covenants in Section 7 is independent covenants
and the existence of any claim by the Executive against the Employer under this
Agreement or otherwise, or against the Buyer, will not excuse the Executive's
breach of any covenant in Section 7, which will survive such expiration or
termination.
(c) If the Executive's employment hereunder expires or is
terminated, this Agreement will continue in full force and effect as is
necessary or appropriate to enforce the covenants and agreements of the
Executive in Section 7.
(d) The period of time applicable to any covenant in Section 7 will
be extended by (i) the duration of any period during which by the Executive is
in breach of such covenant, and (ii)
10
the duration of any period (to the extent not overlapping the period referred to
above) during which the Buyer does not have knowledge of such breach.
8. GENERAL PROVISIONS
8.1 Representations and Warranties by the Executive. The Executive
represents and warrants to the Employer that the execution and delivery by the
Executive of this Agreement do not, and the performance by the Executive of the
Executive's obligations hereunder will not, with or without the giving of notice
or the passage of time, or both: (a) violate any judgment, writ, injunction, or
order of any court, arbitrator, or governmental agency applicable to the
Executive; or (b) conflict with, result in the breach of any provisions of or
the termination of, or constitute a default under, any agreement to which the
Executive is a party or by which the Executive is or may be bound.
8.2 Obligations Contingent on Performance. The obligations of the
Employer hereunder, including its obligation to pay the compensation provided
for herein, are contingent upon the Executive's performance of the Executive's
obligations hereunder.
8.3 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by either party in exercising any right, power, or privilege under this
Agreement will operate as a waiver of such right, power, or privilege, and no
single or partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the exercise
of any other right, power, or privilege. To the maximum extent permitted by
applicable law, (a) no claim or right arising out of this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement.
8.4 Binding Effect; Delegation of Duties Prohibited. Except as
provided in the next sentence hereof, this Agreement shall inure to the benefit
of, and shall be binding upon, the parties hereto and their respective
successors, assigns, heirs, and legal representatives, including any entity with
which the Employer may merge or consolidate or to which all or substantially all
of its assets may be transferred. The duties and covenants of the Executive
under this Agreement, being personal, may not be assigned or delegated.
8.5 Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by facsimile (with written confirmation of receipt), provided
that a copy is mailed by registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nation-ally recognized overnight
delivery service (receipt
11
requested), in each case to the appropriate addresses and facsimile numbers set
forth below (or to such other addresses and facsimile numbers as a party may
designate by notice to the other parties):
If to Employer: ▇▇▇▇▇▇▇ Contracting, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Oak Hill Sportswear Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Chairman
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
1370 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Executive: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
c/▇ ▇▇▇▇▇▇▇ Contracting, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
The Law Offices of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
8.6 Entire Agreement; Amendments. This Agreement, the Stock
Purchase Agreement (including Section 7.8 thereof), and the Sellers' Closing
Documents contain all the agreements
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between the parties and supersede all prior agreements and understandings, oral
or written, between the parties hereto with respect to the subject matter
hereof. This Agreement may not be amended orally, but only by an agreement in
writing signed by the parties hereto.
8.7 Governing Law. This Agreement will be governed by the laws of
the State of California.
8.8. Arbitration. (a) Any claims by the Employer or Buyer against
the Executive, or by the Executive against the Employer, arising out of or in
connection with this Agreement shall be determined by arbitration in accordance
with Section 8.8 of this Agreement; provided, however, that in the event of the
Executive's, Employer's or Buyer's alleged breach or default under this
Agreement, the Employer, Buyer or the Executive may also commence a court action
for injunctive relief pursuant to Section 7.3, but, upon the issuance and during
the continuance of injunctive relief pursuant to Section 7.3, all proceedings in
such action shall be stayed and all issues therein shall be determined by
arbitration as provided herein and the decision of the arbitrator on such issues
shall be determinative in the action. Executive and Employer submit to the
jurisdiction of the Los Angeles Superior Court, sitting in Los Angeles,
California, and Executive appoints ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. (and in the event of
his unavailability, any member of said firm) Ferruzzo & Ferruzzo, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and Employer appoints ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
Esq., Greenberger & ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (and in the event of his unavailability, any member of said firm) as their
respective agents to receive on their respective behalfs service of any process
that may be served in such action. The arbitration may be commenced by a demand
for arbitration with notice of claims served on a party's agent for service of
process as provided for in this Section 8.8, with a simultaneous copy thereof
pursuant to Section 8.5 and to the JAMS/Endispute office in Los Angeles,
California. Except as otherwise provided for herein, the arbitration shall be
conducted in accordance with the JAMS/Endispute Comprehensive Rules and
Procedures then in effect. There shall be one arbitrator agreed upon by the
parties, or if the parties cannot agree on the identity of the arbitrator within
five days of the arbitration demand, the arbitrator shall be selected by the
JAMS/Endispute Administrator. Any issue about whether a claim is covered by this
Agreement to arbitrate shall be determined by the arbitrator.
(b) The provisions of Section 1283.05 of the Code
of Civil Procedure, as amended or replaced as of the arbitration, are
incorporated into this Agreement and shall be applicable to the arbitration.
Depositions may be taken and discovery may be obtained in any arbitration under
this Agreement in accordance with said statute, as amended or replaced as of the
arbitration. The arbitrator shall not be bound by rules of evidence, but may
consider such writings and oral presentations as reasonable business people
would use in the conduct of their day-to-day affairs, and may require the
parties to submit some or all of their case by written or such other manner of
presentation as the arbitrator may determine to be appropriate. Pre-trial
memoranda shall be exchanged no later than five days before the hearing starts.
The parties intend to limit live testimony and cross-examination to the extent
necessary to ensure a fair hearing on material issues without unnecessarily
prolonging the arbitration.
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(c) The arbitrator shall take such steps as he or
she may consider necessary to start the hearing within 60 days of the
appointment of the arbitrator and to conclude the hearing within 20 days; and
the arbitrator's written decision shall be made not later than ten days after
the conclusion of the hearing. A stenographic record shall be kept of the
hearing, except that the arbitrator may employ telephonic conference calls with
the parties' attorneys to decide discovery and procedural issues, and no
stenographic record shall be required thereof. The parties have included these
time limits in order to expedite the proceeding, but they are not
jurisdictional, and the arbitrator shall for good cause (including the inability
of a party to complete its discovery despite diligent efforts in connection
therewith) allow reasonable extensions or delays, which shall not affect the
validity of the award. The arbitrator's written decision shall contain a brief
statement of the claims(s) determined and the award made on each claim. In
making the decision and award, the arbitrator shall apply California substantive
law. Absent fraud, collusion or willful misconduct by the arbitrator, the award
shall be final, and judgment may be confirmed and entered in any court having
jurisdiction thereof. The arbitrator may award injunctive relief or any other
substantive or procedural direction available form a judge in an action, in law
or equity. The arbitrator shall award the predominantly prevailing party its
reasonable attorneys' fees and disbursements and expenses (including
stenographic, witnesses', experts', and on and investigational fees and
expenses) in connection with the arbitration. Until the arbitrator's award of
costs, the fees and disbursements of JAMS/Endispute, the arbitrator,
stenographic recording expenses and similar arbitration expenses shall be borne
and paid 50% by the Executive and 50% by the Employer or Buyer (whichever may be
a party to the arbitration).
(d) Notwithstanding any term in this Agreement to
the contrary, each party hereto, on or prior to the commencement of arbitration
hereunder, shall first notify the other party in writing of its or his intention
to seek arbitration and the specific bases upon which its claims are made.
Within seven days thereof, the party in receipt of such notification may request
that JAMS/Endispute provide mediation services with a mediator in accordance
with its Rules and as selected by the Administrator, and on such request the
other party shall submit to such mediation; the fees and disbursements of said
mediation shall be borne 50% by the Executive and 50% by the Employer or Buyer
(whichever maybe a party to the mediation). The pendency of a request for
mediation, or of a mediation, shall not stay a demand for arbitration pursuant
to Section 8.8(a), or any arbitration procedures, hearing or determination
pursuant to Section 8.8(b), 8.8(a), or 8.8(c). Nothing herein shall limit the
Employer or Buyer from seeking or obtaining injunctive relief as provided in
Sections 7.3 and 8.8.
8.9 Right of Set-off.Buyer may set-off any amounts to which it may
be entitled from ▇▇▇▇▇▇ under the Stock Purchase Agreement or this Employment
Agreement against Incentive Compensation and Additional Incentive Compensation
upon notice to ▇▇▇▇▇▇ specifying in reasonable detail the basis for such
set-off. The exercise of such right of set-off by the Company in good faith,
whether or not ultimately determined to be justified, will not constitute an
event of default under this Agreement. Neither the exercise of nor the failure
to exercise such right of
14
set-off will constitute an election of remedies or limit the Company in any
manner in the enforcement of any other remedies that may be available to it. If
the Company exercises any set-off hereunder, it will (a) within 5 days thereof
deposit the amount thereof with a mutually agreeable escrow agent (or if they
are unable to agree on such agent, deposit it with a commercial escrow agent;
each of the parties will be responsible for 50% of the fees of said agent), and
(b) if the set-off is in respect to a third party claim referred to in Section
7.8(a) within 5 days thereof afford ▇▇▇▇▇▇ the right to control the defense
thereof. Upon a confirmed, final arbitration award, the amount due will be
immediately released to the prevailing party, along with other amounts due under
the award.
8.10 Section Headings, Construction. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections" refer
to the corresponding Section or Sections of this Agreement unless otherwise
specified. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
8.11 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
8.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date above first written above.
Employer:
▇▇▇▇▇▇▇ CONTRACTING, INC. Executive:
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ -------------------------------
President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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