EMPLOYMENT AGREEMENT
AGREEMENT made as of this 1st day of January, 1998, by and
between HOSPITALITY WORLDWIDE SERVICES, INC., a New York corporation with its
principal office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Corporation"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇, residing at ▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("Executive").
W I T N E S S E T H :
WHEREAS, Executive has heretofore been employed by the
Corporation;
WHEREAS, the Corporation desires to continue to employ
Executive, and Executive is willing to undertake such employment, upon the terms
and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. Employment of Executive. The Corporation hereby employs
Executive as its Chairman of the Board and Chief Executive Officer, to perform
the duties and responsibilities incident to such offices, subject at all times
to the normal control and direction of the Board of Directors of the Corporation
(the "Board of Directors").
2. Acceptance of Employment; Time and Attention. Executive
hereby accepts such employment and agrees that throughout the Term (as
hereinafter defined), he will devote substantially his full time, attention,
knowledge and skills, faithfully, diligently
and to the best of his ability, in furtherance of the business of the
Corporation, and will perform the duties assigned to him pursuant to Section 1
hereof, subject, at all times, to the normal direction and control of the Board
of Directors. Executive shall be the principal executive officer of the
Corporation and shall in general manage and control all of the day-to-day
operations of the Corporation. Executive shall also perform such specific duties
and shall exercise such specific authority related to the management of the
day-to-day operations of the Corporation consistent with his position as
Chairman of the Board and Chief Executive Officer as may be assigned to
Executive from time to time by the Board of Directors. Executive shall at all
times be subject to, observe and carry out such rules, regulations, policies,
directions and restrictions as the Corporation shall from time to time
establish. During the Term, Executive shall not, without the written approval of
the Board of Directors first had and obtained in each instance, directly or
indirectly, accept employment or compensation from, or perform services of any
nature for, any business enterprise other than the Corporation and its
subsidiaries. Notwithstanding the foregoing but subject to Section 9 hereof,
Executive shall be permitted to (i) serve as a director on the boards of
directors of other corporations and retain any compensation paid therefor,
provided that such other interests do not materially interfere with the
performance by Executive of his obligations hereunder, and (ii) engage in
business affairs outside the business of the Corporation provided that such
other interests do not materially
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interfere with his obligations hereunder. During the Term, Executive shall not
be entitled to additional compensation for rendering employment services to
subsidiaries of the Company or for serving in any office of the Corporation or
any of its subsidiaries to which he is elected or appointed. Executive shall be
permitted to establish a geographic base from which to perform his duties
hereunder.
3. Term. Except as otherwise provided herein, Executive's
employment hereunder shall be for a three (3) year term commencing as of January
1, 1998 (the "Initial Term"), which may be renewed for such one (1) year periods
as the Corporation and Executive may mutually agree during the ninety (90) day
period immediately prior to the expiration of the Initial Term or any renewal
thereof (the Initial Term and any such renewal thereof are hereinafter
collectively referred to as the "Term").
4. Compensation. The Corporation shall pay to the Executive,
commencing as of January 1, 1998, for the first year of his employment,
compensation at the rate of three hundred thousand ($300,000) dollars per year
("Base Salary"). For each year thereafter, the Base Salary will be increased by
(i) the percentage increase in the consumer price index (the "CPI") for the New
York/Northeastern New Jersey region, published by the United States Department
of Labor, at January 1 of such year over the CPI at January 1 of the prior year
or (ii) such higher amount as shall be determined by the Board of Directors.
Such compensation shall be payable in equal monthly installments. In addition,
Executive
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shall be entitled to receive from the Corporation such bonus (the "Bonus") as
the Board of Directors shall in its sole discretion determine. All compensation
paid to Executive shall be subject to withholding and other employment taxes
imposed by applicable law.
5. Additional Benefits. (a) In addition to such Base Salary,
he (and his family) shall be entitled to participate, to the extent he is (and
they are) eligible under the terms and conditions thereof, in any
profit-sharing, pension, retirement, hospitalization, insurance, disability,
medical service, stock option, bonus or other employee benefit plan generally
available to the executive officers of the Corporation that may be in effect
from time to time during the Term, as well as any discretionary bonus pool of
the Corporation. The Corporation shall be under no obligation to institute or
continue the existence of any such employee benefit plan.
(b) The Corporation shall obtain and maintain in full force
and effect during the Term, at the Corporation's sole cost and expense, a policy
or policies of term insurance on the life of Executive in the aggregate face
amount of five hundred thousand ($500,000) dollars. Executive shall submit to
any physical examinations necessary to obtain such policies and shall otherwise
cooperate with the Corporation in obtaining such insurance coverage. Any
insurance policy maintained by the Corporation on the life of Executive pursuant
to this Section 5(b) shall be made payable to such beneficiary or beneficiaries
as Executive may designate by written notice to the Corporation and the
Corporation
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agrees, promptly upon receipt of such notice, to take all such action as may be
necessary so as to notify the appropriate insurance company of any change of
beneficiary.
6. Reimbursement of Expenses. The Corporation shall reimburse
Executive in accordance with applicable policies of the Corporation for all
expenses reasonably incurred by him in connection with the performance of his
duties hereunder and the business of the Corporation, including expenses
relating to the operation and maintenance of a motor vehicle (including, but not
limited to, vehicle loan and lease payments, insurance premiums, parking,
gasoline and repair expenditures) upon the submission to the Corporation of
appropriate receipts or vouchers.
7. Facilities and Personnel. Executive shall be provided a
private office, secretarial services and such other facilities, supplies,
personnel and services as shall be required or reasonably requested for the
performance of his duties hereunder.
8. Vacation. Executive shall be entitled to four (4) weeks'
paid vacation in respect of each twelve (12) month period during the Term, such
vacation to be taken at times mutually agreeable to Executive and the Board of
Directors and in accordance with the Corporation's vacation policy.
9. Restrictive Covenant. In consideration of the Corporation's
entering into this Agreement, Executive agrees that during the Term, he will not
(i) directly or indirectly own, manage, operate, join, control, participate in,
invest in, or
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otherwise be connected with, in any manner, whether as an officer, director,
employee, partner, investor or otherwise, any business entity that is engaged in
the business of hotel renovation, procurement of hotel furniture, fixtures and
equipment, procurement and reordering of hotel operating supplies and equipment,
the development of hotel properties or any other business which the Corporation
is then engaged in, (ii) for himself or on behalf of any other person,
partnership, corporation or entity, call on any customer of the Corporation for
the purpose of soliciting, diverting or taking away any customer from the
Corporation, or (iii) induce, influence, or seek to induce or influence, any
person engaged as an employee, representative, agent, independent contractor or
otherwise by the Corporation, to terminate his or her relationship with the
Corporation. Nothing herein contained shall be deemed to prohibit Executive from
investing his funds in securities of an issuer if the securities of such issuer
are listed for trading on a national securities exchange or are traded in the
over-the-counter market and Executive's holdings therein represent less than 1%
of the total number of shares or principal amount of the securities of such
issuer outstanding.
Executive acknowledges that the provisions of this Section 9
are reasonable and necessary for the protection of the Corporation, and that
each provision, and the period or periods of time, geographic areas and types
and scope of restrictions on the activities specified herein are, and are
intended to be, divisible. If any provision of this Section 9, including any
sentence, clause
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or part hereof, shall be deemed contrary to law or invalid or unenforceable in
any respect by a court of competent jurisdiction, the remaining provisions shall
not be affected, but shall, subject to the discretion of such court, remain in
full force and effect and any invalid and unenforceable provisions shall be
deemed, without further action on the part of the parties hereto, modified,
amended and limited to the extent necessary to render the same valid and
enforceable.
10. Confidential Information. Executive shall hold in a
fiduciary capacity for the benefit of the Corporation all information, knowledge
and data relating to or concerned with its operations, sales, business and
affairs, and he shall not, at any time for a period of two (2) years after
termination of his employment hereunder, use, disclose or divulge any such
information, knowledge or data to any person, firm or corporation (unless the
Corporation no longer treats such information as confidential) other than to the
Corporation or its designees and employees or except as may otherwise be
required in connection with the business and affairs of the Corporation;
provided, however, that Executive may disclose or divulge such information,
knowledge or data that (i) was known to Executive at the commencement of his
employment with the Corporation; (ii) is or becomes generally available to the
public through no wrongful act on Executive's part; or (iii) becomes available
to Executive from a person or entity other than the Corporation; and provided,
further, that the provisions of this Section 10 shall not apply to Executive's
know-
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how to the extent utilized by him in subsequent employment otherwise than in
breach of this Agreement.
11. Intellectual Property. Any idea, invention, design,
written material, manual, system, procedure, improvement, development or
discovery conceived, developed, created or made by Executive alone or with
others, during the Term and applicable to the business of the Corporation,
whether or not patentable or registrable, shall become the sole and exclusive
property of the Corporation. Executive shall disclose the same promptly and
completely to the Corporation and shall, during the Term and at any time and
from time to time hereafter (i) execute all documents requested by the
Corporation for vesting in the Corporation the entire right, title and interest
in and to the same, (ii) execute all documents requested by the Corporation for
filing and prosecuting such applications for patents, trademarks, service marks
and/or copyrights as the Corporation, in its sole discretion, may desire to
prosecute, and (iii) give the Corporation all assistance it reasonably requires,
including the giving of testimony in any suit, action or proceeding, in order to
obtain, maintain and protect the Corporation's right therein and thereto.
12. Equitable Relief. The parties hereto acknowledge that
Executive's services are unique and that, in the event of a breach or a
threatened breach by Executive of any of his obligations under this Agreement,
the Corporation shall not have an adequate remedy at law. Accordingly, in the
event of any such breach or threatened breach by Executive, the Corporation
shall be
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entitled to such equitable and injunctive relief as may be available to restrain
Executive and any business, firm, partnership, individual, corporation or entity
participating in such breach or threatened breach from the violation of the
provisions hereof. Nothing herein shall be construed as prohibiting the
Corporation from pursuing any other remedies available at law or in equity for
such breach or threatened breach, including the recovery of damages and the
immediate termination of the employment of Executive hereunder.
13. Termination for Cause. (a) The Corporation may at any time
dismiss Executive for "Cause." For purposes of this Agreement, the following
shall constitute "Cause": (i) the death of Executive; or (ii) the failure of
Executive, as a result of illness, physical or mental disability or other
incapacity to render the services provided in this Agreement for a period of one
hundred eighty (180) consecutive days or one hundred eighty (180) days during
any one (1) year period ("Disability"); or (iii) the breach by Executive of a
fiduciary duty in the performance of his duties hereunder or a breach of a
material term of this Agreement, including (x) theft, embezzlement, fraud,
misappropriation of funds, other acts of dishonesty or the violation of any law
relating to Executive's employment; (y) Executive shall have entered a plea of
guilty or nolo contendre to, or have been found by a court of competent
jurisdiction to be guilty of a felony or other crime involving moral turpitude;
and (z) the breach by Executive of any other material provision of this
Agreement, which
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breach is not cured to the Corporation's reasonable satisfaction within thirty
(30) days after written notice thereof; or (iv) the failure by Executive to
carry out any reasonable directive of the Board of Directors commensurate with
Executive's duties hereunder, which failure shall continue for thirty (30) days
after written notice thereof.
(b) In the event of Executive's Disability, he shall be
entitled to receive the Base Salary payments due under Section 4 hereof during
the period of his Disability and for a period of eighteen (18) months
thereafter.
(c) In the event of termination of Executive's employment
hereunder by reason of his death, the Corporation shall pay a benefit (the
"Benefit Payment") to such person or persons as Executive shall, at his option,
from time to time designate by written instrument delivered to the Corporations,
each subsequent designation to revoke all prior designations, or if no such
designation is made, to Executive's estate (the "Payment Beneficiary"). The
Benefit Payment shall be in an amount equal to one and one-half times
Executive's then current Base Salary, and shall be payable to the Payment
Beneficiary in equal quarterly installments over a period of one and one-half
years, provided that if the Corporation then maintains a life insurance policy
on the life of Executive under which it is the beneficiary, the amount of the
death benefit payable thereunder, to a maximum amount equal to the Benefit
Payment, less installments of the Benefit Payment theretofore paid, shall be
paid to the Payment Beneficiary on the
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Benefit Payment installment payment date next succeeding the date on which the
Corporation receives such death benefit proceeds, and the remainder of the
Benefit Payment, if any, shall be paid in equal quarterly installments as
provided above.
14. Change of Control. (a) If prior to termination of this
Agreement, there should be a "Change of Control," as defined in Section 14(b)
below, the Executive may terminate his employment and this Agreement at any time
after the earlier to occur of (A) one year after the Change of Control or (B)
the occurrence of any of the following: (i) Executive's services should be
terminated for any reason other than Executive's voluntary withdrawal or Cause,
or (ii) Executive is placed in any position of lesser stature than that of a
senior executive officer of the Corporation; is assigned duties inconsistent
with a senior executive officer or duties which, if performed, would result in a
significant change in the nature or scope of powers, authority, functions or
duties inherent in such position on the date hereof; is assigned performance
requirements or working conditions which are at variance with the performance
requirements and working conditions in effect immediately prior to the Change of
Control; or is accorded treatment on a general basis that is in derogation of
his status as a senior executive officer; (iii) any breach of Sections 4 through
8, inclusive, of this Agreement; or (iv) any requirement of the Corporation that
the location at which Executive performs his principal duties for the
Corporation be outside of Manhattan, then upon such one year period or
termination, the Corporation will, on
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or before Executive's last day of providing service hereunder, pay to Executive,
as liquidated damages, a lump sum cash payment equal to 2.99 times the aggregate
of (i) Base Salary and (ii) the last Bonus earned by Executive (unless the
aggregate of (i) Base Salary and (ii) the last Bonus earned by Executive is
greater than the "base amount" of Executive's compensation, in which case the
amount paid to Executive hereunder shall be 2.99 times the "base amount" of
Executive's compensation). For purposes hereof, "base amount" shall have the
meaning provided in Section 280G(b)(3)(A) of the Internal Revenue Code of 1986,
as amended, and the Proposed Regulations thereunder.
(b) "Change of Control" shall be deemed to have taken place if
(i) any person, including a group, becomes the beneficial owner of shares of the
Corporation sufficient in manner to control the election of directors of the
Corporation; or (ii) there occurs any cash tender or exchange offer for shares
of the Corporation, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions, and as a
result of or in connection with any such event persons who were directors of the
Corporation before the event shall cease to constitute a majority of the Board
of Directors of the Corporation or any successor to the Corporation. As used
herein, the terms "person" and "beneficial owner" have the same meaning as such
terms under Section 13 (d) of the Securities Exchange Act of 1934, as amended,
and the rules and regulations hereunder.
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15. Insurance Policies. The Corporation shall have the right
from time to time to purchase, increase, modify or terminate insurance policies
on the life of Executive for the benefit of the Corporation, in such amounts as
the Corporation shall determine in its sole discretion. In connection therewith,
Executive shall, at such time or times and at such place or places as the
Corporation may reasonably direct, submit himself to such physical examinations
and execute and deliver such documents as the Corporation may deem necessary or
desirable.
16. Entire Agreement; Amendment. This Agreement constitutes
the entire agreement of the parties hereto, and any prior agreement between the
Corporation and Executive is hereby superseded and terminated effective
immediately and shall be without further force or effect. No amendment or
modification shall be valid or binding unless made in writing and signed by the
party against whom enforcement thereof is sought.
17. Notices. Any notice required, permitted or desired to be
given pursuant to any of the provisions of this Agreement shall be deemed to
have been sufficiently given or served for all purposes if delivered in person
or by responsible overnight delivery service or sent by certified mail, return
receipt requested, postage and fees prepaid as follows:
If to the Corporation, at its address set forth above,
with copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
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If to Executive, at his address set forth above.
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Section 17. The date of the giving of any notice hand delivered
or delivered by responsible overnight carrier shall be the date of its delivery
and of any notice sent by mail shall be the date five days after the date of the
posting of the mail.
18. No Assignment; Binding Effect. Neither this Agreement, nor
the right to receive any payments hereunder, may be assigned by Executive. This
Agreement shall be binding upon Executive, his heirs, executors and
administrators and upon the Corporation, its successors and assigns.
19. Waivers. No course of dealing nor any delay on the part of
the Corporation in exercising any rights hereunder shall operate as a waiver of
any such rights. No waiver of any default or breach of this Agreement shall be
deemed a continuing waiver or a waiver of any other breach or default.
20. Governing Law. This Agreement shall be governed,
interpreted and construed in accordance with the laws of the State of New York,
except that body of law relating to choice of laws.
21. Invalidity. If any clause, paragraph, section or part of
this Agreement shall be held or declared to be void, invalid or illegal, for any
reason, by any court of competent jurisdiction, such provision shall be
ineffective but shall not in
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any way invalidate or affect any other clause, paragraph, section or part of
this Agreement.
22. Further Assurances. Each of the parties shall execute such
documents and take such other actions as may be reasonably requested by the
other party to carry out the provisions and purposes of this Agreement in
accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused this
Employment Agreement to be duly executed as of the day and year first above
written.
HOSPITALITY WORLDWIDE SERVICES, INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
and Chief Financial
Officer
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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