Exhibit 10aa
AGREEMENT
AGREEMENT by and between X. X. XXXX, INC., a New Jersey
corporation (the "Corporation"), and Xxxxxxx X. Xxxx (the
"Executive"), dated as of the 11th day of December, 1996.
WHEREAS, the Corporation, on behalf of itself and its
shareholders, wishes to assure that the Corporation will have the
continued dedication of the Executive, notwithstanding the
possibility, threat, or occurrence of a Change of Control (as
defined below) of the Corporation. The Board of Directors of the
Corporation (the "Board") believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change
of Control, to encourage his attention and dedication to his
assigned duties currently and in the event of any threatened or
pending Change of Control, and to provide the Executive with
competitive compensation arrangements; therefore, the Board has
caused the Corporation to enter into this Agreement (i) to ensure
the Executive of individual financial security in the event of a
Change of Control, and (ii) to provide such protection in a manner
which is competitive with that of other corporations.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions. (a) The "Effective Date"
shall be the first date during the "Change of Control Period" (as
defined in Section l(b)) on which a Change of Control occurs.
Anything in this Agreement to the contrary notwithstanding, if the
Executive's employment with the Corporation is terminated prior to
the date on which a Change of Control occurs, and the Executive can
reasonably demonstrate that such termination (1) was at the request
of a third party who has taken steps reasonably calculated to
effect a Change of Control or (2) otherwise arose in connection
with or anticipation of a Change of Control, then for all purposes
of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination.
(b) The "Change of Control Period" is the period
commencing on the date hereof and ending on the earlier to occur of
(i) the third anniversary of such date or (ii) the first day of the
month next following the Executive's normal retirement date
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"Normal Retirement Date") under the Corporation's retirement plan;
provided, however, that commencing on the date one year after the
date hereof, and on each annual anniversary of such date (such date
and each annual anniversary thereof is hereinafter referred to as
the "Renewal Date"), the Change of Control Period shall be auto-
matically extended so as to terminate on the earlier of (x) two
years from such Renewal Date or (y) the first day of the month
coinciding with or next following the Executive's Normal Retirement
Date, unless at least 60 days prior to the Renewal Date the
Corporation shall give notice that the Change of Control Period
shall not be so extended.
2. Change of Control. (a) For purposes of this
Agreement, a "Change of Control" shall be deemed to have occurred
if a change of control of the nature that would be required to be
reported in response to Item 1(a) of the Current Report on Form 8-K
as in effect on the date hereof pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act") occurs,
provided that, without limitation, a "Change of Control" shall be
deemed to have occurred if (i) the beneficial ownership at any time
hereafter by any person, as defined herein, of capital stock of the
Corporation, constitutes 20 percent or more of the general voting
power of all of the Corporation's outstanding capital or (ii)
individuals who, as of the date hereof, constitute the Board (as of
the date hereof, the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any
person becoming a Director subsequent to the date hereof whose
election, or nomination for election by the Corporation's
shareholders, was approved by a vote of at least three-quarters of
the Directors comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election
contest relating to the election of the Directors of the
Corporation, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of
the Incumbent Board. No sale to underwriters or private placement
of its capital stock by the Corporation, nor any acquisition
initiated by the Corporation, through merger, purchase of assets or
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otherwise, effected in whole or in part by issuance or reissuance
of shares of its capital stock, shall constitute a Change of
Control.
(b) For purposes of the definition of "Change of
Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual,
corporation or other entity and any group as such term is used
in Section 13(d)(3) or 14(d)(2) of the Exchange Act.
(ii) Any person shall be deemed to be the beneficial
owner of any shares of capital stock of the Corporation:
A. which that person owns directly, whether or not
of record, or
B. which that person has the right to acquire
pursuant to any agreement or understanding or upon
exercise of conversion rights, warrants, or options, or
otherwise, or
C. which are beneficially owned, directly or
indirectly (including shares deemed owned through
application of clause (B) above), by an "affiliate" or
"associate" (as defined in the rules of the Securities
and Exchange Commission under the Securities Act of 1933,
as amended) of that person, or
D. which are beneficially owned, directly or
indirectly (including shares deemed owned through
application of clause (B) above), by any other person
with which that person or his "affiliate" or "associate"
(defined as aforesaid) has any agreement, arrangement or
understanding for the purpose of acquiring, holding,
voting or disposing of capital stock of the Corporation.
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(iii) The outstanding shares of capital stock of the
Corporation shall include shares deemed owned through
application of clauses (ii) (B), (C) and (D), above, but shall
not include any other shares which may be issuable pursuant to
any agreement or upon exercise of conversion rights, warrants
or options, or otherwise, but which are not actually
outstanding.
(iv) Shares of capital stock, if any, held by The Chase
Manhattan Bank N.A. under the Indenture and the Escrow
Agreement dated as of November 1, 1971 between International
Paper Corporation and said bank shall not be deemed owned by
International Paper Corporation or by said bank for purposes
of this definition, so long as they are held by said bank
under said Escrow Agreement, but said shares shall be deemed
outstanding for the purpose of determining the aggregate
number of outstanding shares of capital stock of the
Corporation.
3. Employment Period. The Corporation hereby agrees to
continue the Executive in its employ, and the Executive hereby
agrees to remain in the employ of the Corporation, for the period
commencing on the Effective Date and ending on the earlier to occur
of (a) the third anniversary of such date or (b) the first day of
the month coinciding with or next following the Executive's Normal
Retirement Date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i)
During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of
those held, exercised and assigned at any time during the 90-day
period immediately preceding the Effective Date and (B) the
Executive's services shall be performed at the location where the
Executive was employed immediately preceding the Effective Date or
any office or location less than thirty-five (35) miles from such
location.
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(ii) During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote reasonable attention and
time during normal business hours to the business and affairs of
the Corporation and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period it
shall not be a violation of this Agreement for the Executive to (A)
serve on corporate, civic or charitable boards or committees, (B)
deliver lectures, fulfill speaking engagements or teach at
educational institutions and (C) manage personal investments, so
long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of
the Corporation in accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities
have been conducted by the Executive prior to the Effective Date,
the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities to the Corporation.
(b) Compensation. (i) Base Salary. During the
Employment Period, the Executive shall receive a base salary ("Base
Salary") at a monthly rate at least equal to the highest monthly
base salary paid to the Executive by the Corporation during the
twelve-month period immediately preceding the month in which the
Effective Date occurs. During the Employment Period, the Base
Salary shall be reviewed at least annually and shall be increased
at any time and from time to time as shall be consistent with
increases in base salary awarded in the ordinary course of business
to other key executives of the Corporation. Any increase in Base
Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. Base Salary shall not be
reduced after any such increase.
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(ii) Annual Bonus. In addition to Base Salary, the
Executive shall be awarded, for each fiscal year during the
Employment Period, an annual bonus (an "Annual Bonus") in cash at
least equal to the average bonus received by the Executive from the
Corporation in respect of the three fiscal years immediately
preceding the fiscal year in which the Effective Date occurs.
(iii) Incentive, Savings and Retirement Plans. In
addition to Base Salary and Annual Bonus payable as hereinabove
provided, the Executive shall be entitled to participate during the
Employment Period in all incentive, savings and retirement plans
and programs, whether qualified or non-qualified, then applicable
to other key executives of the Corporation and its affiliates
(including the Corporation's 1981 Stock Option Plan, the Long-Term
Performance Incentive Plan, the 1986 Stock Award Plan, the 1981
Employee Stock Appreciation Rights Plan, the Employees' Stock
Ownership Plan and the Employees' Retirement Savings Plan, in each
case to the extent then in effect or as subsequently amended);
provided, however, that such plans and programs, in the aggregate,
shall provide the Executive with compensation, benefits and reward
opportunities at least as favorable as the most favorable such
compensation benefits and reward opportunities provided by the
Corporation for the Executive under such plans and programs as in
effect at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as
provided at any time thereafter with respect to other key
executives.
(iv) Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case
may be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans provided by the
Corporation (including, without limitation, medical, prescription,
dental, disability, salary continuance, executive life, group life,
accidental death and travel accident insurance plans and programs),
at least comparable to those in effect at any time during the
90-day period immediately preceding the Effective Date which would
be most favorable to the Executive or, if more favorable to the
Executive, as in effect at any time thereafter with respect to
other key executives.
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(v) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in accordance with
the most favorable policies and procedures of the Corporation and
its affiliates in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect at any time thereafter with respect to
other key executives.
(vi) Fringe Benefits. During the Employment
Period, the Executive shall be entitled to fringe benefits, in
accordance with the most favorable policies of the Corporation and
its affiliates in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect at any time thereafter with respect to
other key executives.
(vii) Office and Support Staff. During the
Employment Period, the Executive shall be entitled to an office or
offices of a size and with furnishings and other appointments, and
to secretarial and other assistance, at least equal to those
provided to the Executive at any time during the 90-day period
immediately preceding the Effective Date which would be most
favorable to the Executive or, if more favorable to the Executive,
as provided at any time thereafter with respect to other key
executives.
(viii) Vacation. During the Employment Period, the
Executive shall be entitled to paid vacation in accordance with the
most favorable policies of the Corporation and its affiliates as in
effect at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in
effect at any time thereafter with respect to other key executives.
5. Termination. (a) Death or Disability. This
Agreement shall terminate automatically upon the Executive's death.
The Corporation may terminate this Agreement, after having
established the Executive's Disability (pursuant to the definition
of "Disability" set forth below), by giving to the Executive
written notice of its intention to terminate the Executive's
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employment. In such a case, the Executive's employment with the
Corporation shall terminate effective on the 180th day after
receipt of such notice (the "Disability Effective Date"), provided
that, within 180 days after such receipt, the Executive shall not
have returned to full-time performance of the Executive's duties.
For purposes of this Agreement, "Disability" means disability
which, at least 26 weeks after its commencement, is determined to
be total and permanent by a physician selected by the Corporation
or its insurers and acceptable to the Executive or the Executive's
legal representative (such agreement as to acceptability not to be
withheld unreasonably).
(b) Cause. The Corporation may terminate the
Executive's employment for "Cause." For purposes of this Agreement,
"Cause" means (i) an act or acts of dishonesty taken by the
Executive and intended to result in substantial personal enrichment
of the Executive at the expense of the Corporation, (ii) repeated
violations by the Executive of the Executive's obligations under
Section 4(a) of this Agreement which are demonstrably willful and
deliberate on the Executive's part and which are not remedied after
the receipt of notice from the Corporation or (iii) the conviction
of the Executive of a felony.
(c) Termination by Executive for Good Reason. The
Executive's employment may be terminated by the Executive for Good
Reason. For purposes of this Agreement, "Good Reason" means
(i) (A) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or (B) any
other action by the Corporation which results in a diminution
in such position, authority, duties or responsibilities, other
than an insubstantial and inadvertent action which is remedied
by the Corporation promptly after receipt of notice thereof
given by the Executive;
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(ii) any failure by the Corporation to comply with any
of the provisions of Section 4(b) of this Agreement, other
than an insubstantial and inadvertent failure which is
remedied by the Corporation promptly after receipt of notice
thereof given by the Executive;
(iii) the Corporation's requiring the Executive to be
based at any office or location other than that described in
Section 4(a)(i)(B) hereof, except for travel reasonably
required in the performance of the Executive's
responsibilities;
(iv) any purported termination by the Corporation of
the Executive's employment otherwise than as permitted by this
Agreement; or
(v) any failure by the Corporation to comply with and
satisfy Section 11(c) of this Agreement.
Anything in this Agreement to the contrary
notwithstanding, any termination by the Executive for any reason
whatsoever during the six month period immediately following the
first anniversary of the date of a Change of Control shall be a
termination for "Good Reason". For purposes of this Section 5(c),
any good faith determination of "Good Reason" made by the Executive
shall be conclusive.
(d) Notice of Termination. Any termination by the
Corporation for Cause or by the Executive for Good Reason shall be
communicated by Notice of Termination to the other party hereto
given in accordance with Section 12(b) of this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provision so indicated and (iii) if the termination date is other
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than the date of receipt of such notice, specifies the termination
date (which date shall be not more than fifteen (15) days after the
giving of such notice).
(e) Date of Termination. "Date of Termination" means
the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be. If the Executive's
employment is terminated by the Corporation other than for Cause or
Disability, the Date of Termination shall be the date on which the
Corporation notifies the Executive of such termination.
6. Obligations of the Corporation upon Termination. (a)
Death. If the Executive's employment is terminated by reason of
the Executive's death, this Agreement shall terminate without
further obligations to the Executive's legal representatives under
this Agreement, other than those obligations accrued or earned by
the Executive hereunder at the date of the Executive's death.
Anything in this Agreement to the contrary notwithstanding, the
Executive's family shall be entitled to receive benefits at least
equal to the most favorable benefits provided by the Corporation to
surviving families of executives of the Corporation under such
plans, programs and policies relating to family death benefits, if
any, as in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive
and/or the Executive's family, as in effect on the date of the
Executive's death with respect to other key executives and their
families.
(b) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability, this Agreement
shall terminate without further obligations to the Executive, other
than those obligations accrued or earned by the Executive hereunder
as of the Disability Effective Date. Anything in this Agreement to
the contrary notwithstanding, the Executive shall be entitled after
the Disability Effective Date to receive disability and other
benefits at least equal to the most favorable of those provided by
the Corporation to disabled employees and/or their families in
accordance with such plans, programs and policies relating to
disability, if any, as in effect at any time during the 90-day
period immediately preceding the Effective Date or, if more
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favorable to the Executive and/or the Executive's family, as in
effect at any time thereafter with respect to other key executives
and their families.
(c) Cause; Other than for Good Reason. If the
Executive's employment shall be terminated for Cause or the
Executive terminates his employment other than for Good Reason, the
Corporation shall pay the Executive his full Base Salary through
the Date of Termination at the rate in effect at the time Notice of
Termination is given and shall have no further obligations to the
Executive under this Agreement.
(d) Termination by Executive for Good Reason;
Termination by Corporation Other Than for Cause or Disability. If,
during the Employment Period, the Corporation shall terminate the
Executive's employment other than for Cause or Disability, or the
employment of the Executive shall be terminated by the Executive
for Good Reason:
(i) the Corporation shall pay to the Executive in a
lump sum in cash within 10 days after the Date of Termination
(the "Payment Date") the aggregate of the following amounts:
A. to the extent not theretofore paid, the
Executive's Base Salary through the Date of Termination
at the rate in effect on the Date of Termination or, if
higher, at the highest rate in effect at any time within
the three year period preceding the Effective Date (the
"Highest Base Salary"); and
B. the product of (x) the average of the annual
bonuses paid, or payable to the extent deferred, to the
Executive for the three full fiscal years prior to the
Effective Date (the "Recent Bonus") and (y) the fraction
obtained by dividing (i) the number of days between the
Date of Termination and the last day of the last full
fiscal year and (ii) 365; and
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C. the product of (x) three and (y) the sum of the
Highest Base Salary and (ii) the Recent Bonus; and
D. in the case of compensation previously deferred
by the Executive, all amounts previously deferred and not
yet paid by the Corporation; and
(ii) for one year after the Date of Termination, the
Corporation shall continue benefits to the Executive and/or
the Executive's family at least equal to those which would
have been provided to them in accordance with the plans,
programs and policies described in Section 4(b)(iv) of this
Agreement if the Executive's employment had not been
terminated, including health insurance and life insurance, if
and as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable
to the Executive, as in effect at any time thereafter with
respect to other key executives and their families and for
purposes of eligibility for retiree benefits pursuant to such
plans, programs and policies, the Executive shall be
considered to have remained employed until the end of the
Employment Period and to have retired on the last day of such
period.
Anything herein to the contrary notwithstanding, the
Executive may elect in his Notice of Termination to receive the
payment provided for pursuant to Section 6(d)(i)(C) hereof (the
"Severance Payment") in installments. If the Executive elects the
installment method, one-quarter of the Severance Payment shall be
paid to the Executive on the Payment Date and one-quarter of the
severance payment shall be paid to the Executive on each of the
next three anniversaries thereof and, in the case of the latter
three payments, the amounts to be paid shall include interests from
the Payment Date on the remaining unpaid balance of the Severance
Payment calculated at the Xxxxxx Guaranty Trust Company prime rate
as in effect from time to time.
7. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, bonus, incentive or other plan
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or program provided by the Corporation or any of its affiliated
companies and for which the Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as the
Executive may have under any stock option or other agreements with
the Corporation or any of its affiliated companies. Amounts which
are vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Corporation or any of its
affiliated companies at or subsequent to the Date of Termination
shall be payable in accordance with such plan or program.
8. Full Settlement. The Corporation's obligation to
make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or
action which the Corporation may have against the Executive or
others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of
this Agreement. The Corporation agrees to pay, to the full extent
permitted by law, all legal fees and expenses which the Executive
may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Corporation or others of the validity or
enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof or as a result of
any contest by the Executive about the amount of any payment
pursuant to Section 9 of this Agreement, plus in each case interest
at the Federal Rate (as defined below).
9. Gross-up.
(a) In the event it shall be determined that any
payment, benefit or distribution (or combination thereof) by the
Corporation to or for the benefit of Executive (whether paid or
payable or distributed or distributable pursuant to the terms of
this Agreement, or otherwise) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (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, hereinafter
collectively referred to as the "Excise Tax"), Executive shall be
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entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by Executive of 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) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including
whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by Xxxxxx Xxxxxxxx &
Co. (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Corporation and Executive within fifteen
(15) business days of the receipt of notice from Executive that
there has been a Payment, or such earlier time as is requested by
the Corporation. In the event that the Accounting Firm is serving
as accountant or auditor for an individual, entity or group
effecting the change in ownership or effective control (within the
meaning of Section 280G of the Code), Executive shall appoint
another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then
be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the
Corporation. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Corporation to Executive within
five (5) days after the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise
Tax is payable by Executive, it shall so indicate to Executive in
writing. Any determination by the Accounting Firm shall be binding
upon the Corporation and Executive. As a result of the uncertainty
in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by
the Corporation should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event
that the Corporation exhausts its remedies pursuant to Section 9(c)
and Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the
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Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Corporation to or for the benefit of
Executive.
(c) Executive shall notify the Corporation in writing of
any claim by the Internal Revenue Service that, if successful,
would require the payment by the Corporation of the Gross-Up
Payment. Such notification shall be given as soon as practicable
but no later than ten (10) business days after Executive is
informed in writing of such claim and shall apprise the Corporation
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 thirty (30) day period following the date on
which it gives such notice to the Corporation (or such shorter
period ending on the date that any payment of taxes with respect to
such claim is due). If the Corporation notifies Executive in
writing prior to the expiration of such period that it desires to
contest such claim, Executive shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to such claim;
(ii) take such action in connection with contesting such
claim as the Corporation 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 Corporation;
(iii) cooperate with the Corporation in good faith in
order to effectively contest such claim; and
(iv) permit the Corporation to participate in any
proceedings relating to such claim;
provided, however, that the Corporation shall bear and pay directly
all 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, for
any Excise Tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of
costs and expenses. Without limitation on the foregoing provisions
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of this Section 9(c), the Corporation 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 Corporation shall determine; provided, however, that
if the Corporation directs Executive to pay such claim and xxx for
a refund, the Corporation 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
(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 provided, further, that if Executive
is required to extend the statute of limitations to enable the
Corporation to contest such claim, Executive may limit this
extension solely to such contested amount.
(d) If, after the receipt by Executive of an amount
advanced by the Corporation pursuant to Section 9(c), Executive
becomes entitled to receive any refund with respect to such claim,
Executive shall (subject to the Corporation's complying with the
requirements of Section 9(c)) promptly pay to the Corporation the
amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by
Executive of an amount advanced by the Corporation pursuant to
Section 9(c), a determination is made that Executive shall not be
entitled to any refund with respect to such claim and the
Corporation does not notify Executive in writing of its intent to
contest such denial of refund prior to the expiration of thirty
(30) days after 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.
10. Confidential Information. The Executive shall hold
in a fiduciary capacity for the benefit of the Corporation all
secret or confidential information, knowledge or data relating to
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the Corporation or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the
Executive during the Executive's employment by the Corporation or
any of its affiliated companies and which shall not be public
knowledge (other than by acts by the Executive or his
representatives in violation of this Agreement). After termination
of the Executive's employment with the Corporation, the Executive
shall not, without the prior written consent of the Corporation,
communicate or divulge any such information, knowledge or data to
anyone other than the Corporation and those designated by it. In
no event shall an asserted violation of the provisions of this
Section 10 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
11. Successors. (a) This Agreement is personal to the
Executive and without the prior written consent of the Corporation
shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Corporation and its successors.
(c) The Corporation will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Corporation to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the
Corporation would be required to perform it if no such succession
had taken place. As used in this Agreement, "Corporation" shall
mean the Corporation as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be
governed by and construed in accordance with the laws of the State
of New Jersey, without reference to principles of conflict of laws.
The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not
IV-55
be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and
legal representatives.
(b) All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive:
Xxxxxxx X. Xxxx
0 Xxxx Xxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
If to the Corporation:
X. X. XXXX, INC.
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
(c) The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
(d) The Corporation may withhold from any amounts
payable under this Agreement such Federal, state or local taxes as
shall be required to be withheld pursuant to any applicable law or
regulation.
IV-56
(e) The Executive's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a
waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire understanding of
the Corporation and the Executive with respect to the subject
matter hereof.
(g) The Executive and the Corporation acknowledge that
the employment of the Executive by the Corporation is "at will",
and, prior to the Effective Date, may be terminated by either the
Executive or the Corporation at any time. Upon a termination of
the Executive's employment or upon the Executive's ceasing to be an
officer of the Corporation, in each case, prior to the Effective
Date, there shall be no further rights under this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his
hand and, pursuant to the authorization from its Board of
Directors, the Corporation has caused these presents to be executed
in its name on its behalf, all as of the day and year first above
written.
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
X. X. XXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chairman and
Chief Executive Officer
Attest:/s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Assistant Secretary
IV-57
