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EXHIBIT 10.75
SEVERANCE AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the 26th day of
August, 1997, by and between International Post Limited, a Delaware corporation
(the "Corporation") and Xxxxxx Xxxxx residing at 000 Xxxxxx Xxxx, Xxxxxx, Xxx
Xxxxxx 00000 (the "Executive").
B A C K G R O U N D
The Executive and the Corporation are parties to an employment
agreement (the "Existing Agreement") dated February 15, 1994. The Executive and
the Corporation have mutually agreed that the Executive's employment with the
Corporation will be terminated and that the Executive will resign his offices
with the Corporation, other than his position as a director of the Corporation,
in order to pursue other interests. As a result, the Corporation and the
Executive both desire to terminate the Existing Agreement and, in connection
therewith, to enter into the covenants and agreements contemplated herein.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements hereinafter set
forth, the parties hereto, desiring to be legally bound, do hereby agree as
follows:
1. Resignation. The Executive agrees and acknowledges that
effective as of the date hereof (the "Effective Date"), the Executive's
employment shall be deemed to have been terminated and the Executive has, and
shall be deemed to have, resigned from all offices and positions with the
Corporation and any of its affiliates, other than his position as Vice Chairman
of the Board of the Corporation.
The Executive and the Corporation acknowledge and agree that,
except for: (i) the Existing Agreement, which is hereby terminated and shall
hereafter be deemed to be null and void and of no further force or effect; and
(ii) this Agreement, the Executive has not entered into any agreement, whether
written, oral or implied, with the Corporation with respect to the subject
matter hereof or any employment relationship. Notwithstanding the foregoing, (i)
the Executive shall have the rights set forth in Section 7.9(a) of the Agreement
and Plan of Merger among the Corporation, Video Services Corporation, Xxxxx X.
Xxxxxxxxxx, Xxxxxx X. Xxxx and Xxxxxx X. Xxxxxxxx and (ii) the provisions of
Section 5.02 of the Existing Agreement shall survive the termination thereof.
2. Payments.
(a) Termination Payment. The Corporation shall pay to the
Executive severance in equal bi-weekly installments at the rate of: (i) $150,000
per year for the one (1) year
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period from the date hereof; (ii) $100,000 per year for the one (1) year period
thereafter; and (iii) $75,000 per year for the one (1) year period thereafter
(subject to applicable withholding and deductions).
(b) Benefits. The Executive shall, for a period of three (3)
years from the date hereof (subject to the terms and conditions of particular
plans and programs) be entitled to participate in and receive such benefits,
services, equipment, compensation and incentive plans and group life, health,
accident, disability and hospitalization insurance plans, pension plans and
retirement plans as the Corporation may make available to employees of the
Corporation at the expense of the Corporation.
(c) Options. On the date hereof, Xxxxx X. Xxxxxxxxxx, Xxxxxx
X. Xxxxxxxx and Xxxxxx X. Xxxx shall xxxxx to the Executive, options pursuant to
an option agreement in the form of Exhibit A hereto.
3. Withholdings. All amounts payable to the Executive under
this Agreement shall be subject to tax and similar withholdings and deductions
as are required by applicable law, rules and regulations.
4. Non-Competition. The Executive agrees that during the
Non-Competition Term (as hereinafter defined) he will not in any manner,
directly or indirectly, except where specifically contemplated by the terms of
this Agreement, (a) perform consulting services for, be employed by, engage in
or participate in the ownership, management, operation or control of, or act in
any advisory or other capacity for, any Competing Entity which conducts its
business within the Territory (as the terms Competing Entity and Territory are
hereinafter defined); provided, however, that notwithstanding the foregoing, the
employee may make solely passive investments in any Competing Entity the common
stock of which is "publicly held" and of which the employee shall not own or
control, directly or indirectly, in the aggregate securities which constitute 5%
or more of the voting rights or equity ownership of such Competing Entity; or
(b) solicit or divert any business or any customer from the Corporation or
assist any person, firm or corporation in doing so or attempting to do so; or
(c) cause or seek to cause any person, firm or corporation to refrain from
dealing or doing business with the Corporation or assist any person, firm or
corporation in doing so; or (d) hire or seek to hire any person who at the time
so hired, or within 12 months prior to such date was an employee of the
Corporation on the date hereof or during such Non-Competition Term or assist any
person, firm or corporation in doing so or attempting to do so.
For purposes of this Section 4, (i) the term "Non-Competition
Term" shall mean three (3) years commencing on the date hereof; (ii) the term
"Competing Entity" shall mean any entity which presently or hereafter during the
Non-Competition Term engages in any business activity in which the Corporation
or its successor is engaged during the Non-Competition Term; and (iii) the term
"Territory" shall mean any greater metropolitan area in which the Corporation is
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engaged in business while the Executive is employed by the Corporation or within
six months of the date hereof.
5. Severability. If any provision of this Agreement, or
portion thereof, shall be held invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall attach only to such
provision or portion thereof, and shall not in any manner affect or render
invalid or unenforceable any other provision of this Agreement or portion
thereof, and this Agreement shall be carried out as if any such invalid or
unenforceable provision or portion thereof were not contained herein. In
addition, any such invalid or unenforceable provision or portion thereof shall
be deemed, without further action on the part of the parties hereto, modified,
amended or limited to the extent necessary to render the same valid and
enforceable.
6. Headings. The headings of the Sections of this Agreement
are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the constitute on hereof.
7. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
the parties hereto. No waiver of any other provisions hereof (whether or not
similar) shall be binding unless executed in writing by both the parties hereto
nor shall such waiver constitute waiver.
8. Notice. Any notice to be given hereunder shall be given in
writing. Notice shall be deemed to be given when delivered by hand to, or five
days after being mailed, postage prepaid, registered with return receipt
requested, addressed as set forth above or such other address as either party
may specify to the other in writing in accordance with the terms hereof.
9. Identical Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be deemed to be
an original but all of which shall constitute one and the same Agreement.
10. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of New York applicable to
contracts to be performed therein without giving effect to the conflict of law
principles thereof.
11. Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the employment of the Executive by
the Corporation and the subject matter hereof and supersedes any and all prior
understandings, agreements or correspondence between the parties. In the event
that this Agreement is not executed and delivered by the parties hereto, this
Agreement shall not have any effect and shall not constitute, and is not
intended to constitute, evidence or an admission or concession of any matter,
fact or thing.
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12. Further Assurances. The Executive and the Corporation each
agree to execute and deliver such other documents, certificates, agreements and
other writings and to take such other actions as may be necessary or desirable
in order to consummate or implement expeditiously the transactions contemplated
herein and to otherwise fulfill or satisfy the intention of this Agreement.
IN WITNESS WHEREOF the undersigned have executed this
Agreement as of the date set forth above.
INTERNATIONAL POST LIMITED
By: /s/ Xxxx Xxxxxx
Its: Vice President and Treasurer
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
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State of New York )
) ss:
County of New York )
On the 26th day of August, 1997, before me personally came
Xxxxxx Xxxxx, to me known to be the person described in and who executed the
foregoing instrument, and acknowledged that he executed the same.
/s/ Xxxxxx Xxxxxxxx
Notary Public
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EXHIBIT A
STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of August 26, 1997 is made by and between
XXXXX X. XXXXXXXXXX, XXXXXX X. XXXXXXXX and XXXXXX X. XXXX (each, a "Stockholder
and collectively, the "Stockholders") and XXXXXX XXXXX (the "Optionee").
WHEREAS, Video Services Corporation ("VSC") (an entity in which the
Stockholders are the sole stockholders) has entered into a Merger Agreement (the
"Merger Agreement") with International Post Limited (the "Company") dated June
27, 1997, pursuant to which such corporations will be merged (the "Merger");
WHEREAS, the Stockholders desire to grant an option to Optionee to
purchase shares of the Common Stock and Optionee desires to accept such stock
option;
NOW, THEREFORE, the Stockholders and Optionee agree as follows:
Section 1. Grant of Option.
Section 1.1 Grant; Grant Date
Each Stockholder hereby grants to Optionee the right to purchase from
such Stockholder all or any part of the number of shares of Common Stock set
forth opposite his name in the table below (the "Option"), comprising an
aggregate of 75,000 shares of the Company's Common Stock, $.01 par value per
share, (the "Shares") upon the terms and conditions set forth in this Agreement.
The grant date of the Option shall be the date of this Agreement. Optionee
hereby accepts the Option, and agrees to be bound by all the terms and
provisions of this Agreement.
Name Number of Shares
---- ----------------
Xxxxx X. Xxxxxxxxxx 36,540
Xxxxxx X. Xxxxxxxx 36,540
Xxxxxx X. Xxxx 1,920
Section 1.2 Adjustments in Option
In the event that the outstanding Shares subject to the Option are
changed into or exchanged for a different number or kind of shares or securities
of the Company, or of another corporation, by
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reason of reorganization, merger or other subdivision, consolidation,
recapitalization, reclassification, stock split, stock dividend or combination
of shares or similar event, the Stockholders shall make an appropriate and
equitable adjustment in the Option so that Optionee's proportionate interest
shall be maintained as before the occurrence of such event to the maximum extent
possible. Any adjustment made by the Stockholders shall be final and binding
upon Optionee and all other interested parties.
Section 1.3 Option Terms
The Option granted under this Agreement shall be subject to
the following terms and conditions:
(a) Price. The exercise price for the Shares subject to the Option
shall be $0.75 per Share.
(b) Term. The Option shall expire on the fifth anniversary of the date
hereof.
(c) Vesting. At the effective time of the Merger, the Option shall
become fully vested and exercisable immediately.
(d) Exercise. To the extent that the Option has become exercisable in
accordance with this Agreement, it may be exercised in whole or in part at any
time prior to its expiration or termination, by providing written notice to each
Stockholder of the number of Shares as to which the Option is being exercised,
and enclosing payment for the Shares with respect to which the Option is being
exercised. Such payment shall be in cash. Partial exercise shall be for whole
Shares only and shall not be for less than five thousand (5,000) Shares in the
aggregate unless the number of Shares purchased constitutes the total number of
Shares then remaining subject to the Option or the Stockholders permit such
smaller exercise in their sole discretion. Notation of any partial exercise
shall be made by the Stockholders on Schedule I hereto. Any exercise shall be
allotted among the Stockholders in the following ratios:
Percentage of Exercise
Stockholder Applied to his Shares
----------- ---------------------
Xxxxx X. Xxxxxxxxxx 48.720%
Xxxxxx X. Xxxxxxxx 48.720%
Xxxxxx X. Xxxx 2.560%
Section 1.4 Nontransferability
The Option shall not be transferable other than by will or the
applicable laws of descent and distribution, and no transfer so effected shall
be effective to bind the Stockholders unless the Stockholders have been
furnished with written notice thereof and such evidence as the Stockholders
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may deem necessary to establish the validity of the transfer and the acceptance
by the transferee or transferees of the terms and conditions of the Option.
Section 1.5 Conditions to Issuance of Stock Certificates
(a) If required, the stock certificates evidencing the Shares shall
bear legends restricting transferability; in substantially the form indicated
below:
"These Shares have not been registered under the Securities
Act of 1933, as amended (the "Securities Act"), and may not be resold,
pledged or otherwise transferred unless they have been registered under
the Securities Act or unless an exemption from registration is
available."
(b) The Stockholders shall not be required to deliver any certificate
or certificates for Shares deliverable upon any exercise of the Option prior to
fulfillment of all of the following conditions:
(i) The completion of any registration or other
qualification of such Shares under any state or federal law or under rulings or
regulations of the Securities and Exchange Commission or of any other
governmental regulatory body, or the obtaining of approval or other clearance
from any state or federal governmental agency which the Stockholders shall, in
their sole discretion, deem necessary or advisable.
(ii) In the event that the Shares have not been
registered under the Securities Act, if the Stockholders shall, in their sole
discretion, deem it necessary or advisable, the execution by Optionee of a
written representation and agreement, in a form satisfactory to the
Stockholders, in which Optionee represents that the Shares acquired by him upon
exercise are being acquired for investment and not with a view to distribution
thereof.
(c) The parties to this Agreement understand, acknowledge and agree
that any transfer of all or any part of the Shares, or any change in the
ownership of the Company, shall be subject to the requirements of the
Communications Act of 1934, as amended, and the rules and regulations of the
Federal Communications Commission ("FCC") as may be in effect at the time of
such transfer, and that before certain rights provided for in this Agreement are
exercised, it may be necessary to obtain any approval of the FCC required under
applicable law.
Section 2. Miscellaneous.
Section 2.1 Entire Agreement: Amendment
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof. Any term or provision of this
Agreement may be waived at any time by the party which is entitled to the
benefit thereof, and any term or provision of this Agreement may be
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amended or supplemented at any time by the mutual consent of the parties hereto,
except that any waiver of any term or condition, or any amendment, of this
Agreement must be in writing.
Section 2.2 Governing Law
The laws of the State of New York shall govern the interpretation,
validity and performance of the terms of this Agreement regardless of the law
that might be applied under principles of conflict of laws.
Section 2.3 Successors
This Agreement shall be binding upon and inure to the benefit of the
successors, assigns and heirs of the respective parties.
Section 2.4 Notices
All notices or other communications made or given in connection with
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by registered or certified mail, return receipt
requested, to those listed below at their following respective addresses or at
such other address as each may specify by notice to the others:
To Optionee:
Xxxxxx Xxxxx
000 Xxxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
To the Stockholders:
c/o International Post Limited
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx
With a copy to each of the Stockholders at the following
addresses:
Xxxxx X. Xxxxxxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
(000) 000-0000
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Xxxxxx X. Xxxxxxxx
c/o Video Services Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Xxxxxx X. Xxxx
0 Xxxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
All notices to the Stockholders shall also be sent to:
Xxxxxx Xxxxxx Butowsky Xxxxxxx Shalov & Xxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax Number: (000) 000-0000
Section 2.5 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 thereof or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
Section 2.6 Titles; Construction
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
/s/ Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Optionee:
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
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SCHEDULE I
Notations As to Partial Exercise
Number of Balance of
Date of Purchased Shares on Authorized Notation
Exercise Shares Option Signature Date
