EXHIBIT 10(iii)
AGREEMENT AMONG
NEW ENGLAND INVESTMENT COMPANIES, L.P.,
NEW ENGLAND INVESTMENT COMPANIES, INC.
AND XXXXXX X. XXXXXXXXXX
------------------------
THIS AGREEMENT made as of the sixteenth day of August, 1995
(hereinafter referred to as the "Effective Date"), by and among New England
Investment Companies, L.P., a Delaware limited partnership (hereinafter referred
to as the "Limited Partnership"), New England Investment Companies, Inc., a
Massachusetts corporation which is the general partner of the Limited
Partnership (hereinafter referred to as the "General Partner"), parties of the
first part, and Xxxxxx X Xxxxxxxxxx (hereinafter referred to as "Employee"),
party of the second part.
WITNESSETH:
-----------
WHEREAS:
A. Employee is currently employed by the Limited Partnership and the
General Partner as an Executive Vice President; and
B. The Limited Partnership and the General Partner wish to provide
an inducement for Employee to remain in their employ so that they will have the
continued benefit of her ability, experience and services;
NOW, THEREFORE, in consideration of good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby covenant and agree as follows:
-1-
1. Compensation on Termination
---------------------------
As used in this Agreement, the term "Company" means and includes the
Limited Partnership and the General Partner, or either of them. If the Company
terminates Employee's employment other than for Cause or Disability (as defined
in paragraphs 2(b) and 2(d) below) before the third anniversary of the Effective
Date (such three year period being hereinafter referred to as the "Term"), or
the Company Constructively Discharges Employee (as that Term is defined in
paragraph 2(c) below) during the Term, and the Administrator (as defined in
paragraph 2(a) below) determines in the good faith exercise of her sole
discretion that such termination of employment or Constructive Discharge (as the
case may be) is or was not primarily related to Employee's performance or the
ordinary course of business, then the Company shall pay Employee the following
amounts and provide him with the following benefits as severance compensation.
Employee shall not be required to mitigate the amount of any payment or benefit
provided for in this section 1 by seeking other employment or otherwise, nor
shall any compensation earned by Employee in other employment or otherwise
reduce the amount of any payment or benefit provided for in this section 1.
(a) The Company shall pay Employee her salary (as defined in
paragraph 2(c)(iii) below) prorated through the date of termination;
(b) The Company shall pay Employee any accrued but unpaid bonus award
for Employee's services in the calendar year preceding the date of termination,
and a prorated bonus award for the calendar year in which the date of
termination occurs, such prorated bonus award to be determined by multiplying
the "Bonus Amount" as defined in paragraph 1(d) below by a fraction the
numerator of which is the number of
-2-
days in the calendar year of termination that precede the date of termination
and the denominator of which is the number 365;
(c) The Company shall pay Employee a lump sum amount, on or before
the tenth day after the date of termination, equal to one and one-half (1 1/2)
times her salary ( as defined in paragraph 2(c)(iii) below, based on the highest
rate in effect during the Term);
(d) The Company shall pay Employee a lump sum amount, on or before the
tenth day after the date of termination, equal to one and one-half (1 1/2) times
the "Bonus Amount" as hereafter defined. For purposes of this section 1, the
"Bonus Amount" shall mean Employee's Salary (as defined in paragraph 2(c)(iii)
below, based on the highest rate in effect during the Term), multiplied by the
greater of (i) and (ii) where (i) is 40% and (ii) is the percentage of her
Salary (as defined in paragraph 2(c)(iii) below) which Employee was given the
opportunity to earn as an annual bonus for services in the calendar year in
which the date of termination occurs if the Company attains the target bonus
performance objective designated by the Board (or a committee thereof) for such
calendar year;
(e) The Company shall pay or provide Employee, her dependents and
beneficiaries with the payments, coverages, benefits and age, pay and service
credit for benefits described in clauses (A) and (B) of paragraph 2(c)(viii)
below for one and one-half years after the date of termination (with the
compensation described in paragraphs 1(c) and (d) above being considered paid to
her, for purposes of this paragraph 1(e), ratably over such one and one-half
year period); provided, however, that if and to the extent the Company
determines that such payments, coverages, benefits and age, pay and service
credit for benefits cannot
-3-
be paid or provided under the plans in question due to Internal Revenue Code or
other restrictions, the Company shall provide tax-equivalent payments,
coverages, benefits and age, pay and service credit for benefits through other
means reasonably satisfactory to Employee, and, provided further, that if
Employee obtains full time employment within one and one-half years after her
date of termination, any payments under welfare benefit plans to be provided
under this paragraph shall be reduced to the extent Employee receives payments
under comparable plans of the successor employer;
(f) Employee's benefits accrued through the date of termination, and
any benefits accrued pursuant to the provisions of paragraph 1(e) above, under
any and all qualified or non-qualified defined benefit pension plans or defined
contribution pension, profit sharing or stock bonus plans shall become
immediately vested and non-forfeitable on the date of termination; if and to the
extent the Company determines that such vesting cannot be accomplished under the
plan in question due to Internal Revenue Code or other restrictions, the Company
shall provide tax equivalent benefits to Employee through other means reasonably
satisfactory to Employee; and
(g) If any payment (within the meaning of Section 280G(b)(2) of the
Internal Revenue Code of 1986 as amended) or distribution by or on behalf of the
Company to or for the Benefit of Employee pursuant to the terms of this
Agreement, either alone or in conjunction with any other payment or distribution
to or for the Benefit of Employee ( a "Payment"), including any payment pursuant
to this paragraph, is subject to the excise tax imposed by section 4999 of the
Internal Revenue Code of 1986 as amended, or any interest or penalties are
incurred by Employee with respect to such excise tax (such excise tax, together
with any such
-4-
interest or penalties, being hereinafter collectively referred to as the "Excise
Tax"), then Employee shall be entitled to receive on demand an additional
payment from the Company under this Agreement (a "Tax Payment") in an amount
such that after payment by Employee of all taxes (including any interest and
penalties imposed with respect to such taxes), including but not limited to any
Excise Tax, imposed upon the Tax Payment, Employee retains an amount of the Tax
Payment equal to the Excise Tax imposed upon the Payment.
2. Certain Definitions
-------------------
(a) Administrator. As used in section 1 of this Agreement, the term
-------------
"Administrator" means Xxxxx X. Xxxx or, if Xxxxx X. Xxxx should at any time be
unable or unwilling to serve in that capacity, such other person or entity
(whether affiliated with the Company or not) as Xxxxx X. Xxxx may designate in
writing as the person or entity who or which should act in his place and stead
to determine whether any termination of employment or Constructive Discharge of
Employee during the Term is or was not primarily related to Employee's
performance or the ordinary course of business with the meaning of section 1 of
this Agreement. If such person or entity is not an officer, director or employee
of the Company, such person or entity's reasonable fees and expenses for serving
in the capacity of Administrator shall be borne by the Company. The
Administrator's determination shall be final, binding and conclusive on the
Company, the Employee and all persons claiming under or through any of them. The
Company hereby agrees to indemnify and hold harmless any person or entity
serving as the Administrator against any claims, losses, judgments, and causes
of action arising out of or relating to such person's or entity's service as
Administrator under this Agreement.
-5-
(b) Cause. For purposes of this Agreement, Employee shall be
-----
considered to be terminated for "Cause" only
(i) if Employee is convicted of a felony under the laws of the
United States or any state thereof;
(ii) if employee engages in willful malfeasance having a
material adverse effect on the Company; or
(iii) if Employee willfully and repeatably fails to
substantially perform the duties and responsibilities attached to her position
on the Effective Date, except by reason of total or partial incapacity due to
accident or physical or mental illness.
However, in no event (other than clause 2(b)(i) above)shall Employee be
considered to be terminated for "Cause" unless and until the following
conditions are satisfied:
(A) Employee is given reasonable notice and a reasonable opportunity
to be heard at a meeting of the Board of Directors of the Company called for the
purpose of determining whether "Cause" exists for termination of Employee's
employment;
(B) A resolution is duly adopted at such meeting by the affirmative
vote of not less than two-thirds of the entire membership of the Board directing
the Secretary of the Company to give Employee written notice (the "Warning
Notice") of the Board's determination to terminate Employee's employment for
"Cause" if the acts or omissions specified in the Warning Notice are not
discontinued, and the Secretary of the Company gives Employee such written
notice; and
-6-
(C) Employee does not discontinue the acts or omissions in question
within 30 days of her receipt of the Warning Notice;
Anything in this paragraph 2(b) to the contrary notwithstanding, the employment
of Employee shall in no event be considered to be terminated by the Company for
Cause if termination of her employment takes place (I) as the result of bad
judgment or negligence on the part of Employee other than willful or reckless
misconduct, (II) for any act or omission in respect of which a determination
could properly be made that Employee met the applicable standard of conduct
prescribed for indemnification or reimbursement or payment of expenses of an
officer or director under the Bylaws or Limited Partnership Agreement of the
Company or the laws of Delaware or Massachusetts or the directors' and officers'
liability insurance of the Company, in each case as in effect at the time of
such act or omission, (III) as the result of an act or omission which occurred
more than twelve calendar months prior to Employee's having been given Notice of
Termination for such act or omission unless the commission of such act or
omission was not at the time of such commission or omission known to a member of
the Board, in which case more than twelve calendar months from the date the
commission of such act or omission was so known, (IV) as the result of a
continuing course of action which commenced and was known to a member of the
Board more than twelve calendar months prior to Notice of Termination having
been given to Employee, or (V) because of an act or omission reasonably believed
by Employee in good faith to have been in or not opposed to the interests of the
Company.
(c) Constructive Discharge. For purposes of this Agreement, the
Company shall be considered to
-7-
"Constructively Discharge" Employee if any act or omission that is identified
below in this paragraph 2(c) occurs other than (x) in connection with
termination of Employee's employment for Cause or Disability as defined in this
Agreement, or (y) with Employee's written consent; provided that in no event
shall the Company be considered to "Constructively Discharge" Employee unless
and until (I) Employee gives the Board written notice describing the act or
omission in reasonable detail within 60 days after the Employee first knows (or
should have known) of the act or omission, (II) the act or omission is not cured
within 45 days after the Board receives such written notice, and (III) Employee
terminates her employment on 10 days' advance written notice to the Company
given within 90 days after the close of such 45 day cure period:
(i) Any (A) failure to re-designate Employee as, or (B) removal of
Employee from, or failure to re-elect Employee to, the position of, Executive
Vice President-Corporate Development of the Company;
(ii) Any material limitation or expansion of the duties, functions,
authority or responsibilities attached to Employee's position on the Effective
Date;
(iii) Any failure by the Company to pay Employee a salary at an annual
rate equal to at least $205,000 plus such increases (if any) as may be approved
by the Board from time to time, in substantially equal installments at monthly
or more frequent intervals in accordance with the normal payroll practices of
the Company, or to review Employee's salary rate at least annually following the
date of this Agreement to ascertain whether, in the sole, good faith judgment of
the Board, such rate should be increased in light of Employee's performance,
competitive pay levels or such other factors (if any) as the Board may deem
relevant
-8-
(Employee's annual base salary at the rate specified above and including any
increases being referred to in this Agreement as her "Salary");
(iv) Any removal of Employee's office from the Company's principal
executive offices or to a location that (A) is more than 35 miles from its
present location, and (B) increases Employee's commuting distance from her
residence; or
(v) Any objectively demonstrable, substantial increase in the business
travel required of Employee above present levels unless the additional travel is
both appropriate for Employee's position described above and substantially
related to the business and affairs of the Company or its direct or indirect
subsidiaries (any direct or indirect subsidiary of the Company, including
partnerships, limited liability companies, business trusts and other entities as
well as corporations, being hereinafter referred to as a "subsidiary"); or
(vi) Any objectively demonstrable failure by the Company to provide
Employee with the opportunity to earn an annual bonus for each calendar year
that coincides in whole or in part with the Term, equal to at least 40% of her
Salary for such year if the Company attains the target bonus performance
objective designated by the Board (or a committee thereof) for such calendar
year, and equal to at least 80% of her Salary for such year if the Company
attains the maximum bonus performance objective designated by the Board (or a
committee thereof) for such calendar year, or to provide Employee with the
opportunity to earn such a bonus based on performance objectives not
substantially more difficult to attain than those applicable to Employee's
target and maximum bonus opportunities for 1994;
-9-
(vii) Any objectively demonstrable failure by the Company to select
Employee to participate in any other compensation or incentive plan of a long or
short term nature in which other senior executives of the Company having
responsibilities comparable to Employee's then generally participate, or to
provide Employee with a compensation opportunity under any such plan that is as
favorable as the compensation opportunity provided to any other participating
executive having responsibilities comparable to Employee's;
(viii) Any substantial, objectively demonstrable failure by the
Company to provide Employee, her dependents and beneficiaries, including without
limitation any beneficiary of a joint and survivor or other optional method of
payment applicable to the payment of benefits under the Company's tax-qualified
retirement plans, with (A) all payments, coverages, benefits and age, pay and
service credit for benefits as a result of employment to which other senior
officers of the Company, their dependents and beneficiaries are then entitled
under the employee benefit plans and practices of the Company and its
subsidiaries, including without limitation any qualified or non-qualified
pension, profit sharing and savings plans, death benefit plans (including split
dollar life insurance plans and group life insurance plans providing group term
life insurance, accidental death and dismemberment insurance, and travel
accident insurance), sickness and disability benefit plans, vacation pay plans,
and medical, dental, health and welfare plans, or (B) payments, coverages,
benefits and age, pay and service credit for benefits under employee benefit
plans substantially equivalent to those attached to her position on the
Effective Date, or, in the event of any amendment or other change in any
employee benefit plan or practice that would substantially reduce such payments,
coverages, benefits or age, pay or service credit for benefits from
-10-
their present levels, with tax-equivalent payments, coverages, benefits and age,
pay and service credit for benefits under other arrangements reasonably
satisfactory to Employee; or
(ix) Any failure by the Company to obtain the assumption of, and the
agreement to perform, this Agreement, by any successor as contemplated by
paragraph 3(a) below.
A Constructive Discharge in accordance with the provisions of this paragraph
2(c) shall not be deemed a voluntary termination of employment by Employee for
the purpose of this Agreement or any plan or practice of the Company or its
subsidiaries.
(d) Disability. As used in this Agreement, the term "Disability"
----------
means an accident or physical or mental illness which prevents Employee from
substantially performing the duties and responsibilities attached to her
position described in paragraph 2(c)(i) above on the Effective Date for six
consecutive calendar months. Employee shall not be considered under a
Disability for purposes of this Agreement until the close of business on the
last day of such six months' period. If the amount of any Salary or other
compensation payable to Employee during such six month period is reduced by any
payments which Employee receives for the same period because of disability under
any disability or pension plan of the Company or any subsidiary of the Company,
such reduction shall not be considered a failure to pay Employee the amount of
salary so reduced for purposes of paragraph 2(c)(iii) above.
(e) Notice of Termination. Any termination by the Company for Cause
---------------------
or Disability as defined in paragraphs 2(b) and (d) above or by Employee for
Constructive Discharge as defined in paragraph 2(c) above shall be communicated
by
-11-
written Notice of Termination from the Company or the Employee (as the case
may be) to the other party. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which 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
Employee's employment under the provision so indicated. If any dispute
concerning termination of Employee's employment under paragraphs (b), (c) or (d)
above results in a final determination that a proper basis for such termination
did not exist, Employee's employment hereunder shall be treated as having been
terminated other than pursuant to paragraph (b), (c) or (d), as the case may be,
by the party who gave Notice of Termination.
3. Successors; Binding Agreement:
------------------------------
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, including
without limitation any entity formed or availed of to hold the interests of the
public shareholders of the Company, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall entitle Employee to compensation under section 1 above, in the
same amount and on the same terms as she would be entitled to hereunder if her
employment were terminated by the Company other than for Disability or Cause and
the Administrator were to determine that such termination was not primarily
related to Employee's performance or the ordinary course of business, except
that for purposes of implementing the foregoing, the
-12-
date on which any such succession becomes effective shall be deemed the date of
termination.
(b) As used in this Agreement, the "Company" shall mean the Company as
herein before defined and any successor to its business and/or assets as
aforesaid which executes and delivers an agreement provided for in paragraph
3(a) above or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
(c) This Agreement and all rights of Employee hereunder shall inure to
the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributes,
devisees and legatees. If Employee should die while any amounts are due and
payable to her hereunder, all such amounts, unless otherwise provided herein,
shall be paid to Employee's designated beneficiary or, if there be no such
designated beneficiary, whether because none was designated or because none is
alive or in existence at the time any amount becomes payable hereunder, to the
legal representatives of Employee's estate.
(d) Except as to withholding of any tax under the laws of the United
States or any other country, state or locality, neither this Agreement nor any
right or interest hereunder nor any amount payable at any time hereunder shall
be subject in any manner to alienation, sale, transfer, assignment, pledge,
attachment, or other legal process, or encumbrance of any kind by Employee or
the beneficiaries of Employee or by her legal representatives without the
Company's prior written consent, nor shall there be any right of set-off or
counterclaim in respect of any debts or liabilities of Employee, her
beneficiaries or legal representatives; provided, however, that nothing in this
paragraph shall preclude Employee from designating a
-13-
beneficiary to receive any benefit payable on her death, or the legal
representatives of Employee from assigning any rights hereunder to the person or
persons entitled thereto under her will or, in case of intestacy, to the person
or persons entitled thereto under the laws of intestacy applicable to her
estate.
4. Agreement Binding.
-----------------
This Agreement shall be binding upon and shall inure to the benefit of
Employee,her heirs and legal representatives, and the Company, its successors
and assigns and any person, firm, corporation or other entity which succeeds to
all or substantially all of the business, assets or property of the Company, as
provided in section 3 hereof.
5. General Provisions.
------------------
(a) This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof and cancels and supersedes any and all
other agreements between the parties with respect to the subject matter hereof.
However, this Agreement is not intended to diminish, compromise or otherwise
affect adversely any rights Employee may have in respect of termination of
employment (other than rights to severance pay in the circumstances covered by
section 1 above) under any plan or arrangement other than this Agreement.
(b) Any modification of this Agreement shall not be binding unless in
writing and signed by the Company and Employee.
(c) No provision of this Agreement shall impair or diminish any rights
which the Company may have to terminate Employee's employment with or without
Cause, subject to the
-14-
consequences of such termination set forth in this Agreement. No provision of
this Agreement shall be construed to create any right on the part of the
Employee to continue in the employ of the Company for any period of time or at
any particular rate of compensation.
(d) In no event shall Employee be entitled to any payments under this
Agreement unless and until the Company terminates Employee's employment other
than for Cause or Disability during the Term, or Constructively Discharges
Employee during the Term, and the Administrator determines that such termination
of employment or Constructive Discharge (as the case may be) is or was not
primarily related to Employee's performance or the ordinary course of business.
(e) This Agreement is being executed in two or more counterparts, each
of which shall be considered an original.
6. Enforceability.
--------------
In the event that any provision of this Agreement is determined to be
invalid or unenforceable, the remaining terms and conditions of this Agreement
shall be unaffected and shall remain in full force and effect, and any such
determination of invalidity or unenforceability shall not affect the validity or
enforceability of any other provision of this Agreement.
7. Notices.
-------
All notices which may be necessary or proper for either the Company or
Employee to give to the other shall be in writing and shall be delivered by hand
or sent by registered or certified mail, return receipt requested, or by air
courier, to Employee at:
-15-
Xxxxxx X. Xxxxxxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
and shall be sent in the manner described above to the Company, c/o the General
Partner, at 000 Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, XX 00000, Attention:
Secretary, or delivered by hand to the Secretary of the General Partner, and
shall be deemed given when sent, provided that any Notice of Termination or
notice given pursuant to section 2 hereof shall be deemed given only when
received. Any party may by like notice to the other party change the address at
which she or they are able to receive notices hereunder.
8. Arbitration.
-----------
Any controversy or claim arising out of, or related to, this
Agreement, or the breach thereof, shall be settled by binding arbitration in the
City of Boston, in accordance with the rules then obtaining of the American
Arbitration Association, and the arbitrator's decision shall be binding and
final, and judgment upon the award rendered may be entered in any court having
jurisdiction thereof.
9. Governing Law.
-------------
The Agreement is executed in the Commonwealth of Massachusetts and
shall be governed by and enforceable in accordance with the laws thereof without
giving effect to the principles of conflict of laws thereof.
10. Legal Fees and Expenses.
-----------------------
To provide Employee with reasonable assurance that the purposes of
this Agreement will not be frustrated by the cost of its enforcement should the
Company fail to perform its obligations under this Agreement or should the
Company
-16-
or any subsidiary, affiliate or shareholder of the Company contest the
validity or enforceability of this Agreement, the Company shall pay and be
solely responsible for any attorney's fees and expenses, including arbitration
costs and court costs, incurred by Employee as a result of the Company's failure
to perform this Agreement or any provision hereof to be performed by the Company
or as a result of the Company or any subsidiary, affiliate or shareholder of the
Company contesting the validity or enforceability of this Agreement or any
provision hereof to be performed by the Company.
-17-
IN WITNESS WHEREOF, the Limited Partnership and the General Partner
have caused this Agreement to be signed by their proper representatives and
Employee has hereunto set her hand as of the date first above written.
NEW ENGLAND INVESTMENT COMPANIES, L.P.
By New England Investment Companies, Inc.
as General Partner
[Seal]
By Xxxxxx X. Xxxxxx
----------------
Attest: Chairman, Compensation Committee of the Board
New England Investment Companies, Inc.
Xxxxxx X. Xxxxxxxxx
-------------------
Secretary
NEW ENGLAND INVESTMENT COMPANIES, INC.
[Seal]
Attest: By Xxxxxx X. Xxxxxx
----------------
Chairman, Compensation Committee of the Board
Xxxxxx X. Xxxxxxxxx
-------------------
Secretary
EMPLOYEE
Xxxxxx X. Xxxxxxxxxx
--------------------
Xxxxxx X. Xxxxxxxxxx
-18-
