SEVERANCE AGREEMENT
This AGREEMENT, entered into as of April 26, 1990, by and between XXXXXXXX
X. XXXXXXXX (the 'Employee') and THE XXXXXX COMPANIES, INC., a Delaware
corporation (together with its subsidiaries referred to herein as the
'Company'),
W I T N E S S E T H:
WHEREAS the Company recognizes that the Employee's contribution to the
betterment of the Company has been substantial; and
WHEREAS the Company believes it to be important both to the Company's
future prosperity and to its general interests to obtain assurance concerning
the continuation of the Employee's employment and to provide the Employee with
incentives:
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties agree as follows:
1. Term of Agreement.
This Agreement shall be in effect from the date hereof until the earliest
of the following:
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(a) The date when the Employee ceases to be employed by the Company, if no
severance benefit is provided under this Agreement as a result of the employment
termination; or
(b) The date when all obligations of the parties under this Agreement have
been satisfied, if the Employee ceases to be employed by the Company and a
severance benefit is provided under this Agreement as a result of the employment
termination.
2. Employment and Compensation.
(a) The Company agrees to employ the Employee during the Employment Period
(as hereinafter defined) as Vice-President of Corporate Development of
CooperVision, Inc. (together with its predecessor, CooperVision Ophthalmic
Products, Inc., hereinafter referred to as 'CVI'), reporting to the Co-Chairmen
of the Board of Directors of the Company and to the President of CVI, and the
Employee agrees to be so employed by the Company, all subject to the terms and
conditions of this Agreement.
(b) Annual Base Salary: During the Employee's employment hereunder, the
Company shall pay the Employee, through its wholly-owned subsidiary, CVI, a
salary at the rate of not less than $140,000 (One Hundred Forty Thousand
Dollars) per annum ('Annual Base Salary'), payable in equal regular installments
on the 15th and last day of each month. The Board of Directors of the Company
may from time to time, in its sole
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and absolute discretion, increase the Employee's Annual Base Salary. Any such
increased salary shall become the Annual Base Salary on and after the effective
date of such increase.
(c) Incentive Payment Plan: The Employee shall be eligible to participate
in the CVI Incentive Payment Plan ('IPP') at the 35% award level. Such IPP bonus
shall be payable to the Employee if and only if (i) the Board of Directors of
the Company shall have established criteria for the earning of an IPP bonus by
CVI employees and (ii) such criteria shall have been achieved and IPP bonuses
shall have been paid thereunder to other eligible CVI employees.
(d) Restricted Stock Grant:
(i) The Company agrees to submit for stockholder approval, not later
than at the next annual stockholders meeting of the Company, a new incentive
stock plan. Promptly following the approval of such plan, the Employee shall be
granted the right to purchase 40,000 shares of restricted common stock of the
Company at a purchase price of $0.10 per share (the 'Restricted Shares'), to be
purchased and held in accordance with the terms of such incentive stock plan
(the 'Plan'). The restrictions on the Restricted Shares shall be removed as set
forth in Section 2(d)(ii) hereof.
(ii) The restrictions on the Restricted Shares shall be removed in the
following percentages of the total number of such shares, provided the average
closing price of the Company's common stock over a consecutive thirty day period
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achieves the indicated stock price during the Employment Period:
STOCK PRICE % UNRESTRICTED
----------- --------------
$4.43 20%
5.22 40%
6.16 60%
7.27 80%
8.58 100%
Promptly following the last day of the Employment Period, the Employee shall
sell to the Company, and the Company shall repurchase, at $0.10 per share all
the Restricted Shares from which restrictions shall not have been removed
pursuant to this Section 2(d) during the Employment Period. Notwithstanding the
foregoing, upon a resignation following a Change in Control, pursuant to Section
5 hereof, all restrictions shall be removed from the Restricted Shares and the
certificates evidencing such shares promptly shall be delivered to the Employee.
The Employee agrees to execute a restricted stock agreement with respect to the
Restricted Shares in a form reasonably acceptable to counsel to the Company.
(e) Relocation Expenses and Loan: The Employee agrees to relocate to the
State of Connecticut for the purpose of establishing a new headquarters for CVI.
The Company shall reimburse the Employee for the reasonable expense associated
with such relocation in accordance with the Company's Employee Transfer Expense
Policy dated August 21, 1989; except that, with respect to such relocation to
Connecticut, the Employee waives any right, pursuant to Section IV.C of such
policy or otherwise, to reimbursement by the Company of any loss incurred
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upon the sale of the Employee's house in California. Upon such relocation, the
Company shall pay to Employee a one-time lump sum transition allowance in the
amount of $33,600 (Thirty-three Thousand Six Hundred Dollars). Upon such
relocation, the Company agrees to offer to the Employee a relocation housing
loan in an amount up to $90,000 secured by either (i) a valid and enforceable
first lien of mortgage upon the home purchased with such funds; or (ii) a valid
and enforceable second lien of mortgage upon the home purchase with such funds,
provided that such second lien is permitted by the terms of any first lien and
that the total indebtedness secured by the home purchased shall not exceed 85%
of the lesser of the purchase price or the appraised value therefor. The loan
shall bear interest at the Prime Rate of interest charged by the Chase Manhattan
Bank, as from time to time adjusted, with interest only to be paid quarterly in
arrears and principal and unpaid interest, if any, due in full on the 120th day
following Date of Termination. The Employee shall execute a loan agreement and
such other document as shall reasonably be required by the Company, all in form
acceptable to counsel for the Company. Such documents shall provide, inter alia,
that the Company may offset any unpaid principal and interest against any
severance benefit or compensation due upon termination, if any.
(f) Automobile Allowance: From and after the date upon which the Employee
relocates pursuant to Section 2(e) and continuing through the Date of
Termination, the Company shall pay to the Employee an automobile allowance of
$300 per month
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and shall reimburse the Employee for the reasonable operating cost associated
with the business use of such automobile.
(g) Benefits: During the Employment Period, the Employee shall participate
in all employee benefit plans and receive such fringe benefits as are from time
to time made generally available to CVI's senior management including, without
limitation, life insurance, accidental death and dismemberment insurance,
surgical, medical and hospital expense benefits, long-term disability plans,
Stock Purchase Savings and Retirement Income Plans. Upon presentation of
appropriate documentation, the Company shall reimburse the Employee for all
proper expenses incurred by him in the performance of his duties, in accordance
with the policies and procedures established by the Company.
(h) Sales Bonus: The Company agrees to submit to the Board of Directors for
approval a program for the payment of a sale bonus (the 'Sale Bonus') to CVI
Headquarters Staff, to be earned only upon the closing of a sale by the Company
of CVI to a third party buyer. If approved, such Sale Bonus would total, in the
aggregate for all eligible employees of CVI and of the Company, an amount equal
to 1% (one percent) of the Sale Price, as hereinafter defined. Promptly
following the approval of such program, the Employee shall assist the President
of CVI in submitting for approval to the Co-Chairmen of the Company a list of
proposed eligible employees of CVI and the Company, together with the proposed
percentage of the aggregate pool to be allocated to each eligible employee. For
purposes hereof,
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the 'Sale Price' shall be deemed to be the total consideration paid in cash and
securities for CVI, inclusive of all long-term debt, if any, assumed by the
purchaser. Securities, if any, included in the Sale Price shall be valued at the
fair market value therefor on the date of closing.
3. Involuntary Termination Without Cause.
If the Company terminates the Employee's employment without Cause, the
Company shall pay the Employee a severance benefit in an amount equal to 200% of
the Employee's Annual Base Salary and shall deliver to the Employee all
certificates evidencing those of the Restricted Shares from which restrictions
shall have been removed prior to the Date of Termination pursuant to Section
2(d). Promptly following such termination, the Employee shall sell to the
Company, and the Company shall repurchase at $0.10 per share, all of the
Restricted Shares from which restrictions shall not have been removed prior to
the Date of Termination. For purposes of this Agreement, a termination without
cause shall include but not be limited to the Employee ceasing to be employed by
the Company as a result of the Employee's continuing in the employ of a
division, subsidiary or other business unit of the Company that has been sold,
transferred or otherwise conveyed to a third party. The Company shall give the
Employee not less than 90 days' advance notice in writing of any termination
without Cause.
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4. Resignation for Good Reason.
If the Employee terminates his employment for Good Reason then, following
the Date of Termination, the Company shall pay the Employee a severance benefit
in an amount equal to 200% of the Employee's Annual Base Salary and shall
deliver to the Employee all certificates evidencing those of the Restricted
Shares from which restrictions shall have been removed prior to the Date of
Termination pursuant to Section 2(d). Promptly following such termination, the
Employee shall sell to the Company, and the Company shall repurchase at $0.10
per share, all of the Restricted Shares from which restrictions shall not have
been removed prior to the Date of Termination.
5. Resignation After Change in Control.
If the Employee terminates his employment without Good Reason within 90
days after a Change in Control, the Company shall pay the Employee a severance
benefit in an amount equal to 150% of the Employee's Annual Base Salary; in
addition, all restrictions shall be removed from the Restricted Shares and the
certificates, evidencing such shares shall be delivered to the Employee promptly
following the Date of Termination.
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6. Resignation With Notice.
If the Employee terminates his employment other than pursuant to Section 4,
5 or 7 hereof, and provided that the Employee shall have given the Company not
less than 90 days' advance written notice of such termination, then the Company
shall pay to the Employee a severance benefit in an amount equal to 25% of the
Employee's Annual Base Salary and the Company shall have no further obligations
to the Employee under this Agreement other than for those benefits provided
under the Company's Retirement Income and Stock Purchase Savings Plan or those
benefits, if any, which the Company is required by law to provide
notwithstanding any agreement to the contrary. Promptly following such
resignation, the Employee shall sell to the Company, and the Company shall
repurchase at $0.10 per share, all the Restricted Shares from which restrictions
shall not have been removed prior to the Date of Termination.
7. Relocation.
If the Company notifies the Employee that his principal workplace will be
moved to any location more than 50 miles from his present principal workplace
except to any location maintained as the headquarters of any business unit
acquired by the Company or by CVI and the Employee elects not to relocate, then
the Employee's employment shall terminate on the relocation date specified in
the notice referred to in this
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Section 7 and the Company shall pay the Employee a severance benefit in an
amount equal to 150% of the Employee's Annual Base Salary and shall deliver to
the Employee all certificates evidencing those of the Restricted Shares from
which restrictions shall have been removed prior to the Date of Termination
pursuant to Section 2(d). Promptly following such termination, the Employee
shall sell to the Company, and the Company shall repurchase at $0.10 per share,
all of the Restricted Shares from which restrictions shall not have been removed
prior to the Date of Termination. The Company shall give the Employee not less
than 90 days' advance notice of any relocation described in this Section 7. The
Employee shall consent to or decline the relocation within 90 days of receipt of
notice. The Employee hereby consents to the relocation of his principal
workplace to the Sate of Connecticut as set forth in Section 2(e), or to another
headquarters location maintained by any business unit acquired by the Company or
by CVI, and hereby waives any right to benefits pursuant to this Section 7 on
account of such relocations. Following any relocation of the Employee pursuant
to this Section 7, the location of the CVI corporate headquarters in Connecticut
or of the afore-referenced headquarters location maintained by any business unit
acquired by the Company or by CVI shall be deemed to be Employee's principal
workplace for the purpose of this Section 7.
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8. DEATH
If the Employee's employment shall be terminated by reason of his death,
the Company shall pay to such person as the Employee shall have designated in a
notice filed with the Company or, if no such person shall have been designated,
to the Employee's estate, a severance benefit in an amount equal to 200% of the
Employee's Annual Base Salary and shall deliver to the Employee all certificates
evidencing those of the Restricted Shares from which restrictions shall have
been removed prior to the Date of Termination pursuant to Section 2(d). Promptly
following such termination, the Employee shall sell to the Company, and the
Company shall repurchase at $0.10 per share, all of the Restricted Shares from
which restrictions shall not have been removed prior to the Date of Termination.
9. TERMINATION FOR CAUSE.
If the Company terminates the Employee's employment for Cause, the Company
shall pay to the Employee his Annual Base Salary through the Date of Termination
and the Company shall have not further obligations to the Employee under this
Agreement other than for those benefits provided under the Company's Retirement
Income and Stock Purchase Savings Plan or those benefits, if any, which the
Company is required by law to provide notwithstanding any agreement to the
contrary. Promptly following such termination, the Employee shall sell to
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the Company, and the Company shall repurchase at $0.10 per share, all the
Restricted Shares from which restrictions shall not have been removed prior to
the Date of Termination.
10. PAYMENT OF SEVERANCE BENEFIT.
(a) Election. If the Employee becomes entitled to a severance benefit under
the preceding sections of this Agreement, he may elect whether such benefit is
to be paid in a lump sum under Subsection (b) below or in installments under
Subsection (c) below. Such an election shall be submitted to the Company in
writing within five business days after the Date of Termination. If the Employee
fails to submit a timely written election to the Company, such benefit shall be
paid in a lump sum under Subsection (b) below.
(b) Lump Sum. A benefit payable under this Subsection (b) shall be paid in
a single lump sum within 10 business days after the Date of Termination.
(c) Installments. A benefit payable under this Subsection (c) shall be paid
by continuing the Employee's Annual Base Salary in accordance with the Company's
regular payroll practices until such benefit is exhausted, commencing with the
period next following the last payroll period during which the Employee was
employed by the Company.
(d) Withholding. All payments made under this Agreement shall be subject to
reduction to reflect any
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withholding taxes or other amounts required by applicable law or regulation.
(e) Death. Any amount payable under this Section 10 after the Employee's
death shall be paid to the beneficiary or beneficiaries designated by him for
this purpose in writing or, if there is no surviving beneficiary, to his estate.
11. GROUP INSURANCE.
(a) General. If the Employee becomes entitled to a benefit payable under
Section 3, 4, 5, or 7 hereof the Employee's participation (including dependent
coverage) in the life, accident, disability, health and dental insurance plans
of the Company, shall be continued, or equivalent benefits provided by the
Company at no cost to the Employee until the earlier of 24 months following the
Date of Termination or the date the Employee becomes covered by equivalent
benefits by a subsequent employer;
(b) Coordination with COBRA Coverage. For purposes of determining the
required duration of any contribution coverage under the Company's health care
plans mandated by law, the period of any continued coverage under this Agreement
following the termination of the Employee's employment shall be counted as all
or part of such required duration.
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12. OTHER BENEFITS
If the Employee becomes entitled to a benefit under Section 3, 4, 5 or 7,
he shall also receive the following benefits:
(a) The Employee shall be entitled to receive a pro rata share of any
amounts payable, if any, under the CVI Headquarters Incentive Payment Plan
approved by the Board of Directors of the Company, based on the number of
months the Employee served as an employee during the fiscal year completed
or already underway, payable if and when other participants in the Plan
receive payment from the Company thereunder.
(b) The Employee shall fully vest in all benefits due under the
Company's Retirement Income Plan or, if prohibited by the terms thereof,
shall be entitled to receive benefits substantially equivalent to the
benefits accrued thereunder. Whether benefits are substantially equivalent
for purposes of the preceding sentence shall be determined without regards
to the tax consequences thereof.
(c) The Company shall continue to pay to the Employee, for a period of
90 days from the Date of Termination, the automobile allowance described in
Section 2 hereof.
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13. NO MITIGATION REQUIRED.
The Employee shall not be required to mitigate the amount of any benefit
provided under this Agreement by seeking new employment or otherwise.
14. COMPETITIVE ACTIVITY.
During the Employment Period and for a further period of one year
thereafter, the Employee shall not:
(a) Participate, without the written consent of the Board of Directors
or a person authorized thereby, in the management or control of, or act as
an executive for or employee of, any business operation or any enterprise
if such operation or enterprise engages in substantial competition with any
material line of business at the time actively conducted by the Company or
any of its subsidiaries, divisions, affiliates or new business or business
units including, without limitation, CVI (collectively, the 'Companies');
provided, however, that the foregoing shall not include the mere ownership
of not more than five percent of the equity securities of any enterprise or
the participation in an investment banking firm or otherwise engaging in
investment banking activities and in that capacity serving or advising
enterprises in competition with the Companies;
(b) Solicit, in competition with the Companies, any person who is a
customer of the business conducted by the
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Companies or of any business in which the Companies are substantially engaged at
any time during the Employment Period; and
(c) Induce or attempt to persuade any employee of the Companies to
terminate his or her employment relationship in order to enter into
competitive employment.
15. UNAUTHORIZED DISCLOSURE.
During the Employment Period and for a further period of ten years
thereafter, the Employment shall not, except as required by any court or
administrative agency, without the written consent of the Board of Directors or
a person authorized thereby, disclose to any person, other than an employee of
the Company or a person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by the Employee or his duties to
the Company, any confidential information obtained by him while in the employ of
the Company with respect to any of the Company's inventions, processes,
customers, methods of distribution, methods of manufacturing, attorney-client
communications, pending or contemplated acquisitions, other trade secrets, or
any other material which the Company is obliged to keep confidential pursuant to
any confidentiality agreement or protective order; provided, however, that
confidential information shall not include any information now known or which
becomes known
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generally to the public (other than as a result of an unauthorized disclosure by
The Employee) or any information of a type not otherwise considered confidential
by a person engaged in the same business or a business similar to that conducted
by the Companies.
16. SCOPE OF COVENANTS; REMEDIES.
The following provisions shall apply to the covenants contained in Section
14 and 15 hereof;
(a) The covenants contained in Sections 14(a) and 14(b) shall apply
within the territories in which any of the Companies are actively engaged
in the conduct of business during the Employment Period including, without
limitation, the territories in which customers are then being solicited;
(b) Without limiting the right of the Company to pursue all other
legal and equitable remedies available for violation by the Employee of the
covenants contained in Sections 14 and 15 hereof, it is expressly agreed by
the Employee and the Company that such other remedies cannot fully
compensate the Company for any such violation and that the Company shall be
entitled to injunctive relief to prevent any such violation or any
continuing violation thereof;
(c) Each party intends and agrees that if, in any action before any
court or agency legally empowered to enforce the covenants contained in
Sections 14 and 15 hereof, any term,
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restriction, covenant or promise contained therein is found to be unreasonable
and accordingly unenforceable, then such term, restriction, covenant or promise
shall be deemed modified to the extent necessary to make it enforceable by such
court or agency; and
(d) The covenants contained in Sections 14 and 15 hereof shall survive
the conclusion of the Employment Period.
17. MISCELLANEOUS PROVISIONS.
(a) Limitation on Severance Benefits. The severance benefits set forth
in Sections 3, 4, 5, 6, 7 and 8 of this Agreement shall be mutually
exclusive. Nothing contained herein shall be construed to permit the
payment of severance benefits under more than one of said Sections 3, 4, 5,
6, 7 and 8.
(b) Excess Parachute Cap. In the event that any payments or benefits
received or to be received by the Employee pursuant to this Agreement in
connection with a Change in Control as defined herein or upon the
termination of the Employee's employment would not be deductible to the
Company, in whole or in part, as a result of Section 280G of the Internal
Revenue Code, then such payments or benefits shall be reduced by the
minimum amounts necessary so that no portion thereof is not deductible. Any
determination with regard to whether or not any such payment or benefits
would be deductible as a result of Section 280G shall be made by tax
counsel
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selected by the Company's independent auditors, in accordance with the
principles of Section 280c.
(c) Delivery of Notice. All notices, requests, demands and other
communications made pursuant to this Agreement shall be in writing and shall be
deemed duly given (a) if delivered by hand, and the time delivered or (b) if
mailed, at the time mailed at any general or branch United States Post Office
enclosed in a registered or certified postpaid envelope addresses to the
respective parties as follows:
If to the company:
The Xxxxxx Companies, Inc.
0000 Xxxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Att: Corporate Secretary
with a copy to:
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att: General Counsel
If to The Employee:
c/o The Xxxxxx Companies, Inc.
0000 Xxxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
with a copy to:
------------------------------------
------------------------------------
or to such other address as either party may have previously furnished to the
other in writing in the manner set forth
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above, provided that such notice of change of address shall only be effective
upon receipt.
(d) Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Employee and the company. No waiver by either party of any
breach of, or of compliance with, any condition or provision shall be construed
as a waiver of any breach of, or compliance with, any other condition or
provision or of the same condition or provision at another time.
(e) Assignment and Successors. Neither party shall assign any right or
delegate any obligation hereunder without the other party's written consent, and
any purported assignment or delegation by a party hereto without the other
party's written consent shall be void. The Company shall require any successor
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
company's business and/or assets, by an agreement in substance and form
satisfactory to the Employee, to assume this Agreement in the same manner and to
the same extent as the Company would be required to perform it in the absence of
a succession. The Company's failure to obtain such agreement prior to the
effectiveness of a succession shall be a breach of this Agreement and shall
entitle the Employee to all of the compensation and benefits to which he would
have been entitled hereunder if the Company had involuntarily terminated his
employment without Cause on the
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date when such succession becomes effective. For all purposes under this
Agreement, the term 'Company' shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in the preceding sentence of this Subsection (d) or which becomes
bound by this Agreement by operation of law. This Agreement and all rights of
the Employeee hereunder shall inure to the benefit of, and be enforceable by,
the Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
(f) Whole Agreement. No agreements, representations or understandings
(whether oral or written and whether express or implied) which are not expressly
set forth or incorporated in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. Effective as of the date
hereof, this Agreement supersedes any prior employment or severance agreement
between the Employee and the Company.
(g) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York.
(h) Severability. The invalidity of enforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.
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18. Definitions.
(a) 'Cause' shall mean (i) gross misconduct injurious to the company, as
determined in a written opinion rendered to the Company's board of directors by
the Company's outside counsel, (ii) conduct by the Employee constituting or
competitive activity in violation of Section 14; or (iii) the willful making by
the Employee of any unauthorized disclosure in violation of Section 15.
(b) 'Change in Control' shall mean that: (i) a sufficient number of
individuals who were not nominated by management are elevated to the board of
directors of the Company to constitute 50% or more of the Company's board of
directors; (ii) the Company's stockholders adopt a plan of liquidation; (iii) a
third party, pursuant to a tender offer to the Company's stockholders, acquires
at least a majority of the shares of Common Stock of the company; or (iv) none
of Xxxx X. Xxxxxx, Xxxxx X. Xxxxxxx, or another member of the Singer family
shall continue to serve as Chairman or Co-Chairman of the Board of Directors of
the Company.
(c) 'Good Reason' shall mean (i) any assignment to the Employee of any
duties, other than those assigned to him on the date of this Agreement, which
are not mutually acceptable to the parties hereto, (ii) any removal of the
Employee from, or any failure to reelect the Employee to, any of the positions
held by him on the date of this Agreement, except in connection with the
termination of the Employee's employment for Cause, or
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(iii) a reduction in the Employee's rate of compensation or fringe benefits.
(d) 'Employment Period' shall be that period commencing on the date hereof
and continuing until the Date of Termination.
(e) 'Date of Termination' shall mean (i) if the Consultant's employment is
terminated by his death, the date of his death; (ii) in the case of a
termination by the Company pursuant to Section 9, the date specified in the
notice of termination; (iii) in the case of a termination by the Company other
than pursuant to Section 9, the date specified in the notice of termination
which date shall be at least 90 days after the date of such notice; (iv) in the
case of a termination by the Employee, the date specified in the notice of
termination, which date shall be at least 90 days after the date of such notice.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, as of the day and year
first above written.
XXXXXXXX X. XXXXXXXX
-----------------------------
Xxxxxxxx X. Xxxxxxxx
THE XXXXXX COMPANIES, INC.
BY XXXXXX X. XXXXXX
-----------------------------
Xxxxxx X. Xxxxxx
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