Exhibit 10.21
EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective as of June 1, 2003 (the "Effective
Date"), is made by and between Coach, Inc., a Maryland corporation (the
"Company"), and Xxxx Xxxxxxx (the "Executive").
RECITALS:
A. It is the desire of the Company to assure itself of
the services of the Executive by engaging the Executive as its President and
Executive Creative Director.
B. The Executive desires to commit himself to serve the
Company on the terms herein provided.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements set forth below, the parties hereto agree as
follows:
1. Certain Definitions
(a) "Affiliate" shall mean with respect to any
Person, any other Person directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control
with, such Person. For purposes of this Section 1(a), "control" shall
have the meaning given such term under Rule 405 of the Securities Act
of 1933, as amended.
(b) "Annual Base Salary" shall have the meaning
set forth in Section 5(a).
(c) "Annual Bonus" shall have the meaning set
forth in Section 5(b).
(d) "Board" shall mean the Board of Directors of
the Company.
(e) The Company shall have "Cause" to terminate
the Executive's employment upon (i) the Executive's failure to attempt
in good faith to substantially perform the duties as President and
Executive Creative Director (other than any such failure resulting from
the Executive's physical or mental incapacity) which is not remedied
within 30 days after receipt of written notice from the Company
specifying such failure; (ii) the Executive's failure to attempt in
good faith to carry out, or comply with, in any material respect any
lawful and reasonable directive of the Board, which is not remedied
within 30 days after receipt of written notice from the Company
specifying such failure; (iii) the Executive's commission at any time
of any act or omission that results in, or may reasonably be expected
to result in, a conviction, plea of no contest, or imposition of
unadjudicated probation for any felony (or any other crime involving
fraud, embezzlement, material misconduct or misappropriation having a
material adverse impact on the Company); (iv) the Executive's unlawful
use (including being under the influence) or possession of illegal
drugs on the Company's premises or while performing the Executive's
duties and responsibilities; or (v) the Executive's willful commission
at any time of any act of fraud, embezzlement, misappropriation,
misconduct, or breach of
fiduciary duty against the Company (or any predecessor thereto or
successor thereof), having a material adverse impact on the Company.
(f) "Change in Control" shall occur when:
(i) A Person (which term, when used in
this Section 1(f), shall not include the Company, any
underwriter temporarily holding securities pursuant to an
offering of such securities, any trustee or other fiduciary
holding securities under an employee benefit plan of the
Company, or any Company owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of Voting Stock of the Company)
is or becomes, without the prior consent of a majority of the
Continuing Directors, the beneficial owner (as defined in Rule
13d-3 promulgated under the Securities Exchange Act of 1934,
as amended), directly or indirectly, of Voting Stock
representing, without the prior written consent of a majority
of the Continuing Directors, twenty percent (20%) (or, even
with such prior consent, thirty-five percent (35%)) or more of
the combined voting power of the Company's then outstanding
securities; or
(ii) The Company consummates a
reorganization, merger or consolidation of the Company (which
prior to the date of such consummation has been approved by
the Company's stockholders) or the Company sells, or otherwise
disposes of, all or substantially all of the Company's
property and assets (other than a reorganization, merger,
consolidation or sale which would result in all or
substantially all of the beneficial owners of the Voting Stock
of the Company outstanding immediately prior thereto
continuing to beneficially own, directly or indirectly (either
by remaining outstanding or by being converted into voting
securities of the resulting entity), more than fifty percent
(50%) of the combined voting power of the voting securities of
the Company or such entity resulting from the transaction
(including, without limitation, an entity which as a result of
such transaction owns the Company or all or substantially all
of the Company's property or assets, directly or indirectly)
outstanding immediately after such transaction in
substantially the same proportions relative to each other as
their ownership immediately prior to such transaction), or the
Company's stockholders approve a liquidation or dissolution of
the Company; or
(iii) The individuals who are Continuing
Directors of the Company (as defined below) cease for any
reason to constitute at least a majority of the Board.
(g) "Code" shall mean the Internal Revenue Code
of 1986, as amended.
(h) "Committee" shall mean the Human Resources
and Corporate Governance Committee of the Board.
(i) "Common Stock" shall mean the $.01 par value
common stock of the Company.
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(j) "Company" shall, except as otherwise
provided in Section 9, have the meaning set forth in the preamble
hereto.
(k) "Competitive Business" shall mean any entity
that, as of the date of the Executive's termination of employment, the
Committee has designated in its sole discretion as an entity that
competes with any of the businesses of the Company; provided, that (i)
not more than 20 entities (which term "entities" shall include any
subsidiaries, parent entities and other Affiliates thereof) shall be
designated as Competitive Businesses at one time and (ii) such entities
are the same 20 entities used for any list of competitive entities for
any other arrangement with an executive of the Company; and, provided
further, that the Committee may change its designation of Competitive
Businesses at any time that is not less than 90 days prior to the
Executive's termination of employment upon written notice thereof to
the Executive (and any such change within the 90 day period immediately
preceding the Executive's termination of employment shall not be
effective). The list of Competitive Businesses in effect as of the
Effective Date (which the parties acknowledge and agree may be changed
by the Committee in accordance with the terms of the immediately
preceding sentence) shall be communicated by the Company to the
Executive as soon as reasonably practicable following the Effective
Date.
(l) "Continuing Director" means (i) any member
of the Board (other than an employee of the Company) as of the
Effective Date or (ii) any person who subsequently becomes a member of
the Board (other than an employee of the Company) whose election or
nomination for election to the Board is recommended by a majority of
the Continuing Directors.
(m) "Contract Year" shall mean (i) the period
beginning on June 1, 2003 and ending on June 30, 2004 and (ii) each
twelve month period beginning on July 1, 2004 or any anniversary
thereof.
(n) "Date of Termination" shall mean (i) if the
Executive's employment is terminated by his death, the date of his
death and (ii) if the Executive's employment is terminated pursuant to
Section 6(a)(ii) - (vi), the date specified in the Notice of
Termination (or if no such date is specified, the last day of the
Executive's active employment with the Company).
(o) "Disability" shall mean any mental or
physical illness, condition, disability or incapacity which:
(i) Prevents the Executive from
discharging substantially all of his essential job
responsibilities and employment duties;
(ii) Shall be attested to in writing by
a physician or a group of physicians selected by the Executive
and acceptable to the Company; and
(iii) Has prevented the Executive from so
discharging his duties for any 180 days in any 365 day period.
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A Disability shall be deemed to have occurred on the 180th day in any
such 365 day period.
(p) "Executive" shall have the meaning set forth
in the preamble hereto.
(q) "Extension Term" shall have the meaning set
forth in Section 2.
(r) "Financial Gain" with respect to any
specified period of time shall mean the sum of all (i) Retention
Bonuses paid to Executive during such period; (ii) Retention Option
Gains realized by the Executive during such period and (iii) Retention
RSU Gains realized by the Executive during such period.
(s) The Executive shall have "Good Reason" to
resign his employment upon the occurrence of any of the following: (i)
failure of the Company to continue the Executive in the position of
President and Executive Creative Director (or any other position not
less senior to such position); (ii) a material diminution in the nature
or scope of the Executive's responsibilities, duties or authority;
(iii) relocation of the Company's executive offices more than 50 miles
outside of New York, New York or relocation of Executive away from the
executive offices; (iv) failure of the Company to timely make any
material payment or provide any material benefit under this Agreement
or the Company's material reduction of any compensation, equity or
benefits that the Executive is eligible to receive under this
Agreement; or (v) the Company's material breach of this Agreement;
provided, however, that notwithstanding the foregoing the Executive may
not resign his employment for Good Reason unless: (x) the Executive
provides the Company with at least 30 days prior written notice of his
intent to resign for Good Reason (which notice is provided not later
than the 60th day following the occurrence of the event constituting
Good Reason) and (y) the Company does not remedy the alleged
violation(s) within such 30-day period; and, provided, further, that
Executive may resign his employment for Good Reason if in connection
with any Change in Control the surviving entity does not assume this
Agreement (or, with the written consent of the Executive, substitute a
substantially identical agreement) with respect to the Executive in
writing delivered to the Executive prior to, or as soon as reasonably
practicable following, the occurrence of such Change in Control.
(t) "Initial Term" shall have the meaning set
forth in Section 2.
(u) "Intellectual Property" shall have the
meaning set forth in Section 9(f).
(v) "Maximum Bonus" shall have the meaning set
forth in Section 5(b).
(w) "Notice of Termination" shall have the
meaning set forth in Section 6(b).
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(x) "Option" shall mean an option to purchase
Common Stock pursuant to the Stock Incentive Plan (or any other equity
based compensation plan or agreement that may be adopted or entered
into by the Company from time to time).
(y) "Person" shall mean an individual,
partnership, corporation, business trust, limited liability company,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
(z) "Pro-Rata Bonus" shall have the meaning set
forth in Section 7(d).
(aa) "Release" shall have the meaning set forth
in Section 7(b).
(bb) "Retention Bonuses" shall have the meaning
set forth in Section 5(d).
(cc) "Retention Option Gain" with respect to any
specified period of time shall mean the product of (i) the number of
shares of Common Stock purchased upon the exercise of any Retention
Options during such period and (ii) the excess of (A) the fair market
value per share of Common Stock as of the date of such exercise over
(B) the exercise price per share of Common Stock subject to such
Retention Options.
(dd) "Retention Options" shall have the meaning
set forth in Section 5(e).
(ee) "Retention RSU Gain" with respect to any
specified period of time shall mean the product of (i) the number of
shares of Common Stock subject to Retention RSUs that first become
vested during such period and (ii) the fair market value per share of
Common Stock as of the date such Retention RSUs first become vested.
(ff) "Retention RSUs" shall have the meaning set
forth in Section 5(f).
(gg) "Stock Incentive Plan" shall mean the
Company's 2000 Stock Incentive Plan, as amended from time to time.
(hh) "Target Bonus" shall have the meaning set
forth in Section 5(b).
(ii) "Term" shall have the meaning set forth in
Section 2.
(jj) "Voting Stock" means all capital stock of
the Company which by its terms may be voted on all matters submitted to
stockholders of the Company generally.
2. Employment. The Company shall employ the Executive
and the Executive shall continue in the employ of the Company, for the period
set forth in this Section 2, in the positions set forth in the first sentence of
Section 3 and upon the other terms and conditions herein provided. The initial
term of employment under this Agreement (the "Initial Term") shall be for the
period beginning on the Effective Date and ending on July 1, 2008, unless
earlier terminated as provided in Section 6. The Initial Term shall
automatically be
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extended for successive one-year periods (each, an "Extension Term") unless
either party hereto gives written notice of non-extension to the other no later
than 90 days prior to the scheduled expiration of the Initial Term or the then
applicable Extension Term (the Initial Term and any Extension Term shall be
collectively referred to hereunder as the "Term").
3. Position and Duties. The Executive shall serve as
President and Executive Creative Director of the Company, reporting to the
Company's Chief Executive Officer, with such responsibilities, duties and
authority as are customary for such role. The Executive shall devote all
necessary business time and attention, and employ his reasonable best efforts,
toward the fulfillment and execution of all assigned duties, and the
satisfaction of defined annual and/or longer-term performance criteria.
Notwithstanding the foregoing, the Executive may manage his personal
investments, be involved in charitable and professional activities (including
serving on charitable and professional boards), and, with the consent of the
Company's Chief Executive Officer, serve on for profit boards of directors and
advisory committees so long as such service does not materially interfere with
Executive's obligations hereunder or violate Section 9 hereof.
4. Place of Performance. In connection with his
employment during the Term, the Executive shall be based at the Company's
offices in New York, New York, except for necessary travel on the Company's
business.
5. Compensation and Related Matters
(a) Annual Base Salary. At the commencement of
the Term, the Executive shall receive a base salary at a rate of
$1,000,000 per annum (the "Annual Base Salary"), paid in accordance
with the Company's general payroll practices for executives, but no
less frequently than monthly. No less frequently than annually during
the Term, the Board and the Committee shall review the rate of Annual
Base Salary payable to the Executive, and may, in their discretion,
increase the rate of Annual Base Salary payable hereunder; provided,
however, that any increased rate shall thereafter be the rate of
"Annual Base Salary" hereunder.
(b) Annual Bonus. Except as otherwise provided
for herein, with respect to each Contract Year on which the Executive
is employed hereunder on the last day, the Executive shall be eligible
to receive an annual bonus, as determined pursuant to the Coach, Inc.
Performance-Based Annual Incentive Plan or another "qualified
performance-based compensation" bonus plan that has been approved by
the stockholders of the Company in accordance with the provisions for
such approval under Code Section 162(m) and the regulations promulgated
thereunder (collectively, the "Bonus Plan"), and on the basis of the
Executive's or the Company's attainment of objective financial or other
operating criteria established by the Committee in its sole discretion
and in accordance with Code Section 162(m) and the regulations
promulgated thereunder (the "Annual Bonus"). With respect to each
Contract Year (i) the Executive shall be eligible to receive a maximum
Annual Bonus (the "Maximum Bonus") in an amount equal to at least 100%
of his Annual Base Salary and (ii) the Executive's target-level Annual
Bonus (the "Target Bonus") shall be equal to 75% of the amount of the
Maximum Bonus. For the avoidance of doubt, the Maximum Bonus may be
greater than 100% of his Annual Base Salary with respect to any
Contract Year. In addition, the Executive shall be
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eligible to participate in any other bonus plan or program that may be
established by the Committee and that covers the Executive (even if
such plan or program does not provide for qualified performance-based
bonuses within the meaning of Code Section 162(m)).
(c) Employment Agreement Signing Bonus. As of
the Effective Date, the Executive shall be paid a supplemental bonus in
the amount of $2,750,000. Notwithstanding the foregoing, if the
Executive's employment with the Company is terminated for any reason
(other than by the Company without Cause, by the Executive for Good
Reason, or due to the Executive's death or Disability) prior to the
third anniversary of the Effective Date, then, in addition to any
amount the Executive may be required to pay to the Company pursuant to
Section 11, the Executive shall be required to pay to the Company an
amount equal to the product of (i) $2,750,000 and (ii) the ratio of (A)
36 minus the number of full months the Executive was employed by the
Company following the Effective Date and prior to the date of such
termination, to (B) 36.
(d) Retention Bonuses. During the Term, in
addition to any Annual Bonuses paid to the Executive, the Executive
shall be eligible to receive the following supplemental retention bonus
payments (the "Retention Bonuses") pursuant to the terms and conditions
set forth in this Section 5(d):
(i) Subject to the Executive's
continued employment with the Company: (A) through July 1,
2004, the Executive shall be paid a supplemental bonus in the
amount of $750,000; (B) through July 1, 2005, the Executive
shall be paid a supplemental bonus in the amount of $750,000;
(C) through July 1, 2006, the Executive shall be paid a
supplemental bonus in the amount of $2,500,000; (D) through
July 1, 2007, the Executive shall be paid a supplemental bonus
in the amount of $1,500,000; and (E) through July 1, 2008, the
Executive shall be paid a supplemental bonus in the amount of
$1,500,000.
(ii) With respect to the Contract Year
ending on June 30, 2007, the Executive shall be eligible to
receive an additional bonus under the Bonus Plan or otherwise
in the maximum amount of $1,500,000 on the basis of the
Company's attainment of objective financial or other operating
criteria established by the Committee in its sole discretion
and in accordance with Code Section 162(m) and the regulations
promulgated thereunder, such additional bonus to be paid at
the time bonuses under the Bonus Plan are paid generally but,
in any event, no later than 90 days after the end of the
applicable Contract Year.
(iii) With respect to the Contract Year
ending on June 30, 2008, the Executive shall be eligible to
receive an additional bonus under the Bonus Plan or otherwise
in the maximum amount of $2,500,000 on the basis of the
Company's attainment of objective financial or other operating
criteria established by the Committee in its sole discretion
and in accordance with Code Section 162(m) and the regulations
promulgated thereunder, such additional bonus to be paid at
the time bonuses under the Bonus Plan are paid generally but,
in any event, no later than 90 days after the end of the
applicable Contract Year.
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(e) Stock Options
(i) During the Term, the Executive
shall be eligible to be granted Options at such time(s) and in
such amount(s) as may be determined by the Committee in its
sole discretion; provided, that the Executive shall be granted
such Options in accordance with the Company's customary past
practice unless the Committee determines in its good faith
discretion that the amount or timing of such Option grants
shall be revised based upon the Executive's performance.
(ii) In addition to any Options granted
in accordance with subsection (i), as of July 1, 2003 the
Executive shall be granted a non-qualified stock option (the
"Retention Options") to purchase 200,000 shares of Common
Stock, pursuant to the terms and conditions of the Stock
Incentive Plan and a written Retention Stock Option Agreement
to be entered into by and between the Company and Executive as
of the date hereof in substantially the form attached hereto
as Exhibit A (the "Retention Stock Option Agreement"). The
Retention Options shall have an exercise price equal to the
fair market value per share of Common Stock as of July 1, 2003
and shall have a term of 10 years. The Retention Options shall
become exercisable in three cumulative installments as
follows: (A) the first installment shall consist of 25% of the
shares of Common Stock covered by the Retention Options and
shall become vested and exercisable on July 1, 2006; (B) the
second installment shall consist of 25% of the shares of
Common Stock covered by the Retention Options and shall become
vested and exercisable on July 1, 2007; and (C) the third
installment shall consist of 50% of the shares of Common Stock
covered by the Retention Options and shall become exercisable
on July 1, 2008; provided, that, except as otherwise provided
in Section 7 or in the Retention Stock Option Agreement, no
portion of the Retention Options not then exercisable shall
become exercisable following the Executive's termination of
employment for any reason. In the event of the Executive's
termination of employment for any reason other than for Cause,
the Retention Options to the extent then exercisable shall
remain exercisable until the earlier of (x) the date provided
in the Retention Stock Option Agreement or (y) July 1, 2013.
The Company and the Executive acknowledge and agree that the
Retention Options shall not provide for the grant of any
"Restoration Options" as defined in the Stock Incentive Plan.
(f) Restricted Stock Units
(i) During the Term, the Executive
shall be eligible to be awarded Restricted Stock
Units ("RSUs") and other equity compensation awards
pursuant to the Stock Incentive Plan (or any other
equity based compensation plan that may be adopted by
the Company from time to time), at such time(s) and
in such amount(s) as may be determined by the
Committee in its sole discretion.
(ii) In addition to any RSUs awarded in
accordance with subsection (i), as of July 1, 2003
the Executive shall be awarded that number of RSUs
that have a projected aggregate value as of July 1,
2008 equal to $3,000,000
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(assuming the market value per share of Common Stock
is exactly $30 greater on July 1, 2008 than on July
1, 2003) (the "Retention RSUs"), pursuant to the
terms and conditions of the Stock Incentive Plan and
a written Retention RSU Agreement to be entered into
by and between the Company and Executive as of the
date hereof in substantially the form attached hereto
as Exhibit B (the "Retention RSU Agreement"). The
Retention RSUs shall become vested with respect to
(A) 25% of the Retention RSUs on July 1, 2006; (B)
25% of the Retention RSUs on July 1, 2007; and (C)
with respect to 50% of RSUs on July 1, 2008;
provided, that, except as otherwise provided in
Section 7 or in the Retention RSU Agreement, no
Retention RSUs not then vested shall become vested
following the Executive's termination of employment.
For a period of not less than one year following the
date any Retention RSUs first become vested, the
Executive shall retain (and shall not sell or
otherwise transfer) at least 50% of the net after-tax
shares of Common Stock received by the Executive upon
the vesting of the Retention RSUs.
(g) Benefits. The Executive shall be entitled to
receive such benefits and to participate in such employee group benefit
plans, including life, health and disability insurance policies, as are
generally provided by the Company to its senior executives in
accordance with the plans, practices and programs of the Company.
(h) Expenses. The Company shall reimburse the
Executive for all reasonable and necessary expenses incurred by the
Executive in connection with the performance of the Executive's duties
as an employee of the Company. Such reimbursement is subject to the
submission to the Company by the Executive of appropriate documentation
and/or vouchers in accordance with the customary procedures of the
Company for expense reimbursement, as such procedures may be revised by
the Company from time to time.
(i) Vacations. The Executive shall be entitled
to paid vacation in accordance with the Company's vacation policy as in
effect from time to time. However, in no event shall the Executive be
entitled to less than four weeks vacation per Contract Year. The
Executive shall also be entitled to paid holidays and personal days in
accordance with the Company's practice with respect to same as in
effect from time to time (but in no event shall the Executive be
entitled to fewer than two personal days per Contract Year).
(j) Automobile Allowance. During the Term, the
Company shall provide the Executive with a Company-leased automobile or
a car allowance in accordance with the Company's applicable policies
and procedures.
6. Termination. The Executive's employment hereunder may
be terminated by the Company, on the one hand, or the Executive, on the other
hand, as applicable, without any breach of this Agreement only under the
following circumstances:
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(a) Terminations
(i) Death. The Executive's employment
hereunder shall terminate upon his death.
(ii) Disability. In the event of the
Executive's Disability, the Company may give the Executive
written notice of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the
Company shall terminate effective on the 14th day after
delivery of such notice, provided that within the 14 days
after such delivery, the Executive shall not have returned to
full-time performance of his duties.
(iii) Cause. The Company may, with the
approval of the Board, terminate the Executive's employment
hereunder for Cause; provided, however, that, notwithstanding
the foregoing, if (A) the Company terminates the Executive's
employment for Cause pursuant to Section 1(d)(iii) and (B) the
Executive (i) is not indicted for, or otherwise charged by any
court or other governmental or regulatory authority with, any
felony or any other crime involving fraud, embezzlement,
material misconduct or misappropriation having a material
adverse impact on the Company (which felony or other crime was
the reason for such termination) within 18 months following
the date of his termination of employment, or (ii) is not
convicted of, does not plea no contest to, and does not
receive unadjudicated probation for, any felony (or any other
crime involving fraud, embezzlement, material misconduct or
misappropriation having a material adverse impact on the
Company) (which felony or other crime was the reason for such
termination), then the Executive's termination of employment
will be deemed to be without Cause and the Executive shall
retroactively be eligible for severance payments to the extent
provided by Section 7(b).
(iv) Good Reason. The Executive may
terminate his employment for Good Reason.
(v) Without Cause. The Company may
terminate the Executive's employment hereunder without Cause.
A notice by the Company of non-extension of the Term shall be
treated as a termination without Cause as of the last day of
the Term.
(vi) Resignation without Good Reason.
The Executive may resign his employment without Good Reason
upon 90 days written notice to the Company.
(b) Notice of Termination. Any termination of
the Executive's employment by the Company or by the Executive under
this Section 6 (other than termination pursuant to paragraph (a)(i))
shall be communicated by a written notice to the other party hereto
indicating the specific termination provision in this Agreement relied
upon, setting forth in reasonable detail any facts and circumstances
claimed to provide a basis for termination of the Executive's
employment under the provision so indicated,
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and specifying a Date of Termination which, except in the case of
termination for Cause or Disability, shall be at least thirty days (or
such longer period provided by Section 6(a)(vi)) following the date of
such notice (a "Notice of Termination"); provided, the Company may pay
out such notice period instead of employing the Executive, in which
case the Date of Termination shall be the last day of the Executive's
active employment.
7. Severance Payments and Benefits
(a) Termination for any Reason. In the event the
Executive's employment with the Company is terminated for any reason,
the Company shall pay the Executive (or his beneficiary in the event of
his death) any unpaid Annual Base Salary that has accrued as of the
Date of Termination, any unreimbursed expenses due to the Executive and
an amount for any accrued but unused vacation days and any earned but
unpaid bonus for any fiscal year of the Company completed prior to the
date of such termination. The Executive shall also be entitled to
accrued, vested benefits under the Company's benefit plans and programs
as provided therein. The Executive shall be entitled to the cash
severance payments described below only as set forth herein and the
provisions of this Section 7 shall supersede in their entirety any
severance payment provisions in any severance plan, policy, program or
arrangement maintained by the Company.
(b) Termination without Cause or for Good
Reason. Except as otherwise provided by Section 7(c) with respect to
certain terminations of employment in connection with a Change in
Control, if the Executive's employment shall terminate without Cause
(pursuant to Section 6(a)(v)) or for Good Reason (pursuant to Section
6(a)(iv)), the Company shall (subject to the Executive's entering into
a Separation and Release Agreement with the Company in substantially
the form attached hereto as Exhibit C (the "Release")):
(i) Pay to the Executive (A) an amount
equal to his then current Annual Base Salary, payable in equal
monthly installments during the period beginning on the Date
of Termination and ending on the first anniversary thereof;
(B) an amount equal to the Target Bonus for the year of
termination, payable in equal monthly installments during the
period beginning on the Date of Termination and ending on the
first anniversary thereof; and (C) each Retention Bonus that
would otherwise have been payable to the Executive pursuant to
Section 5(d)(i), (ii) or (iii) (assuming for purposes of
Section 5(d)(ii) and (iii) that the Executive would be
entitled to the same bonus to which he would otherwise have
been entitled had he remained employed by the Company in the
position of President and Executive Creative Director),
payable at such time as such Retention Bonus would otherwise
have been paid to the Executive had the Executive remained
employed through the applicable payment date; provided,
however, that no amount shall be payable pursuant to this
Section 7(b)(i) on or following the date the Executive first
(i) violates any of the covenants set forth in Section 9(a) or
9(b) or (ii) materially violates any of the covenants set
forth in Section 9(c), 9(e) or 9(f);
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(ii) Continue to provide the Executive
with all health and welfare benefits and perquisites which he
was participating in or receiving as of the Date of
Termination until the earlier of (A) the first anniversary of
the Date of Termination or (B) the date the Executive first
(i) violates any of the covenants set forth in Section 9(a) or
9(b) or (ii) materially violates any of the covenants set
forth in Section 9(c), 9(e) or 9(f). If such benefits cannot
be provided under the Company's programs, such benefits and
perquisites will be provided on an individual basis to the
Executive such that his after-tax costs will be no greater
than the costs for such benefits and perquisites under the
Company's programs;
(iii) Notwithstanding any provision to
the contrary in any Option or RSU agreement, cause all (A)
Retention RSUs and Retention Options not vested or exercisable
as of the Date of Termination to remain or become vested and
remain exercisable in accordance with the terms and conditions
of the applicable Retention Option or Retention RSU agreement
and (B) Options and RSUs (other than the Retention Options and
the Retention RSUs) then held by the Executive to continue to
become vested and exercisable in accordance with their terms
as if the Executive had remained employed by the Company until
the first anniversary of the Date of Termination (and all
Options and RSUs (other than the Retention Options and the
Retention RSUs) that do not become vested and exercisable on
or prior to the first anniversary of the Date of Termination
shall thereupon be forfeited);
(iv) Pay to the Executive a Pro-Rata
Bonus, as defined in Section 7(d), when bonuses are paid for
the year of termination based on actual results and the
relative portion of the fiscal year during which the Executive
was employed.
(c) Certain Terminations in connection with a
Change in Control. If the Executive's employment shall terminate
without Cause (pursuant to Section 6(a)(v)) or for Good Reason
(pursuant to Section 6(a)(iv)) within six months prior to a Change in
Control or during the 12 month period immediately following such Change
in Control, the Company shall (subject to the receipt of the Release):
(i) Pay to the Executive (A) an amount
equal to his then current Annual Base Salary, payable in equal
monthly installments during the period beginning on the Date
of Termination and ending on the first anniversary thereof;
(B) an amount equal to the Target Bonus for the year of
termination, payable in equal monthly installments during the
period beginning on the Date of Termination and ending on the
first anniversary thereof; and (C) each Retention Bonus that
would otherwise have been payable to the Executive pursuant to
Section 5(d)(i), (ii) or (iii) (assuming for purposes of
Section 5(d)(ii) and (iii) that the Executive would be
entitled to the same bonus to which he would otherwise have
been entitled had he remained employed by the Company in the
position of President and Executive Creative Director),
payable at such time as such Retention Bonus would otherwise
have been paid to the Executive had the Executive remained
employed through the applicable payment date; provided,
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however, that no amount shall be payable pursuant to this
Section 7(c)(i) on or following the date the Executive first
(i) violates any of the covenants set forth in Section 9(a) or
9(b), or (ii) materially violates any of the covenants set
forth in Section 9(c), 9(e) or 9(f);
(ii) Continue to provide the Executive
with all health and welfare benefits and perquisites which he
was participating in or receiving as of the Date of
Termination until the earlier of (A) the first anniversary of
the Date of Termination or (B) the date the Executive first
(i) violates any of the covenants set forth in Section 9(a) or
9(b), or (ii) materially violates any of the covenants set
forth in Section 9(c), 9(e) or 9(f). If such benefits cannot
be provided under the Company's programs, such benefits and
perquisites will be provided on an individual basis to the
Executive such that his after-tax costs will be no greater
than the costs for such benefits and perquisites under the
Company's programs;
(iii) Notwithstanding any provision to
the contrary in any Option or RSU agreement, cause all Options
(including without limitation the Retention Options), RSUs
(including without limitation the Retention RSUs) and other
equity based compensation awards then held by the Executive to
become fully vested and exercisable with respect to all shares
subject thereto, effective immediately prior to the Date of
Termination and all Options shall remain exercisable for the
remainder of the 10 year term;
(iv) Pay Executive a Pro-Rata Bonus, as
defined in Section 7(d), within 10 days following the date of
such termination.
(d) Termination by Reason of Disability or
Death. If the Executive's employment shall terminate by reason of his
Disability (pursuant to Section 6(a)(ii)) or death (pursuant to Section
6(a)(i)), then (i) the Company shall pay to the Executive (or
Executive's designated beneficiary or, if none, his estate) a pro-rated
amount of the Executive's Target Bonus for the Contract Year in which
the Date of Termination occurs (the "Pro-Rata Bonus"); (ii) all
Retention Options and Retention RSUs not vested or exercisable as of
the Date of Termination shall thereupon be forfeited; provided, that in
the alternative the Committee may, in its sole discretion, cause all or
any portion of any Retention Options or Retention RSUs then held by the
Executive to become vested and exercisable effective as of the Date of
Termination; and (iii) all Options and RSUs (other than Retention
Options and the Retention RSUs) then held by the Executive shall be or
become vested and shall remain exercisable in accordance with the terms
of the applicable Option or RSU agreement.
(e) Termination for Cause or without Good
Reason. If the Executive's employment shall terminate by reason of his
voluntary resignation without Good Reason (pursuant to Section
6(a)(vi)) or by the Company for Cause (pursuant to Section 6(a)(iii)),
then (i) notwithstanding any provision to the contrary in any Option or
RSU agreement, all Retention RSUs and Retention Options not vested or
exercisable as of the Date of Termination shall thereupon be forfeited
and (ii) all Options and RSUs (other than the Retention Options and the
Retention RSUs) or other equity based compensation awards
13
not vested or exercisable as of the Date of Termination shall thereupon
be forfeited and, except as set forth in Section 7(a), 7(f), 8 and 13,
the Company shall have no further obligations to the Executive.
(f) Survival. The expiration or termination of
the Term shall not impair the rights or obligations of any party hereto
which shall have accrued hereunder prior to such expiration or
termination.
(g) No Mitigation. The Executive shall have no
obligation to mitigate any payments due hereunder. Any amounts earned
by the Executive from other employment shall not offset amounts due
hereunder, except as provided in this Section 7.
8. Parachute Payments.
(a) If it is determined by a nationally
recognized United States public accounting firm selected by the Company
and approved in writing by the Executive (which approval shall not be
unreasonably withheld) (the "Auditors") that any payment or benefit
made or provided to the Executive in connection with this Agreement or
otherwise (including without limitation any Option or RSU vesting)
(collectively, a "Payment"), would be subject to the excise tax imposed
by Section 4999 of the Code (the "Parachute Tax"), then the Company
shall pay to the Executive, prior to the time the Parachute Tax is
payable with respect to such Payment, an additional payment (a
"Gross-Up Payment") in an amount such that, after payment by the
Executive of all taxes (including any Parachute Tax) imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Parachute Tax imposed upon the Payment. The amount
of any Gross-Up Payment shall be determined by the Auditors, subject to
adjustment, as necessary, as a result of any Internal Revenue Service
position. For purposes of making the calculations required by this
Agreement, the Auditors may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable,
good faith interpretations concerning the application of Sections 280G
and 4999 of the Code, provided that the Auditors' determinations must
be made with substantial authority (within the meaning of Section 6662
of the Code).
(b) The federal tax returns filed by the
Executive (and any filing made by a consolidated tax group which
includes the Company) shall be prepared and filed on a basis consistent
with the determination of the Auditors with respect to the Parachute
Tax payable by the Executive. The Executive shall make proper payment
of the amount of any Parachute Tax, and at the request of the Company,
provide to the Company true and correct copies (with any amendments) of
his federal income tax return as filed with the Internal Revenue
Service, and such other documents reasonably requested by the Company,
evidencing such payment. If, after the Company's payment to the
Executive of the Gross-Up Payment, the Auditors determine in good faith
that the amount of the Gross-Up Payment should be reduced or increased,
or such determination is made by the Internal Revenue Service, then
within ten business days of such determination, the Executive shall pay
to the Company the amount of any such reduction, or the Company shall
pay to the Executive the amount of any such increase; provided,
however, that in no event shall the Executive have any such refund
obligation if it is determined by the
14
Company that to do so would be a violation of the Xxxxxxxx-Xxxxx Act of
2002, as it may be amended from time to time; and provided, further,
that if the Executive has prior thereto paid such amounts to the
Internal Revenue Service, such refund shall be due only to the extent
that a refund of such amount is received by the Executive; and
provided, further, that (i) the fees and expenses of the Auditors (and
any other legal and accounting fees) incurred for services rendered in
connection with the Auditor's determination of the Parachute Tax or any
challenge by the Internal Revenue Service or other taxing authority
relating to such determination shall be paid by the Company and (ii)
the Company shall indemnify and hold the Executive harmless on an
after-tax basis for any interest and penalties imposed upon the
Executive to the extent that such interest and penalties are related to
the Auditor's determination of the Parachute Tax or the Gross-Up
Payment. Notwithstanding anything to the contrary herein, the
Executive's rights under this Section 8 shall survive the termination
of his employment for any reason and the termination or expiration of
this Agreement for any reason.
9. Certain Restrictive Covenants
(a) The Executive shall not, at any time during
the Term or during the 12-month period following the Date of
Termination (the "Restricted Period") directly or indirectly engage in,
have any equity interest in, or manage or operate any (i) Competitive
Business or (ii) new luxury accessories business that competes directly
with the existing or planned product lines of the Company; provided,
however, that the Executive shall be permitted to acquire a passive
stock or equity interest in such a business provided the stock or other
equity interest acquired is not more than five percent (5%) of the
outstanding interest in such business.
(b) During the Restricted Period, the Executive
will not, directly or indirectly, recruit or otherwise solicit or
induce any employee, director, consultant, wholesale customer, vendor,
supplier, lessor or lessee of the Company to terminate its employment
or arrangement with the Company, or otherwise change its relationship
with the Company.
(c) Except as required in the good faith opinion
of the Executive in connection with the performance of the Executive's
duties hereunder or as specifically set forth in this Section 9(c), the
Executive shall, in perpetuity, maintain in confidence and shall not
directly, indirectly or otherwise, use, disseminate, disclose or
publish, or use for his benefit or the benefit of any person, firm,
corporation or other entity any confidential or proprietary information
or trade secrets of or relating to the Company, including, without
limitation, information with respect to the Company's operations,
processes, products, inventions, business practices, finances,
principals, vendors, suppliers, customers, potential customers,
marketing methods, costs, prices, contractual relationships, regulatory
status, business plans, designs, marketing or other business
strategies, compensation paid to employees or other terms of
employment, or deliver to any person, firm, corporation or other entity
any document, record, notebook, computer program or similar repository
of or containing any such confidential or proprietary information or
trade secrets. The parties hereby stipulate and agree that as between
them the foregoing matters are important, material and confidential
proprietary information
15
and trade secrets and affect the successful conduct of the businesses
of the Company (and any successor or assignee of the Company). Upon
termination of the Executive's employment with the Company for any
reason, the Executive will promptly deliver to the Company all
correspondence, drawings, manuals, letters, notes, notebooks, reports,
programs, plans, proposals, financial documents, or any other documents
concerning the Company's customers, business plans, designs, marketing
or other business strategies, products or processes, provided that the
Executive may retain his rolodex, address book and similar information
and any non-proprietary documents he received as a director or an
officer. Notwithstanding the foregoing, this Section 9(c) shall not
apply with respect to any information that is currently or becomes (i)
publicly known or available in the absence of any improper or unlawful
action on the Executive's part, or (ii) known or available to the
Executive other than through or on behalf of the Company.
(d) Notwithstanding Section 9(c), the Executive
may respond to a lawful and valid subpoena or other legal process or
other government or regulatory inquiry but shall give the Company
prompt notice thereof (except to the extent legally prohibited), and
shall, as much in advance of the return date as is reasonably
practicable, make available to the Company and its counsel copies of
any documents sought which are in the Executive's possession or to
which the Executive otherwise has reasonable access. In addition, the
Executive shall reasonably cooperate with and assist the Company and
its counsel at any time and in any manner reasonably requested by the
Company or its counsel (with due regard for the Executive's other
commitments if he is not employed by the Company) in connection with
any litigation or other legal process affecting the Company of which
the Executive has knowledge as a result of his employment with the
Company (other than any litigation with respect to this Agreement). In
the event of such requested cooperation, the Company shall reimburse
the Executive's reasonable out of pocket expenses.
(e) The Executive shall not disparage the
Company, any of its products or practices, or any of its directors,
officers, agents, representatives, or employees, either orally or in
writing, at any time. The Company (including without limitation its
directors) shall not disparage the Executive, either orally or in
writing, at any time. Notwithstanding the foregoing, nothing in this
Section 9(e) shall limit the ability of the Company or the Executive,
as applicable, to provide truthful testimony as required by law or any
judicial or administrative process.
(f) The Executive agrees that all sketches,
drawings, samples, design samples, designs, patterns, methods,
processes, techniques, themes, layouts, mechanicals, trade secrets,
copyrights, trademarks, patents, ideas, specifications and other
material or work product ("Intellectual Property") that the Executive
creates, develops or assembles in connection with his employment
hereunder shall become the permanent and exclusive property of the
Company to be used in any manner it sees fit, in its sole discretion.
The Executive shall not communicate to the Company any ideas, concepts,
or information of any kind (i) which were earlier communicated to the
Executive in confidence by any third party, or (ii) which the Executive
knows or has reason to know is the proprietary information of any third
party, or (iii) which is subject to any claim of proprietary interest
by any third party. Further, the Executive shall adhere to and comply
with the
16
Company's Global Business Integrity Program Guide. All Intellectual
Property created or assembled in connection with the Executive's
employment hereunder shall be the permanent and exclusive property of
the Company. The Company and the Executive mutually agree that all
Intellectual Property and work product created in connection with this
agreement, which is subject to copyright, shall be deemed to be "work
made for hire," and that all rights to copyrights shall be vested in
the Company. If for any reason the Company cannot be deemed to have
commissioned "work made for hire," and its rights to copyright are
thereby in doubt, then the Executive agrees not to claim to be the
proprietor of the work prepared for the Company, and to irrevocably
assign to the Company, at the Company's expense, all rights in the
copyright of the work prepared for the Company. The Company shall have
the right to use the Executive's name and likeness in connection with
the sale, display and advertising of any product designed by the
Executive during his employment with the Company; provided that, at any
time after the Date of Termination, such use is limited to use in
conjunction with the trademark "Coach" or any other trademark of the
Company under which such product was originally sold, displayed or
advertised. Subject to Section 9(a) hereof, the Executive shall have
the right to use his own name and likeness in connection with the sale,
display and advertising of any product designed by the Executive to
which Coach does not have proprietary or exclusive rights; provided
that nothing herein shall give the Executive any right to use any
trademark owned by the Company for any purpose without the prior
written consent of the Company.
(g) As used in this Section 9, the term
"Company" shall include the Company and any of its Affiliates or direct
or indirect subsidiaries.
(h) The Company and the Executive expressly
acknowledge and agree that the agreements and covenants contained in
this Section 9 are reasonable. In the event, however, that any
agreement or covenant contained in this Section 9 shall be determined
by any court of competent jurisdiction to be unenforceable by reason of
its extending for too great a period of time or over too great a
geographical area or by reason of its being too extensive in any other
respect, it will be interpreted to extend only over the maximum period
of time for which it may be enforceable, and/or over the maximum
geographical area as to which it may be enforceable and/or to the
maximum extent in all other respects as to which it may be enforceable,
all as determined by such court in such action.
10. Specific Performance. It is recognized and
acknowledged by the Executive that a breach of the covenants contained in
Section 9 will cause irreparable damage to the Company and its goodwill (or to
the Executive, as the case may be), the exact amount of which will be difficult
or impossible to ascertain, and that the remedies at law for any such breach
will be inadequate. Accordingly, the parties agree that in the event a party
breaches any covenant contained in Section 9, in addition to any other remedy
which may be available at law or in equity (or pursuant to Section 11 of this
Agreement or under any other agreement between the Company and the Executive),
the other party will be entitled to specific performance and injunctive relief.
17
11. Claw-Backs
(a) In the event that the Executive violates any
of the covenants set forth in Section 9(a) or 9(b) or materially
violates any of the covenants set forth in Section 9(c), 9(e) or 9(f),
the Executive shall, in addition to any other remedy which may be
available (i) at law or in equity, (ii) pursuant to Section 5(c) or
Section 10 or (iii) pursuant to any applicable Option or RSU agreement,
be required to pay to the Company an amount equal to all Financial Gain
that the Executive has received during the 12-month period immediately
preceding (or at any time after) the date that the Executive first
breaches such covenant. In addition, all Retention Options that have
not been exercised prior to the date that the Executive violates any of
the covenants set forth in Section 9(a) or 9(b), or materially violates
any of the covenants set forth in Section 9(c), 9(e) or 9(f) and all
Retention RSUs that have not become vested prior to the date of such
breach shall thereupon be forfeited.
(b) If at any time during the Term the Executive
willfully commits any act of fraud, embezzlement, misappropriation,
material misconduct, or breach of fiduciary duty against the Company
(or any predecessor thereto or successor thereof), having a material
adverse impact on the Company, then (in addition to any remedy which
may be available under any applicable Option or RSU agreement) the
Executive shall be required to pay to the Company an amount equal to
all Financial Gain that the Executive has received at any time
following the date of such act. The Executive shall not be required to
make any payments of Financial Gain pursuant to this Section 11(b) to
the extent the Executive makes payments of such Financial Gain in
connection with the same act pursuant to Section 11(a).
12. Purchases and Sales of the Company's Securities. The
Executive agrees to use his reasonable best efforts to comply in all respects
with the Company's applicable written policies regarding the purchase and sale
of the Company's securities by employees, as such written policies may be
amended from time to time and disclosed to the Executive. In particular, and
without limitation, the Executive agrees that he shall not purchase or sell
Company securities (a) at any time that he possesses material non-public
information about the Company or any of its businesses; and (b) while an
employee during any "trading blackout period" as may be determined by the
Company and set forth in the Company's applicable written policies from time to
time.
13. Indemnification. The Executive shall be entitled to
indemnification set forth in the Company's Charter to the maximum extent allowed
under the laws of the State of Maryland, and he shall be entitled to the
protection of any insurance policies the Company may elect to maintain generally
for the benefit of its directors and officers against all costs, charges and
expenses incurred or sustained by him in connection with any action, suit or
proceeding to which he may be made a party by reason of his being or having been
a director, officer or employee of the Company or any of its subsidiaries or his
serving or having served any other enterprise or benefit plan as a director,
officer, employee or fiduciary at the request of the Company (other than any
dispute, claim or controversy arising under or relating to this Agreement).
Notwithstanding anything to the contrary herein, the Executive's rights under
this
18
Section 13 shall survive the termination of his employment for any reason
and the expiration of this Agreement for any reason.
14. Delegation and Assignment. The Executive shall not
delegate his employment obligations under this Agreement to any other person.
The Company may not assign any of its obligations hereunder other than to any
entity that acquires (by purchase, merger or otherwise) all or substantially all
of the Voting Stock or assets of the Company. In the event of the Executive's
death while he is receiving severance hereunder the remainder shall be paid to
his estate.
15. Notices. Any written notice required by this
Agreement will be deemed provided and delivered to the intended recipient when
(a) delivered in person by hand; or (b) three days after being sent via U.S.
certified mail, return receipt requested; or (c) the day after being sent via by
overnight courier, in each case when such notice is properly addressed to the
following address and with all postage and similar fees having been paid in
advance:
If to the Company: Coach, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
with a copy to: Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxx X. Xxxxxxxx
If to the Executive: to him at the most recent address in
the Company's records.
Either party may change the address to which notices, requests, demands and
other communications to such party shall be delivered personally or mailed by
giving written notice to the other party in the manner described above.
16. Legal Fees. The Company shall pay or reimburse the
Executive for reasonable attorneys' fees incurred by him in connection with the
negotiation of this Agreement and his commencement of employment hereunder.
17. Binding Effect. This Agreement shall be for the
benefit of and binding upon the parties hereto and their respective heirs,
personal representatives, legal representatives, successors and, where
applicable, assigns.
18. Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter
described in this Agreement and supersedes all prior agreements, understandings
and arrangements, both oral and written, between the parties with respect to
such subject matter; provided, however, that any written agreements between the
Executive and the Company concerning Options, RSUs or any other equity
compensation awards shall remain in full force and effect in accordance with
their terms. This Agreement may not be modified, amended, altered or rescinded
in any manner, except by written instrument signed by both of the parties
hereto; provided, however, that the waiver by either party of a breach or
19
compliance with any provision of this Agreement shall not operate nor be
construed as a waiver of any subsequent breach or compliance.
19. Severability. In case any one or more of the
provisions of this Agreement shall be held by any court of competent
jurisdiction or any arbitrator selected in accordance with the terms hereof to
be illegal, invalid or unenforceable in any respect, such provision shall have
no force and effect, but such holding shall not affect the legality, validity or
enforceability of any other provision of this Agreement.
20. Dispute Resolution and Arbitration. In the event that
any dispute arises between the Company and the Executive regarding or relating
to this Agreement and/or any aspect of the Executive's employment relationship
with the Company, AND IN LIEU OF LITIGATION AND A TRIAL BY JURY, the parties
consent to resolve such dispute through mandatory arbitration under the
Commercial Rules of the American Arbitration Association ("AAA"), before a
single arbitrator in New York, New York. The parties hereby consent to the entry
of judgment upon award rendered by the arbitrator in any court of competent
jurisdiction. Notwithstanding the foregoing, however, should adequate grounds
exist for seeking immediate injunctive or immediate equitable relief, any party
may seek and obtain such relief. The parties hereby consent to the exclusive
jurisdiction in the state and Federal courts of or in the State of New York for
purposes of seeking such injunctive or equitable relief as set forth above. Any
and all out-of-pocket costs and expenses incurred by the parties in connection
with such arbitration (including attorneys' fees) shall be allocated by the
arbitrator in substantial conformance with his or her decision on the merits of
the arbitration.
21. Choice of Law. The Executive and the Company intend
and hereby acknowledge that jurisdiction over disputes with regard to this
Agreement, and over all aspects of the relationship between the parties hereto,
shall be governed by the laws of the State of New York without giving effect to
its rules governing conflicts of laws.
22. Section Headings. The section headings contained in
this Agreement are for reference purposes only and shall not affect in any
manner the meaning or interpretation of this Agreement.
23. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
24. Force Majeure. Neither Company nor the Executive
shall be liable for any delay or failure in performance of any part of this
Agreement to the extent that such delay or failure is caused by an event beyond
its reasonable control including, but not be limited to, fire, flood, explosion,
war, strike, embargo, government requirement, acts of civil or military
authority, and acts of God not resulting from the negligence of the claiming
party.
25. Right of Offset. The Company may offset any payment
to be made to the Executive pursuant to this Agreement by any amount that the
Executive owes to the Company (including without limitation any amount that the
Executive may be required to pay to the Company pursuant to Section 11) as of
the time such payment would otherwise be made. This
20
right of offset shall be cumulative (but not duplicative) with any similar
obligation with respect to which the Executive may be subject under any other
agreement with the Company. Notwithstanding the foregoing, no amount of (a)
Annual Base Salary or Annual Bonus deferred by the Executive on or following the
Effective Date pursuant to any deferred compensation plan or arrangement
maintained by the Company, or (b) compensation deferred by the Executive prior
to the Effective Date pursuant to any deferred compensation plan or arrangement
maintained by the Company shall be subject to the Company's right of offset
described in this Section 25.
26. Withholding. The Company shall be entitled to
withhold from any amounts payable under this Agreement any federal, state, local
or foreign withholding or other taxes or charges which the Company is required
to withhold. The Company shall be entitled to rely on an opinion of counsel if
any questions as to the amount or requirement of withholding shall arise.
[signature page follows]
21
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first above written.
COMPANY
By: ________________________________________
Its: _______________________________________
EXECUTIVE
____________________________________________
Xxxx Xxxxxxx
22
