THIS EMPLOYMENT AGREEMENT (this "Agreement"), effective as of October 1,
1999, made and entered into by and between XXXXXX XXXXXX VISIONCARE, INC., a
Delaware corporation, with its principal office located at 000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxxxxx, Xxxxxxxx 00000 (together with its successors and assigns
permitted under this Agreement, "Xxxxxx Xxxxxx" or the Company) and XXXXX X.
XXXX ("Xxxx"), an Illinois resident.
W I T N E S S E T H:
WHEREAS, Xxxxxx Xxxxxx is appreciative of the past management and
leadership efforts of Xxxx, which Xxxxxx Xxxxxx xxxxx to have been essential to
its successful public offering and its outstanding growth in revenue and
profitability, and Xxxxxx Xxxxxx xxxxx his services as Chief Executive Officer
to be necessary for continued growth and profitability in the foreseeable
future; and
WHEREAS, Xxxxxx Xxxxxx has determined that it is in the best interests of
Xxxxxx Xxxxxx and its stockholders to enter into this Agreement setting forth
the obligations and duties of both Xxxxxx Xxxxxx and Xxxx; and
WHEREAS, Xxxxxx Xxxxxx wishes to assure itself of the services of Xxxx for
the period hereinafter provided, and Xxxx is willing to be employed by Xxxxxx
Xxxxxx for said period, upon the terms and conditions provided in this
Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, Xxxxxx Xxxxxx and Xxxx (individually a "Party"
and together the "Parties") agree as follows:
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1. DEFINITIONS
(A) "BASE SALARY" shall mean the annual salary provided for in Section 3
below, as adjusted from time to time by the Board.
(B) "BENEFICIAL OWNER" shall have the meaning defined in Rule 13d-3 under
the Exchange Act.
(C) "BENEFICIARY" shall mean the person or persons named by Xxxx pursuant
to Section 18 below or, in the event that no such person is named and survives
Xxxx, his estate.
(D) "BOARD" shall mean the Board of Directors of Xxxxxx Xxxxxx.
(E) "CAUSE" shall mean:
(i) conviction in a court of law of, or a guilty plea or no contest plea
to, a felony charge or a finding by a court or regulatory agency of any direct
act or omission (but excluding supervisory oversights) involving dishonesty,
disloyalty or fraud by Xxxx with respect to the Company or any of its
Subsidiaries; or
(ii) a material breach of Section 13 (Confidentiality) or Section
15 (Noncompetition/Nonsolicitation) below.
(F) "CHANGE IN CONTROL" shall mean:
(i) any Person becoming the Beneficial Owner of 30 percent or
more of the combined voting power of Xxxxxx Xxxxxx'x then outstanding
securities.
(ii) a change in the composition of the Board occurring within a
rolling two-year period, as result of which fewer than a majority of the
directors are Incumbent Directors ("Incumbent Directors" shall mean directors
who either (x) are members of the Board as of the date of this Agreement or (y)
are elected, or nominated for election, to the Board with the affirmative votes
of at least a majority of the Incumbent Directors at the time of such election
or nomination, but shall not include an individual not otherwise an Incumbent
Director whose
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election or nomination is in connection with an actual or threatened proxy
contest, including but not limited to a consent solicitation, relating to the
election of directors to the Board); or
(iii) consummation, in any transaction or series of transactions,
of a complete liquidation or dissolution of Xxxxxx Xxxxxx or a merger,
consolidation or sale of all or substantially all of Xxxxxx Xxxxxx'x assets
(collectively, a "Business Combination") other than a Business Combination after
which (x) the stockholders of Xxxxxx Xxxxxx own more than 70 percent of the
combined voting power of the voting securities of the company resulting from the
Business Combination, (y) at least a majority of the board of directors of the
resulting corporation were Incumbent Directors or (z) no individual, entity or
group (excluding any corporation resulting from the Business Combination or any
employee benefit plan of such corporation or of Xxxxxx Xxxxxx) becomes the
Beneficial Owner of 30 percent or more of the combined voting power of the
securities of the resulting corporation, who did not own such securities
immediately before the Business Combination.
(G) "CODE" shall mean the Internal Revenue Code of 1986, as from time to
time amended.
(H) "COMMITTEE" shall mean the Compensation Committee of the Board.
(I) "CONSULTING PERIOD" shall mean the period specified in Section 12 below
during which Xxxx serves as a consultant to Xxxxxx Xxxxxx.
(J) "COVENANT PERIOD" shall mean the period beginning with commencement of
the Term and ending as provided in Section 15(b).
(K) "DATE OF TERMINATION" shall mean, with respect to any purported
termination of Ryan's employment during the Term:
(i) if Ryan's employment terminates by reason of Disability, the
applicable date specified in Section 1(l); and
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(ii) if Ryan's employment terminates for any other reason, the
date specified in the Notice of Termination (which shall be not less than 30
days and, in the case of voluntary termination by Xxxx as provided in Section
10(g), not more than 90 days, after the date of such Notice of Termination).
(L) "DISABILITY" shall mean any physical or mental incapacity that results
in Ryan's inability to perform substantially his duties and responsibilities for
Xxxxxx Xxxxxx (i) during the Term of Employment for six consecutive months, as
determined by the Board in its good-faith judgment, which shall be deemed to
have occurred on the last day of the six-month period of such inability to
perform and (ii) during the Consulting Period as determined by a competent
physician acceptable to the Board and effective upon 30 days' notice to Xxxx or
the Board, as the case may be.
(M) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as from
time to time amended.
(N) "GOOD REASON" shall mean the occurrence (without Ryan's prior written
consent or his acquiescence) of any one of the following acts or omissions by
Xxxxxx Xxxxxx unless, in the case of any act or omission described in paragraph
(i), (iii), (v) or (vi) of this Section 1(n), such act or omission is corrected
by Xxxxxx Xxxxxx prior to the Date of Termination specified in the Notice of
Termination in respect thereof:
(i) assignment to Xxxx of any duties inconsistent with his role
as Chief Executive Officer and President of Xxxxxx Xxxxxx or a successor
company, failure to maintain him in the position of Chief Executive Officer and
reporting relationship set forth in Section 2(c)(i) below or a substantial
adverse alteration in the nature of his authority or responsibilities under this
Agreement;
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(ii) reduction by Xxxxxx Xxxxxx in Xxxx'x Base Salary, in effect
on the date of this Agreement or as the same may be increased from time to time,
except for across-the-board salary reductions similarly affecting all senior
executives of Xxxxxx Xxxxxx or of any Person in control of Xxxxxx Xxxxxx;
(iii) reduction or other adverse changes in the bonus
opportunity available to Xxxx (with respect to the level of bonus opportunity,
the applicable performance criteria and otherwise the manner in which bonuses
are determined) in the aggregate from those available as of the date of this
Agreement in accordance with Section 4(a) below, excluding changes resulting
from material adverse changes in the financial condition of Xxxxxx Xxxxxx;
(iv) Xxxxxx Xxxxxx'x failure to pay Xxxx any amounts otherwise
vested and due him hereunder or under any plan or policy of Xxxxxx Xxxxxx;
(v) relocation of Xxxxxx Xxxxxx'x principal executive offices to
a location more than 50 miles from the location of such offices on the date of
this Agreement or a requirement that Xxxx be based anywhere other than at Xxxxxx
Xxxxxx'x principal executive offices except for necessary travel on Xxxxxx
Xxxxxx'x business to an extent substantially consistent with Ryan's business
travel obligations on the date of this Agreement; or
(vi) failure by Xxxxxx Xxxxxx to continue to provide Xxxx with
benefits substantially similar to those enjoyed by him under any of the
plans described in Section 9 below in which he was a participant at the
time of any such failure.
(O) "NOTICE OF TERMINATION" shall mean delivery of written notice by one
Party and receipt thereof by the other Party in accordance with Section 28
below, which notice 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 Ryan's employment
hereunder.
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(P) "PERSON" shall have the meaning defined in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d); provided, however, that a
Person shall not include:
(i) Xxxxxx Xxxxxx or any Subsidiary;
(ii) a trustee or other fiduciary holding securities under an
employee benefit plan of Xxxxxx Xxxxxx or any Subsidiary;
(iii) an underwriter temporarily holding securities pursuant to
an offering of such securities;
(iv) a corporation owned, directly or indirectly, by the
stockholders of Xxxxxx Xxxxxx in substantially the same proportion as their
ownership of stock of Xxxxxx Xxxxxx; or
(v) any existing stockholders of Xxxxxx Xxxxxx on the effective
date of this Agreement.
(Q) "SPOUSE" shall mean, during the Term of Employment and any Consulting
Period, the woman who as of any relevant date is legally married to Xxxx.
(R) "SUBSIDIARY" shall mean a corporation of which Xxxxxx Xxxxxx owns
directly or indirectly more than 50 percent of its outstanding securities
representing the right, other than as affected by events of default, to vote for
the election of directors.
(S) "TERM OF EMPLOYMENT" or "TERM" shall mean the period specified in
Section 2(b) below.
2. TERM OF EMPLOYMENT, POSITIONS AND DUTIES.
(A) EMPLOYMENT OF XXXX. Xxxxxx Xxxxxx hereby continues to employ Xxxx, and
Xxxx hereby accepts continued employment with Xxxxxx Xxxxxx, in the positions
and with
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the duties and responsibilities set forth below and upon such other terms and
conditions as are hereinafter stated.
(B) TERM OF EMPLOYMENT. The Term of Employment shall be five years,
commencing on the date of this Agreement and terminating on September 30, 2004;
provided, however, that, at the end of each 12-month period after the date
hereof, unless either Party gives Notice of Termination to the other, the Term
shall thereafter extend automatically for an additional 12-month period but in
no event shall the Term of Employment extend beyond September 30, 2012.
Notwithstanding the foregoing, Ryan's employment may be sooner terminated as
provided in Section 10 below.
(C) TITLE, DUTIES AND AUTHORITIES.
(i) Until termination of his employment hereunder, Xxxx shall be
employed as Chief Executive Officer and President of Xxxxxx Xxxxxx, reporting to
the Board and subject to its overall direction and authority, with all the
authorities and responsibilities that normally accrue to the position of chief
executive officer, and shall hold such other titles as the Board may grant; and
(ii) Consistent with its obligations to stockholders or unless
otherwise directed by the Incumbent Directors, Xxxxxx Xxxxxx agrees to use its
best efforts to procure the election of Xxxx as a member of and Chairman of the
Board and to ensure Ryan's re-election to that position during the Term.
(iii) Upon termination of his employment, Xxxx shall resign as a
direct or of Xxxxxx Xxxxxx and its subsidiaries, as the case may be.
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(D) TIME AND EFFORT.
(i) Xxxx agrees to devote his best efforts and abilities and his
full business time and attention to the business and affairs of Xxxxxx Xxxxxx
and its Subsidiaries in order to carry out and perform faithfully his duties and
responsibilities under this Agreement.
(ii) Nothing in this Section 2(d) shall preclude Xxxx from:
(A) serving on the boards of a reasonable number of trade
associations and charitable organizations or on the board of any business not in
competition with Xxxxxx Xxxxxx;
(B) engaging in charitable activities and community affairs;
or
(C) managing his personal investments and affairs; provided,
however, that any such activities do not materially interfere with the proper
performance of his duties and responsibilities referenced in Section 2(c) above.
3. BASE SALARY.
Xxxx shall receive from Xxxxxx Xxxxxx an initial Base Salary, payable
in accordance with the regular payroll practices of Xxxxxx Xxxxxx, of $500,000.
During the Term of Employment, the Board shall review the Base Salary for
increase no less often than annually as of the beginning of each calendar year
after 2000.
4. ANNUAL BONUS.
(A) ENTITLEMENT. Each calendar year during the Term of Employment, Xxxx
shall be eligible to participate in Xxxxxx Xxxxxx'x Professional Incentive Plan
and/or any other annual incentive plan established by Xxxxxx Xxxxxx either for
Xxxx alone or for members of Xxxxxx Xxxxxx'x senior management generally.
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(B) PAYMENT. Any annual bonus shall be payable as soon as reasonably
practicable after the completion of Xxxxxx Xxxxxx'x audited financial statements
for such calendar year, prepared in accordance with generally accepted
accounting principles, and normally no later than 120 days after the end of the
calendar year.
5. LONG-TERM INCENTIVE COMPENSATION.
During the Term of Employment, Xxxx shall be eligible to participate
in any long-term incentive plan established by Xxxxxx Xxxxxx either for Xxxx
alone or for members of Xxxxxx Xxxxxx'x senior management generally.
6. EQUITY OPPORTUNITY.
During the Term of Employment, Xxxx shall be eligible to receive
grants of options to purchase shares of Xxxxxx Xxxxxx'x stock and awards of
shares of Xxxxxx Xxxxxx'x stock, either or both as determined by the Committee,
under and in accordance with the terms of applicable plans of Xxxxxx Xxxxxx and
related option and award agreements. Also, to the extent permitted by any such
plan, Xxxx shall be eligible during any Consulting Period to receive grants of
options and awards of shares of Xxxxxx Xxxxxx'x stock in the same manner.
7. EXPENSE REIMBURSEMENT.
Xxxx shall be entitled to prompt reimbursement by Xxxxxx Xxxxxx for
all reasonable out-of-pocket expenses incurred by him during the Term of
Employment and any Consulting Period in performing services under this
Agreement, upon his submission of such accounts and records as may be reasonably
required by Xxxxxx Xxxxxx.
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8. PERQUISITES.
(a) TERM OF EMPLOYMENT. During the Term of Employment, Xxxxxx Xxxxxx shall
provide Xxxx with the following perquisites:
(i) an office of a size and with furnishings and other
appointments, and exclusive personal secretarial and other assistance, at least
equal to that provided to Xxxx by Xxxxxx Xxxxxx as of the date of this
Agreement.
(ii) payment of club dues, use of an automobile and payment of
related expenses and provision of tax and financial planning services, all on
the same terms as in effect on the date hereof or, if more favorable to Xxxx, as
made available generally to other executive officers of Xxxxxx Xxxxxx and its
Subsidiaries at any time thereafter.
(b) CONSULTING PERIOD. During any Consulting Period, Xxxxxx Xxxxxx shall
provide Xxxx with an appropriate office and administrative support consistent
with his prior executive status, shall continue the payment of club dues and the
provision of tax and financial planning services on the same terms as in effect
on the date hereof or, if more favorable to Xxxx, as made available generally to
other executive officers of Xxxxxx Xxxxxx and its Subsidiaries during the Term,
and shall reimburse Xxxx for reasonable expenses related to his duties.
9. EMPLOYEE BENEFIT PLANS.
(A) GENERAL. During the Term of Employment, Xxxx shall be entitled to
participate in all employee benefit plans and programs made available to Xxxxxx
Xxxxxx'x senior executives or to its employees generally, as such plans or
programs may be in effect from time to time, including, without limitation,
pension and other retirement plans, profit-sharing plans, savings and similar
plans, group life insurance, accidental death and dismemberment insurance,
travel accident insurance, hospitalization insurance, surgical insurance, major
and excess major
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medical insurance, dental insurance, short-term and long-term disability
insurance, sick leave (including salary continuation arrangements), holidays,
vacation and any other employee benefit plans or programs that may be sponsored
by Xxxxxx Xxxxxx from time to time, including plans that supplement the above-
listed types of plans, whether funded or unfunded.
(B) MEDICAL CARE REIMBURSEMENT INSURANCE. During the Term of Employment and
any Consulting Period, Xxxxxx Xxxxxx shall reimburse Xxxx for 100 percent of any
medical expenses incurred by him for himself or his Spouse that are not
reimbursed by insurance or otherwise, offset by any amounts that are
reimbursable by Medicare if Xxxx and his Spouse, when eligible, elect to be
covered by Medicare. Xxxxxx Xxxxxx shall provide Xxxx and his Spouse during his
lifetime with hospitalization insurance, surgical insurance, major and excess
major medical insurance and dental insurance in accordance with the most
favorable plans, policies, programs and practices of Xxxxxx Xxxxxx and its
Subsidiaries as in effect from time to time.
(C) LIFE INSURANCE BENEFIT. In addition to the group business travel and
accidental death and dismemberment insurance available to senior-level employees
generally, Xxxxxx Xxxxxx shall provide Xxxx with an individual permanent life
insurance benefit in an initial amount of approximately $5 million to the extent
that such insurance is obtainable at a reasonable cost, not in any event to
exceed the applicable Table D rate. The terms and conditions of any such benefit
shall be as more fully described in an insurance ownership agreement between
Xxxxxx Xxxxxx and Xxxx.
(D) DISABILITY BENEFIT. In consideration of the benefit payable to Xxxx in
the event of termination of his employment by reason of Disability, as provided
in Section 10(d) below, or, if applicable, in the event of termination of Ryan's
consulting services by reason of Disability during the Consulting Period, as
provided in Section 12(d) below, Xxxxxx Xxxxxx shall
11
not be obligated to provide Xxxx with long-term disability insurance. If Xxxxxx
Xxxxxx elects to provide Xxxx with such insurance, he shall be the owner of any
individual policies obtained and shall pay the premiums thereon; provided,
however, that Xxxxxx Xxxxxx shall reimburse Xxxx for any premiums that he pays.
(E) RETIREMENT BENEFIT. Xxxx shall be entitled to the benefits provided
under Xxxxxx Xxxxxx'x Supplemental Executive Retirement Plan (the "SERP")
established as of the date of this Agreement. If Xxxxxx Xxxxxx fails to maintain
the SERP in accordance with the terms thereof, it shall provide Xxxx with a
retirement benefit determined as if the SERP had remained in effect until
termination of his employment with Xxxxxx Xxxxxx by retirement at age 72. This
retirement benefit is in addition to the benefits provided under this Agreement,
and no modification, amendment or termination of this Agreement shall affect
Ryan's rights under the SERP as in effect on the date hereof or, if more
favorable to Xxxx, as in effect at any time thereafter.
10. TERMINATION OF EMPLOYMENT.
(A) GENERAL. In addition to payments and benefits under, or except as
specifically provided in subsections (b) through (h) below as applicable, in the
event of termination of Ryan's employment under this Agreement for any reason
whatsoever, he, his dependents or his Beneficiary, as the case may be, shall be
entitled to receive:
(i) his Base Salary through the Date of Termination;
(ii) payment in lieu of any unused vacation, in accordance with
Xxxxxx Xxxxxx'x vacation policy and applicable laws;
(iii) any annual bonus earned but not yet paid to him for any
calendar year prior to the year in which his termination occurs;
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(iv) any deferred compensation under any incentive compensation
plan of Xxxxxx Xxxxxx or any deferred compensation agreement then in effect;
(v) any other compensation or benefits, including without
limitation long-term incentive compensation described in Section 5 above,
benefits under equity grants and awards described in Section 6 above and
employee benefits under plans described in Section 9 above, that have vested
through the Date of Termination or to which he may then be entitled in
accordance with the applicable terms and conditions of each grant, award or
plan; and
(vi) reimbursement in accordance with Sections 7 and 9(b) above of
any business and medical expenses incurred by Xxxx or his Spouse, as applicable,
through the Date of Termination but not yet paid to him.
(B) TERMINATION BY REASON OF RETIREMENT. In the event that Ryan's employment
terminates by reason of his retirement upon or after his attainment of age 65,
he shall be entitled, in addition to the compensation and benefits specified in
Section 10(a), to the benefit provided under the SERP, in accordance with
Section 9(e) above. Any voluntary termination by Xxxx of his employment without
Good Reason after he reaches age 65, in accordance with the notice provisions of
Section 10(g) below, shall be considered a termination by reason of retirement.
(C) TERMINATION BY REASON OF DEATH. In the event that Ryan's employment
terminates by reason of his death, his Beneficiary shall be entitled, in
addition to the compensation and benefits specified in Section 10(a), to:
(i) his Base Salary, at the rate in effect on the date of his
death, through the end of the month following the month in which his death
occurs; and
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(ii) an annual bonus under Xxxxxx Xxxxxx'x Professional Incentive
Plan (and/or any other applicable annual incentive plan of Xxxxxx Xxxxxx)
prorated to the date of death, for the year in which his death occurs.
(D) TERMINATION BY REASON OF DISABILITY. In the event that Ryan's employment
terminates by reason of Disability, he or his Beneficiary, as the case may be,
shall be entitled, in addition to the compensation and benefits specified in
Section 10(a) to:
(i) an annual bonus under Xxxxxx Xxxxxx'x Professional Incentive
Plan (and/or any other applicable annual incentive plan of Xxxxxx Xxxxxx),
prorated to the Date of Termination, for the year in which his termination by
reason of Disability occurs; and
(ii) the retirement benefit under the SERP to which Xxxx would be
entitled upon termination of his employment with Xxxxxx Xxxxxx by reason of
Disability, payable as provided in the SERP, in accordance with Section 9(e)
above.
(E) TERMINATION BY XXXXXX XXXXXX FOR CAUSE. In the event that Xxxxxx Xxxxxx
terminates Ryan's employment for Cause, he shall be entitled only to the
compensation and benefits specified in Section 10(a), excepting from such
entitlement the lifetime medical benefits described in Section 9(b) above.
Notwithstanding the foregoing, termination for Cause may not occur
pursuant to clause (ii) of Section 1(e) above unless and until, with the Board's
prior approval, Xxxxxx Xxxxxx has delivered to Xxxx Notice of Termination, which
shall contain in reasonable detail the facts purporting to constitute the
alleged breach of Section 13 or Section 15 below, as applicable, and afforded
him 30 days thereafter to respond in writing to the Board setting forth his
position that his termination for Cause should not occur and requesting
reconsideration by the Board, in which event (x) the Date of Termination shall
be deferred until the Board has had the opportunity to consider any request by
Xxxx for reconsideration, and (y) the Board shall
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thereafter cause a written notice to be delivered on its behalf to Xxxx either
rescinding its determination to terminate his employment for Cause or affirming
its determination to terminate his employment for Cause and setting the Date of
Termination, which shall be not earlier than 15 days after such Notice is given.
Section 1(n)(i) to the contrary notwithstanding, upon delivery to Xxxx of Notice
of Termination under this Section 10(e), Xxxx shall be suspended from all duties
and responsibilities unless and until the Board rescinds its determination to
terminate his employment for Cause; provided, however, that pending resolution
of any dispute between the Parties, benefits and payments to him under this
Agreement shall continue as provided in Section 27(c) below.
(F) TERMINATION BY XXXXXX XXXXXX WITHOUT CAUSE OR BY XXXX FOR GOOD REASON.
(i) Termination without Cause shall mean termination of Ryan's
employment by Xxxxxx Xxxxxx, excluding termination (A) by reason of retirement,
death or Disability, (B) for Cause or (C) by Xxxx voluntarily before age 65.
(ii) Xxxxxx Xxxxxx shall provide Xxxx 30 days' Notice of
Termination without Cause, and Xxxx shall provide Xxxxxx Xxxxxx 30 days' Notice
of Termination for Good Reason.
(iii) In the event of termination by Xxxxxx Xxxxxx of Xxxx'x
employment without Cause or of termination by Xxxx of his employment for Good
Reason, he shall be entitled, in addition to the compensation and benefits
specified in Section 10(a), to:
(A) his Base Salary, payable for the remainder of the Term
of Employment at the rate in effect immediately before such termination;
(B) annual bonuses for the remainder of the Term (including a
prorated bonus for any partial calendar year) equal to the average of the three
highest annual
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bonuses awarded to him during the ten years preceding the year of termination,
such bonuses to be paid at the same time annual bonuses are regularly paid by
Xxxxxx Xxxxxx to Xxxx;
(C) continued medical reimbursement for the remainder of the
Term and thereafter the lifetime medical benefits described in Section 9(b)
above;
(D) commencing at the end of the remainder of the Term, the
retirement benefit under the SERP to which Xxxx would be entitled upon
termination of his employment with Xxxxxx Xxxxxx without Cause or for Good
Reason, payable as provided in the SERP, in accordance with Section 9(e) above;
(E) continued participation in all employee benefit plans or
programs available to Xxxxxx Xxxxxx employees generally in which Xxxx was
participating on the Date of Termination for the remainder of the Term;
provided; however, that if Xxxx is precluded from continuing his participation
in any employee benefit plan or program as provided in this clause (E), he shall
be entitled to the after-tax economic equivalent of the benefits under the plan
or program in which he is unable to participate until the end of the Term (such
economic equivalent of any benefit foregone being deemed the lowest cost that
Xxxx would incur in obtaining such benefit on an individual basis); and
(F) other benefits in accordance with applicable plans and
programs of Xxxxxx Xxxxxx.
(iv) Prior written consent by Xxxx to any of the events described
in Section 1(n) above shall be deemed a waiver by him of his right to terminate
for Good Reason under this Section 10(f) solely by reason of the events set
forth in such waiver.
(G) VOLUNTARY TERMINATION BY XXXX. Upon not more than 90 days' Notice of
Termination, Xxxx shall have the right, with the consent of the Board, which
shall not be unreasonably withheld, voluntarily to terminate his employment
without Good Reason. In the
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event that Xxxx gives such Notice, his employment shall cease as of the date
stated therein. If on that date:
(i) Xxxx has not yet attained age 65, he shall be entitled only to
receive compensation and benefits as if Xxxxxx Xxxxxx had terminated his
employment for Cause, as provided in Section 10(e).
(ii) Xxxx has attained age 65, he shall be entitled to receive
compensation and benefits as if his employment with Xxxxxx Xxxxxx had terminated
by reason of retirement, as provided in Section 10(b).
(H) TERMINATION BY XXXXXX XXXXXX WITHOUT CAUSE OR BY XXXX FOR GOOD REASON
FOLLOWING A CHANGE IN CONTROL. In the event of termination of Ryan's employment
within one year following a Change in Control either by Xxxxxx Xxxxxx without
Cause or by Xxxx for Good Reason, but prior to Ryan's attainment of age 72, he
shall be entitled, in addition to the compensation and benefits specified in
Section 10(a), to the following in lieu of the amounts specified in Section
10(f)(iii):
(i) the benefits specified in Section 10(f)(iii)(C) and (E);
(ii) the SERP benefit, specified in Section 10(f)(iii)(D),
determined as if Ryan's employment with Xxxxxx Xxxxxx had continued until his
retirement at age 72, with payment commencing on the first day of the month next
following payment to him in a lump sum, in accordance with Section 10(h)(iii),
of the amount of Base Salary specified in Section 10(f)(iii)(A);
(iii) the present value of the amounts specified in Section
10(f)(iii)(A) and (B), payable to him in a cash lump sum not later than five
business days after the Date of Termination; and
(iv) the additional rights specified in Section 10(f)(iii)(C),
(D) and (E).
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(i) Determination of Amounts of Payments. If Xxxxxx Xxxxxx'x independent
auditors determine that the amount due Xxxx under this Agreement or otherwise
will exceed the amount permissible under Code Section 280G without imposition of
the excise tax imposed by Code Section 4999 (the "280G Limit"), they shall then
determine (i) the after-tax amount and (ii) the 280G Limit. Xxxxxx Xxxxxx shall
then pay the greater of those two amounts to Xxxx in lieu of the amount due Xxxx
under Section 10(h). No such reduction shall occur unless Xxxx will receive a
greater after-tax benefit by reason of the reduced payment.
(J) CESSATION OF PAYMENTS. If, during or after the Term, Xxxx commits a
breach of Section 13 or Section 15 below, Xxxxxx Xxxxxx shall have no further
obligation to make payments to him under this Agreement except as may be
required in accordance with Section 10(a).
(K) OFFSET. In making any payments under this Agreement, Xxxxxx Xxxxxx may
offset any amounts Xxxx owes to it or its Subsidiaries against any amount Xxxxxx
Xxxxxx owes to Xxxx.
(l) Notice Requirements. Except by reason of death, any purported
termination of Ryan's employment that is not effected pursuant to Notice of
Termination satisfying the requirements of Sections 1(k) and 1(o) above and
Section 28 below shall not be effective for purposes of this Agreement.
11. NO DUTY TO MITIGATE.
Xxxx shall not be required to mitigate damages or the amount of any
payment provided for under this Agreement by seeking other employment or
otherwise, nor will any payment hereunder be subject to offset in the event that
Xxxx does receive compensation for services from any other source.
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12. CONSULTING PERIOD.
(A) GENERAL. Effective upon termination of Ryan's employment, unless
termination was:
(i) by reason of Ryan's death or Disability,
(ii) by Xxxxxx Xxxxxx for Cause, or
(iii) by Xxxx without Good Reason before age 65, Xxxx shall become
a consultant to Xxxxxx Xxxxxx, in recognition of the continued value to Xxxxxx
Xxxxxx of his extensive knowledge and expertise. Unless earlier terminated, as
provided in Section 12(e), the Consulting Period shall continue for five years.
(B) DUTIES AND EXTENT OF SERVICES.
(i) During the Consulting Period, Xxxx shall consult with Xxxxxx
Xxxxxx and its senior executive officers regarding its respective businesses and
operations. Such consulting services shall not require more than 50 days in any
calendar year, nor more than one day in any week, it being understood and agreed
that during the Consulting Period Xxxx shall have the right, consistent with the
prohibitions of Sections 13 and 15 below, to engage in full-time or part-time
employment with any business enterprise that is not a competitor of Xxxxxx
Xxxxxx.
(ii) Ryan's service as consultant shall only be required at such
times and such places as shall not result in unreasonable inconvenience to him.
In order to minimize interference with Ryan's other commitments, his consulting
services may be rendered by personal consultation at his residence or office
wherever maintained, or by correspondence through mail, telephone, fax or other
similar mode of communication at times, including weekends and evenings, most
convenient to him.
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(iii) During the Consulting Period, Xxxx shall not be obligated to
serve as a member of the Board or to occupy any office on behalf of Xxxxxx
Xxxxxx or any of its Subsidiaries.
(C) COMPENSATION. During the Consulting Period, Xxxx shall receive from
Xxxxxx Xxxxxx each year an amount equivalent to the applicable percentage of his
Base Salary upon termination of his employment, as follows:
Year Percentage of Base Salary
------ -------------------------
1 100
2 90
3 80
4 70
5 60
(D) DISABILITY. In the event of Disability during the Consulting Period,
Xxxxxx Xxxxxx or Xxxx xxx terminate Ryan's consulting services. If Ryan's
consulting services terminate by reason of Disability, he shall be entitled to
compensation, in accordance with Section 12(c), for the remainder of the
Consulting Period.
(E) TERMINATION. The Consulting Period shall terminate after five years or,
if earlier, upon Ryan's death or upon his failure to perform consulting services
as provided in Section 12(b), pursuant to 30 days' written notice by Xxxxxx
Xxxxxx to Xxxx of the grounds constituting such failure and reasonable
opportunity afforded Xxxx to cure the alleged failure. Upon any such
termination, payment of consulting fees and benefits (with the exception of
lifetime medical benefits under Section 9(b) above) shall cease.
(F) OTHER. During the Consulting Period, Xxxx shall be entitled to expense
reimbursement (including secretarial, telephone and similar support services)
and perquisites and medical benefits, pursuant to the terms of Sections 7, 8 and
9(b), respectively. Xxxxxx Xxxxxx shall also extend to Xxxx group business
travel and accidental death and dismemberment
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insurance equivalent to the coverage he received as a senior-level employee in
accordance with Section 9(c) above.
(G) ASSIGNMENT. Anything in this Agreement to the contrary notwithstanding,
Xxxx xxx assign his rights under this Section 12 to a corporation or
partnership; provided, however, that he shall remain obligated to perform
personally the consulting services specified in Section 12(b).
13. CONFIDENTIAL INFORMATION.
(A) ACKNOWLEDGMENTS. Xxxx acknowledges that:
(i) As a result of his employment with Xxxxxx Xxxxxx, Xxxx has
obtained and will obtain secret and confidential information concerning the
business of Xxxxxx Xxxxxx and its Subsidiaries, including, without limitation,
the identity of customers and sources of supply, their needs and requirements,
the nature and extent of contracts with them, and related cost, price and sales
information;
(ii) Xxxxxx Xxxxxx and its Subsidiaries will suffer damage that
will be difficult to compute if, during the Term of Employment and any
Consulting Period or thereafter, Xxxx should divulge secret and confidential
information relating to the business of Xxxxxx Xxxxxx heretofore or hereafter
acquired by him in the course of his employment with Xxxxxx Xxxxxx or any of its
Subsidiaries; and
(iii) The provisions of this Section 13 are reasonable and
necessary for the protection of the business of Xxxxxx Xxxxxx and its
Subsidiaries.
(B) CONFIDENTIAL INFORMATION. Xxxx agrees that he will not at any time,
either during the Term of Employment and any Consulting Period or thereafter,
divulge to any person, firm or corporation any information obtained or learned
by him during the course of his
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employment with Xxxxxx Xxxxxx or any of its Subsidiaries, with regard to the
operational, financial, business or other affairs of Xxxxxx Xxxxxx or its
Subsidiaries, their officers and directors, including, without limitation, trade
"know how," secrets, customer lists, sources of supply, pricing policies,
operational methods or technical processes, except:
(i) as necessary and appropriate in the course of performing his
duties hereunder;
(ii) with Xxxxxx Xxxxxx'x express written consent;
(iii) to the extent that any such information is in the public
domain, is ascertainable from public or published information or is known to any
person who is not subject to a contractual or fiduciary obligation owed to
Xxxxxx Xxxxxx not to disclose such information, in each case other than as a
result of Ryan's breach of any of his obligations hereunder; or
(iv) when required to be disclosed by court order, subpoena or
other government process.
In the event that Xxxx shall be required to make disclosure pursuant
to the provisions of clause (iv) of the preceding sentence, he shall promptly,
but in no event more than 48 hours after learning of such court order, subpoena
or other government process, notify Xxxxxx Xxxxxx by personal delivery or by
facsimile, confirmed by mail. Further, at Xxxxxx Xxxxxx'x written request and
expense, Xxxx shall (i) take all reasonably necessary steps requested by Xxxxxx
Xxxxxx to defend against the enforcement of such court order, subpoena or other
government process and (ii) permit Xxxxxx Xxxxxx to intervene and participate
with counsel of its choice in any proceeding relating to the enforcement
thereof.
(C) RETURN OF DOCUMENTS AND PROPERTY. Upon termination of his employment
with Xxxxxx Xxxxxx and any Consulting Period, or otherwise at any time Xxxxxx
Xxxxxx may so request, Xxxx shall promptly deliver to Xxxxxx Xxxxxx all files,
memoranda, notes,
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records, reports, manuals, data, drawings, blueprints and other documents and
information (and all copies thereof) relating to the business of Xxxxxx Xxxxxx
and its Subsidiaries, and all property associated therewith, that are then in
his possession or under his control.
(D) REMEDIES AND SANCTIONS. In the event that Xxxx is found to be in
violation of Section 13(b) or (c), Xxxxxx Xxxxxx shall be entitled to relief as
provided in Section 16 below.
14. INVENTIONS AND PATENTS.
Xxxx acknowledges that all inventions, innovations, improvements,
developments, methods, designs, analyses, drawings, reports and all similar or
related information (whether or not patentable) that relate to Xxxxxx Xxxxxx'x
or any of its Subsidiaries' actual or anticipated business, research and
development or existing or future products or services and that are conceived,
developed or made by Xxxx while being employed by Xxxxxx Xxxxxx and any of its
Subsidiaries ("Work Product") belong to Xxxxxx Xxxxxx or such Subsidiary. Xxxx
shall promptly disclose such Work Product to the Board and perform all such
actions reasonably requested by the Board (whether during or after the Term of
Employment) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments).
15. NONCOMPETITION/NONSOLICITATION.
(A) ACKNOWLEDGMENTS. Xxxx acknowledges that:
(i) Xxxxxx Xxxxxx and its Subsidiaries will suffer damage that
will be difficult to compute if, during the Term of Employment and any
Consulting Period or thereafter, Xxxx should enter a competitive business; and
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(ii) The provisions of this Section 15 are reasonable and
necessary for the protection of the business of Xxxxxx Xxxxxx and its
Subsidiaries.
(B) NONCOMPETITION AND NONSOLICITATION. During the Term of Employment and
any Consulting Period and for 12 months thereafter (the "Covenant Period") Xxxx,
without the prior written permission of Xxxxxx Xxxxxx, shall not, directly or
indirectly:
(i) enter into the employ of or render any services to any person,
firm on corporation engaged in any business that derives more than 5 percent of
its gross sales (such 5 percent of gross sales not to exceed $50 million in any
event) from products that are interchangeable with or substitutable for a
product sold by one or more of the businesses conducted by Xxxxxx Xxxxxx or any
of its Subsidiaries when the Term or Consulting Period, as applicable, ends (a
"Competitive Business");
(ii) engage in any Competitive Business for his own account;
(iii) become associated with or interested in any Competitive
Business as an individual, partner, shareholder, creditor, director, officer,
principal, agent, employee, trustee, consultant, advisor or in any other
relationship or capacity;
(iv) employ or retain, or have or cause any other person or entity
to employ or retain, any person who was employed or retained by Xxxxxx Xxxxxx or
any of its Subsidiaries while Xxxx was employed by or performing consulting
services for Xxxxxx Xxxxxx; or
(v) solicit, endeavor to entice away from or knowingly interfere
with Xxxxxx Xxxxxx or any of its Subsidiaries, any of its or their customers or
sources of supply.
Notwithstanding the foregoing, nothing in this Agreement shall preclude
Xxxx from investing his personal assets in the securities of any corporation or
other business entity that is engaged in a Competitive Business if such
securities are traded on a national stock
24
exchange or in the over-the-counter market and if such investment does not
result in his owning beneficially at any time more than 2 percent of the
publicly traded equity securities of such competitor.
(C) REMEDIES AND SANCTIONS. In the event that Xxxx is found to be in
violation of Section 15(b), Xxxxxx Xxxxxx shall be entitled to relief as
provided in Section 16 below.
16. INJUNCTIVE RELIEF.
(A) BREACH OR THREATENED BREACH. If Xxxx commits a breach, or threatens to
commit a breach, of any of the provisions of Sections 13 or 15 above, Xxxxxx
Xxxxxx shall have the right and remedy to seek to have the provisions of this
Agreement specifically enforced by any court having equity jurisdiction without
posting bond or other security, it being acknowledged and agreed by Xxxx that
the services being rendered hereunder to Xxxxxx Xxxxxx are of a special, unique
and extraordinary character and that any such breach or threatened breach will
cause irreparable injury to Xxxxxx Xxxxxx and that monetary damages will not
provide an adequate remedy to Xxxxxx Xxxxxx.
The rights and remedies enumerated in this Section 16(a) shall each be
independent of the other and shall be severally enforceable, and such rights and
remedies shall be in addition to, and not in lieu of, any other damages, rights
and remedies available to Xxxxxx Xxxxxx under law or equity.
(B) EXTENSION OF COVENANT PERIOD. If Xxxx shall violate any covenant
contained in this Section 16, the Covenant Period shall automatically extend for
12 months from the date on which Xxxx permanently ceases such violation or, if
later, from the date of entry by a court of competent jurisdiction of a final
order or judgment enforcing such covenant.
25
(C) UNENFORCEABILITY. If any provision of this Section 16 is held to be
unenforceable because of the scope, duration or area of its applicability, the
tribunal making such determination shall have the power to modify such scope,
duration, or area, or all of them, and any such provision shall then be
applicable in such modified form.
17. WITHHOLDING TAXES.
All payments to Xxxx or his Beneficiary shall be subject to withholding on
account of federal, state and local taxes as required by law. If any payment
under this Agreement is insufficient to provide the amount of such taxes
required to be withheld, Xxxxxx Xxxxxx may withhold such taxes from any
subsequent payment due Xxxx or his Beneficiary. In the event that all payments
due are insufficient to provide the required amount of such withholding taxes,
Xxxx or his Beneficiary, within five days after written notice from Xxxxxx
Xxxxxx, shall pay to Xxxxxx Xxxxxx the amount of such withholding taxes in
excess of the payments due.
18. BENEFICIARIES/REFERENCES.
Xxxx shall be entitled to select (and change, to the extent permitted under
any applicable law) a beneficiary or beneficiaries to receive any compensation
or benefit payable under this Agreement following his death by giving Xxxxxx
Xxxxxx written notice thereof. In the event of Ryan's death or of a judicial
determination of his incompetence, reference in this Agreement to Xxxx shall be
deemed to refer, as appropriate, to his beneficiary, estate or other legal
representative.
26
19. INDEMNIFICATION AND LIABILITY INSURANCE.
Nothing herein is intended to limit Xxxxxx Xxxxxx'x indemnification of
Xxxx, and Xxxxxx Xxxxxx shall indemnify him to the fullest extent permitted by
applicable law consistent with Xxxxxx Xxxxxx'x Certificate of Incorporation and
By-Laws as in effect on the date of this Agreement, with respect to any action
or failure to act on his part while he is an officer, director or employee of
Xxxxxx Xxxxxx or any Subsidiary. Xxxxxx Xxxxxx shall cause Xxxx to be covered at
all times by directors' and officers' liability insurance on terms no less
favorable than the directors' and officers' liability insurance maintained by
Xxxxxx Xxxxxx in effect on the date hereof in terms of coverage and amounts.
Xxxxxx Xxxxxx shall continue to indemnify Xxxx as provided above and maintain
such liability insurance coverage for him after the Term of Employment and, if
applicable, the Consulting Period for any claims that may be made against him
with respect to his service as a director or officer of Xxxxxx Xxxxxx or any of
its Subsidiaries or as a consultant to Xxxxxx Xxxxxx.
20. ASSIGNABILITY, SUCCESSORS, BINDING AGREEMENT.
This Agreement shall be binding upon and inure to the benefit of the Parties
and their respective successors, heirs (in the case of Xxxx) and assigns. No
rights or obligations of Xxxxxx Xxxxxx under this Agreement may be assigned or
transferred by Xxxxxx Xxxxxx except pursuant to (a) a merger or consolidation in
which Xxxxxx Xxxxxx is not the continuing entity or (b) sale or liquidation of
all or substantially all of the assets of Xxxxxx Xxxxxx, provided that the
surviving entity or assignee or transferee is the successor to all or
substantially all of the assets of Xxxxxx Xxxxxx and such surviving entity or
assignee or transferee assumes the liabilities, obligations and duties of Xxxxxx
Xxxxxx under this Agreement, either contractually or as a matter of law.
27
Xxxxxx Xxxxxx further agrees that, in the event of a sale of assets or
liquidation as described in the preceding sentence, it will use its best efforts
to have such assignee or transferee expressly agree to assume the liabilities,
obligations and duties of Xxxxxx Xxxxxx hereunder; provided, however, that
notwithstanding such assumption, Xxxxxx Xxxxxx shall remain liable and
responsible for fulfillment of the terms and conditions of this Agreement; and
provided, further, that in no event shall such assignment and assumption of this
Agreement adversely affect Ryan's rights upon a Change in Control, as provided
in Section 10(h) above. No rights or obligations of Xxxx under this Agreement
may be assigned or transferred by him.
21. REPRESENTATIONS.
The Parties respectively represent and warrant that each is fully authorized
and empowered to enter into this Agreement and that the performance of its or
his obligations, as the case may be, under this Agreement will not violate any
agreement between such Party and any other person, firm or organization. Xxxxxx
Xxxxxx represents and warrants that this Agreement has been duly authorized by
all necessary corporate action and is valid, binding and enforceable in
accordance with its terms.
22. ENTIRE AGREEMENT.
Except to the extent otherwise provided herein, this Agreement contains the
entire understanding and agreement between the Parties concerning the subject
matter hereof and supersedes Ryan's Employment Agreement of June 28, 1995 and
any other prior agreements, whether written or oral, between the Parties
concerning the subject matter hereof. Payments and benefits provided under this
Agreement are in lieu of any payments or other benefits under any severance
program or policy of Xxxxxx Xxxxxx to which Xxxx would otherwise be entitled.
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23. AMENDMENT OR WAIVER.
No provision in this Agreement may be amended unless such amendment is
agreed to in writing and signed by both Xxxx and an authorized officer of Xxxxxx
Xxxxxx. No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent time. Any waiver must be in writing and
signed by the Party to be charged with the waiver. No delay by either Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof.
24. SEVERABILITY.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
25. SURVIVAL.
The respective rights and obligations of the Parties under this Agreement
shall survive any termination of Ryan's employment with, or consulting services
for, Xxxxxx Xxxxxx.
26. GOVERNING LAW.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Illinois, without reference to
principles of conflict of laws.
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27. RESOLUTION OF DISPUTES.
(A) ARBITRATION. The Parties hereby express a preference that any dispute
arising under or in connection with this Agreement be resolved by arbitration,
to be held in Chicago, Illinois, in accordance with the commercial rules and
procedures of the American Arbitration Association.
(B) COSTS. Except as provided in Section 13(b), each Party shall bear its or
his respective costs, fees (including attorneys' fees) and expenses of any
arbitration or litigation in connection with this Agreement. Notwithstanding the
foregoing, Xxxxxx Xxxxxx shall reimburse Xxxx for costs, fees and expenses,
including attorneys' fees and disbursements, incurred by him in connection with
any arbitration or litigation between the Parties, whether or not instituted by
Xxxxxx Xxxxxx or Xxxx, relating to any provision of this Agreement, including
but not limited to the interpretation, enforcement or reasonableness thereof, if
Xxxx is the prevailing party in such arbitration or litigation.
(C) CONTINUATION OF BENEFITS AND PAYMENTS. Pending the outcome or resolution
of any dispute between the Parties, Xxxxxx Xxxxxx shall continue to provide on
Ryan's behalf all benefits due him under employee benefit plans and programs as
set forth in this Agreement and shall pay Xxxx all other amounts due under this
Agreement without regard to such dispute; provided, however, that if Xxxxxx
Xxxxxx shall be the prevailing party in such dispute, Xxxx shall promptly repay
Xxxxxx Xxxxxx all amounts that he received during pendency of the proceeding, as
well as any other amounts determined, at the outcome or resolution of such
dispute, not to have been due him.
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28. NOTICES.
Any notice given to either Party shall be in writing and shall be deemed to
have been given when delivered either personally, by fax, by overnight delivery
service (such as Federal Express) or sent by certified or registered mail,
postage prepaid, return receipt requested, duly addressed to the Party concerned
at the address indicated below or to such changed address as the Party may
subsequently give notice of.
If to Xxxxxx Xxxxxx: Xxxxxx Xxxxxx VisionCare, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
If to Xxxx: Xxxxx X. Xxxx
c/o Wesley Xxxxxx Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
cc. To Xxxxx Xxxx'x then current
residence, as he specifies in writing
from time to time
29. HEADINGS.
The headings of the sections contained in this Agreement are for convenience
only and shall not be deemed to control or affect the meaning or construction of
any provision of this Agreement.
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29. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
XXXXXX XXXXXX VISIONCARE, INC.
Attest: /s/ XXXXXX XXXXXXX By: /s/ XXXXXX X. XXXXXX
________________________ _________________________
Name: XXXXXX X. XXXXXX
Title:CHIEF FINANCIAL OFFICER
Witness:/s/ XXX XXXXX /s/ XXXXX X. XXXX
________________ ________________________________
Xxxxx X. Xxxx
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