EMPLOYMENT AGREEMENT
(Xxxxxx X. Xxxxxx)
EMPLOYMENT AGREEMENT (the "Agreement") dated as of
___________, 2004 (the "Effective Date") by and between Xxxxx & Steers Capital
Management, Inc. (the "Company") and Xxxxxx X. Xxxxxx (the "Executive").
The Company desires to continue to employ Executive and to
enter into an agreement embodying the terms of such employment; and
Executive desires to continue such employment and enter into
such an agreement.
In consideration of the premises and mutual covenants herein
and for other good and valuable consideration, the parties agree as follows:
1. Term of Employment. Subject to the provisions of Section 7
of this Agreement, Executive shall be employed by the Company for a period
commencing on the Effective Date and ending on the third anniversary of the
Effective Date (the "Employment Term") on the terms and subject to the
conditions set forth in this Agreement; provided, however, that commencing with
the third anniversary of the Effective Date and on each anniversary thereof
(each an "Extension Date"), the Employment Term shall be automatically extended
for an additional one-year period, unless the Company or Executive provides the
other party hereto 60 days prior written notice before the next Extension Date
that the Employment Term shall not be so extended.
2. Position.
a. During the Employment Term, Executive shall serve as
Co-Chief Executive Officer of Xxxxx & Steers, Inc. ("Xxxxx & Steers") and the
Company and Co-Chairman of the Board of Directors of Xxxxx & Steers (the
"Board") and the Board of Directors of the Company (the "Company Board"). In
such positions, Executive shall have authority commensurate with such positions
and such duties, commensurate with such positions, as shall be determined from
time to time by the Board and the Company Board, as applicable, and Executive
shall report directly to the Board and the Company Board, as applicable.
b. During the Employment Term, Executive will devote
Executive's full business time and best efforts to the performance of
Executive's duties hereunder and will not engage in any other business,
profession or occupation for compensation or otherwise which would conflict or
interfere with the rendition of such services either directly or indirectly,
without the prior written consent of the Board; provided that nothing herein
shall preclude Executive (x) from managing Executive's personal investments, (y)
from continuing to serve on any board of directors, or as trustee, of any
business corporation or any charitable organization on which Executive serves as
of the Effective Date and which have been previously disclosed to the Company
and (z) subject to the prior approval of the Board (which shall not be
unreasonably withheld), from accepting appointment to or continuing to serve on
any board of directors or trustees of any business corporation or any charitable
organization; provided in each case, and in the aggregate, that such activities
do not conflict or interfere with the performance of Executive's duties
hereunder or conflict with Section 8 of this Agreement.
2
3. Base Salary. During the Employment Term, the Company shall
pay Executive a base salary at the annual rate of $500,000, payable in regular
installments in accordance with the Company's usual payment practices. Executive
shall be entitled to such increases in Executive's base salary, if any, as may
be determined from time to time in the sole discretion of the Board. Executive's
annual base salary, as in effect from time to time, is hereinafter referred to
as the "Base Salary."
4. Annual Bonus. With respect to each fiscal year during the
Employment Term, Executive shall be eligible to earn an annual bonus award (an
"Annual Bonus") in such amount, if any, as determined in the sole discretion of
the Compensation Committee of the Board; provided, however, that the Annual
Bonus for each such fiscal year shall be at least $1,000,000 (the "Target Annual
Bonus") and no greater than $5,000,000; provided, further, however, that the
Annual Bonus for fiscal year 2004 shall be $1,000,000.
5. Benefits.
a. Employee Benefits. During the Employment Term,
Executive shall be entitled to (i) employee benefits that are no less favorable
than those employee benefits provided to Executive prior to the Effective Date
and (ii) participate in all employee benefit programs of the Company and its
affiliates maintained for the benefit of employees of the Company on a basis
which is no less favorable than is provided to any other executives of the
Company (collectively, the "Employee Benefits").
b. Tax Gross-Up Payment. If it shall be determined that
any payment to Executive pursuant to this Agreement or any other payment or
benefit from the Company or its affiliates would be subject to the excise tax
imposed by section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), then Executive shall receive a gross-up payment pursuant to Exhibit A
attached hereto.
6. Business Expenses. During the Employment Term, reasonable
business expenses incurred by Executive in the performance of Executive's duties
hereunder shall be reimbursed by the Company in accordance with Company
policies.
7. Termination. The Employment Term and Executive's employment
hereunder may be terminated by either party at any time and for any reason;
provided that Executive will be required to give the Company at least 60 days
advance written notice of any resignation of Executive's employment.
Notwithstanding any other provision of this Agreement, the provisions of this
Section 7 shall exclusively govern Executive's rights upon termination of
employment with the Company and its affiliates.
a. By the Company For Cause or By Executive Resignation
Without Good Reason.
(i) The Employment Term and Executive's employment hereunder
may be terminated by the Company for Cause (as defined below) and shall
terminate automatically upon Executive's resignation without Good Reason (as
defined in Section 7(c)).
3
(ii) For purposes of this Agreement, "Cause" shall mean (A)
Executive's continued failure substantially to perform the Participant's duties
hereunder (other than as a result of total or partial incapacity due to physical
or mental illness) for a period of 10 days following written notice by the
Company to Executive of such failure, (B) Executive's engagement in conduct
inimical to the interests of the Company or any of its affiliates, including
without limitation, fraud, embezzlement, theft or dishonesty in the course of
Executive's employment hereunder, (C) Executive's commission of, or plea of
guilty or nolo contendere to, (I) a felony or (II) a crime other than a felony,
which involves a breach of trust or fiduciary duty owed to the Company or any of
its affiliates, (D) Executive's disclosure of trade secrets or confidential
information of the Company or any of its affiliates, or (E) Executive's breach
of any agreement with the Company or any of its affiliates in respect of
confidentiality, nondisclosure, non-competition or otherwise.
(iii) If Executive's employment is terminated by the Company for
Cause or if Executive resigns without Good Reason, Executive shall be entitled
to receive:
(A) the Base Salary through the date of termination;
(B) any Annual Bonus earned but unpaid as of the date of
termination for any previously completed fiscal year;
(C) reimbursement for any unreimbursed business expenses
properly incurred by Executive in accordance with Company policy prior
to the date of Executive's termination; and
(D) such Employee Benefits, if any, as to which Executive
may be entitled under the employee benefit plans of the Company and
its affiliates (the amounts described in clauses (A) through (D)
hereof being referred to as the "Accrued Rights").
In addition, if Executive resigns without Good Reason,
Executive and Executive's spouse and dependents shall be entitled to receive
continued coverage under the medical plans of the Company and its affiliates in
which Executive was participating at the time of such termination for the
remainder of Executive's life, subject to payment by Executive of the same
premiums Executive would have paid during such period of coverage if Executive
were an active employee of the Company and its affiliates (the "Continued
Medical Benefits"). Following the termination of Executive's employment by the
Company for Cause or resignation by Executive without Good Reason, except as set
forth in Section 5(b), this Section 7(a)(iii) and Section 11(i), Executive shall
have no further rights to any compensation or any other benefits under this
Agreement.
b. Disability or Death.
(i) The Employment Term and Executive's employment hereunder
shall terminate upon Executive's death and may be terminated by the Company if
Executive becomes physically or mentally incapacitated and is therefore unable
for a period of six consecutive months or for an aggregate of nine months in any
24 consecutive month period to perform Executive's duties (such incapacity is
hereinafter referred to as "Disability"). Any question as to
4
the existence of the Disability of Executive as to which Executive and the
Company cannot agree shall be determined in writing by a qualified independent
physician mutually acceptable to Executive and the Company. If Executive and the
Company cannot agree as to a qualified independent physician, each shall appoint
such a physician and those two physicians shall select a third who shall make
such determination in writing. The determination of Disability made in writing
to the Company and Executive shall be final and conclusive for all purposes of
the Agreement.
(ii) Upon termination of Executive's employment hereunder due to
either death or Disability, Executive or Executive's estate (as the case may be)
shall be entitled to receive:
(A) the Accrued Rights;
(B) the Continued Medical Benefits, if applicable; and
(C) a lump sum payment equal to Executive's Target Annual
Bonus for the fiscal year in which the termination occurs,
payable when the Annual Bonus would have otherwise been payable
had Executive's employment not terminated.
Following Executive's termination of employment due to death
or Disability, except as set forth in Section 5(b), this Section 7(b)(ii) and
Section 11(i), Executive shall have no further rights to any compensation or any
other benefits under this Agreement.
c. By the Company Without Cause or Resignation by
Executive for Good Reason.
(i) The Employment Term and Executive's employment hereunder
may be terminated by the Company without Cause (which (x) shall include the
Company's election not to extend the Employment Term pursuant to Section 1 of
this Agreement and (y) shall not include a termination due to death or
Disability) or by Executive's resignation for Good Reason (each, a "Qualifying
Termination").
(ii) For purposes of this Agreement, "Good Reason" shall mean
(A) the failure of the Company to pay or cause to be paid Executive's Base
Salary or Annual Bonus (to the extent earned in accordance with the terms of any
applicable annual bonus or annual incentive arrangement), if any, when due or
(B) any substantial and sustained diminution in Executive's authority or
responsibilities; provided that either of the events described in clauses (A)
and (B) of this Section 7(c)(ii) shall constitute Good Reason only if the
Company fails to cure such event within 30 days after receipt from Executive of
written notice of the event which constitutes Good Reason; provided, further,
that "Good Reason" shall cease to exist for an event on the 60th day following
the later of its occurrence or Executive's knowledge thereof, unless Executive
has given the Company written notice thereof prior to such date.
(iii) If Executive's employment terminates due to a Qualifying
Termination, Executive shall be entitled to receive:
(A) the Accrued Rights;
5
(B) subject to Executive's continued compliance with
the provisions of Sections 8 and 9 of this Agreement, a lump sum
payment equal to, (I) if the Qualifying Termination occurs prior to a
Change in Control (as defined in the Xxxxx & Steers, Inc. 2004 Stock
Incentive Plan or any successor plan thereto), two times the sum of
Executive's Base Salary and Target Annual Bonus and (II) if the
Qualifying Termination occurs on the date of, or following, a Change
in Control, three times the sum of Executive's Base Salary and Target
Annual Bonus; provided that (x) any termination of employment by the
Company without Cause within six months prior to the occurrence
of a Change in Control shall be deemed to be a termination
of employment on the date of such Change in Control and (y) the
aggregate amount described in this clause (B) shall be reduced by the
present value of any other cash severance or termination benefits
payable to Executive under any other plans, programs or arrangements
of the Company or its affiliates; and
(C) the Continued Medical Benefits.
Following Executive's termination of employment by the Company
due to a Qualifying Termination, except as set forth in Section 5(b), this
Section 7(c)(iii) and Section 11(i), Executive shall have no further rights to
any compensation or any other benefits under this Agreement.
d. Expiration of Employment Term.
(i) Election Not to Extend the Employment Term. In the event
either party elects not to extend the Employment Term pursuant to Section 1 of
this Agreement, unless Executive's employment is earlier terminated pursuant to
paragraphs (a), (b) or (c) of this Section 7, Executive's termination of
employment hereunder (whether or not Executive continues as an employee of the
Company thereafter) shall be deemed to occur on the close of business on the day
immediately preceding the next scheduled Extension Date. In the event Executive
elects not to extend the Employment Term, Executive shall be entitled to receive
the Accrued Rights and the Continued Medical Benefits. In the event the Company
elects not to extend the Employment Term, such election shall be treated as a
termination by the Company without Cause and Executive shall be entitled to
receive payments and benefits pursuant to Section 7(c)(iii) of this Agreement.
Following such termination of Executive's employment hereunder
as a result of either party's election not to extend the Employment Term, except
as set forth in this Section 7(d)(i) and Section 11(i), Executive shall have no
further rights to any compensation or any other benefits under this Agreement.
(ii) Continued Employment Beyond the Expiration of the
Employment Term. Unless the parties otherwise agree in writing, continuation of
Executive's employment with the Company beyond the expiration of the Employment
Term shall be deemed an employment at-will and shall not be deemed to extend any
of the provisions of this Agreement and Executive's employment may thereafter be
terminated at will by either Executive or the Company; provided that the
provisions of Sections 8, 9 and 10 of this Agreement shall survive any
termination of this Agreement or Executive's termination of employment
hereunder.
6
e. Notice of Termination. Any purported termination of
employment by the Company or by Executive (other than due to Executive's death)
shall be communicated by written Notice of Termination to the other party hereto
in accordance with Section 11(h) hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated.
f. Use of Name.
(i) Notwithstanding any other provision of this Agreement or
any other Company policy, upon a termination of Executive's employment for any
reason, subject to Section 7(f)(ii), Executive shall retain the right to use
Executive's name in connection with future business ventures.
(ii) Executive acknowledges and agrees that the Company owns
and shall continue to own exclusively all rights in and to the name and
trademark "XXXXX & STEERS", and any name or trademark that contains that
combination of words that may exist now or at any time in the future. Executive
covenants that following termination of Executive's employment, he will not use
his name in conjunction with the name Xxxxx, or in conjunction with any
confusingly similar name or word.
(iii) For the avoidance of doubt, Executive hereby grants to
the Company a worldwide, non-exclusive, non-transferable, non-sublicensable,
perpetual, royalty-free right and license to use (A) Executive's name, and
initials; and (B) Executive's likeness, photograph, portrait, signature,
autographs and biographical information, solely in connection with the business
of the Company or its affiliates (including, without limitation, businesses
which the Company or its affiliates have specific plans to conduct in the future
and as to which Executive is aware of such planning).
8. Non-Competition.
a. Executive acknowledges and recognizes the highly
competitive nature of the business of the Company and its affiliates and
accordingly agrees that, during the Employment Term and for a period of one year
following the date Executive ceases to be employed by the Company due to (x) a
termination by the Company for Cause, (y) a resignation by Executive without
Good Reason or (z) Executive's election not to extend the Employment Term
pursuant to Section 1 of the Agreement, Executive shall not:
(i) other than on behalf of the Company and its affiliates,
seek to provide or provide investment advisory services to, (x) during the
period when Executive remains in the employment of the Company and its
affiliates, any person to whom the Company or an affiliate rendered such
services during Executive's employment with the Company and its affiliates and
(y) following Executive's termination of employment with the Company and its
affiliates, any person to whom the Company or an affiliate rendered such
services during the three-year period prior to such termination of employment;
7
(ii) solicit or seek to induce or actually induce any person
who is employed by the Company or an affiliate during Executive's employment
with the Company and its affiliates, or who becomes employed by the Company or
an affiliate at any time during the three-month period following the termination
of Executive's employment, to discontinue such employment, or hire or employ any
such person;
(iii) directly or indirectly engage in any business that
competes with the business of the Company or its affiliates (including, without
limitation, businesses which the Company or its affiliates have specific plans
to conduct in the future and as to which Executive is aware of such planning)
within the United States or any other country in which the Company or its
affiliates is conducting business at the time of determination (a "Competitive
Business");
(iv) directly or indirectly enter the employ of, or render
any services to, any "person" (as such term is used for purposes of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, or any
successor thereto) (or any division or controlled or controlling affiliate of
any person) who or which engages in a Competitive Business;
(v) directly or indirectly acquire a financial interest in,
or otherwise become actively involved with, any Competitive Business, directly
or indirectly, as an individual, partner, shareholder, officer, director,
principal, agent, trustee or consultant; provided that nothing herein shall
preclude Executive from directly or indirectly, owning, solely as an investment,
securities of any person engaged in a Competitive Business which are publicly
traded on a national or regional stock exchange or on the over-the-counter
market, if Executive (x) is not a controlling person of, or a member of a group
which controls, such person and (y) does not, directly or indirectly, own 5% or
more of any class of securities of such person; or
(vi) directly or indirectly interfere with, or attempt to
interfere with, business relationships (whether formed before, on or after the
date of this Agreement) between the Company or any of its affiliates and
customers, clients, suppliers, partners, members or investors of the Company or
its affiliates.
b. It is expressly understood and agreed that, although
Executive and the Company consider the restrictions contained in this Section 8
to be reasonable, if a final judicial determination is made by a court of
competent jurisdiction that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction against Executive,
the provisions of this Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
9. Confidentiality; Intellectual Property.
a. Confidentiality.
(i) Executive will not at any time (whether during or after
Executive's employment with the Company) (x) retain or use for the benefit,
purposes or account of
8
Executive or any other Person; or (y) disclose, divulge, reveal, communicate,
share, transfer or provide access to any Person outside the Company (other than
its professional advisers who are bound by confidentiality obligations), any
non-public, proprietary or confidential information -- including without
limitation trade secrets, know-how, research and development, software,
databases, inventions, processes, formulae, technology, designs and other
intellectual property, information concerning finances, investments, profits,
pricing, costs, products, services, vendors, customers, clients, partners,
investors, personnel, compensation, recruiting, training, advertising, sales,
marketing, promotions, government and regulatory activities and approvals --
concerning the past, current or future business, activities and operations of
the Company, its subsidiaries or affiliates and/or any third party that has
disclosed or provided any of same to the Company on a confidential basis
("Confidential Information") without the prior written authorization of the
Board.
(ii) "Confidential Information" shall not include any
information that is (a) generally known to the industry or the public other than
as a result of Executive's breach of this covenant or any breach of other
confidentiality obligations by third parties; (b) made legitimately available to
Executive by a third party without breach of any confidentiality obligation; or
(c) required by law to be disclosed; provided that Executive shall give prompt
written notice to the Company of such requirement, disclose no more information
than is so required, and cooperate with any attempts by the Company to obtain a
protective order or similar treatment.
(iii) Except as required by law, Executive will not disclose
to anyone, other than Executive's immediate family and legal or financial
advisors, the existence or contents of this Agreement; provided that Executive
may disclose to any prospective future employer the provisions of Sections 8 and
9 of this Agreement provided they agree to maintain the confidentiality of such
terms.
(iv) Upon termination of Executive's employment with the
Company for any reason, Executive shall (x) cease and not thereafter commence
use of any Confidential Information or intellectual property (including without
limitation, any patent, invention, copyright, trade secret, trademark, trade
name, logo, domain name or other source indicator) owned or used by the Company,
its subsidiaries or affiliates; (y) immediately destroy, delete, or return to
the Company, at the Company's option, all originals and copies in any form or
medium (including memoranda, books, papers, plans, computer files, letters and
other data) in Executive's possession or control (including any of the foregoing
stored or located in Executive's office, home, laptop or other computer, whether
or not Company property) that contain Confidential Information or otherwise
relate to the business of the Company, its affiliates and subsidiaries, except
that Executive may retain only those portions of any personal notes, notebooks
and diaries that do not contain any Confidential Information; and (z) notify and
fully cooperate with the Company regarding the delivery or destruction of any
other Confidential Information of which Executive is or becomes aware.
b. Intellectual Property.
(i) If Executive has created, invented, designed, developed,
contributed to or improved any works of authorship, inventions, intellectual
property, materials, documents or other work product (including without
limitation, research, reports, software, databases, systems,
9
applications, presentations, textual works, content, or audiovisual materials)
("Works"), either alone or with third parties, prior to Executive's employment
by the Company, that are relevant to or implicated by such employment ("Prior
Works"), Executive hereby grants the Company a perpetual, non-exclusive,
royalty-free, worldwide, assignable, sublicensable license under all rights and
intellectual property rights (including rights under patent, industrial
property, copyright, trademark, trade secret, unfair competition and related
laws) therein for all purposes in connection with the Company's current and
future business.
(ii) If Executive creates, invents, designs, develops,
contributes to or improves any Works, either alone or with third parties, at any
time during Executive's employment by the Company and within the scope of such
employment and/or with the use of any the Company resources ("Company Works"),
Executive shall promptly and fully disclose same to the Company and hereby
irrevocably assigns, transfers and conveys, to the maximum extent permitted by
applicable law, all rights and intellectual property rights therein (including
rights under patent, industrial property, copyright, trademark, trade secret,
unfair competition and related laws) to the Company to the extent ownership of
any such rights does not vest originally in the Company.
(iii) Executive agrees to keep and maintain adequate and
current written records (in the form of notes, sketches, drawings, and any other
form or media requested by the Company) of all Company Works. The records will
be available to and remain the sole property and intellectual property of the
Company at all times.
(iv) Executive shall take all requested actions and execute
all requested documents (including any licenses or assignments required by a
government contract) at the Company's expense (but without further remuneration)
to assist the Company in validating, maintaining, protecting, enforcing,
perfecting, recording, patenting or registering any of the Company's rights in
the Prior Works and Company Works. If the Company is unable for any other reason
to secure Executive's signature on any document for this purpose, then Executive
hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as Executive's agent and attorney in fact, to act for and in
Executive's behalf and stead to execute any documents and to do all other
lawfully permitted acts in connection with the foregoing.
(v) Executive shall not improperly use for the benefit of,
bring to any premises of, divulge, disclose, communicate, reveal, transfer or
provide access to, or share with the Company any confidential, proprietary or
non-public information or intellectual property relating to a former employer or
other third party without the prior written permission of such third party.
Executive hereby indemnifies, holds harmless and agrees to defend the Company
and its officers, directors, partners, employees, agents and representatives
from any breach of the foregoing covenant. Executive shall comply with all
relevant policies and guidelines of the Company, including regarding the
protection of confidential information and intellectual property and potential
conflicts of interest. Executive acknowledges that the Company may amend any
such policies and guidelines from time to time, and that Executive remains at
all times bound by their most current version.
10
c. The provisions of Sections 8 and 9 shall survive the
termination of Executive's employment for any reason.
10. Specific Performance. Executive acknowledges and agrees
that the Company's remedies at law for a breach or threatened breach of any of
the provisions of Section 8 or Section 9 would be inadequate and the Company
would suffer irreparable damages as a result of such breach or threatened
breach. In recognition of this fact, Executive agrees that, in the event of such
a breach or threatened breach, in addition to any remedies at law, the Company,
without posting any bond, shall be entitled to cease making any payments or
providing any benefit otherwise required by this Agreement and obtain equitable
relief in the form of specific performance, temporary restraining order,
temporary or permanent injunction or any other equitable remedy which may then
be available.
11. Miscellaneous.
a. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to conflicts of laws principles thereof.
b. Entire Agreement/Amendments. This Agreement contains
the entire understanding of the parties with respect to the employment of
Executive by the Company. There are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth herein. This
Agreement may not be altered, modified, or amended except by written instrument
signed by the parties hereto.
c. No Waiver. The failure of a party to insist upon
strict adherence to any term of this Agreement on any occasion shall not be
considered a waiver of such party's rights or deprive such party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement.
d. Severability. In the event that any one or more of
the provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
e. Assignment. This Agreement, and all of Executive's
rights and duties hereunder, shall not be assignable or delegable by Executive.
Any purported assignment or delegation by Executive in violation of the
foregoing shall be null and void ab initio and of no force and effect. This
Agreement may be assigned by the Company to a person or entity which is an
affiliate or a successor in interest to substantially all of the business
operations of the Company. Upon such assignment, the rights and obligations of
the Company hereunder shall become the rights and obligations of such affiliate
or successor person or entity.
f. Set Off/No Mitigation. The Company's obligation to
pay Executive the amounts provided and to make the arrangements provided
hereunder shall be subject to set-off, counterclaim or recoupment of amounts
owed by Executive to the Company or
11
its affiliates. Executive shall not be required to mitigate the amount of any
payment provided for pursuant to this Agreement by seeking other employment.
g. Successors; Binding Agreement. This Agreement shall
inure to the benefit of and be binding upon personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.
h. Notice. For the purpose 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 by hand or overnight
courier or three days after it has been mailed by United States registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth below in this Agreement, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
If to the Company:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
If to Executive:
To the most recent address of Executive set forth in the
personnel records of the Company.
i. Legal Fees and Expenses. The Company agrees to pay
all legal fees and expenses which Executive may reasonably incur as a result of
any contest by the Company or Executive of the validity or enforceability of, or
liability under, any provision of this Agreement if Executive prevails in
substantially all material respects on the issues presented for resolution.
j. Executive Representation. Executive hereby
represents to the Company that the execution and delivery of this Agreement by
Executive and the Company and the performance by Executive of Executive's duties
hereunder shall not constitute a breach of, or otherwise contravene, the terms
of any employment agreement or other agreement or policy to which Executive is a
party or otherwise bound.
k. Prior Agreements. This Agreement supersedes all
prior agreements and understandings (including verbal agreements) between
Executive and the Company and/or its affiliates regarding the terms and
conditions of Executive's employment with the Company and/or its affiliates.
l. Cooperation. Executive shall provide Executive's
reasonable cooperation in connection with any action or proceeding (or any
appeal from any action or proceeding) which relates to events occurring during
Executive's employment hereunder. This provision shall survive any termination
of this Agreement.
12
m. Withholding Taxes. The Company may withhold from any
amounts payable under this Agreement such Federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.
n. Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
XXXXX & STEERS CAPITAL MANAGEMENT, INC.
By: _________________________________
Title: ________________________________
--------------------------------------
Xxxxxx X. Xxxxxx
EXHIBIT A
Gross-Up Payment
In the event the provisions of Section 5(b) of the Agreement
to which this Exhibit A is a part shall become applicable, then the following
provisions shall apply:
(a) If it shall be determined that any amount, right or
benefit paid, distributed or treated as paid or distributed by the Company or
any of its affiliates to or for Executive's benefit (other than any amounts
payable pursuant to this Exhibit A) (a "Payment") would be subject to the excise
tax imposed by Section 4999 of the Code, or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, collectively, the "Excise Tax"), then
Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") equal to the amount necessary such that after payment by Executive of
all federal, state and local taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and the Excise Tax
imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) All determinations required to be made under this Exhibit
A, including whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by the Company's independent auditors (the
"Auditor"). The Auditor shall provide detailed supporting calculations to both
the Company and Executive within 15 business days of the receipt of notice from
Executive or the Company that there has been a Payment, or such earlier time as
is requested by the Company. All fees and expenses of the Auditor shall be paid
by the Company. Any Gross-Up Payment, as determined pursuant to this Exhibit A,
shall be paid by the Company to Executive (or to the Internal Revenue Service or
other applicable taxing authority on Executive's behalf) within five days of the
receipt of the Auditor's determination. All determinations made by the Auditor
shall be binding upon the Company and Executive; provided that following any
payment of a Gross-Up Payment to Executive (or to the Internal Revenue Service
or other applicable taxing authority on Executive's behalf), the Company may
require Executive to xxx for a refund of all or any portion of the Excise Taxes
paid on Executive's behalf, in which event the provisions of paragraph (c) below
shall apply. As a result of uncertainty regarding the application of Section
4999 of the Code hereunder, it is possible that the Internal Revenue Service may
assert that Excise Taxes are due that were not included in the Auditor's
calculation of the Gross-Up Payments (an "Underpayment"). In the event that the
Company exhausts its remedies pursuant to this Exhibit A and Executive
thereafter is required to make a payment of any Excise Tax, the Auditor shall
determine the amount of the Underpayment that has occurred and any additional
Gross-Up Payments that are due as a result thereof shall be promptly paid by the
Company to Executive (or to the Internal Revenue Service or other applicable
taxing authority on Executive's behalf).
(c) Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business
2
days after Executive receives written notification of such claim and shall
apprise the Company of the nature of such claim and the date on which such claim
is requested to be paid. Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which Executive gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall: (i) give the Company all information
reasonably requested by the Company relating to such claim; (ii) take such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company and ceasing all efforts to contest such claim; (iii)
cooperate with the Company in good faith in order to effectively contest such
claim; and (iv) permit the Company to participate in any proceeding relating to
such claim; provided, however, that the Company shall bear and pay directly all
reasonable costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expense. Without limiting the foregoing
provisions of this Exhibit A, the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall determine
and direct; provided, however, that if the Company directs Executive to pay such
claim and xxx for a refund, the Company shall advance the amount of such payment
to Executive, on an interest-free basis, and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment of
taxes for Executive's taxable year with respect to which such contested amount
is claimed to be due is limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(d) If, after Executive's receipt of an amount advanced by the
Company pursuant to this Exhibit A, Executive becomes entitled to receive any
refund with respect to such claim, Executive shall promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after Executive's receipt of an amount
advanced by the Company pursuant to this Exhibit A, a determination is made that
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after the Company's receipt
of notice of such determination, then such advance shall be forgiven and shall
not be required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.
