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EMPLOYMENT AGREEMENT
BETWEEN LEXFORD PROPERTIES, INC.
AND
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TABLE OF CONTENTS
Page
1. Employment................................................................1
2. Term and Positions........................................................1
3. Compensation..............................................................2
4. Insurance and Other Benefits..............................................4
5. Payment in the Event of Death or Permanent Disability.....................4
6. Termination and Further Compensation......................................5
7. Reimbursement.............................................................7
8. Covenants and Confidential Information....................................7
9. Withholding Taxes.........................................................8
10. No Conflicting Agreement..................................................8
11. Severable Provisions......................................................9
12. Binding Agreement.........................................................9
13. Arbitration...............................................................9
14. Notices...................................................................9
15. Waiver....................................................................9
16. Amendment.................................................................9
17. Governing Law............................................................10
18. Captions and Section Headings............................................10
19. Miscellaneous............................................................10
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 1st
day of January, 1997, between Lexford Properties, Inc., a Texas corporation
("Employer"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("Employee").
WITNESSETH:
WHEREAS, Employer and Employee desire to enter into this Agreement to
assure Employer of the services of Employee, and Employee's employment for the
term set forth herein, and to set forth the rights and duties of the parties
hereto.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
1. Employment.
(a) Employer hereby employs Employee, and Employee hereby
accepts such employment, upon the terms and conditions hereinafter set
forth.
(b) During the term of this Agreement, or any renewal or
extension hereof (for purposes hereof, all references herein to the
term of this Agreement shall be deemed to include references to the
period of renewal or extension hereof, if any), Employee shall devote
his full time to his employment and perform with reasonable diligence
such duties as are customarily performed by the Vice President for a
company having the size and structure of Employer and its subsidiaries,
together with such other duties as may be reasonably requested from
time to time by the Board of Directors of Employer (the "Board"), which
duties shall be consistent with the further covenants set forth in
Section 2 of this Agreement.
(c) Employee shall not, without the prior written consent of
Employer, directly or indirectly, during the term of this Employment
Agreement, other than in the performance of duties naturally inherent
in the businesses of Employer or any subsidiary of Employer and in
furtherance thereof, render services of a business, professional or
commercial nature to any other person or firm, for compensation. For
purposes of this Agreement, all references herein to subsidiaries and
affiliates of Employer shall be deemed to include subsidiaries and
affiliates now or hereafter existing.
2. Term and Positions.
(a) Subject to the provisions for termination as hereinafter
provided, the term of this Agreement shall begin on January 1, 1997 and
shall continue through December 31, 1997 (the "Original Term"). The
Original Term may be extended for additional terms of one year each
(each, a "Renewal Term") upon the mutual agreement of Employer and
Employee.
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(b) Employee shall, without any compensation in addition to
that which is specifically provided in this Agreement, serve as Vice
President of Employer, and in such other offices or positions with any
subsidiary or affiliate of Employer as shall, from time to time, be
assigned reasonably by the Board (but such office or positions shall be
consistent with the duties, offices or positions hereinbefore named).
(c) To the extent that the Board shall request during the term
of this Agreement, Employee shall serve as a member of the Board or as
a member of the Board of Directors of any subsidiary or affiliate of
Employer.
(d) During the term of this Employment Agreement, Employer
shall provide Employee with use of the office space currently occupied
by Employee and located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇.
3. Compensation.
(a) For all services he may render to Employer (and any
subsidiary or affiliate) during the term of this Agreement, Employer
shall pay to Employee base compensation ("Base Compensation") and
commissions ("Commissions") on the following terms:
(i) For the Original Term and any Renewal Term, One
Hundred and Twenty-five Thousand Dollars ($125,000) per annum
as Base Compensation.
(ii) Base Compensation payable to Employee under this
Section 3(a) shall be payable in bi-weekly installments.
(iii) Base Compensation may be increased in any
subsequent fiscal year, during which this Agreement may remain
in effect, upon appropriate action by the Board. If increased,
such increased dollar amount shall prospectively constitute
"Base Compensation" for all purposes under this Agreement.
(iv) For the Original Term and any Renewal Term,
Employer will pay as commissions, with respect to all property
management fees received by Employer in respect of property
management contracts obtained as a direct result of Employee's
business development efforts ("Employee Source Fees"), amounts
as follows: (A) on a monthly basis, an amount equal to 1.5% of
gross Employee Source Fees, and (B) provided that Employee
remains an employee of Employer at such time, within 90 days
of the end of Employer's fiscal year, an amount equal to 3.5%
of gross Employee Source Fees derived from property management
contracts which at the end of the fiscal year have been in
effect for a period of at least 12 months. For purposes of
this subsection (a)(iv), fees received by Employer after
January 1, 1997 from affiliates of Messrs. ▇▇▇▇▇▇ and ▇▇▇▇▇
(but not other existing clients of Employer) will be deemed to
result from the efforts of Employee.
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(b) Employer shall pay to Employee bonus compensation during
the term of this Agreement as follows:
(i) In addition to the Base Compensation and
Commissions, Employee shall be entitled to receive, if earned,
a performance cash bonus (the "Cash Bonus") as a Grade 11
Property Management Executive under an incentive compensation
plan of Cardinal Realty Services, Inc. ("Cardinal") as may be
adopted and amended or replaced by the Board of Directors of
Cardinal from time to time up to a maximum of forty-five
percent (45%) of Employee's Base Compensation earned during
fiscal year 1997 and subsequent fiscal years, if any, while
this Employment Agreement is in effect.
(ii) Employee's Cash Bonus, if any, due under
subsection (i) above shall be paid within thirty (30) days
after the issuance the applicable final audited year end
income statements of Employer.
(iii) In addition to the Cash Bonus, for Employer's
1997 fiscal year, and for each fiscal year thereafter during
which this Employment Agreement remains in effect, Cardinal
will grant to Employee a stock bonus ("Stock Bonus"; and,
together with the Cash Bonus, the "Bonus") payable in shares
of Cardinal's common stock, without par value (the "Common
Stock"), in accordance with and subject to a Deferred Shares
Award Agreement (the "Deferred Shares Agreement") to be
entered into between Cardinal. The dollar amount of the Stock
Bonus will be determined on the same basis as the Cash Bonus
(including the limitations set forth in the partial-year
provision set forth in Section 6(c)), except that the dollar
value of the Stock Bonus will equal 2/3 of the value of the
Cash Bonus.
(iv) The number of shares constituting the Stock
Bonus payable to Employee will be determined by dividing (A)
the dollar value of the Stock Bonus determined in accordance
with this Section 3(b) and the Incentive Compensation Plan by
(B) the closing price of Cardinal's Common Stock on the NASDAQ
National Market System, or if Cardinal's Common Stock is not
listed or admitted to trading in such system, the principal
securities exchange on which Cardinal's Common Stock is listed
or admitted to trading on the last trading date in the period
for which the Stock Bonus is calculated (i.e. December 31 or
the last closing price for the Common Stock immediately
preceding the date Employee ceases employment with Employer).
Any Stock Bonus which Employee is entitled to receive from
Employer shall be issued on the same date as the Cash Bonus
for the same period. No fractional share shall be payable to
Employee in connection with the Stock Bonus, but Employee will
be entitled to a cash payment equal to the dollar value of any
fractional share to which he would otherwise be entitled under
the Stock Bonus, to be paid to Employee together with the
payment of Employee's Cash Bonus hereunder.
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(c) Further, Cardinal will grant to Employee rights to receive
5,000 shares of Common Stock of Cardinal pursuant to the terms and
conditions of that certain Restricted Shares Agreement (the "Restricted
Shares Agreement") to be entered into between Cardinal and Employee, in
the form attached hereto as Exhibit A (such Common Stock to be referred
to herein as "Restricted Stock"). The Restricted Shares Agreement shall
provide for five thousand (5,000) shares of Restricted Stock, one-third
of which shall vest on each of the third, fourth and fifth
anniversaries of the Date of Grant (as defined, and more particularly
set forth, in the applicable Restricted Shares Agreement), which
issuance of shares shall be made effective on January 1, 1997. As used
hereunder, the term "vest" shall mean that Employee shall own the
Restricted Shares free from any restriction, encumbrance, or
limitation, except for any such restriction or limitation imposed by
applicable state and federal securities laws and regulations and except
for the terms of Employer's Executive Deferred Compensation Plan and
the terms of the Trust Agreement.
(d) Cardinal will grant to Employee options to purchase two
thousand five hundred (2,500) shares of Employer's Common Stock ("Stock
Options") in accordance with, and subject to, Cardinal's Incentive
Equity Plan, as amended, and a Non-Qualified Stock Option Agreement to
be entered into between Cardinal and Employee, in the form attached
hereto as Exhibit C (the "Option Award Agreement" and, together with
the Deferred Shares Agreement and the Restricted Shares Agreements, the
"Award Agreements"). The Stock Options shall have an exercise price
equal to the closing price of Employer's Common Stock on the NASDAQ
National Market System on December 31, 1997, one-third of which shall
vest on the third, fourth and fifth anniversaries of the date of such
grant, which grant shall be made pursuant to the Option Award
Agreement.
4. Insurance and Other Benefits. Employee shall be entitled to such
medical, hospitalization, health, accident, life and disability insurance and
pension plan benefits and such other similar employment privileges and benefits
as are afforded generally from time to time to other executive officers of
Employer, or subsidiaries of Employer.
5. Payment in the Event of Death or Permanent Disability.
(a) In the event of Employee's death or Permanent Disability
(as defined hereinbelow) during the term of this Agreement, Employee or
his estate, as the case may be, shall be entitled to receive (i) an
amount equal to (A) the lesser of (x) any remaining Base Compensation
for the Original Term or any then current Renewal Term or (y) one year
of Base Compensation reduced by (B) any and all payments made to
Employee pursuant to any disability insurance policy maintained by
Employer for Employee's benefit pursuant to Section 4(a) of this
Agreement or otherwise (the "Disability Policy"), (ii) a pro rata
portion of the Bonus, if any, applicable to the fiscal year in which
such death or Permanent Disability occurs, as such bonuses are
determined under Section 3(b) of this Agreement, and (iii) any shares
of Restricted Stock and Stock Options that have vested in accordance
with the provisions of the Award Agreements. Such pro rata portion of
the Bonus shall be determined by a multiplying a fraction (the
numerator of which shall be the
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number of days in the applicable fiscal year elapsed prior to the date
of death or Permanent Disability, as the case may be, and the
denominator of which shall be three hundred sixty-five (365)) by the
amount of the Bonus that would have been payable, if any, pursuant to
such Section 3(b), if Employee had remained employed under this
Agreement for the entire applicable fiscal year.
(b) Upon death or Permanent Disability of Employee, the Bonus,
if any, shall be paid when and as provided in Section 3(b) of this
Agreement. The other compensation to be paid pursuant to this Section 5
shall be paid, at the election of Employee or Employee's designated
beneficiary (who shall be his wife, unless he gives Employer written
notice of a different designation), either (i) in two (2) equal annual
installments paid within the two (2) year period beginning on the date
of such death or Permanent Disability, as the case may be, or (ii) in
one (1) lump sum paid within ninety (90) days after the date of such
death or Permanent Disability, as the case may be.
(c) Employee shall be entitled to no further compensation or
other benefits under this Agreement, except as to that portion of any
benefits accrued and earned by him hereunder up to and including the
date of such death or Permanent Disability.
(d) For purposes of this Section 5, Employee's Permanent
Disability shall be deemed to occur on the date after the first to
occur of (i) ninety (90) consecutive days, or (ii) one hundred eighty
(180) days cumulatively in any twelve (12) month period, of Employee's
inability to provide the services required hereunder of him due to
sickness or injury ("Permanent Disability").
6. Termination and Further Compensation.
(a) The employment of Employee under this Agreement, and the
term hereof, subject to Employee's rights set forth elsewhere herein,
may be terminated by Employer:
(i) on death or Permanent Disability of Employee, or
(ii) for cause at any time by action of the Board.
For purposes hereof, the term "cause" shall mean:
A. an intentional act of fraud,
embezzlement, theft or any other material violation
of law in connection with Employee's duties or in the
course of his employment with Employer;
B. intentional wrongful damage to material
assets of Employer;
C. intentional wrongful disclosure of
material confidential information of Employer;
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D. intentional wrongful engagement in any
competitive activity which would constitute a
material breach of the duty of loyalty; or
E. breach of any material term of this
Agreement.
No act, or failure, to act, on the part of Employee shall be
deemed "intentional", or provide the basis for termination for
cause, if it was due primarily to an error in judgment or
negligence without bad faith or reckless disregard, but shall
be deemed "intentional" only if done, or omitted to be done,
by Employee not in good faith and without reasonable belief
that his action or omission was in or not opposed to the best
interest of Employer. Failure to meet performance standards or
objectives of Employer shall not constitute cause for purposes
hereof. Further, in the event Employer terminates Employee for
"cause", Employer shall give Employee written notice as to the
specific circumstances giving rise to its decision to
terminate Employee for cause ("Notice"), and, Employee shall
be given the opportunity to respond, with counsel, to
Employer's decision and Employer's articulated circumstances,
such responses shall be before the Board of Directors of
Employer and shall take place within fourteen (14) days of
Employer's Notice. Any termination by reason of the foregoing
shall not be in limitation of any other right or remedy
Employer may have under this Agreement or otherwise. On any
termination of this Agreement, Employee shall be deemed to
have resigned from all offices and directorships held by
Employee in Employer and any subsidiaries and affiliates of
Employer.
(b) In the event of termination of this Agreement for any of
the reasons set forth in Section 6(a)(ii) hereof, Employee shall be
entitled to no further compensation or other benefits under this
Agreement, except as to (i) that portion of any unpaid Base
Compensation reduced by any and all payments made, or to be made, to
Employee pursuant to the Disability Policy and other benefits accrued
and earned by him hereunder up to and including the effective date of
such termination; and (ii) any of his shares of Restricted Stock and
Stock Options that have vested in accordance with the provisions of
Section 3(c) of this Agreement.
(c) In the event that Employee's employment is terminated
without cause during the Original Term of this Agreement or in the
event that the Original Term of this Agreement shall have expired and
shall not have been renewed and Employee thereupon ceases to be
employed by Employer for any reason other than termination of his
employment for cause, Employee shall be entitled to receive: (i) an
amount equal to his Base Compensation, and any other benefits due
Employee under Section 4 of this Agreement, for the nine (9) month
period immediately following such termination; (ii) the Bonus, if any,
applicable to the fiscal year in which such cessation of employment
occurs, as such Bonus is determined under Section 3(b) of this
Agreement but on a prorated basis calculated in the manner contemplated
by Section 5(a) of this Agreement; and (iii) all of his shares of
Restricted Stock awarded pursuant to Section 3(c) of this Agreement and
the
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Restricted Shares Agreement and Stock Options immediately fully vested,
and otherwise free of any forfeiture provisions or other restrictions
imposed under the Award Agreements except for any restrictions or
limitations imposed by applicable state and federal securities laws and
regulations. In the event that Employee's employment is terminated
without cause during a Renewal Term, Employee will be entitled to
receive all of the compensation and benefits provided for in the
immediately preceding sentence. Upon any such termination by Employer,
other than for "cause", Employee's obligations to Employer hereunder
shall terminate.
7. Reimbursement. Employer shall reimburse Employee or provide him with
an expense allowance during the term of this Agreement, for travel,
entertainment and other expenses reasonably and necessarily incurred by Employee
in performing services hereunder or, generally, the promotion of Employer's
business. Employee shall furnish such documentation with respect to
reimbursement to be paid under this Section 7 as Employer shall reasonably
request.
8. Covenants and Confidential Information.
(a) Employee acknowledges Employer's reliance and expectation
of Employee's continued commitment of performance of his duties and
responsibilities during the term of this Agreement. In light of such
reliance and expectation on the part of Employer, Employee agrees that
during the period beginning on the effective date of this Agreement and
ending eighteen (18) months after the termination of Employee's
employment for cause or Employee's resignation from employment with
Employer (except with respect to subsection (a)(iii), in which case
Employee agrees that at time beginning on the effective date of this
Agreement and thereafter), he shall not, directly or indirectly, do or
suffer any of the following:
(i) employ, assist in employing, or solicit for
employment any employee or officer of Employer or any of
Employer's affiliates or subsidiaries who was employed or
retained at any time during the one (1) year period preceding
the date on which Employee's employment with Employer is
terminated;
(ii) induce any person who is an employee or officer of
Employer or any of Employer's affiliates or subsidiaries to
terminate said relationship in such a manner which is not in
furtherance of Employer's interest; or
(iii) except in performing services hereunder, disclose,
divulge, discuss, copy or otherwise use or suffer to be used
in any manner, in competition with, or contrary to the
interests of, Employer or any of Employer's affiliates or
subsidiaries entities, the proprietary customer lists, limited
partner lists, research or data or other trade secrets of
Employer or any of Employer's affiliates or subsidiaries, it
being acknowledged by Employee that any such proprietary
information regarding the business of Employer and Employer's
affiliates or
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subsidiaries entities compiled or obtained by, or furnished
to, Employee while Employee shall have been employed by or
associated with Employer, and which has not been publicly
disclosed by Employer or which is otherwise not available in
the public domain, is confidential information and Employer's
property.
(b) Employee expressly agrees and understands that the remedy
at law for any breach by him of this Section 8 will be inadequate and
that the damages flowing from such breach are not readily susceptible
to being measured in monetary terms. Accordingly, it is acknowledged
that upon adequate proof of Employee's violation of any legally
enforceable provision of this Section 8, Employer shall be entitled to
immediate injunctive relief and may obtain a temporary order
restraining any threatened or further breach. Nothing in this Section 8
shall be deemed to limit Employer's remedies at law or in equity for
any breach by Employee of any of the provisions of this Section 8 which
may he pursued or availed of by Employer.
(c) Employee has carefully considered the nature and extent of
the restrictions upon him and the rights and remedies conferred upon
Employer under this Section 8, and hereby acknowledges and agrees that
the same are reasonable in time and territory, are designed to
eliminate competition which otherwise would be unfair to Employer, do
not stifle the inherent skill and experience of Employee, would not
operate as a bar to Employee's sole means of support, are fully
required to protect the legitimate interests of Employer and do not
confer a benefit upon Employer disproportionate to the detriment to
Employee.
9. Withholding Taxes. All payments to Employee shall be subject to
withholding on account of federal, state and local taxes as required by law. Any
amounts remitted by Employer to the appropriate taxing authorities as taxes
withheld by Employer from Employee on income realized by Employee with respect
to the vesting of his shares of Restricted Stock shall reduce the amounts
payable by Employer to Employee by way of compensation or otherwise. If any
particular payment required hereunder is insufficient to provide the amount of
such taxes required to be withheld, Employer may withhold such taxes from any
other payment due Employee. In the event all cash payments due Employee are
insufficient to provide the required amount of such withholding taxes, Employee,
within thirty (30) days of written notice from Employer, shall pay to Employer
the amount of such withholding taxes in excess of all cash payments due Employee
at the time such withholding is required to be made by Employer, provided,
however, the foregoing shall not be deemed to limit Employee's right to receive
loans from Employer to fund income tax obligations as set forth in Section 3 of
this Agreement.
10. No Conflicting Agreement. The parties hereto represent and warrant
to each other that they are not a party to any agreement, contract or
understanding, whether employment or otherwise, which would restrict or would
prohibit them from undertaking or performing in accordance with the terms and
conditions of this Agreement. Employer represents and covenants that its
entering into this Agreement has been duly authorized and ratified, and that it
has full
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authority to consummate the undertakings set forth herein including, without
limitation, the grant of the Restricted Stock and Stock Options to Employee.
11. Severable Provisions. The provisions of this Agreement are
severable and if any one or more provisions may be determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions and any
partially unenforceable provision to the extent enforceable in any jurisdiction
shall, nevertheless, be binding and enforceable.
12. Binding Agreement. The rights and obligations of Employer under
this Agreement shall inure to the benefit of, and shall be binding upon,
Employer and its successors and assigns, and the rights and obligations (other
than obligations to perform services) of Employee under this Agreement shall
inure to the benefit of, and shall be binding upon, Employee and his heirs,
personal representatives and estate. Employer agrees and acknowledges that the
services Employee is providing Employer are personal to Employer, and Employer
shall not have the right to assign this Agreement without Employee's written
consent.
13. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association then
pertaining in the City of Columbus, Ohio, and judgment upon the award rendered
by the Arbitrator or Arbitrators may be entered in any Court having jurisdiction
thereof. The Arbitrator or Arbitrators shall be deemed to possess the powers to
issue mandatory orders and restraining orders in connection with such
arbitration; provided, however, that nothing in this Section 13 shall be
construed so as to deny Employer the right and power to seek and obtain
injunctive relief in a court of equity for any breach or threatened breach of
Employee of any of his covenants contained in Section 8(a) of this Agreement.
14. Notices. Any notice to be given under this Agreement shall be
personally delivered in writing or shall have been deemed duly given when
received after it is posted in the United States mail, postage prepaid,
registered or certified, return receipt requested, and if mailed to Employer,
shall be addressed to its principal place of business, attention: General
Counsel, and if mailed to Employee, shall be addressed to him at his home
address last known on the records of Employer, or at such other address or
addresses as either Employer or Employee may hereafter designate in writing to
the other.
15. Waiver. The failure of either party to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions as to any future violations thereof, nor
prevent that party thereafter from enforcing each and every other provision of
this Agreement. The rights granted the parties herein are cumulative and the
waiver of any single remedy shall not constitute a waiver of such party's right
to assert all other legal remedies available to it under the circumstances.
16. Amendment. This Agreement supersedes all prior agreements and
understandings between the parties and may not be modified or terminated orally.
No modification, termination
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or attempted waiver shall be valid unless in writing and signed by the party
against whom the same it is sought to be enforced.
17. Governing Law. This Agreement shall be governed by and construed
according to the laws of the State of Ohio.
18. Captions and Section Headings. Captions and section headings used
herein are for convenience and are not a part of this Agreement and shall not be
used in construing it.
19. Miscellaneous. Where necessary or appropriate to the meaning
hereof, the singular and plural shall be deemed to include each other, and the
masculine and neuter shall be deemed to include each other.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
on the day and year first set forth above.
"EMPLOYER"
ATTEST: LEXFORD PROPERTIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chief Financial Officer
"EMPLOYEE"
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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