EXHIBIT 10.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
entered into by and between Xxxxxx Scientific International, Inc., a Delaware
corporation (the "Company") and Xxxx X. Xxxxxxx (the "Executive"), and dated as
of the 31st day of December, 2003.
1. Term of the Agreement. This Agreement shall commence as of January 1,
2004 (the "Effective Date"). The Executive's services under Section 2 shall
commence on such date and end on December 31, 2006 (the "Initial Employment
Period" and, together with any extensions thereof pursuant to the next sentence,
the "Employment Period"). As of the last day of the Initial Employment Period
and each anniversary thereof, unless either party hereto shall have given the
other party 60 days' advance notice that there shall be no further extensions
pursuant to this sentence, the Employment Period shall be extended by an
additional year.
2. Position and Duties. During the Employment Period, the Executive's
position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate in all
material respects with those held, exercised and assigned to the Executive on
the day immediately preceding the Effective Date. The Executive's services shall
be performed at the location where the Executive was employed immediately
preceding the Effective Date or any office or location less than 25 miles from
such location. During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (a) serve on corporate, civic, charitable,
governmental or religious boards or committees, (b) manage or participate in
activities of The General Chemical Group, GenTek Inc. and Xxxxxx Associates,
Inc., or such other entities in a manner and at a time or times consistent with
his current practice, (c) deliver lectures, fulfill speaking engagements or
teach at educational institutions, (d) participate in political activities and
fundraising and (e) manage personal investments, so long as such activities do
not significantly interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that to the extent that any
such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.
3. Compensation.
(a) Base Salary. During the Employment Period, the Executive shall receive
an annual base salary of at least $620,000 ("Annual Base Salary"), which shall
be paid in accordance with the Company's generally applicable payroll practices
and policies, except that any portion of such base salary (taking into account
any increase therein after the date hereof) that, if paid currently to
Executive, would not be deductible by the Company due to the provisions of
Section 162(m) of the Internal Revenue Code shall be mandatorily deferred and
paid to the Executive no earlier than the first taxable year of the Company as
to which the Executive is no longer a "covered employee" within the meaning of
such Section. Any amounts mandatorily deferred pursuant to the immediately
preceding sentence shall be credited to a book entry account for the Executive
under a Company sponsored deferred compensation plan and the Executive shall
have all rights and benefits as a participant in such plan, including the right
to have deemed earnings credited on such deferred amounts in accordance with the
term of such plan. During the Employment Period, the Annual Base Salary shall be
reviewed at least annually. Any increase in Annual Base Salary shall not serve
to limit or reduce any other obligation to the Executive under this Agreement.
The Annual Base Salary shall not be reduced after any such increase and the term
Annual Base Salary as utilized in this Agreement shall refer to Annual Base
Salary as so increased.
(b) Incentive, Savings and Retirement Plans Generally. During the
Employment Period, and without limiting the Executive's rights under Section
3(c), the Executive shall be entitled to participate in and shall receive all
benefits under all incentive, savings and retirement plans, practices, policies
and programs applicable generally to other peer executives of the Company and
its affiliated companies, but in no event shall such plans, practices, policies
and programs provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the extent, if
any, that such distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the aggregate, than the
most favorable of those provided by the Company and its affiliated companies for
the Executive under such plans, practices, policies and programs as in effect
immediately preceding the Effective Date or if more favorable to the Executive,
those provided generally at any time after the Effective Date to other peer
executives of the Company and its affiliated companies. Without limiting the
generality of the foregoing (including the right of Executive to participate in
and receive all benefits under any short-term or special bonus or other
incentive compensation opportunities), the target regular annual bonus
opportunity made available to the Executive with respect to any calendar year
after 2003 shall be at least equal to 100% of his Annual Base Salary for such
year. No portion of the bonus payable to the Executive for any calendar year
during the term of this agreement shall be guaranteed, except as otherwise
provided in Section 5.
(c) Retirement Benefits. To induce the Executive to continue in the
Company's employ and to enter into this amended and restated employment
agreement, which eliminates a number of provisions that would have provided the
Executive substantial benefits in connection with his termination of service
with the Company, for purposes of calculating the Executive's retirement benefit
under any excess or supplemental defined benefit retirement plans in which the
Executive participates, including, without limitation, the Company's Executive
Retirement and Savings Plan, (collectively, the "SERP") and notwithstanding
anything in the SERP to the contrary, the annual retirement benefit payable to
the Executive at his normal retirement age under the SERP (which may be paid in
a lump sum) shall be not less than 65% of his final average Earnings, which
shall be equal to the average of the sums of the Executive's Earnings payable
(in each case determined by including in such calculation any amounts of Annual
Base Salary or bonus payable, but deferred (regardless of whether on a mandatory
basis or at the election of the Executive)) in respect of any three years during
the last ten years of the Executive's service (including the Severance Period)
in which the average of such sums is the highest. In the event of the
Executive's death prior to the commencement of receipt of his retirement
benefit, notwithstanding anything in the SERP to the contrary, the retirement
benefit payable hereunder to the Executive's surviving spouse or, if the
Executive is not survived by his spouse, to his estate, shall be paid in a lump
sum in an amount equal to the benefit that would have been payable to the
Executive had the Executive terminated his employment immediately prior to his
death and received the retirement benefit as a lump sum. For the avoidance of
doubt, for purposes of calculating the Executive's annual retirement benefit and
the retirement benefit payable to his surviving spouse or his estate, as
provided above in this paragraph (c): (A) all amounts payable (or that would
have been payable) to Executive in respect of the Severance Period absent his
death shall be taken into account as provided in Section 5(a)(iii), (B) no such
retirement benefit shall be subject to reduction on account of any Offset, and
(C) the amount of any retirement benefit calculated as provided above shall,
upon the commencement thereof (either annually or as a lump sum), be subject to
cost of living increases in accordance with the Existing Plan. Capitalized terms
used herein without other definition shall have the meanings given in the Xxxxxx
Scientific International Inc. Executive Retirement and Savings Program as
restated effective June 23, 1997 (the "Existing Plan").
(c) Welfare Benefit Plans. During the Employment Period, the Executive
and/or the Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent applicable generally
to other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.
Notwithstanding the
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foregoing, the Executive and the Company have agreed that the split-dollar
arrangement previously entered into by the Company for the benefit of the
Executive shall terminate not later than December 31, 2003, the amount of life
insurance premiums paid by the Company in respect of such arrangement shall be
returned to the Company and the Company shall have no further obligation to
make, or liability in respect of, premium payments required to have been made
under such arrangement, whether before or after the date hereof.
(d) Expenses. During the Employment Period, the Executive shall be entitled
to receive prompt reimbursement for all reasonable expenses incurred by the
Executive in respect of his services to the Company in accordance with the most
favorable policies, practices and procedures of the Company and its affiliated
companies in effect for the Executive immediately preceding the Effective Date
or, if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.
(e) Fringe and Other Benefits. During the Employment Period, the Executive
shall be entitled to fringe benefits, personal perquisites, and any other
benefits in accordance with the most favorable plans, practices, programs and
policies of the Company in all respects and its affiliated companies in effect
for the Executive immediately preceding the Effective Date or, if more favorable
to the Executive, as in effect generally at any time thereafter with affiliated
companies.
(f) Office and Support Staff. During the Employment Period, the Executive
shall be entitled to an office or offices of a size and with furnishings and
other appointments, and to secretarial and other assistance, in all respects
equal to that provided to the Executive by the Company immediately preceding the
Effective Date or, if more favorable to the Executive, as provided generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.
(g) Vacation. During the Employment Period, the Executive shall be entitled
to paid vacation in accordance with the plans, policies, programs and practices
of the Company in all respects and its affiliated companies as in effect for the
Executive immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.
4. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 10(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's employment during the
Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean:
(i) the willful and continued failure of the Executive to perform
substantially the Executive's duties hereunder with the Company or one of
its affiliates (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board which specifically
identifies the manner in which the Board believes that the Executive has
not substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or gross
misconduct that is materially and demonstrably injurious to the Company.
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For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was not inconsistent with the best interests of
the Company. Any act, or failure to act, based upon authority given pursuant to
a resolution duly adopted by the Board or upon the instructions of the Chief
Executive Officer or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of employment
of the Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Board
(excluding the Executive) at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to the Executive and the Executive
is given an opportunity, together with counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, the Executive is guilty of
the conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.
(c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason at any time within 90 days after the Executive first
has actual knowledge of the occurrence of such Good Reason. For purposes of this
Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties inconsistent in any
respect with the Executive's position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as
contemplated by Section 2 of this Agreement, or any other action by the
Company which results in a diminution in such position, authority, duties
or responsibilities, excluding, for this purpose an isolated, insubstantial
and inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the provisions
of Section 3 of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at any office
or location other than as provided in Section 2 hereof or the Company's
requiring the Executive to travel on Company business to a substantially
greater extent than required immediately prior to the Effective Date;
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement;
(v) any delivery by the Company of a Notice of Non-Extension; or
(vi) any failure by the Company to comply with and satisfy Section 9
of this Agreement.
For purposes of this Section 4(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 10(b) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after the
giving of such notice). The failure by the Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
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(e) Date of Termination. "Date of Termination" means (i) if the Executive's
employment is terminated by the Company for Cause, or by the Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive's employment is
terminated by the Company other than for Cause or Disability, the date on which
the Company notifies the Executive of such termination, (iii) if the Executive's
employment is terminated by the Executive other than for Good Reason, the date
on which the Executive notifies the Company of such termination and (iv) if the
Executive's employment is terminated by reason of death or Disability, the date
of death of the Executive or the Disability Effective Date, as the case may be.
5. Obligations of the Company Upon Termination.
(a) By Executive for Good Reason; By the Company Other Than for Cause or
Disability. In partial consideration for the noncompetition covenants of the
Executive pursuant to Section 8(b) and in part as liquidated damages in lieu of
the payments and benefits to which the Executive would have been entitled
through the remainder of the Employment Period, if, during the Employment
Period, the Company shall terminate the Executive's employment other than for
Cause or Disability or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive or his legal
representatives in a lump sum in cash within 30 days after the Date of
Termination the aggregate of the following amounts:
A. the sum of
(1) the Executive's Annual Base Salary through the Date of
Termination to the extent not theretofore paid,
B. the product of
(1) the Executive's target bonus as determined under the
applicable Xxxxxx compensation or incentive plan(s) for the year in
which the Date of Termination occurs, and
(2) a fraction, the numerator of which is the number of days in
the current fiscal year through the Date of Termination, and the
denominator of which is 365, and
C. any compensation previously deferred by the Executive (together
with any accrued interest or earnings thereon) and any accrued vacation
pay, in each case to the extent not theretofore paid (the sum of the
amounts described in clauses (A), (B), and (C) shall be hereinafter
referred to as the "Accrued Obligations"); and
(ii) subject to the Executive's remaining reasonably available to
assist the Company, in such manner and at such time as shall be mutually
agreed in good faith upon the Company's request through appropriate
notice to the Executive, in the transition of his duties and
responsibilities hereunder, the Company shall pay to the Executive an
amount equal to the Annual Base Salary that would have been payable to
him had he continued to be employed for the period commencing on the
Date of Termination and ending on the day before the third anniversary
thereof (the "Severance Period") and an amount equal to three times the
Executive's target bonus opportunity under the Company's applicable
compensation or incentive plan(s) for the year in which such Date
occurs. The amounts described in the immediately preceding sentence
shall be deemed earned on the Date of Termination, but subject to
Section 5(b) shall be payable in 36 substantially equal monthly
installments over the Severance Period. It is expressly understood that
the assistance to be provided to the Company under this clause (ii)
shall not involve any fixed time commitment on the part of Executive.
(iii) for purposes of calculating the Executive's retirement
benefits under the SERP, the Executive shall be deemed to have completed
three additional years of service and received the amounts payable under
Section 5(a)(ii) over the Severance Period as compensation for such
period of service.
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(iv) for three years after the Executive's Date of Termination, or
such longer period as may be provided by the terms of the appropriate
plan, program, practice or policy, the Company shall continue all fringe
and other benefits to the Executive and/or the Executive's family at
least equal to those which would have been provided to them in
accordance with the plans, programs, practices and policies described in
Section 3(d), (e), (f) and (g) of this Agreement if the Executive's
employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies and
their families, provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical or
other welfare benefits under another employer-provided plan, the medical
and other welfare benefits described herein shall be secondary to those
provided under such other plan during such applicable period of
eligibility, and for purposes of determining eligibility (but not the
time of commencement of benefits) of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the Executive
shall be considered to have remained employed until three years after
the Date of Termination and to have retired on the last day of such
period.
(b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, the Executive, his estate and/or
beneficiaries shall be entitled to the payments and other benefits provided for
in Section 5(a) above including, for the avoidance of doubt, the payment in a
lump sum of the amounts provided for under Section 5(a)(ii), and, in addition,
benefits at least equal to the most favorable benefits provided by the Company
and affiliated companies to the estates and beneficiaries and peer executives of
the Company and such affiliated companies under such plans, programs, practices
and policies relating to death benefits, if any, as in effect with respect to
other peer executives and their beneficiaries at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive's estate and/or the Executive's beneficiaries, as in effect on the
date of the Executive's death with respect to other peer executives of the
Company and its affiliated companies and their beneficiaries. Accrued
Obligations shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
(c) Disability. If the Executive's employment is terminated by reason of
the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations, except that the Executive shall be entitled to receive,
disability and other benefits at least equal to the most favorable of those
generally provided by the Company and its affiliated companies to disabled
executives and/or their families in accordance with such plans, programs,
practices and policies relating to disability, if any, as in effect generally
with respect to other peer executives and their families at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to
the Executive and/or the Executive's family, as in effect at any time thereafter
generally with respect to other peer executives of the Company and its
affiliated companies and their families. Accrued Obligations shall be paid to
the Executive in a lump sum in cash within 30 days of the Date of Termination.
Without limiting the foregoing provisions of this Section 5(c), in the event
that the Executive is unable, by reason of accident, illness or other disability
(whether or not constituting a Disability) to exercise any right or make any
election contemplated hereby (including any election to receive SERP payments in
a lump sum or to exercise the put rights provided for in Section 11) such
exercise or election may be made by the Executive's spouse, or, if the
Executive is not survived by his spouse, his estate, and the Company shall act
upon and be entitled to rely upon same.
(d) By the Company for Cause; By the Executive without Good Reason. If the
Executive's employment shall be terminated by the Company for Cause or by the
Executive without Good Reason during the Employment Period, this Agreement shall
terminate without further obligations to the Executive hereunder other than the
obligation to pay to the Executive (i) the Annual Base Salary through the Date
of Termination, and (ii) the amount of any compensation previously deferred by
the Executive. In such case, all Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination.
6. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of
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its affiliated companies and for which the Executive may qualify, nor, subject
to Section 10(f), shall anything herein limit or otherwise affect such rights as
the Executive may have under any contract or agreement with the Company or any
of its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
7. Full Settlement; Legal Fees. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company or its affiliates may
have against the Executive or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this
Agreement and except as specifically provided in Section 5(a)(ii), such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay promptly as incurred, to the full extent permitted by law,
all legal fees and expenses which the Executive may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the Company, the Executive
or others of the validity or enforceability of, or liability or entitlement
under, any provision of this Agreement or any guarantee of performance thereof
(whether such contest is between the Company and the Executive or between either
of them and any third party, and including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal rate
("Applicable Federal Rate") provided for in Section 7872(f)(2)(A) of the
Internal Revenue Code of 1986, as amended (the "Code").
8. Confidential Information; Noncompetition.
(a) Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret, proprietary or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies. During the period the Executive is employed with the
Company and for a period of 24 months after termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company or in the course of performing his obligations hereunder. The
restrictions set forth in this Section 8 will not apply to information that is
generally known to the public or in the trade, unless such knowledge results
from an unauthorized disclosure by the Executive or representatives of the
Executive in violation of this Agreement. This exception will not affect the
application of any other provisions of this Agreement to such information in
accordance with the terms of such provision. All documents and tangible things
embodying or containing confidential information are the Company's exclusive
property. The Executive will protect the confidentiality of their content and
will return all copies, facsimiles and specimens of them and any other form of
confidential information in the Executive's possession, custody or control to
the Company before leaving the employment with the Company.
(b) Noncompetition. In consideration of the benefits described in Section
5, until the Date of Termination, and for a period of 36 months thereafter, the
Executive shall not, directly or indirectly, engage, participate or invest in or
be employed by any business which is engaged in the scientific and clinical
laboratory research distribution business in the United States. The foregoing
restriction shall apply regardless of the capacity in which the Executive
engages or engaged, participates or participated, or invests or invested in or
is or was employed by a given business, whether as owner, partner, shareholder,
consultant, agent, employee, co-venturer or otherwise. The provisions of this
Section 8(b) shall not prevent the Executive from acquiring or holding publicly
traded stock or other publicly traded securities of a business, so long as the
Executive's ownership does not exceed 2 percent of the outstanding securities of
such company of the same class as those held by the Executive or from engaging
in any activity or having an ownership interest in any business that is reviewed
by the Board of Directors. The Executive understands that the restrictions set
out in
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Sections 8(b) are intended to protect the Company's interest in its established
customer relationships and goodwill, and agrees that such restrictions are
reasonable and appropriate for this purpose.
(c) Injunctive Relief. The Executive agrees that it would be difficult to
measure any damages caused to the Company that might result from any breach by
the Executive of the provisions of Section 8(b), and that in any event money
damages would be an inadequate remedy for any such breach. Accordingly, the
Executive agrees that in the case of breach, or proposed breach, of such
provisions, the Company shall be entitled, in addition to all other remedies
that it may have, to seek an injunction or other appropriate equitable relief to
restrain any such breach without showing or proving any actual damage to the
Company. However, in no event shall an asserted violation of any provision of
this Section 8 constitute a basis for deferring or withholding any amounts or
other benefits to which the Executive may be entitled under this Agreement.
9. Successors. This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns. 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 to assume expressly 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. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid by operation of law, or otherwise.
10. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
IF TO THE EXECUTIVE:
Xxxx X. Xxxxxxx
00 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
IF TO THE COMPANY:
Attention: General Counsel
Xxxxxx Scientific International Inc.
Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) Withholding. The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
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(e) Waiver. The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason, shall not be deemed to be a waiver of such provision
or right or any other provision or right of this Agreement.
(f) Entire Agreement. From and after the Effective Date this Agreement
shall supersede any other agreement (including, without limitation, the
Employment Agreement between Executive and the Company, dated as of December 31,
2001) between the parties with respect to the subject matter hereof. For the
avoidance of doubt, this Agreement shall not amend, modify or alter in any way
any existing agreement between the Company and the Executive regarding any
equity interest in the Company, regardless of form.
11. Executive's Put Right. In partial consideration of the Executive's
noncompetition covenant pursuant to Section 8(b), the Company granted to the
Executive 51,667 Executive Performance Options (the "Put Options") pursuant to
the Xxxxxx Scientific International Inc. 1998 Equity and Incentive Plan as to
which the Executive had the right (the "Put Right"), exercisable by delivery of
a written notice to the Company, to require the Company to purchase the Put
Options for an aggregate purchase price of $5,000,000 in cash (the "Put Price").
As a result of the Executive's exercise of the Put Right on January 1, 1999, the
Company shall pay to the Executive or Permitted Transferee, as applicable, the
Put Price plus interest thereon at a rate equal to the prime rate published by
The Chase Manhattan Bank on the business day nearest to the date on which the
Put Right was exercised, compounded daily, upon the first date on which the
Executive is no longer a "covered employee" whose compensation is subject to the
limitation on deductibility imposed by Section 162(m) of the Code. Interest
shall accrue from the date of exercise until the date the Put Price is paid to
the Executive or the Permitted Transferee, as applicable, and shall be paid to
the Executive or the Permitted Transferee, as applicable, concurrently with the
Put Price. For purposes of this Section 11, a "Permitted Transferee" is any
heir, executor, administrator, testamentary trustee, legatee or beneficiary of
the Executive or any party who is a legitimate transferee of the right to
receive the Put Price in accordance with the instruments governing such
transfer.
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
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Xxxx X. Xxxxxxx
XXXXXX SCIENTIFIC INTERNATIONAL INC.
By:
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