EXHIBIT 10.7
STANDARD FORM
EXECUTIVE EMPLOYMENT AGREEMENT
Employment Agreement ("Agreement") dated as of June 30, 1998 between Arbor
National Holdings, Inc., a Delaware corporation (the "Company"), and Elliot
Silverman (the "Executive").
ARTICLE I
EMPLOYMENT
The Company hereby employs Executive, and Executive accepts employment with
the Company, upon the following terms and conditions:
1.1 EMPLOYMENT.
(a) The Company hereby employs Executive, and Executive agrees to
serve, as the Senior Vice President- Human Resources, Organization Development,
Marketing and Management Information Systems of the Company.
(b) Commencing January 1, 1999, the Executive agrees to devote
substantially his full business time and attention and best efforts to the
affairs of the Company and the Subsidiaries. Prior thereto, the Executive may
engage in activities not related to the Company, provided that these activities
do not interfere with the Executive's responsibilities to the Company as
determined by the Chief Executive Officer.
(c) Executive represents and warrants to the Company that he is free
to accept employment with the Company as
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contemplated herein and has no other written or oral obligations or commitments
of any kind or nature which would in any way interfere with his acceptance of
employment pursuant to the terms hereof or the full performance of his
obligations hereunder or the exercise of his best efforts in his employment
hereunder or which would otherwise pose any conflict of interest.
1.2 TERM. Subject to the provisions for earlier termination set forth in
Article IV hereof, this Agreement shall commence on the effective date of the
Company's initial public offering, and it shall continue until the close of
business on December 31, 2001 (the "Employment Term").
ARTICLE II
COMPENSATION
2.1 ANNUAL SALARY; BONUS.
(a) During the Employment Term, the Company shall pay to the
Executive a base annual salary of $175,000. The "Base Salary" shall be reviewed
annually and shall be payable in accordance with the Company's customary
procedures.
(b) The Executive shall be entitled to participate in the bonus pool
and any other compensation plans established for executive officers.
(c) The Executive shall receive such award of stock incentives
pursuant to the Company's 1998 Long-Term Incentive Plan
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as described on Exhibit "A" annexed hereto.
2.2 REIMBURSEMENT OF EXPENSES. (a) The Executive shall be entitled to
receive prompt reimbursement of all reasonable expenses incurred by the
Executive in performing services hereunder, including all expenses of travel,
entertainment and living expenses while away from home on business at the
request of, or in the service of, the Company or any Subsidiary, provided that
such expenses are incurred and accounted for in accordance with the policies and
procedures established by the Company.
(b) The Executive shall be entitled to receive all of the relocation
benefits set forth in the Company's Offer Letter dated January 28, 1998.
2.3 BENEFITS. The Executive shall be entitled to participate in and be
covered by all health, insurance, pension and other employee plans and benefits
established by the Company (collectively referred to herein as the "Company
Benefit Plans") for its executive employees generally, subject to meeting
applicable eligibility requirements.
2.4 VACATIONS AND HOLIDAYS. The Executive shall be entitled to an annual
vacation leave of four (4) weeks at full pay. The Executive shall be entitled
to such holidays as are
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established by the Company for all employees.
ARTICLE III
CONFIDENTIALITY; NONDISCLOSURE; NON-COMPETE
3.1 CONFIDENTIALITY. Executive understands and acknowledges that during
his employment with the Company he will be exposed to Confidential information
(as defined below), all of which is proprietary and which will rightfully belong
to the Company. Executive shall hold in a fiduciary capacity for the benefit of
the Company such Confidential Information obtained by Executive during his
employment with the Company and shall not, directly or indirectly, at any time,
either during or after his employment with the Company, without the Company's
prior written consent, use any of such Confidential Information or disclose any
of such Confidential Information to any individual or entity other than the
Company or its employees, except as required in the performance of his duties
for the Company or as otherwise required by law. Executive shall take all
reasonable steps to safeguard such Confidential Information and to protect such
Confidential Information against disclosure, misuse, loss or theft. The term
"Confidential Information" shall mean any information not
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generally known in the relevant trade or industry or otherwise not generally
available to the public, which was obtained by Executive from the Company, its
subsidiary, or which was learned, discovered, developed, conceived, originated
or prepared by Executive during or as a result of the performance of any
services by Executive on behalf of the Company. For purposes of this
Article III, the Company shall be deemed to include any entity which is
controlled, directly or indirectly, by the Company and any entity of which a
majority of the economic interest is owned, directly or indirectly, by the
Company.
3.2 NON-SOLICITATION. The Executive agrees that for a period of one (1)
year following his termination of employment with the Company, the Executive
will not, on behalf of himself or any other party, directly or indirectly,
solicit, recruit, hire or cause to be hired, any individual or individuals who
are employed by or act as agents or contractors for the Company or its
subsidiaries/affiliates on or after Executive's date of termination.
3.3 RETURN OF DOCUMENTS. Except for such items which are of a personal
nature to Executive (E.G., daily business planner), all writings, records, and
other documents and things containing any Confidential Information shall be the
exclusive property of the Company and shall not be copied, summarized, extracted
from or removed from the premises of the Company, except in pursuit of the
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business of the Company at the direction of the Company and shall be delivered
to the Company, without retaining any copies, upon the termination of
Executive's employment or at any time thereafter as requested by the Company.
3.4 NON-COMPETE. During the Employment Term and for the "Non-Compete
Period" (herein defined), the Executive will not, directly or indirectly: (i)
own, manage, operate, join, control, or participate in or be connected with, as
an officer, employee partner, stockholder, director, adviser, consultant, or
agent (whether paid or unpaid), any business, individual, partnership, firm or
corporation (collectively "Entity"), which is at the time engaged in a business
which is, directly or indirectly, in competition with the business of the
Company or any Subsidiary; the foregoing provision being also intended to
prohibit the Executive from acquiring or holding more than one (1%) percent of
any issue of stock or securities of any Entity which has any securities listed
on a national securities exchange or quoted in the daily listing of
over-the-counter market securities; or (ii) solicit or assist any person or
entity to terminate such person's or entity's contractual and/or business
relationship with the Company or any Subsidiary.
For the purposes of this Paragraph, the term "Non-Compete Period"
shall mean (i) in the case the Executive's employment is terminated pursuant to
Paragraph "4.1" and "4.2" hereof, a one (1) year period from the date of
termination, and
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(ii) in the case the Executive terminates his employment pursuant to paragraph
"4.3" without Good Reason a one (1) year period from the date of termination.
The Executive agrees that the salary and benefits received by
Executive during the Employment Term is adequate consideration for the
non-competition covenants of Executive specified above. However, in order to
prevent undue hardship of Executive, the Company agrees that if, due to the
Executive's compliance with the non-competition covenants specified above,
Executive is unable to find suitable employment after the Employment Term and
demonstrates same to the Company's chief executive officer, then, if and to the
extent that the Company insists on compliance by Executive with this paragraph
3.4, then Company shall pay Executive an amount equal to his last annual base
salary, pro rata, for so long as Company insists on compliance by Executive with
the provisions of this paragraph 3.4.
3.5 RIGHT TO INJUNCTIVE AND EQUITABLE RELIEF. The Executive's obligations
not to disclose or use Confidential Information and to refrain from the
non-solicitation and non-compete activities described in this Article III are of
a special and unique character which gives them a peculiar value, and which is
supported by valuable consideration. The Company cannot be reasonably or
adequately compensated in damages in an action at law in the event Executive
breaches such obligations. Therefore, the Executive expressly agrees that the
Company shall be entitled
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to injunctive and other equitable relief without bond or other security in the
event of such breach in addition to any other rights or remedies which the
Company may possess. Furthermore, the obligations of the Executive and the
rights and remedies of the Company under this Article III are cumulative and in
addition to, and not in lieu of, any obligations, rights, or remedies created by
applicable law relating to mis-appropriation or theft or trade secrets of
confidential information.
ARTICLE IV
TERMINATION
4.1 TERMINATION BY COMPANY WITH OR WITHOUT CAUSE. The Company may
terminate Executive's employment for cause on 30 days written notice.
4.2 PERMANENT DISABILITY. The Company may terminate Executive's
employment due to Executive's permanent disability. "Permanent Disability"
shall mean a physical or mental incapacity as a result of which the Executive
becomes totally unable to continue the performance of his duties hereunder for a
period of one hundred eighty (180) consecutive days or a period of an aggregate
of two hundred seventy (270) days in any consecutive twenty-four (24) month
period. A determination of Permanent Disability shall be subject to the
certification of a qualified medical doctor agreed to by the Company and the
Executive or, in
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the event of the Executive's incapacity to designate a doctor, the Executive's
legal representative. In the absence of agreement between the Company and the
Executive, each party shall nominate a qualified medical doctor and the two
doctors so nominated shall select a third doctor, who shall make the
determination as to the occurrence and continuance of a Permanent Disability.
4.3 TERMINATION BY EXECUTIVE. The Executive may voluntarily terminate
this Agreement upon ninety (90) days written notice to the Company, which
termination shall be deemed to be without Good Reason. The Executive may also
terminate this Agreement on thirty (30) days written notice to the Company with
Good Reason in the event the Company has materially breached its material
obligations to the Executive. In this case, the Executive shall state the
specific facts and circumstances of such breach in the written notice provided
to the Company.
4.4 DEATH OF EXECUTIVE. This Agreement shall terminate immediately upon
the death of the Executive.
4.5 SEVERANCE BENEFITS RECEIVED UPON TERMINATION.
(a) If (i) the Executive's employment is terminated by death, or due
to permanent disability, or by the Company for cause pursuant to paragraph 4.1,
or (ii) the Executive terminates his employment without Good Reason, then the
Company shall pay the Executive his Base Salary through the end of the month
during
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which such termination occurs (or at the Executive's election, the rate in
effect on the first day of the month preceding the month in which the date of
termination occurs) plus credit for any vacation earned but not taken and the
Company shall thereafter have no further obligations to the Executive under this
Agreement; PROVIDED, HOWEVER, that the Company will continue to honor any
obligations that may have accrued under the existing Company Benefit Plans or
any other agreements or arrangements applicable to the Executive.
(b) If the Executive's employment is terminated by the Company
without cause the Executive will be payed severance as follows:
(1) Executive's base pay, subject to standard witholdings, is
guaranteed and will continue to be paid on a semi-monthly
basis for a period of twelve (12) months from the date of
Executive's termination;
(2) In the event that Executive shall not have been employed
during said initial twelve (12) month period, and shall
continue not to be employed during the thirteenth to
twenty-fourth months from the date of Executive's
termination, Executive will be paid his base salary, subject
to standard withholding, on a semi-monthly basis until
Executive becomes employed or until the end of twenty-four
(24)
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months from the date of Executive's termination, whichever
comes first. For purposes of this Agreement, employment
shall be defined to include employment as a consultant or
independent contractor.
ARTICLE V
GENERAL PROVISIONS
5.1 BENEFICIAL INTERESTS. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts are still payable to
him or her hereunder, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there be no such designee, to the
Executive's estate.
5.2 NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt required, postage prepaid, as follows:
If to the Company:
Arbor National Holdings, Inc.
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333 Earle Ovington Boulevard
Uniondale, New York 11553
Attn.: Chairman, Compensation Committee of
Board of Directors
If to the Executive:
Mr. Elliot Silverman
21 Broadview Farm Road
St. Louis, Mo. 63141
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
5.3 NO WAIVERS. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by the Executive and the Company. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
5.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws.
5.5 SEVERABILITY OF PARTIAL INVALIDITY. The invalidity or
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un-enforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
5.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
5.7 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings, and negotiations between the parties with
respect to the subject matter hereof. This Agreement is intended by the parties
as the final expression of their agreement with respect to such terms as are
included in this Agreement and may not be contradicted by evidence of any prior
or contemporaneous agreement. The parties further intend that this Agreement
constitutes the complete and exclusive statement of its terms and that no
extrinsic evidence may be introduced in any judicial proceeding involving this
Agreement.
5.8 HEADINGS. The headings of the sections of this Agreement are inserted
for convenience only and shall not be deemed to constitute a part hereof and
shall not affect the validity or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ARBOR NATIONAL HOLDINGS, INC.
a New York corporation
By: /s/ Ivan Kaufman
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/s/ Elliot Silverman
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