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AGREEMENT made as of January 1, 1997, by and between Xxxxxx Corporation,
a Maryland corporation having its principal office at 0000 Xxxxxx Xxxx, Xxxx
Xxxxx, Xxxxxxx 00000 (the "Employer"), and Xxxxxxx X. Xxxxxx, having an address
at 0000 Xxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx 00000 (the "Employee").
W I T N E S S E T H:
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WHEREAS, the Employer is desirous of the services of the Employee as
herein provided, and
WHEREAS, the Employee is willing to perform such services hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, it is mutually covenanted and agreed as follows:
1. Employment. The Employer hereby employs the Employee and the
Employee hereby accepts employment, and agrees to devote his best efforts and
substantially all of his business time and attention, except during vacation
periods (which shall not be less than 20 days in each calendar year) and period
of illness or other disability, to the business of the Employer.
2. Term. The term of this Agreement shall commence as of the date
hereof and shall continue to and including December 31, 2001 except as
otherwise herein provided. From and after December 31, 2001, the term shall
automatically be extended from year to year for one year unless either party
provides notice not to so extend this Agreement, which notice, if given, must
first be given at least six months prior to December 31, 2001 and thereafter
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must be given at least six months prior to the end of the term as same may have
been extended hereby.
3. Compensation. The Employer agrees to pay the Employee and the
Employee agrees to accept the following compensation and benefits during his
term of employment:
(a) Base salary shall be paid at the annual rate of $350,000
commencing January 1, 1997. Such salary shall be payable
in accordance with the normal payroll practices of the
Employer.
(b) Incentive Compensation shall be paid in an amount equal
to 3% of Pre-Tax Net Income of Employer, as defined and
set forth in Exhibit A.
(c) The Employer may cause Xxxxxxxx Corporation ("Xxxxxxxx")
to grant to the Employee, in Xxxxxxxx'x discretion,
stock options or other stock rights.
In addition, the Employee shall be entitled to such group life
insurance, retirement, medical insurance, hospitalization, vacation, disability,
and similar employee benefit plans as may exist for the benefit of Employer's
executive officers generally ("perquisites").
4. Expenses. The Employee shall be reimbursed for reasonable
out-of-pocket expenses incurred by him attributable to and in furtherance of the
Employer's business, upon submission of reasonable itemized vouchers therefor.
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5. Duties and Covenants. The Employee is engaged as Chairman of
the Board, President, and Chief Executive Officer of the Employer and is to
perform such duties and services as may be assigned to him from time to time by
the Board of Directors or principal executive officers of the Employer and
Xxxxxxxx and shall observe the by-laws and policies of the Employer and
Xxxxxxxx from time to time promulgated by the Board of Directors and principal
executive officers thereof. Notwithstanding the foregoing, in no event shall
the Employee be required to perform services not commensurate with his office.
The Employee agrees that he will devote his entire business time, attention and
best efforts and will not engage in any conduct detrimental in any material
respect to the business and affairs of the Employer and its affiliates, and
will not engage or be interested in any capacity, directly or indirectly, in
any other business activity during the term of the Agreement. Nothing contained
in this paragraph 5 shall prevent the Employee from investing in passive equity
interests in real estate provided such investments are not inconsistent with
Employee's responsibilities hereunder, or holding stock (less than 3% of the
outstanding) in any public corporation. In no event (including removal from
office under paragraph 7 below) shall the Employer directly or indirectly
require the Employee to relocate his principal residence outside of South
Florida.
The Employee agrees that during the term of this Agreement and at all
times thereafter, he will not, without the Employer's prior written consent,
divulge, furnish or make accessible to any third party (other than in the
regular course of business of the Employer or its subsidiaries or as required
by law or valid legal process) any non-public, confidential information of or
concerning the Employer or its affiliates.
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Inasmuch as the Employee's breach or attempted breach of any provision
of this paragraph 5 would cause grave damage to the Employer or its affiliates
not measurable in money damages, the Employer shall, in addition to all other
remedies, be entitled to a temporary and permanent injunction and/or a decree
for specific performance of the terms of this paragraph 5, without being
required to furnish any bond or other security or to show any actual damages.
If any provision of this paragraph 5 shall be held to be invalid or
unenforceable, such provision shall be construed so as to be narrowed to the
least extent necessary to make such provision valid and enforceable.
6. Termination. This Agreement shall be terminable by the
Employer only upon the Employee's death, in the event of such physical or
mental disability or illness of the Employee as prevents his performance of the
duties incident to this employment for a period of no less than three (3)
consecutive months or an aggregate of 120 days in any period of twelve (12)
months ("disability"), for cause (as hereafter defined) or as provided in
paragraph 7 below. For purposes of this Agreement "cause" shall mean:
(i) gross or willful misconduct, gross negligence or material
failure to perform Employee's duties under this Agreement (which
gross negligence or material failure shall have an adverse
effect on the Employer's business and shall either not be
curable or, if curable, shall continue uncured for more than 15
days after the Employee's receipt of written notice setting
forth with particularity such misconduct); or
(ii) conviction of a felony or act of fraud or dishonesty.
In connection with any termination hereunder, all amounts owing and accrued to
the Employee on the date of termination shall be paid promptly to the Employee
upon termination.
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(b) Upon the death of the Employee during the term, the Employee's
beneficiar(ies) shall receive (i) base salary in the amount provided under
paragraph 3(a) above for the 12-month period following such death payable in
accordance with the normal payroll practices of the Employer, and (ii)
Incentive Compensation in accordance with paragraph (e)(i) of Exhibit A hereto
for the fiscal year in which such death occurs.
7. Sale Of The Company. Notwithstanding anything to the contrary
contained in this Agreement, the Employer may, at any time following a Sale of
the Company (as such term is defined below), remove the Employee as Chairman of
the Board, President and Chief Executive Officer of the Employer, provided that
in the event of such removal (i) the Employee shall remain in the Employer's
employ in accordance with this agreement as a senior executive of the Company
with duties and responsibilities commensurate with those of a senior executive
position and compensation and perquisites continuing in accordance with this
agreement during the remaining period of the Employee's employment hereunder
and (ii) effective at any time on or following January 1 of the calendar year
second succeeding the calendar year in which such removal occurs (for example,
effective on or after January 1, 1999 if such removal occurs during 1997),
either the Employer or the Employee may, at its or his option, terminate this
Agreement upon no less than 90 days' prior written notice to the other, in
either of which events the Employer shall (A) pay the Employee, in full
satisfaction of its obligations to Employee under paragraph 3(a) above, a lump
sum payment simultaneously with the effective date of such termination equal to
$350,000 times a fraction the numerator of which is the number of days
remaining in the term of this Agreement from the effective date of such
termination through December 31, 2001 and the denominator of which is 365, and
(B) pay the
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Employee Incentive Compensation in accordance with Exhibit A hereto for the
period prior to the effective date of such termination. For example, if a
removal from office occurred during 1997, the Employee remained as a senior
executive of the Employer, and a termination notice were given in accordance
with this paragraph 7 effective January 1, 1999, the Employee would receive
base salary and Incentive Compensation in accordance with this Agreement
including Exhibit A hereto for 1997 and 1998, would receive a lump sum payment
equal to $1,050,000, and would receive no further Incentive Compensation or
base salary. The Employer agrees that if the Employees' employment with the
Employer is terminated pursuant to this paragraph 7 or is otherwise terminated
by the Employer other than by reason of cause, the Employee shall not be
required to seek other employment or attempt in any way to reduce any amount
payable to the Employee by the Employer pursuant to this Agreement including
Exhibit A hereto. Further, the amount of any payment or benefit provided for in
this Agreement shall not be reduced by any compensation earned by the Employee
or benefit provided to the Employee as a result of employment by another
employer or otherwise, except that any compensation actually earned by the
Employee in a senior executive or similar capacity from another party for the
period beginning 18 months after the effective date of such termination and
ending December 31, 2001 shall reduce and be an offset against any amount paid
or payable by the Employer to the Employee as a result of such termination (and
the Employee shall to the extent necessary promptly return the amount of such
reduction to the Employer). For purposes of this Agreement, including Exhibit A
hereto, a "Sale of the Company" shall mean a sale or other disposition of all
or substantially all of the assets of the Employer, the sale or other
disposition of a majority of the voting stock of the Employer, or the merger or
consolidation of the Employer, with or to any person or entity or group of
persons or entities
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other than Xxxxxxxx or Xxxxxxxx'x or the Employer's direct or indirect
subsidiaries; provided, however, that the merger or consolidation of Xxxxxxxx, a
sale or other disposition of stock of Xxxxxxxx, or the sale or other disposition
of all or substantially all of the assets of Xxxxxxxx, with or to one or a group
of persons or entities shall not be deemed a Sale of the Company.
8. Notices. Any notice in connection with this Agreement shall be in
writing and personally delivered, sent by overnight delivery service or sent by
registered or certified mail to the addressee at its or his address set forth
above, or to such other address(es) as either party may designate by like
written notice to each other.
9. Binding Effect. This Agreement shall be binding upon the parties
hereto, their respective heirs, administrators, successors and assigns, and
shall inure to benefit of and be binding upon the Employer, its affiliates, and
their successors and assigns.
10. Entire Agreement. This Agreement contains the entire agreement of
the parties and supersedes any prior employment agreements or understandings
between them. It may not be changed, waived, extended or terminated orally, but
only by a writing signed by the party against whom enforcement of any change,
waive, extension or termination is sought. The headings herein have been
inserted for convenience only, and are not to be part of this Agreement.
Nothing contained herein shall be deemed to impact that certain Xxxxxx
Corporation Deferred Compensation Plan and Split Dollar Agreement for Employee,
dated December 23, 1993, which shall remain in full force and effect.
11. Governing Law, Venue. This Agreement shall be governed by the
laws of the State of Florida. Any and all suits, legal actions or proceedings
missing out of this
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Agreement shall be brought in the court of competent jurisdiction in Palm
Beach, Florida, and the parties irrevocably waive any objection to such choice
of venue.
XXXXXX CORPORATION
By:
---------------------------
Name:
Title:
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Xxxxxxx X. Xxxxxx
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EXHIBIT A
To Employment Agreement (the "Agreement")
between Xxxxxx Corporation (the "Employer")
and Xxxxxxx X. Xxxxxx (the "Employee")
(a) Incentive Compensation. Subject to the provisions of paragraph
(e) below, with respect to each fiscal year of the Employer or portion thereof
(as described below) during the term of the Agreement, commencing with the
fiscal year beginning January 1, 1997 and ending with the fiscal year ending
December 31, 2001, the Employer shall pay to the Employee incentive
compensation equal to 3% of the Pre-Tax Net Income (as defined below) of the
Employer and its subsidiaries.
(b) Statements. The determination of Pre-Tax Net Income shall be made
by the then independent certified public accountants of the Employer in
accordance with this Exhibit A, and a written statement by such accountants
containing such determination (the "Statement") shall be delivered to the
Employee no later than 120 days after the end of each fiscal year. The Employer
shall deliver a check, in the amount of the incentive compensation payable to
the Employee for such fiscal year based upon the Pre-Tax Net Income as
reflected in the Statement, payable to the Employee, simultaneously with its
delivery of the Statement. The Statement shall be deemed correct and accepted
by the Employee unless the Employee shall deliver to the Employer, within 10
days after the receipt by the Employee of the Statement, a written statement of
the Employee's objections to such Statement (the "Objecting Statement"). If the
Employer gives written notice to the Employee within 10 days of its receipt of
the Objecting Statement that it does not agree with the Employee's objections,
then the Statement
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shall be deemed correct and accepted by the Employee unless the Employee,
within 10 days after the Employee's receipt of the Employer's notice, notifies
the Employer in writing that the Employee requests arbitration. If the Employer
does not object to the Objecting Statement as provided herein, the Statement,
with such changes as are necessary to reflect the objections contained in the
Objecting Statement, shall be deemed correct and accepted by the Employer.
The arbitration provided for herein shall be in Florida by a panel of
three arbitrators, all of whom shall be independent certified public
accountants (who do not perform services for the Employer, the Employee or any
of their respective affiliates), one selected by the Employee, one selected by
the Employer and a third selected by the two so chosen. The arbitrators shall
be guided by the rules then obtaining of the American Arbitration Association.
If the two arbitrators so chosen cannot select a third arbitrator, the third
arbitrator shall be selected by the American Arbitration Association. Judgment
upon the award may be entered in any court having jurisdiction thereof. The
sole matters to be submitted to arbitration shall be (i) the determination of
Pre-Tax Net Income (including the calculations furnished by the Employer to the
Employee of the incentive compensation payable under paragraph (a) above) in
accordance with this Exhibit A and (ii) any dispute referred to in the second
sentence of paragraph (f) below. The arbitrators shall not have jurisdiction to
determine any other matter, claim or dispute whatsoever.
(c) Pre-Tax Net Income. For purposes of this Exhibit A, "Pre-Tax Net
Income" shall mean the consolidated net income of the Employer and its
subsidiaries, before deduction of, or provision or reserve for, any Federal and
Puerto Rico taxes based on net income (but not state,
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local or other taxes all of which shall be deducted or provided or reserved
for), as determined in accordance with generally accepted accounting
principles, consistently applied, provided that:
(1) There shall not be included as an expense in determining Pre-Tax
Net Income any incentive compensation paid to or accrued with respect to the
Employee and similar incentive compensation paid to or accrued with respect to
any other employee of the Employer having similar incentive compensation
arrangements.
(2) Pre-Tax Net Income shall not include any management fees, charges
or allocation of overhead from any affiliate of the Employer or non-recurring
items or items of an extraordinary nature as determined in accordance with
generally accepted accounting principles, consistently applied, including
without limitation the proceeds of any key-man life insurance or the proceeds
of the sale of all or substantially all of the Employer's or any of its
subsidiaries' assets. Any transaction between the Employer and any of its
affiliates shall be treated for purposes of determining Pre-Tax Net Income at
prices and terms no less favorable than would be available on an arms-length
basis from independent third parties.
(d) Payment. The balance of any unpaid incentive compensation shall be
paid within 10 days after the date the Statement is deemed correct and accepted
as provided in paragraph (b) above or upon the effective date of the award of
the arbitration proceeding referred to therein.
(e) Continuation of Employment. Except as provided in clause (i) or
(ii) of this paragraph (e) below, the Employee shall not be entitled to receive
Incentive Compensation for any fiscal year of the Employer (or portion thereof)
if he does not continue in the employ of the
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Employer through the last day of such fiscal year, provided, however, that (i)
in the event of the termination of the Employee's employment as a result of the
death or disability (as such term is defined in paragraph 6(a) of the
Agreement) of the Employee, the Employee shall be entitled to Incentive
Compensation for the fiscal year in which such termination of employment occurs
but for no subsequent years, and (ii) in the event of the termination of the
Employee's employment as a result of the termination by the Employer of the
Employee's employment other than for death, disability or cause (as such term
is defined in paragraph 6(a) of the Agreement) and other than as provided in
paragraph 7 of the Agreement, the Employee shall be entitled to Incentive
Compensation for the fiscal year in which such termination of employment occurs
and the next succeeding fiscal year but for no subsequent years, it being
agreed by the parties that (A) continued employment by the Employee as
contemplated by paragraph 7 of the Agreement shall be deemed continued
employment for all purposes of this Exhibit A and (B) neither removal of the
Employee from the offices of Chairman of the Board, President and Chief
Executive Officer as contemplated by paragraph 7 of the Agreement nor
termination of the Employee by the Employer in accordance with paragraph 7 of
the Agreement shall be deemed termination of the Employee by the Employer
without cause.
(f) Inability to Calculate Incentive Compensation. In the event that as
a result of a Sale of the Company (as such term is defined in paragraph 7 of
the Agreement) the business and operations of the Employer are significantly
changed or it otherwise becomes impracticable to separately determine the
Employer's Pre-Tax Net Income on a basis consistent with such determination
prior to the sale of the Company (the fiscal year in which such change or
impracticability results from a Sale of the Company being herein referred to as
the "Sale
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Year"), the Employer's Incentive Compensation for the Sale Year and each
subsequent fiscal year during the term of the Agreement shall be conclusively
deemed to be the average of the Employee's Incentive Compensation for the five
fiscal years of the Employer immediately preceding the Sale Year; provided,
however, that the Employer and Employee acknowledge that nothing in this
paragraph (f) shall be deemed to entitle Employee to Incentive Compensation
following his termination of employment except as expressly provided in
paragraph (e) above. A dispute concerning whether a Sale Year has occurred
shall be determined by arbitration in accordance with paragraph (b) above.
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