EMPLOYMENT AGREEMENT
EXHIBIT 10.1
THIS AGREEMENT, dated as of this 2nd day of January, 2002,
by and between GETTY IMAGES, INC., a Delaware corporation (the “Company”), and Xxxxxx X. Xxxxxx, an individual residing at 00000 000xx Xxxxxx XX, Xxxxxxxxxxx, XX 00000 (the “Employee”).
WITNESSETH:
WHEREAS, both parties desire that the terms and conditions of the Employee’s employment with the Company be governed by the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. Employment and Duties.
(a) General. The Company hereby employs the Employee, effective as of the date hereof (the
“Effective Date”), and the Employee agrees upon the terms and conditions herein set forth to serve, effective as of the Effective Date, as Senior Vice President, Chief Technology Officer and shall perform all duties customarily
appurtenant to such position. In such capacity, the Employee shall report directly to Xxxxxxxx Xxxxx, Chief Executive Officer of the Company, or to such other person designated by the Board of Directors of the Company. The Employee’s principal
place of business shall be Seattle, Washington.
(b) Services and Duties. For so long
as the Employee is employed by the Company, the Employee shall devote his full business time to the performance of his duties hereunder; shall faithfully serve the Company; shall in all respects conform to and comply with the lawful and good faith
directions and instructions given to him by Xxxxxxxx Xxxxx, or such other person designated by the Board of Directors of the Company; and shall use his best efforts to promote and serve the interests of the Company.
(c) No Other Employment. For so long as the Employee is employed by the Company, he shall not, directly or
indirectly, render services to any other person or organization for which he receives compensation without the prior approval of Xxxxxxxx Xxxxx, or such other person designated by the Board of Directors of the Company. No such approval will be
required if the Employee seeks to perform inconsequential services without direct compensation therefore in connection with the management of personal investments or in connection with the performance of charitable and civic activities, provided
that such activities do not contravene the provisions of Section 6 hereof.
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2. Term of Employment. The term of the Employee’s
employment under this Agreement (the “Term”) shall commence on the Effective Date and continue until at least January 1, 2003.
3. Compensation and Other Benefits. Subject to the provisions of this Agreement, the Company shall pay and provide the following compensation and other benefits to the Employee
during the Term as compensation for all services rendered hereunder and the covenants contained in Section 6 hereof:
(a) Salary. The Company shall pay to the Employee an annual salary (the “Salary”) at the initial rate of $275,000, payable to the Employee in accordance with the normal payroll
practices of the Company for its employees as are in effect from time to time. The amount of the Employee’s Salary shall be reviewed by the Company on or about April 1st, 2002.
(b) Annual
Bonus. The Employee shall be eligible in the 2002 calendar year to participate in an annual incentive bonus program established by the Company, in accordance with the policies of the Company, its subsidiaries and
affiliates (hereinafter, collectively the “Group”) and subject to such terms and conditions as may be approved by the Company. Under the terms of the annual incentive bonus program, the Employee will be afforded the opportunity to
earn up to 40% of his Salary (the “Bonus”) in effect for the 2002 calendar year, subject to the achievement of the performance targets established by the Company for that year and subject to the provisions of Section 4, to be paid
on a pro-rata basis in the event that the Employee is employed for less than a full calendar year.
(c) Contract
Renewal Bonus. The Company shall provide a contract renewal bonus associated with the commencement of this agreement for the amount of $30,000 subject to all applicable taxes.
(d) Stock Options. Effective as of December 20, 2001, the Company shall grant the Employee an option (the
“Option”) to purchase 25,000 shares of the common stock of the Company pursuant to the terms the Company’s 1998 Stock Option Plan (the “Option Plan”). The per share exercise price of the Option shall equal the fair
market value of a share of Common Stock on the approval date from the Board of Directors, as determined in accordance with the terms of the Option Plan. Subject to such terms and conditions as may be specified by the Compensation Committee of the
Company, the Option shall vest and become exercisable as to 25% on the first anniversary of the Grant Date; the remainder of the Option shall vest ratably on the first day of each subsequent month over the following three years. Except as otherwise
specified herein, the Option shall be subject to the terms of the Option Plan and to such other terms and conditions as may be specified by the Compensation Committee of the Company in the form of a standard option agreement between the Company and
the Employee.
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As per the terms of the Company’s Option Plan, in the event of a Change in Control and except as the Committee (as
constituted immediately prior to such Change in Control) may otherwise determine in its sole discretion, (i) all Stock Options or Stock Appreciation Rights then outstanding shall become fully exercisable as of the date of the Change in Control,
whether or not then exercisable, (ii) all restrictions and conditions of all Stock Awards then outstanding shall lapse as of the date of the Change in Control, (iii) all Performance Share Awards shall be deemed to have been fully earned as of the
date of the Change in Control.
(e) Expenses. The Company shall pay or reimburse the
Employee for all reasonable out-of-pocket expenses incurred by the Employee in connection with his employment hereunder in accordance with Group Policies. Such expenses shall be paid upon the periodic submission of invoices and shall be paid
reasonably promptly after the date of such invoice. The reimbursement of expenses under this Section 3(e) shall be subject to the Employee’s providing the Company with such documentation of the expenses as the Company may from time to time
reasonably request in accordance with the policies of the Group.
(f) 401k plan, Health and Fringe
Benefits. During the Term, the Employee shall be eligible to participate in the Company’s 401k plan, medical, disability and life insurance plans applicable to executives of the Company in accordance with the terms of
such plans as in effect from time to time. The Employee shall also be provided with free parking at the place of employment.
(g) Long-Term Incentive Program. During the Term, the Employee shall participate in all long-term incentive plans and programs of the Group that are applicable to its senior executives in accordance
with their terms and in a manner consistent with his position with the Company.
(h) Holidays. In addition to the usual public and bank holidays, the Employee shall be entitled to twenty days’ paid vacation annually, which shall be taken at such times as are approved by the
Company. The Employee shall be permitted to carry forward any portion of his vacation time for up to one year and, upon the expiration of such one-year period, the Employee shall be paid in lieu of such vacation days.
4. Termination of Employment. Subject to the notice and other provisions of this Section 4, the Company shall
have the right to terminate the Employee’s employment hereunder, and he shall have the right to resign, at any time for any reason or for no stated reason.
(a) Termination for Cause; Resignation Without Good Reason. (i) If the Employee’s employment is terminated by the Company for Cause or if
the Employee resigns from his employment hereunder other than for Good Reason, he
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shall be entitled to payment of the pro rata portion of his Salary and accrued Bonus (for purposes of this Agreement, “accrued Bonus” shall be
determined using the number of days in the applicable calendar year that the Employee was employed by the Company and the applicable performance criteria under the bonus plan, in each case through the date of termination or resignation) through and
including the date of termination or resignation, as well as any un-reimbursed expenses. Except to the extent required by the terms of any applicable compensation or benefit plan or program or as otherwise required by applicable law, the Employee
shall have no rights under this Agreement or otherwise to receive any other compensation or to participate in any other plan, program or arrangement after such termination or resignation of employment with respect to the year of such termination or
resignation and later years.
(ii) In addition, the Employee shall be entitled to retain the then-vested portion of
his options to purchase shares of the Company’s common stock until such options expire in accordance with their terms.
(iii) Termination for “Cause” shall mean termination of the Employee’s employment with the Company because of (A) willful, material or persistently repeated non-performance of the Employee’s duties to
the Company (other than by reason of the incapacity of the Employee due to physical or mental illness) after notice by the Board of such failure and the Employee’s non-performance and continued, willful, material or persistent repeated
non-performance after such notice, (B) the indictment of the Employee for a felony offense, (C) fraud against the Group or any willful misconduct that brings the reputation of the Group into serious disrepute or causes the Employee to cease to be
able to perform his duties, (D) any other material breach by the Employee of any material term of this Agreement, or (E) the Employee is unable to perform his duties, by reason of disability, for a period of six (6) months or more.
(iv) Termination of the Employee’s employment for Cause shall be communicated by delivery to the Employee of a written notice
from the Company stating that the Employee has been terminated for Cause, specifying the particulars thereof and the effective date of such termination. The date of a resignation by the Employee without Good Reason shall be the date specified in a
written notice of resignation from the Employee to the Company, provided, however, that the Employee shall provide at least 30 days’ advance written notice of resignation without Good Reason.
(b) Involuntary Termination. (i) If the Company terminates the Employee’s employment for any reason other
than Cause or Employee resigns from his employment hereunder for Good Reason (collectively hereinafter referred to as an “Involuntary Termination”), the Company shall pay to the Employee his Salary and accrued Bonus up to and
including the date of such Involuntary Termination, as well as any un-reimbursed expenses. In addition, the Company shall continue to pay to the Employee as severance and in compensation for the covenants of Section 6 (the “Severance
Payments”) in accordance with the Company’s normal payroll practices, his
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Salary, at the rate in effect immediately prior to such Involuntary Termination, through the first anniversary date of the effective date of the termination or
resignation.
(ii) Resignation for “Good Reason” shall mean resignation by Employee because of (A)
an adverse and material change in the Employee’s duties, titles or reporting responsibilities, (B) a material breach by the Company of any term of the Agreement, (C) a reduction in the Employee’s Salary or bonus opportunity or the failure
of the Company to pay the Employee any material amount of compensation when due, (D) the assignment to Employee of any material duties that are inconsistent with those described in Section 1 of this Agreement without the Employee’s consent, or
(E) the Company’s requirement that Employee perform a substantial portion of his duties outside the Seattle, Washington metropolitan area, except for travel in furtherance of the Company’s business. The Company shall have 30 business days
from the date of receipt of such notice to effect a cure of the material breach described therein and, upon cure thereof by the Company to the reasonable satisfaction of the Employee, such material breach shall no longer constitute Good Reason for
purposes of this Agreement.
(iii) The date of termination of employment without Cause shall be the date specified in
a written notice of termination to the Employee. The date of resignation for Good Reason shall be the date specified in a written notice of resignation from the Employee to the Company; provided, however, that no such written notice
shall be effective unless the cure period specified in Section 4(b)(ii) above has expired without the Company having corrected, to the reasonable satisfaction of the Employee, the event or events subject to cure.
5. Limitation on Payments.
Notwithstanding anything herein to the contrary, if any of the payments made hereunder would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Internal Revenue Code of 1986, as
amended (the “Code”), and the net after-tax amount of the parachute payment is less than the net after-tax amount if the aggregate payments to be made to the Employee were three times his “base amount” (as defined in
Section 280G(b)(3) of the Code), less $1.00, then the aggregate of the amounts constituting the parachute payment shall be reduced to an amount that will equal three times the base amount, less $1.00. The determinations to be made with respect to
this Section 5 shall be made by an independent accounting firm of national standing (other than the Company’s regular auditors). The accounting firm shall be paid by the Company for its services performed hereunder.
6. Protection of the Company’s Interests.
(a) No Competing Employment. For so long as the Employee is employed by the Company and for one (1) year thereafter (such period being referred
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to hereinafter as the “Restricted Period”), the Employee shall not, without the prior written consent of the Board, directly or indirectly, own
an interest in, manage, operate, join, control, lend money or render financial or other assistance to or participate in or be connected with, as an officer, employee, partner, stockholder, consultant or otherwise, any individual, partnership, firm,
corporation or other business organization or entity that competes with the Group by providing any goods or services provided or under development by the Group at the effective date of the Employee’s termination of employment under this
Agreement; provided, however, that this Section 6(a) shall not proscribe the Employee’s ownership, either directly or indirectly, of either less than five percent of any class of securities which are listed on a national
securities exchange or quoted on the automated quotation system of the National Association of Securities Dealers, Inc..
(b) No Interference. During the Restricted Period, the Employee shall not, whether for his own account or for the account of any other individual, partnership, firm, corporation or other business
organization (other than the Company), intentionally solicit, endeavor to entice away from the Group or otherwise interfere with the relationship of the Group with, any key person or team who is employed by or otherwise engaged to perform services
for the Group or any key person or team or entity who is, or was within the then most recent twelve–month period, a customer, client or supplier of the Group.
(c) Secrecy. The Employee recognizes that the services to be performed by him hereunder are special, unique and extraordinary in that, by reason
of his employment hereunder, he may acquire confidential information and trade secrets concerning the operation of the Group, the use or disclosure of which could cause the Group substantial losses and damages which could not be readily calculated
and for which no remedy at law would be adequate. Accordingly, the Employee covenants and agrees with the Company that he will not at any time, except in performance of the Employee’s obligations to the Company hereunder or with the prior
written consent of the Board, directly or indirectly disclose to any person any confidential information that he may learn or has learned by reason of his association with the Group. The term “confidential information” means any
information not previously disclosed to the public or to the trade by the Group with respect to the Company’s, or any of its affiliates’ or subsidiaries’, products, facilities and methods, trade secrets and other intellectual
property, systems, procedures, manuals, confidential reports, product price lists, customer lists, financial information (including the revenues, costs or profits associated with any of the Group’s products), business plans, prospects or
opportunities.
(d) Exclusive Property. The Employee confirms that all confidential
information is and shall remain the exclusive property of the Group. All business records, papers and documents kept or made by the Employee relating to the business of the Group shall be and remain the property of the Group. Upon the termination of
his employment with the Company or upon the request of the Company at any time, the Employee shall promptly deliver to the Company, and shall not without the consent of the Board retain copies of, any written materials not previously made available
to the
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public, or records and documents made by the Employee or coming into his possession concerning the business or affairs of the Group; provided,
however, that subsequent to any such termination, the Company shall provide the Employee with copies (the cost of which shall be borne by the Employee) of any documents which are requested by the Employee and which the Employee has determined
in good faith are (i) required to establish a defense to a claim that the Employee has not complied with his duties hereunder or (ii) necessary to the Employee in order to comply with applicable law.
(e) Assignment of Developments. All “Developments” (as defined below) that were or are at any
time made, conceived or suggested by Employee, whether acting alone or in conjunction with others, during Employee’s employment with the Group shall be the sole and absolute property of the Group, free of any reserved or other rights of any
kind on the part of Employee. During Employee’s employment and, if such Developments were made, conceived or suggested by Employee during his employment with the Group, thereafter, Employee shall promptly make full disclosure of any such
Developments to the Group and, at the Group’s cost and expense, do all acts and things (including, among others, the execution and delivery under oath of patent and copyright applications and instruments of assignment) deemed by the Group to be
necessary or desirable at any time in order to effect the full assignment to the Group of Employee’s right and title, if any, to such Developments. For purposes of this Agreement, the term “Developments” shall mean all data,
discoveries, findings, reports, designs, inventions, improvements, methods, practices, techniques, developments, programs, concepts, and ideas, whether or not patentable, relating to the activities of the Group of which Employee is as of the date of
this Agreement aware or of which Employee becomes aware at any time during the Term, excluding any Development for which no equipment, supplies, facilities or confidential information of the Group was used and which was developed entirely on
Employee’s own time, unless (i) the Development relates directly to the business of the Group, (ii) the Development relates to actual or demonstrably anticipated research or development of the Group, or (iii) the Development results from any
work performed by Employee for the Group (the foregoing is agreed to satisfy the written notice and other requirements of Section 49.44.140 of the Revised Code of Washington).
(f) Injunctive Relief. Without intending to limit the remedies available to the Company, the Employee acknowledges that a breach of any of the
covenants contained in this Section 6 may result in material irreparable injury to the Group for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, the Company shall be entitled to obtain a temporary restraining order and/or a preliminary or permanent injunction restraining the Employee from engaging in activities prohibited by this Section 6 or such other relief as
may be required to specifically enforce any of the covenants in this Section 6. Without intending to limit the remedies available to the Employee, the Employee shall be entitled to seek specific performance of the Company’s obligations under
this Agreement.
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7. General Provisions.
(a) Source of Payments. All payments provided under this Agreement, other than payments made pursuant to a plan
which provides otherwise, shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established, and no other segregation of assets made, to assure payment. The Employee shall have no right, title or
interest whatever in or to any investments which the Company may make to aid the Company in meeting its obligations hereunder. To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no
greater than the right of an unsecured creditor of the Company; provided, however, that this provision shall not be deemed to waive or abrogate any preferential or other rights to payment accruing to the Employee under applicable
bankruptcy laws by virtue of the Employee’s status as an employee of the Company.
(b) No Other Severance
Benefits. Except as specifically set forth in this Agreement, the Employee covenants and agrees that he shall not be entitled to any other form of severance benefits from the Company, including, without limitation,
benefits otherwise payable under any of the Company’s regular severance policies, in the event his employment hereunder ends for any reason and, except with respect to obligations of the Company expressly provided for herein, the Employee
unconditionally releases the Company and its subsidiaries and affiliates, and their respective directors, officers, employees and stockholders, or any of them, from any and all claims, liabilities or obligations under this Agreement or under any
severance or termination arrangements of the Company or any of its subsidiaries or affiliates for compensation or benefits in connection with his employment or the termination thereof.
(c) Tax Withholding. Payments to the Employee of all compensation contemplated under this Agreement shall be subject to all applicable tax
withholding.
(d) Notices. Any notice hereunder by either party to the other shall be
given in writing by personal delivery, or certified mail, return receipt requested, or (if to the Company) by telex or facsimile, in any case delivered to the applicable address set forth below:
(i) To the Company:
Getty Images, Inc.
000 X. 00xx Xxxxxx
Xxxxxxx, XX 00000
(ii) To the Employee:
Xxxxxx X. Xxxxxx
00000 000xx Xxxxxx XX
Xxxxxxxxxxx, XX 00000
or to such other persons or other addresses as either party may specify to the other in writing.
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(e) Representation by the Employee. The Employee
represents and warrants that his entering into this Agreement does not, and that his performance under this Agreement and consummation of the transactions contemplated hereby will not, violate the provisions of any agreement or instrument to which
the Employee is a party, or any decree, judgment or order to which the Employee is subject, and that this Agreement constitutes a valid and binding obligation of the Employee in accordance with its terms. Breach of this representation will render
all of the Company’s obligations under this Agreement void ab initio.
(f) Limited
Waiver. The waiver by the Company or the Employee of a violation of any of the provisions of this Agreement, whether express or implied, shall not operate or be construed as a waiver of any subsequent violation of any such
provision.
(g) Assignment; Assumption of Agreement. No right, benefit or interest
hereunder shall be subject to assignment, encumbrance, charge, pledge, hypothecation or setoff by the Employee in respect of any claim, debt, obligation or similar process. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to assume expressly and to agree to perform this Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
(h) Amendment; Actions by the
Company. This Agreement may not be amended, modified or canceled except by written agreement of the Employee and the Company. Any and all determinations, judgments, reviews, verifications, adjustments, approvals, consents,
waivers or other actions of the Company required or permitted under this Agreement shall be effective only if undertaken by the Company pursuant to authority granted by a resolution duly adopted by the Board; provided, however, that by
resolution duly adopted in accordance with this Section 7(h), the Board may delegate its responsibilities hereunder to one or more of its members other than the Employee.
(i) Severability. If any term or provision hereof is determined to be invalid or unenforceable in a final court or arbitration proceeding, (i)
the remaining terms and provisions hereof shall be unimpaired and (ii) the invalid or unenforceable term or provision shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of
the invalid or unenforceable term or provision.
(j) Governing Law. This Agreement
shall be governed by and construed in accordance with the laws of the State of Washington (determined without regard to the choice of law provisions thereof).
(k) Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties hereto with respect to the matters covered hereby and
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supersedes all prior agreements and understandings of the parties with respect to the subject matter hereof.
(l) Headings. The headings and captions of the sections of this Agreement are included solely for convenience of reference and shall not
control the meaning or interpretation of any provisions of this Agreement.
(m) Counterparts. This Agreement may
be executed by the parties hereto in counterparts, each of which shall be deemed an original, but both such counterparts shall together constitute one and the same document.
(n) Disciplinary and Grievance Procedures. For statutory purposes, there is no formal disciplinary procedure in relation to the Employee’s employment. The Employee shall
be expected to maintain the highest standards of integrity and behavior. If the Employee has any grievance in relation to his employment or is not satisfied with any disciplinary procedure taken in relation to him, he may apply in writing within 14
days of that decision to the Board, whose decision shall be final. The foregoing shall not be construed, however, to limit the Employee’s remedies at law or otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year first written above.
| GETTY IMAGES, INC. | ||
| By: |
/S/ XXXXXXXX XXXXX | |
| Name: Xxxxxxxx Xxxxx Title: Chief Executive Officer | ||
| EMPLOYEE | ||
| By: |
/S/ XXXXXX X. XXXXXX | |
| Xxxxxx X. Xxxxxx | ||
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