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EXHIBIT 10.32
EMPLOYMENT AGREEMENT
AGREEMENT dated as of April 24, 1996, by and between XXXXX
XXXXXX GROUP INC., a Delaware corporation with its principal office at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("PWG"), PAINEWEBBER
INCORPORATED, a Delaware corporation with its principal office at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("PWI'), as the employers, and XXXXXX X.
XXXXX XX., who resides at Xxxxxxxxxx Xxxxx Xxxx, Xxx Xxxxxx, Xxx Xxxxxx 00000,
as the employee (the "Executive").
WHEREAS, the Executive has been serving as President of PWI,
and
WHEREAS, PWG and PWI each desire to assure the Executive of
his rights to compensation and benefits that are granted to him because of his
service in the foregoing capacity, and Executive desires to continue to serve in
such capacity in consideration of the terms and conditions hereinafter set
forth,
NOW THEREFORE, in consideration of the premises and of the
mutual covenants set forth herein and for other good and valuable consideration,
PWG, PWI and the Executive hereby agree as follows:
1. DEFINITIONS
(a) "Cause" shall mean (i) the Executive is convicted
of a crime involving moral turpitude, or (ii) the Executive, in carrying out his
duties, is guilty of (A) willful gross neglect or (B) willful gross misconduct
resulting, in either case, in material harm to PWG or PWI unless such act, or
failure to act, was believed by the Executive in good faith to be in the best
interests of PWG or PWI.
(b) a "Change in Control" shall be deemed to have
occurred if:
(i) any "person" as such term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (the "Act"),
becomes a beneficial owner, as such term is used in Rule 13d-3 promulgated under
the Act, of securities of PWG or PWI representing 20% or more of the combined
voting power of the outstanding securities of PWG or PWI, as the case may be,
having the right to vote in the election of directors (any such owner being
herein referred to as an "Acquiring Person"),
(ii) a majority of the Board of Directors of
PWG ("PWG Board") at any time consists of individuals elected to membership at a
PWG Board meeting or a PWG shareholders' meeting other than individuals
nominated or approved by a majority of the Disinterested Directors;
(iii) all or substantially all the business
of PWI is disposed of pursuant to a merger, consolidation or other transaction
(other than a merger, consolidation or other transaction with a company of which
50% or more of the combined voting power of the outstanding securities having a
right to vote at the election of directors is owned, directly or indirectly, by
PWG both before and immediately after the merger, consolidation or other
transaction) in which PWI is not the surviving corporation or PWG is materially
or completely liquidated; or
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(iv) PWG or PWI combines with another
company and is the surviving corporation (other than a merger, consolidation or
other transaction with a company of which 50% or more of the combined voting
power of the outstanding securities having a right to vote at the election of
directors is owned, directly or indirectly, by PWG both before and immediately
after the merger, consolidation or other transaction) but, immediately after the
combination, the shareholders of PWG hold, directly or indirectly, less than 50%
of the total outstanding securities of the combined company having the right to
vote in the election of directors.
(c) "Disinterested Director" shall mean any member of
the PWG Board (i) who is not an officer or employee of PWG, PWI or any of their
subsidiaries, (ii) who is not an Acquiring Person or an affiliate or associate
of an Acquiring Person or a nominee or representative of an Acquiring Person or
of any such affiliate or associate and (iii) who was a member of the PWG Board
prior to the date of this Agreement or was recommended for election or elected
by a majority of the Disinterested Directors then on the PWG Board.
(d) "Constructive Termination" shall mean that,
without the Executive's prior written consent, one or more of the following
events occurs and, within six months thereafter, the Executive, on his own
initiative, terminates his employment:
(i) The Executive is not reelected to or is
otherwise removed from the position of President of PWI as described in Section
2(a) for any reason other than his termination of employment under Section
10(a), 10(b) or 10(d).
(ii) The Executive is assigned any duties or
responsibilities that are inconsistent, in any significant respect, with the
scope of duties and responsibilities associated with his position as described
in Section 2(a).
(iii) The Executive suffers a reduction in
the authorities, duties and responsibilities associated with his position as
described in Section 2(a) on the basis of which he makes a determination in good
faith that he can no longer carry out such position in the manner contemplated
at the time this Agreement was entered into.
(iv) The Executive's base salary or annual
bonus decreases below the minimum level provided in Section 3 or 4, as the case
may be, or his benefits under any employee benefit plan or program of PWG or
PWI, or his incentive opportunity under any incentive program of PWG or PWI is
materially reduced below the level, or opportunity, as the case may be, in
effect on the Operative Date, unless PWG or PWI provides the Executive with a
comparable plan or program having the economic equivalent thereof.
(v) The principal office of PWG or PWI or
the Executive's own office location as assigned to him by PWG or PWI is
relocated outside an area within ten miles of the headquarters of PWI in
Manhattan on the date hereof.
(e) "Disability" shall mean the Executive's inability
to render for a period of six consecutive months, full and effective services
hereunder by reason of permanent disability, whether resulting from illness,
accident or otherwise; provided, however, that in no event will the Executive be
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considered disabled for the purposes of this Agreement unless he is deemed
disabled pursuant to the PWG Long Term Disability Plan.
(f) "Operative Date" shall mean the date, if any,
following a Change in Control that has been designated in a resolution adopted
by a majority of the Disinterested Directors, in their sole discretion, as the
Operative Date.
(g) "Pro Rata Bonus" shall mean an amount equal to
the annual bonus otherwise payable with respect to the fiscal year in question
multiplied by a fraction, the numerator of which is the number of days in such
fiscal year during which the Executive is employed, and the denominator of which
is 365.
(h) "Term of this Agreement" shall mean the period
between the Operative Date and the third anniversary thereof, but only if the
Executive is employed by PWG or PWI on the Operative Date.
2. POSITIONS AND DUTIES
(a) During the Term of this Agreement, the Executive
shall be employed as President of PWI. The Executive shall be during the Term of
this Agreement responsible for the duties of the President as set forth in the
By-laws of PWI and such other duties as may be assigned to him by the Board of
Directors and/or the Chief Executive Officer of PaineWebber Group. He shall
recommend during the Term of this Agreement objectives, policies and plans for
the areas of his responsibility. During the Term of this Agreement and subject
to the provisions of Section 2(b), the Executive shall devote his full business
time and attention to the business and affairs of PWG and PWI and shall use his
best efforts, skills and abilities to promote their interests.
(b) Anything herein to the contrary notwithstanding,
nothing shall preclude the Executive from serving on the boards of directors of
other companies, engaging in charitable and community affairs and managing his
personal investments, provided that such activities do not materially interfere
with the performance of his duties or responsibilities hereunder.
3. SALARY
During the Term of this Agreement, the Executive
shall be paid by PWI a base salary payable no less frequently than in equal
semi-monthly installments at an annualized rate of no less than the annual
salary being paid to the Executive on the Operative Date. Such base salary shall
be reviewed annually for increase in the discretion of the Compensation
Committee of the PWG Board (the "Committee"), taking into account such factors
as corporate and individual performance, salary increases for other senior
officers and increases, if any, in the Consumer Price Index for New York (the
"Consumer Price Index").
4. ANNUAL BONUS
For each fiscal year during the Term of this
Agreement, PWI shall pay the Executive an annual bonus of not less than the
average of the three annual bonuses awarded to him for the three fiscal years of
PWI next preceding the Operative Date or such larger amount as the Committee in
its discretion shall determine, taking into account such factors as corporate
and individual performance, bonuses for other senior officers and increases, if
any, in the Consumer Price Index. For
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the period of employment during the last fiscal year in which falls the Term of
this Agreement, PWI shall pay the Executive a Pro Rata Bonus. All bonuses shall
be paid to the Executive at the same time bonuses are paid to other senior
officers of PWI, unless the Executive has elected to defer receipt of all or
part of the bonus to which he is entitled in respect of such fiscal year in
accordance with the terms of any deferred compensation program as then in affect
and available to the Executive.
5. RESTRICTED STOCK
During the Term of this Agreement, the Executive
shall be entitled to participate in the restricted stock award program under the
Xxxxx Xxxxxx Group Inc. 1994 Executive Stock Award Plan (the "Stock Award
Plan"), or any successor program or programs. Size and frequency of awards shall
be determined in accordance with administrative policies consistent with those
followed in the past.
6. STOCK OPTION AND STOCK APPRECIATION RIGHTS AWARDS
During the Term of this Agreement, the Executive
shall be entitled to participate in the stock option and other stock based award
programs under the Stock Award Plan, or any successor program or programs. Size
and frequency of awards shall be determined in accordance with administrative
policies consistent with those followed in the past.
7. PW PARTNERS L.P.; PW PARTNERS DEDICATED L.P.
During the Term of this Agreement, the Executive
shall be eligible to participate in leveraged investment partnerships such as PW
Partners 1995 L.P. and PW stock based partnerships such as PW Partners 1993
Dedicated, L.P.
8. EMPLOYEE BENEFIT PROGRAMS
During the Term of this Agreement, the Executive
shall be entitled to participate in all employee benefit programs of PWG or PWI
now or hereafter made available to PWG or PWI executives or salaried employees
generally, as such programs may be in effect from time to time, including,
without limitation, pension and other retirement plans, profit sharing plans,
group life insurance, accidental death and dismemberment insurance,
hospitalization, surgical, major medical coverage, sick leave (including salary
continuation arrangements), long-term disability, vacations, holidays and other
employee benefit programs sponsored by PWG or PWI.
9. BUSINESS EXPENSE REIMBURSEMENT AND PERGUISITES
(a) During the Term of this Agreement, the Executive
shall be entitled to receive proper reimbursement by PWG or PWI for all
reasonable, out-of-pocket expenses incurred by him (in accordance with the
policies and procedures established by PWG or PWI for their senior executives)
in performing services under this Agreement, provided that the Executive submits
reasonable documentation with respect to such expenses.
(b) During the Term of this Agreement, the Executive
shall also be entitled to any of the PWG or PWI executive perquisites in
accordance with the terms and provisions of such arrangements as are in effect
and applicable on the Operative Date.
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10. TERMINATION OF EMPLOYMENT
(a) Termination Due to Death or Disability. In the
event the Executive's employment terminates during the Term of this Agreement as
a result of death or termination by PWG or PWI due to Disability, the Executive
or his legal representative, as the case may be, shall be entitled to:
(i) base salary as provided in Section 3, at
the rate in effect at the time of his termination through the date of
termination of employment;
(ii) any bonus awarded but not yet paid
under Section 4;
(iii) a Pro Rata Bonus for the fiscal year
in which death or disability occurs;
(iv) any deferred bonus as provided in
Section 4, including interest or other credits on the deferred amounts;
(v) reimbursement for expenses incurred
pursuant to Section 9(a) prior to termination; and
(vi) such rights to other compensation and
benefits as may be provided in applicable plans and programs of PWG or PWI,
including without limitation restricted stock as provided in Section 5, stock
options and other stock based awards as provided in Section 6 and interests in
PW Partners L.P. and PW Partners Dedicated L.P. as provided in Section 7, as
well as applicable employee benefit plans and programs as provided in Section 8.
(b) Termination by PWG or PWI for Cause. In the event
PWG or PWI terminates the Executive's employment during the Term of this
Agreement for Cause, he shall be entitled to:
(i) base salary as provided in Section 3 at
the rate in effect at the time of his termination through the date of
termination of employment;
(ii) any bonus awarded but not yet paid
under Section 4;
(iii) any deferred bonus as provided in
Section 4, including interest or other credits on the deferred amounts;
(iv) reimbursement for expenses incurred
pursuant to Section 9(a) prior to termination; and
(v) such rights to other compensation and
benefits as may be provided in applicable plans and programs of PWG or PWI,
including without limitation restricted stock as provided in Section 5, stock
options and other stock based awards as provided in Section 6, and interests in
PW Partners L.P. and PW Partners Dedicated L.P. as provided in Section 7, as
well as applicable employee benefit plans and programs as provided in Section 8.
In any case described in this Section 10(b), the Executive
shall be given written notice, authorized by a vote of at least a majority of
the members of the PWG Board (excluding the Executive),
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that PWG or PWI intends to terminate his employment for Cause under this Section
10(b). Such written notice shall specify the particular acts, or failures to
act, on the basis of which the decision to so terminate employment has been
made. The Executive shall be given the opportunity within 20 days of the receipt
of such notice to meet with the PWG Board to defend such acts, or failures to
act, and the Executive shall be given seven days after such meeting to correct
such acts or failures to act. Upon failure of the Executive, within seven days,
to correct such acts or failures to act, the Executive's employment by PWG and
PWI shall automatically be terminated for Cause under this Section 10(b).
(c) Termination Without Cause or Constructive
Termination.
(i) In the event that during the Term of
this Agreement (A) either PWG or PWI terminates the Executive's employment
without Cause, other than due to Disability, or (B) there is a Constructive
Termination, the Executive shall thereupon be entitled to (x) a lump sum payment
equal to the present value of:
(aa) base salary until the end of the Term of this
Agreement at the rate in effect immediately prior to the termination of
employment;
(bb) a bonus for the year of termination and bonuses
for each year until the end of the Term of this Agreement, at an annualized rate
equal to the average of the bonuses awarded to him with respect to the three
years preceding the year in which termination occurs; and
(cc) any bonus awarded but not yet paid (including
deferred bonus); and (y) such rights to compensation, benefits and
reimbursements as may be provided in applicable plans, programs and policies of
PWG or PWI, including without limitation restricted stock as provided in Section
5, stock options and other stock based awards as provided in Section 6 and
interests in PW Partners L.P. and PW Partners Dedicated L.P. as provided in
Section 7, as well as applicable employee benefit plans and programs as provided
in Section 8. To the extent that, because of his termination under this Section
10(c), the Executive is ineligible for continued employee benefit coverage under
the employee benefit programs as provided in Section 8, PWI shall provide him
with the economic equivalent thereof
(ii) Notwithstanding anything herein to the
contrary, if
(A) any amounts due under Section 10(c)(i) constitute
"Parachute Payments" within the meaning of Section 28OG(b)(2) of the Internal
Revenue Code (the "Code"), or successor provision, and
(B) the amount of the Parachute Payments, reduced by
all Federal, state and local taxes applicable with respect thereto, including
the excise tax imposed pursuant to Section 4999 of the Code, is less than the
amount he would receive, after taxes, if he were paid only 2.99 times his "Base
Amount" within the meaning of Section 28OG(b)(3). then, in lieu of the Parachute
Payments the Executive shall be paid an amount in cash equal to 2.99 times the
Base Amount. The determinations made with respect to this Section 10(c)(ii)
shall be made by an independent auditor (the "Auditor") jointly selected by PWG
and the Executive, or his legal representatives. The Auditor shall be a
nationally recognized United States public accounting firm which has not, during
the two years preceding the date of its selection, acted in any way on behalf of
PWG or its affiliates.
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(iii) Any payments to which the Executive
shall be entitled under this Section 10(c) shall be made as promptly as possible
following the termination of the Executive's employment hereunder.
(d) Voluntary Termination. A "Voluntary Termination"
under this Section 10(d) shall mean a termination of employment, during the Term
of this Agreement, by the Executive on his own initiative other than (i) a
termination due to disability under Section 10(a) or (ii) a Constructive
termination under Section 10(c). Such a termination shall not be deemed a breach
of the Agreement and shall entitle the Executive to all of the rights and
benefits to which he would be entitled in the event of a termination for Cause
as described in Section 10(b).
(e) No-Mitigation: No Offset. In the event of any
termination under this Section 10, the Executive shall be under no obligation to
seek other employment and there shall be no offset against amounts due the
Executive under this Section 10 on account of any remuneration attributable to
any subsequent employment that the Executive may obtain. Any amounts due under
this Section 10 are in the nature of severance payments, or liquidated damages,
or both, and are not in the nature of a penalty.
11. INDEMNIFICATION
PWG and PWI represent that, while the Executive is
employed under this Agreement, he shall be serving as an officer of PWI at the
request of PWG for purposes of the provisions of Article VII of the By-laws of
PWG and as an officer of PWI for purposes of the provisions of Article IX of the
By-laws of PWI as in effect on the date hereof. If either By-law is amended so
as to remove or diminish the protection therein accorded to covered officers,
PWG and/or PWI will notify the Executive within five days of such removal or
diminution. PWG and PWI further agree to maintain the same liability insurance
coverage for the Executive with respect to all periods during which the
Executive serves or served as an officer of PWG or PWl as is maintained with
respect to such periods for other senior executives of PWG and PWI.
12. DISPUTES
Any controversy or claim arising out of or relating
to this Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the rules of the American Arbitration Association then in effect
in the State of New York, and judgment upon such award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. The
arbitration shall be held in Manhattan. The cost of the arbitration including,
but not limited to, any reasonable legal fees or other expenses incident
thereto, shall be determined by the arbitrator(s) and shall be borne by the
parties to the arbitration. To the extent the Executive's position is upheld,
any reasonable expenses (including costs of witnesses, evidence, and attorneys)
incurred by the Executive in connection with the arbitration shall be reimbursed
to the Executive by PWG or PWI.
13. ASSIGNABILITY
No rights or obligations under this Agreement may be
assigned or transferred by the Executive except (a) the Executive's rights to
compensation and benefits hereunder shall, in the event of death, pass to his
estate, or to his designated beneficiary, and may be transferred by will or
operation of law, and (b) the Executive's rights under PWI and PWG plans,
programs and policies as described in Sections 5, 6, 7 and 8 may be assigned or
transferred in accordance with such plans, policies or practices.
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No rights or obligations of PWI or PWG under this Agreement may be assigned or
transferred except that such rights or obligations may be assigned or
transferred by operation of law in situations described in Section 368 of the
Code, as amended, or successor provision, in liquidation, in dissolution or
otherwise where PWI or PWG is not the continuing entity, provided the assignee
or transferee is the successor to all or substantially all the assets of PWI or
PWG and such assignee or transferee assumes the rights, duties and liabilities
of PWI or PWG, as contained in this Agreement, either contractually or as a
matter of law.
14. GOVERNING LAW
This agreement shall be governed by the laws of the
State of New York without reference to the principles of conflict of laws.
15. ENTIRE AGREEMENT
Except as otherwise specifically provided herein,
this Agreement contains all the legally binding understandings and
representations between PWG, PWI and the Executive pertaining to the subject
matter hereof and supersedes all undertakings and agreements, if any, whether
oral or in writing, previously entered into by PWG, PWI and the Executive with
respect to such subject matter.
16. AMENDMENT OR MODIFICATION; WAIVER
No provision of this Agreement may be amended or
waived unless such amendment or waiver is agreed to in writing, signed by the
Executive and by a duly authorized officer of PWI or PWG. Except as otherwise
specifically provided in this Agreement, no waiver by PWG, PWI or the Executive
of any breach by the other of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of a similar or
dissimilar provision or condition at the same or any prior or subsequent time.
17. NOTICES
Any notice required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have been given when
delivered personally or sent by certified or registered mail, postage prepaid,
return receipt requested, duly addressed to the party concerned at the address
indicated below or to such changed address as such party may subsequently give
notice of
If to PWG or PWI:
Xxxxx Xxxxxx Group Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, X.X. 00000
Attn: Corporate Secretary
If to the Executive:
Xxxxxx X. Xxxxx, Xx.
Xxxxxxxxxx Xxxxx Xxxx
Xxx Xxxxxx, X.X. 00000
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18. SEVERABILITY. In the event that any provision or
portion of this Agreement shall be determined to be invalid or unenforceable for
any reason, the remaining provisions or portions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
19. SURVIVORSHIP. To the extent contemplated by this
Agreement, the respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
20. REPRESENTATIONS
(a) By the Executive. The Executive represents and
warrants that the performance of his duties under this Agreement will not
violate any agreement between him and any other person, firm or organization.
(b) By PWG and PWI. PWG and PWI represent and warrant
that they are fully authorized and empowered to enter into this Agreement.
21. IMPACT OF AGREEMENT ON OTHER BENEFITS.
Nothing in this Agreement shall curtail the
Executive's entitlement to full participation in the executive compensation,
employee benefit and other programs of PWG and PWI in which senior executives of
PWG and PWI are eligible to participate.
22. REFERENCES.
In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
will be deemed, where appropriate, to refer to his legal representative, or,
where appropriate, to his beneficiary or beneficiaries.
23. HEADINGS.
Headings to the sections in this Agreement are
intended solely for convenience and no provision of this Agreement shall be
construed by reference to any heading.
24. COUNTERPARTS.
This agreement may be executed in one or more
counterparts.
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IN WITNESS WHEREOF, the Executive, PWG and PWI have caused
this Agreement to be executed as of the day and year first above written.
XXXXX XXXXXX GROUP INC.
by: /s/
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PAINEWEBBER INCORPORATED
by: /s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx, Xx.
