EXHIBIT 10(E)
EMPLOYMENT AGREEMENT
AGREEMENT made as of October 1, l993 by and between AMREP CORPORATION
(the "Company"), an Oklahoma corporation, and MOHAN VACHANI ("Executive"), an
individual residing at 1 Diablo View Drive, Orinda, California.
W I T N E S S E T H:
WHEREAS, the Company presently employs Executive as a Senior Vice
President-Chief Financial Officer and desires that Executive continue in the
Company's employ for the term and on the terms and conditions hereinafter set
forth, and Executive is willing to do so.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereby agree as follows:
1. EMPLOYMENT. The Company agrees to continue to employ, and does
hereby employ, Executive as Senior Vice President-Chief Financial Officer, and
Executive hereby accepts
such employment, for the Term, with the duties and compensation and upon the
terms and conditions contained hereafter in this Agreement.
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2. TERM. Unless earlier ended as hereinafter in this Agreement
provided, the term of Executive's employment (the "TERM") shall continue to and
end on September 30, l995.
3. OFFICES AND DUTIES. (a) During the Term, Executive shall be a
Senior Vice President and Chief Financial Officer of the Company and also shall
be General Manager of the Company's Pacific Operations. Executive shall perform
his services subject only to the direction and control of the Company's Board of
Directors ("BOARD") and of the Chairman of the Board and President. Executive
shall not be required to perform any duties other than those which are
consistent with his status as a Senior Vice President of the Company.
(b) During the Term, Executive shall devote his full working
time and energies to the business and affairs of the Company. Executive agrees
during the Term to use his best efforts, skill and abilities to promote the
Company's interests; to serve as a director of the Company for so long as
elected; to serve as a director and officer of any corporation which is a
subsidiary of the Company if elected by the stockholders or board of directors
of such subsidiary corporation; and, subject to the provisions of the last
sentence of paragraph (a) of this
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Section 3, to perform such duties as may be assigned to him by the Board or the
Chairman of the Board or the President.
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(c) For so long as Executive's employment by the Company during
the Term shall continue, (i) Executive shall be elected as a Senior Vice
President of the Company by the Board at each meeting at which officers are
elected, and (ii) unless Executive otherwise consents in writing, the
headquarters for the performance of his services shall be the principal offices
of the Corporation in New York City, subject to such reasonable travel as the
performance of his duties may require, it being expected that Executive will
spend a portion of his time each month on the West Coast.
4. COMPENSATION. (a) As used herein the following terms shall have
the meanings set forth below:
"BONUS PLAN" means the Bonus Plan for Executives and Key Employees
established by the Board at a meeting on September 23, l993, as from time
to time amended.
"BONUS POOL" shall have the meaning set forth in the Bonus Plan.
"CPI" means the Consumer Price Index for All Urban Consumers (CPI-U)
United States City Averages (l967=100) issued by the Bureau of Labor
Statistics of the United States Department of Labor or, if such Index shall
be
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changed or discontinued, such other comparable or revised
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index as may be issued by the Bureau of Labor Statistics or another Agency
of the United States Government.
"YEAR" means the fiscal year of the Company.
(b) During the Term and except as otherwise provided in this
Agreement, the Company shall pay Executive an annual salary (the "SALARY"). The
Salary initially shall be at an annual rate not less than $236,500. The Salary
shall be reviewed at least annually by the Board and shall be increased (the
"MANDATORY INCREASE") October 1, 1994 by a percentage at least equal to the
percentage, if any, by which the CPI for the month of September 1994 exceeds the
CPI for the month of September 1993, and the resultant amount shall thereafter
be the Salary. The Salary shall be payable in equal installments not less
frequently than monthly.
(c) Except as otherwise provided in this Agreement, Executive
shall be paid a Bonus (the "BONUS") for each Year ending during the Term for
which there is a Bonus Pool. The Bonus for a Year shall be such percentage of
the Bonus Pool as the Chief Executive Officer of the Company shall determine.
The Bonus shall be paid not later than the July 31 following the end of the
applicable Year.
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5. EXPENSES, BENEFITS AND PERQUISITES. (a) The Company will pay
or reimburse Executive for all travel and
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other expenses reasonably incurred by Executive during the Term in connection
with the performance of his duties hereunder.
(b) During the Term, Executive shall be entitled to participate
in all retirement, group insurance, medical and similar programs, and stock
option and other benefit plans which from time to time are available to
executives of the Company, and shall receive a car allowance of $450 per month.
6. DEATH OF EXECUTIVE. In the event Executive should die during
the Term, this Agreement and all benefits hereunder shall terminate, except that
Company shall pay Executive's surviving spouse or, if none, his estate the
Executive's Salary until the earlier of the last day of the sixth month next
following the month in which Executive's death occurs or September 30, l995.
Such termination shall not affect any rights which Executive may have at the
time of his death pursuant to any insurance or other death benefit, bonus,
retirement or stock award plans or arrangements of the Company or any
subsidiary, or any stock option plan or any options granted thereunder, which
rights shall continue to be governed by the provisions of such plans and
arrangements. In the event Executive's surviving spouse dies during the period
when
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payments are to be made to her, the balance of the amount remaining to be paid
at the date of her death shall be paid to her estate in like manner.
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7. DISCHARGE FOR CAUSE. The Board may discharge Executive for
cause at any time. Such discharge shall be effected by notice (the "DISCHARGE
NOTICE") to Executive which shall specify the reasons for Executive's discharge
and the effective date thereof. As used herein, the term "FOR CAUSE" shall mean
only (i) chronic alcoholism, drug addiction, criminal dishonesty or (ii) willful
violation of specific written directions from the Board, which directions are
lawful and are consistent with the provisions of this Agreement ("WILLFUL
VIOLATION"); PROVIDED, however, that if (i) such discharge is effected because
of Executive's Willful Violation and (ii) within seven (7) days following the
date of receipt by the Executive of the Discharge Notice Executive shall cease
his Willful Violation and shall use his best efforts to carry out such written
directions, the termination shall not be effective. Upon termination pursuant
to this Section 7, this Agreement and all benefits hereunder shall terminate,
except that such termination shall not affect any rights which Executive may
have at the time of termination pursuant to any insurance or other death
benefit, bonus, retirement, severance pay or stock award plans or arrangements
of the Company or any subsidiary, or any stock option plan or any options
granted thereunder, which
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rights shall continue to be governed by the provisions of such plans and
arrangements.
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8. DISABILITY. (a) For the purposes of this Section the
following shall have the meanings set forth:
(i) "CONSULTING SERVICES" shall mean the services set forth
in Section 8(d)(ii)(B)(i).
(ii) "TOTAL DISABILITY" shall mean the inability of
Executive for any substantial period of time, by reason of a physical or
mental condition, to either (a) fully perform the duties required of him
hereunder or (b) perform Consulting Services at least 40% of his normal
working time (working full days) prior to his disability ("Normal Working
Time").
(iii) "PARTIAL DISABILITY" shall mean the inability of
Executive for any substantial period of time, by reason of a physical or
mental condition, to fully perform the duties required of him hereunder
while having the ability to perform Consulting Services at least 40% of his
Normal Working Time.
(iv) "CONSULTING DISABILITY" shall mean a disability which
arises during a period of Executive's Partial Disability which results in
the inability of Executive to perform Consulting Services at least 40% of
his Normal Working Time; and
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(v) "CONSULTING PERCENTAGE" shall mean such percentage of
his Normal Working Time as Executive is able
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to perform Consulting Services while having a Partial Disability. The
Consulting Percentage shall be determined by the Board from time to time
and shall be in multiples of 20%.
(b) Executive's employment as an employee hereunder may be
terminated by the Company if Executive has either a Total Disability or a
Partial Disability determined as provided in paragraph (i) of this Section 8.
Subject to the provisions of the next sentence, such termination shall be
effective on such date as the Board shall fix by resolution adopted after it has
been determined that Executive has a Total Disability or a Partial Disability,
which date shall not be earlier than the date on which such resolution is
adopted nor earlier than six (6) months after the date on which Executive first
was unable to fully perform the duties required of him hereunder. However, if
at any time during the period prior to the effective date determined pursuant to
the preceding sentence Executive has a Partial Disability, Executive shall
perform such services as the Board may reasonably request for a percentage of
his Normal Working Time determined by the Board not to exceed the Consulting
Percentage, and if Executive shall refuse or fail to do so, Executive's
employment as an employee shall terminate
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on the date of such refusal or failure, such termination being hereafter called
a "Work Refusal Termination".
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(c) If Executive's employment as an employee is terminated
pursuant to paragraph (b) of this Section 8 because Executive has a Total
Disability, the Company shall pay Executive the following, in monthly
installments:
(i) his Salary through the date of termination; plus
(ii) the amount of his Salary (at the rate prevailing at
such termination) for the twelve (12) months after the date of such
termination (but not after the Term End) plus, if the date of such
termination is more than twelve (12) months prior to the Term End, one half
of such amount thereafter until the Term End, the amounts payable hereunder
to be increased each October 1st by the same percentage as the percentage
increase in the CPI computed as set forth in paragraph (b) of Section 4.
(d) If Executive's employment as an employee is terminated
pursuant to paragraph (b) of this Section 8 because Executive has a Partial
Disability and not as a result of a Work Refusal Termination, then:
(i) The Company shall pay Executive his Salary through the
date of termination.
(ii) (A) Commencing the day following the
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date of termination of Executive's employment as an employee and until the
Term End, Executive shall be a
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consultant to the Company and as such shall perform Consulting Services to
the fullest extent he is able for a percentage of his Normal Working Time
determined by the Board not to exceed his Consulting Percentage, and the
Company shall pay Executive for his services as a consultant in monthly
installments an amount equal to (i) 50 percent of the Salary (at the rate
prevailing at the date of such termination of Executive's employment as an
employee) plus (ii) a percentage of such Salary (the "Additional
Percentage") determined as follows:
If the Consulting The Additional
Percentage is: Percentage is:
----------------- --------------
40% 20%
60% 30%
80% 40%
The amounts determined pursuant to the preceding sentence shall be
increased each October 1st by the same percentage as the percentage
increase in the CPI computed as set forth in paragraph (b) of Section 4.
(B) During the period Executive is a consultant to the
Company, (i) Executive will provide such services concerning the business,
affairs and management
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of the Company as may be reasonably requested by the Board, which services
shall be performed at a time and place
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mutually convenient to both parties, and (ii) Executive shall not engage in
any other employment or perform any consulting services for others. During
the period he is a consultant, the Company shall supply Executive with such
secretarial and other services (including transportation and the use of
office facilities) as may be reasonably necessary to the performance of his
duties as a consultant.
(iii) If subsequent to the time of the determination that
Executive has a Partial Disability Executive shall have a Consulting
Disability and pursuant to Section 8(g) his services as a Consultant are
terminated, thereafter and until the Term End the Company shall pay
Executive the monthly amounts he would have been paid if the Executive had
had a Total Disability on the date of termination of his employment as an
employee.
(e) If Executive's employment as an employee is terminated by a
Work Refusal Termination, Executive shall not thereafter have any right to any
Salary or other compensation under this Section 8 or any other provision of this
Agreement.
(f) There shall be deducted from any compensation to which
Executive may be entitled under this Section 8 an amount equal to any disability
insurance payments received by
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Executive with respect to the period for which he
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may be entitled to compensation thereunder pursuant to any disability insurance
policy paid for by the Company.
(g) If while Executive is a consultant he has a Consulting
Disability, his services as a consultant thereupon shall terminate.
(h) Amounts paid to Executive pursuant to this Section 8 shall
not diminish or otherwise adversely affect any rights which Executive may have
at the time of termination pursuant to any insurance or other benefit, bonus,
retirement, severance pay or stock award plans or arrangements of the Company or
any subsidiary, or any stock option plan or any options granted thereunder,
which rights shall continue to be governed by the provisions of such plans and
arrangements.
(i) The determination of whether Executive has
a Total Disability, Partial Disability or a Consulting Disability (and if a
Partial Disability, in what percentage), shall be made by the Board.
9. CHANGE IN CONTROL. (a) For the purposes of this Agreement
there will be a "CHANGE IN CONTROL OF THE COMPANY" if (i) 20% or more of the
voting stock of the Company becomes owned by a person or group and such person
or group, by
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its filing on a Schedule l3D made under the Securities Exchange Act of l934 or
otherwise, indicates the intention of seeking or exercising control of the
Company or reserves the right to seek
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or exercise control, or (ii) the Company merges or consolidates with another
corporation (other than a subsidiary of the Company) or sells all or
substantially all the assets of the Company, or (iii) five (5) or more of the
directors of the Company resign or cease to be directors within any twelve month
period for reasons other than (A) death, (B) incapacity or (C) personal reasons
not arising from a hostile environment.
(b) In the event there is a Change in Control of the Company
during the Term, then at any time thereafter:
(i) At the sole option of Executive an amount equal to the Bonus
of the Executive for the Year immediately preceding the date of exercise of
such option (the "BONUS INCREMENT") shall be added to and become part of
the Salary effective as of May 1st of the Year in which Executive exercises
such option (with the amount of the resulting increase in Salary applicable
to the period from May 1st of such Year to and including the month of
exercise payable at the time of exercise) and, from and after such
exercise, (A) Executive shall not be entitled to any further Bonuses, and
(B) if such option is exercised prior to October 1, l994, the Salary as so
increased shall be increased effective October 1, 1994 by the same
percentage as the percentage
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increase in the CPI computed as set forth in paragraph (b) of Section 4;
and
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(ii) At any time after the option described in clause (i) of
this paragraph (b) has been exercised, Executive may terminate his services
as an officer and employee and become a consultant to the Company on such
date as Executive elects, in which event (A) he shall serve as a consultant
to the Company and perform Consulting Services from such date until
September 30, l995, and (B) the Company shall pay Executive for his
Consulting Services in monthly installments a consulting fee in an amount
equal to 57-l/2% of the Salary at the rate prevailing at the date of such
termination of the Executive's employment as an employee, and if the date
of such termination is prior to October l, l994, such amount shall be
increased effective October 1, l994 by the same percentage as the
percentage increase in the CPI computed as set forth in paragraph (b) of
Section 4.
10. DISCHARGE WITHOUT CAUSE OR REDUCTION IN RESPONSIBILITIES.
(a) The Company retains the right to discharge Executive without cause at any
time during the Term by notice of termination given to Executive, which notice
shall become effective no sooner than 90 days after the giving thereof.
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(b) Whether or not Executive is discharged pursuant to paragraph
(a) of this Section 10, if Executive
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shall not be continued until September 30, l995 as a Senior Vice President of
the Company for a reason other than cause, Executive's resignation or inability
to perform, Executive shall have the right to terminate all of his obligations
under this Agreement by giving notice to the Company at any time within 90 days
after he ceases to hold such office. Such notice shall specify the date of
termination which shall be no sooner than 30 days following the date on which
such notice is given.
(c) If the Company discharges Executive without cause or if
Executive terminates pursuant to paragraph (b) of this Section 10, then until
September 30, l995 the Company shall pay Executive, in monthly installments, as
severance compensation and liquidated damages, all of the compensation provided
in Section 4 hereof which Executive would have received, and Executive shall be
entitled to all of the benefits which he would have been entitled to receive
hereunder (including, but not limited to, the benefits referred to in Section
5(b) hereof), had Executive not been so discharged or his offices not been so
terminated, and the following provisions shall apply:
(i) As used herein, the term "BONUS SEGMENT" shall mean an
amount equal to the Bonus paid or payable for
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the Year ended immediately preceding the date of discharge
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or termination;
(ii) If the Bonus Increment shall not have been added to and
become part of the Salary pursuant to paragraph (b) of Section 9, (x) the
Bonus Segment shall be added to and become part of the Salary effective as
of May 1st of the Year in which such discharge or termination occurs (with
the amount of the resulting increase in Salary applicable to the period
from May 1st of such Year to and including the month of discharge or
termination payable at the time of discharge or termination) and (y)
Executive shall not be entitled to any further Bonuses;
(iii) If the date of such discharge or termination is prior to
October 1, l994, the Salary shall be increased effective October 1, l994 by
the same percentage as the percentage increase in the CPI computed as set
forth in paragraph (b) of Section 4;
(iv) In determining the other benefits which Executive would
have received under Section 5(b) during the Term had such discharge or
termination not occurred, it shall be assumed that Executive would have
received benefits (including stock awards and other incentive compensation)
equal to those which he received with respect to the last
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Year prior to the Year in which the discharge or termination occurs; and
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(v) Executive shall not be required to seek or accept other
employment in order to mitigate damages, and the Company's obligation to
pay him following such discharge or termination shall not be reduced by the
amount of any compensation actually received by Executive for employment
with any other person thereafter. If any options or stock awards made
prior to the date of termination shall lapse by reason of a discharge or
termination governed by this Section 10, Executive shall be entitled to
recover from the Company as additional severance compensation and
liquidated damages amounts equal to the aggregate of all losses sustained
by Executive by reason of such lapse.
11. INDEMNIFICATION AND LEGAL FEES. (a) The Company shall
indemnify Executive to the fullest extent permitted by law and the certificate
of incorporation and by-laws of the Company from and against any loss, claim,
liability and/or expense incurred for, or by reason of, or arising out of, acts
of Executive as an officer and/or Director of the Company or any subsidiary.
(b) In the event Executive institutes any legal action to
enforce his rights under, or to recover damages for
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breach of, this Agreement and he is the prevailing party in such an action, he
shall be entitled to recover from the
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Company any actual reasonable expenses for attorneys' fees and disbursements
incurred by him in connection therewith.
12. NONCOMPETITION AND CONFIDENTIALITY AGREEMENT.
(a) During the Term, Executive will not, without the prior
written consent of the Company, directly or indirectly own, manage, operate,
control or participate in the ownership, management, operation or control of, or
be connected as a stockholder, partner, joint venturer or otherwise with, or
accept employment of any kind with, any business which, or any business or
organization any part of which, competes with the businesses of the Company or
any of its subsidiaries as such businesses are now conducted, in any
geographical area in which such businesses are conducted during the term of this
Agreement. However, nothing herein contained shall prevent Executive from
investing solely as a passive investor in any securities of a corporation,
partnership, trust, or other entity. For the purposes of this Agreement,
Executive shall be deemed to be a "passive investor" if he does not control, or
does not become part of any control group of, the issuer of securities acquired
by Executive.
(b) Notwithstanding anything to the contrary set
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forth therein, the prohibitions of paragraph (a) of this Section 12 shall not be
binding on Executive if the Company
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discharges Executive without cause or if the Company otherwise breaches this
Agreement.
(c) (i) Executive acknowledges that during the term of his
employment with the Company or any of its subsidiaries, he may have access to
secret and confidential information with respect to some or all of the
following:
(A) product and business plans, budgets, sales forecasts,
design plans, research and engineering data, inventions, methods, systems
and processes,
(B) customers, and
(C) trade secrets
(all such information being hereinafter referred to as "Confidential
Information").
(ii) Executive agrees that (except as authorized in writing by
the Company or required pursuant to legal or administrative process) he will not
reveal, divulge or make known to any person, firm or corporation any
Confidential Information.
(iii) Executive agrees that if after the end of the Term he
shall discover any Confidential Information in his possession, he shall
forthwith deliver the same to the Company.
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13. FISCAL YEAR. If the Company shall change its fiscal year,
appropriate adjustments shall be made in the terms of this Agreement to reflect
such change.
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14. ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration in the
City of New York in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment upon the award rendered by the
Arbitrator(s) may be entered in any court having jurisdiction thereof.
15. MISCELLANEOUS. (a) This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof. This Agreement may only be modified or amended by an instrument in
writing executed by the parties hereto.
(b) This Agreement shall be construed and enforced in accordance
with the laws of the State of New York without regard to choice of law
principles.
(c) This Agreement and the rights and obligations of the parties
hereto shall bind and inure to the benefit of the successor or successors of the
Company, whether by merger, consolidation or otherwise.
(d) Any notice to be given pursuant to the terms of this
Agreement shall be in writing and delivered by hand or
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sent by registered or certified mail, if to the Company, to the Secretary of the
Company at its principal offices in New York, New York, and if to Executive, to
his address set forth above
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or to such other address or to the attention of such other person as either
party has specified by prior written notice to the other party.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its officers thereunto duly authorized, and Executive has executed
this Agreement all as of the date first above set forth.
AMREP CORPORATION
By /s/ Anthony B. Gliedman
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Chairman of the Board
of Directors
/s/ Mohan Vachani
--------------------------
MOHAN VACHANI
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