EXHIBIT 10.14
TRANSITION
AGREEMENT
THIS TRANSITION AGREEMENT (this
“ Agreement ”), is made and entered into as of
the 22 nd day of February, 2005, effective as
of the Effective Date (as such term is hereinafter defined), by and
between CB RICHARD ELLIS GROUP, INC. and CB RICHARD ELLIS, INC.
(collectively, the “ Company ”), and RAYMOND E.
WIRTA (“ Executive ”).
W I T N E S S E T H:
WHEREAS, the Company currently
employs Executive as its Chief Executive Officer, and Executive
currently serves as a member of the Company’s Board of
Directors (the “ Board of Directors
”);
WHEREAS, Executive wishes to resign
from the position of Chief Executive Officer on the Effective Date
but continue as an employee of the Company in a different capacity;
and
WHEREAS, Executive and the Company
deem it to be in their respective best interests to enter into this
Agreement upon the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of
the promises and the mutual covenants and agreements contained
herein, it is hereby agreed as follows:
1. Effective Date; Pro Rata
Bonus .
(a) From the date of this Agreement
until the later of June 2, 2005 or such other date on which the
2005 annual meeting of the Company’s shareholders is held and
the Company designates a new Chief Executive Officer (the “
Trigger Date ”), the Company agrees to continue to pay
to Executive his current base salary, payable in regular
installments in accordance with the Company’s normal payroll
procedures, and to continue Executive’s participation in
current bonus programs and benefit plans, according to the terms of
such plans and programs as they may exist from time to time. On the
Trigger Date, Executive shall submit a letter of resignation to the
Board of Directors of the Company (the “ Board of
Directors ”) to resign from the position of Chief
Executive Officer and this Agreement shall become effective on the
date (the “ Effective Date ”) immediately
following the Trigger Date; provided, however, that in the event
the Board of Directors refuses to accept Executive’s
resignation and Executive is reinstated as the Chief Executive
Officer on the Trigger Date, this Agreement shall become null and
void and the current terms of Executive’s employment shall
continue in full force in effect; and further provided that if the
Board of Directors terminates the employment of Executive without
Cause at any time before the Trigger Date, the Effective Date shall
be the day before the date of such termination.
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(b) Executive shall be entitled to
receive a pro-rata portion of the annual bonus (“ Pro-Rata
Bonus ”) which he would have earned if he were employed
as the Chief Executive Officer of the Company for the entire 2005
calendar year, with such pro-rata portion being calculated as the
product of the annual bonus multiplied by a fraction, the numerator
of which is the number of days employed as the Chief Executive
Officer of the Company in 2005 and the denominator of which is 365
days. All stock options and “Equity Incentive Plan”
shares issued to Executive prior to the Effective Date shall become
fully vested and exercisable as of the Effective Date.
2. Duties . The Company
hereby agrees to employ Executive as its Vice Chairman, and
Executive agrees to render services to the Company as a member of
the Board of Directors, for the “ Employment Period
” (as such term is hereinafter defined); provided ,
however , that in the event the Executive shall be removed
from the Board of Directors, Executive shall nonetheless continue
as an employee for the remainder of the Employment Period.
Executive agrees to use his best efforts during the Employment
Period to protect, encourage and promote the interests of the
Company and its subsidiaries and affiliates (collectively, the
“ Affiliates ”). During the Employment Period,
Executive shall also perform such other duties consistent with the
offices held by Executive, including overseas business travels, as
may be reasonably assigned to him from time to time by the Chief
Executive Officer of the Company, and will devote substantial time
and attention to such duties, except while on sick leave,
reasonable vacations and excused leaves of absence; provided
, however , that Executive shall not be required to be
present in the Company’s offices or travel in excess of 40
hours per month.
3. Compensation and Benefits
.
(a) The Company agrees to pay to
Executive a base salary during the Employment Period at a rate
equal to two hundred fifty thousand dollars ($250,000) per year
(“ Base Salary ”), payable in regular
installments in accordance with the Company’s normal payroll
procedures.
(b) During the Employment Period,
Executive shall be eligible to participate in the life, health,
long-term disability insurance, deferred compensation plans and
401(k) plan of the Company (the “ Company Benefit
Plans ”) available to other employees of the
Company.
(c) The Company will reimburse
Executive for reasonable business expenses in performing
Executive’s duties and promoting the businesses of the
Company and its Affiliates, including, without limitation,
reasonable entertaining expenses, automobile expenses, and travel
and lodging, when incurred in connection with business matters of
the Company or an Affiliate assigned to Executive from time to
time. The cost of these items shall be borne by the Company upon
presentation of an itemized expense voucher.
4. Employment Period . As
used herein, the phrase “ Employment Period ”
shall mean the period commencing on the Effective Date and ending
on the 2nd anniversary thereof.
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Notwithstanding the foregoing, the Employment
Period shall expire on the first to occur of the
following:
(a) Termination without Cause
. If the Employment Period is terminated by the Company without
Cause, Executive shall be entitled to continue to receive his Base
Salary for the period beginning on the date of such termination and
ending on the 2nd anniversary of the Effective Date. The payments
of Executive’s Base Salary by the Company under this Section
4(a) will be made periodically in the same amounts and at the same
intervals as if the Employment Period had not ended and
Executive’s Base Salary otherwise continued to be paid. In
addition, (i) all unvested stock options and unvested “Equity
Incentive Plan” shares previously granted to Executive shall
automatically vest in full and (ii) the Company shall offer
continued medical benefit coverage as required by law; provided
that Executive’s obligation to pay premiums for such coverage
shall be limited to the employee premiums payable by similarly
situated active employees until the earlier of (A) the expiration
of the Employment Period and (B) the date Executive becomes
employed by another party. Following the expiration of such period
of limited premiums, the remaining coverage shall be subject to
payment by Executive of any applicable premiums. Executive shall
not be required to mitigate the amount of any payment or benefit
provided for under this Section 4(a) by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided
for in this Section 4(a) be reduced by any compensation earned by
Executive as a result of other employment. Payment to Executive
pursuant to this Section 4(a) shall constitute the entire
obligation of the Company for severance pay and full settlement of
any claim for severance pay under law or in equity that Executive
might otherwise assert against the Company or any of its employees,
officers or directors on account of the Company’s termination
of the Employment Period without Cause. Executive shall remain
entitled to any benefits which are then due to him under the
Company Benefit Plans.
(b) Termination for Cause .
The Company shall have the right to terminate Executive’s
employment at any time for Cause by giving Executive written notice
of the effective date of termination (which effective date may,
except as otherwise provided below, be the date of such notice).
For purposes of this Agreement, “ Cause ” shall
mean:
(i) fraud, misappropriation,
embezzlement or other proven, felonious act of willful and material
misconduct against the Company or any of its Affiliates;
(ii) willful and substantial failure
to render services (except by reason of Disability (as such term is
hereinafter defined) or incapacity) or comply with the agreements
and covenants set forth herein in accordance with the terms of this
Agreement, provided that (A) a demand for performance of services
had been delivered to Executive by the Chief Executive Officer of
the Company at least thirty (30) days prior to termination
identifying the manner in which such Chief Executive Officer
believes that Executive has failed to perform or comply and (B)
Executive has thereafter failed to remedy such failure to perform
or comply; or
(iii) conviction of or plea of
guilty or nolo contendere to a felony.
If the Company terminates Executive’s
employment for any of the reasons set forth in this Section 4(b),
the Company shall have no further obligations hereunder from and
after the effective date of termination and shall have all other
rights and remedies available under this or
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any other agreement and at law or in equity,
except that Executive shall remain entitled to any benefits which
are then due to him under the Company Benefit Plans, and under
previously vested stock options and previously vested “Equity
Incentive Plan” shares. If Executive’s employment is
terminated for Cause and Executive does not consent to such
termination, such Executive shall perform no further duties
hereunder, but such termination shall not be considered immediately
effective and Executive’s rights under this Agreement during
the Employment Period shall continue (including, without
limitation, the provisions of Section 3 hereof) until the existence
of such Cause has been determined by an independent arbitrator
appointed by the American Arbitration Association and either
party’s rights to petition a court of law for a decision in
the matter have been exhausted. In connection with the appointment
of an arbitrator, both parties agree to submit the question to
final and binding arbitration in the County of Los Angeles,
California by an appointee of the American Arbitration Association
and to cooperate with the arbitrator. If the arbitrator determines
that Executive’s termination was for Cause, then
Executive’s termination shall be considered effective as of
the date set forth in the notice of termination, and Executive
shall repay to the Company all compensation received pursuant to
Section 3 hereof during the period commencing upon
Executive’s termination and ending upon the
arbitrator’s final determination. If the arbitrator
determines that Executive’s termination was not for Cause,
then such termination shall be considered without Cause, shall be
effective on the date of the arbitrator makes its determination and
Section 4(a) shall apply.
(c) Termination on Account of
Disability . If the Employment Period is terminated by the
Company because of Executive’s Disability (as such term is
hereinafter defined), in addition to any benefits paid or payable
to Executive under any long-term disability insurance policy
maintained for the benefit of Executive, Executive shall be
entitled to continue to receive his Base Salary for the period
beginning on the date of such termination and ending on the 2nd
anniversary of the Effective Date. The payments of
Executive’s Base Salary by the Company under this Section
4(c) will be made periodically in the same amounts and at the same
intervals as if the Employment Period had not ended and
Executive’s Base Salary otherwise continued to be paid. For
purposes of this Agreement, “ Disability ” shall
mean Executive’s inability to perform his duties under this
Agreement for one hundred eighty (180) consecutive days during any
twelve (12) month period due to illness, accident or other
incapacity (as determined in good faith by a physician mutually
acceptable to the Company and Executive). All unvested stock
options and unvested “Equity Incentive Plan” shares
previously granted to Executive shall vest in full upon
Executive’s Disability. Executive shall remain entitled to
any benefits which are then due to him under the Company Benefit
Plans.
(d) Termination on Account of
Death . In the event of Executive’s death during the
Employment Period, in addition to any benefits paid or payable to
Executive under any life insuranc
