EMPLOYMENT AGREEMENT
Exhibit
10.16
AGREEMENT
entered into as of March 9, 2008, by and between XXXXXXXX CORPORATION, an Iowa
corporation (the "Company"), and XXXX XXXXXXX ("Xxxxxxx"), to become effective
March 6, 2008 (“Effective Date”).
WITNESSETH:
WHEREAS,
Xxxxxxx has been employed by the Company as President, Xxxxxxxx Publishing
Group; and
WHEREAS,
the Company wishes to continue to employ Xxxxxxx pursuant to the terms and
conditions hereof, and in order to induce Xxxxxxx to enter into this agreement
(the "Agreement") and to secure the benefits to accrue from his performance
hereunder is willing to undertake the obligations assigned to it herein;
and
WHEREAS,
Xxxxxxx is willing to continue his employment with the Company under the terms
hereof and to enter into the Agreement;
NOW
THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. Position; Duties;
Responsibilities.
1.1 Xxxxxxxx
shall employ Xxxxxxx in New York, New York, as President, Xxxxxxxx Publishing
Group, reporting to Xxxxx Xxxx (or his successor, if
applicable). While employed hereunder, Xxxxxxx shall have such
responsibility and authority as has historically attached to being President of
Xxxxxxxx Publishing Group.
1.2 During
the course of his employment, Xxxxxxx agrees to devote his full time and
attention and give his best efforts and skills to furthering the business and
interests of the Company, which, subject to the mutual agreement of Xxxxxxx and
Xxxxx Xxxx (or his successor, if applicable), which shall not be unreasonably
withheld, may include Xxxxxxx volunteering his time and efforts on behalf of
charitable, civic, professional organizations and boards of other
corporations.
2. Term.
The term
of employment under this Agreement shall commence as of March 6, 2008, and shall
continue through June 30, 2011, unless sooner terminated in accordance with this
Agreement, and thereafter as herein provided. Xxxxxxx'x term of employment shall
automatically renew for subsequent one (1) year terms, the first of which would
begin on July 1, 2011, subject to the terms of this Agreement unless either
party gives written notice six (6) months or more prior to the expiration of the
then existing term of its decision not to renew (the "Term").
In the
event this Agreement expires at the end of the Term, as extended if applicable,
after the Company has delivered a Non-Renewal Notice to Xxxxxxx, such
termination of Xxxxxxx’x employment with the Company will be treated for all
purposes hereunder as a termination of employment by the Company Without Cause
pursuant to Section 9.4.
3. Base
Salary.
3.1 The
Company shall pay Xxxxxxx a base salary at the annual rate of Seven Hundred
Twenty-Five Thousand Dollars ($725,000) ("Base Salary"), beginning on the
Effective Date and continuing through June 30, 2009, payable in accordance with
the standard payroll practices of the Company.
3.2 It
is understood that the Base Salary is to be Xxxxxxx'x minimum annual
compensation during the Term. The Base Salary may increase beginning July 1,
2009 at the discretion of the Compensation Committee of the Company's Board of
Directors ("Compensation Committee"). Base Salary shall include all
such increased amounts, and, if increased, Base Salary shall not thereafter be
decreased.
4. Long-Term Incentive
Plans.
During
the Term of this Agreement, Xxxxxxx shall be eligible to participate in all
long-term incentive plans, including, without limitation, stock incentive plans
adopted by the Company and in effect (collectively, "Long-Term Incentive
Plans"), at levels of awards to be granted by the Compensation Committee
commensurate with the level of Xxxxxxx'x responsibilities and performance
thereof. At its regular August 2008 meeting, the Compensation
Committee, in the exercise of its discretion, shall approve an award to Xxxxxxx
of: (a) 50,000 non-qualified stock options with a three (3) year cliff vesting
schedule and a strike price equal to the fair market value of Xxxxxxxx common
stock on the date of such award, and (b) 7,500 Restricted Stock Units of
Xxxxxxxx common stock with a three (3) year cliff vesting schedule.
5. Bonus.
5.1 During
the Term of this Agreement, Xxxxxxx shall be eligible to participate in the
Xxxxxxxx Management Incentive Plan (or any successor or replacement annual
incentive plan of the Company) ("MIP"), for such periods as it continues in
effect, subject to the terms of the MIP, and to the discretion vested in the
Compensation Committee under the MIP; provided, however, that the percentage of
Base Salary payable as a target bonus under the MIP shall not be less than
eighty percent (80%) (actual Company financial results may result in an actual
bonus paid to Xxxxxxx equal to less than or more than eighty percent (80%) of
Base Salary).
5.2 The
MIP bonus pursuant to this Section 5.1 shall be paid to Xxxxxxx in conformance
with the Company's normal MIP bonus pay policies following the end of the
respective fiscal year. For the purpose of Section 5.1, MIP bonuses paid with
respect to the fiscal year shall include payments made outside of the fiscal
year but for such fiscal year and shall exclude payments made in the fiscal year
that are for another fiscal year.
5.3 For
each year during the term of this Agreement, Xxxxxxx will receive an annual Stay
Bonus ("Stay Bonus") of Seventy-Five Thousand Dollars ($75,000) less applicable
withholdings and deductions, to be payable in twelve (12) equal installments of
Six Thousand Two Hundred Fifty Dollars ($6,250) on the first regular payday of
each month, thereafter conditioned on Xxxxxxx'x continuing employment with
Xxxxxxxx on each such payday.
6. Short-Term
Disability.
During
any period of short-term disability, the Company will continue to pay to Xxxxxxx
the Base Salary throughout the period of short-term disability, but in no event
beyond the end of Term. In addition, Xxxxxxx will continue to receive
all rights and benefits under the benefit plans and programs of the Company in
which Xxxxxxx is a participant as determined in accordance with the terms of
such plans and programs, and Xxxxxxx shall be eligible to receive the benefit of
his target MIP and Stay Bonuses for the initial year in which the short-term
disability occurs without reduction for the period of short-term
disability. In the event of Xxxxxxx'x death during a period of
short-term disability, the provisions of Section 9.1 shall apply. For the
purposes of this Agreement, short-term disability shall be defined as the
incapacitation of Xxxxxxx by reason of sickness, accident or other physical or
mental disability which continues for a period not to exceed the fifth month
anniversary of the date of the cause or onset of such
incapacitation. All benefits provided under this Section 6 shall be
in replacement of and not in addition to benefits payable under the Company’s
short-term and long-term disability plan(s), except to the extent such
disability plan(s) provide greater benefits than the disability benefits
provided under this Agreement, in which case the applicable disability plan(s)
would supersede the applicable provisions of this Agreement. In the
event Xxxxxxx is determined to be permanently disabled (as determined under
Section 9.2), the provisions of Section 9.2 shall apply.
7. Employee Benefit
Plans.
7.1 During
the Term of this Agreement and subject to all eligibility requirements, and to
the extent permitted by law, Xxxxxxx will have the opportunity to participate in
all employee benefit plans and programs generally available to the Company's
employees in accordance with the provisions thereof as in effect from time to
time, including, without limitation, medical coverage, group life insurance,
holidays and vacations, Xxxxxxxx Savings and Investment Plan (401k) and the
Xxxxxxxx Employees' Retirement Income Plan, but not including the Company's
short-term and long-term disability plans, except to the extent that such
disability plans provide greater benefits than the disability benefits provided
under this Agreement, in which case the applicable disability plan would
supersede the applicable provisions of this Agreement.
7.2 In
addition to benefits described in Section 7.1 during the Term of this Agreement,
Xxxxxxx shall also receive or participate in, to the extent permitted by law,
the various perquisites and plans generally available to officers of the Company
in accordance with the provisions thereof as in effect from time to time
including, without limitation, the following perquisites to the extent the
Company continues to offer them: an automobile or automobile allowance, tax and
estate planning, and executive life insurance (if insurable). Xxxxxxx shall also
be reimbursed for the regular annual dues for the Yale Club and the New York
Athletic Club and for the initiation fees and regular annual dues at a mutually
agreed upon country club incurred by Xxxxxxx in furtherance of the Company's
business. All such reimbursements or in-kind benefits shall be
payable by the Company on or before the last day of Xxxxxxx’x taxable year
following the taxable year in which the expense was incurred. The
expenses paid or in-kind benefits provided by the Company during any taxable
year of Xxxxxxx will not affect the expenses paid or in-kind benefits provided
by the Company in another taxable year. This right to reimbursement
or in-kind benefits is not subject to liquidation or exchange for another
benefit. In addition, Xxxxxxx shall participate in the Xxxxxxxx
Replacement Benefit Plan and the Xxxxxxxx Supplemental Benefit
Plan.
8. Expense
Reimbursements.
During
Xxxxxxx'x employment with the Company, Xxxxxxx will be entitled to receive
reimbursement by the Company for all reasonable, out-of-pocket expenses incurred
by him (in accordance with policies and procedures established by the Company),
in connection with his performing services hereunder, provided Xxxxxxx properly
accounts therefor. All such reimbursements shall be payable by the
Company on or before the last day of Xxxxxxx’x taxable year following the
taxable year in which the expense was incurred. The expenses paid by the Company
during any taxable year of Xxxxxxx will not affect the expenses paid by the
Company in another taxable year. This right to reimbursement is not
subject to liquidation or exchange for another benefit.
9. Consequences of Termination
of Employment.
9.1 Death. In the event
of the death of Xxxxxxx during the Term of this Agreement or during the period
when payments are being made pursuant to Sections 6 or 9.2, this Agreement shall
terminate and all obligations to Xxxxxxx shall cease as of the date of death
except that, (a) the Company will pay to the legal representative of his estate
in substantially equal installments the Base Salary and Stay Bonus under Section
5.3 until the end of the month of the first anniversary of Xxxxxxx'x death (but
not beyond June 30, 2011) with each installment treated as a separate “payment”
for purposes of Section 409A of the Code, such that any payment that would
otherwise be payable within 2 ½ months after Xxxxxxx’x taxable year in
which his employment with the Company is terminated or, if later, within 2 ½
months after the end of the Company’s taxable year in which Xxxxxxx’x employment
with the Company is terminated (the “Short Term Deferral Period”) is exempt from
Section 409A of the Code, and (b) all rights and benefits of Xxxxxxx under the
benefit plans and programs of the Company in which Xxxxxxx is a participant,
will be provided as determined in accordance with the terms and provisions of
such plans and programs. Any MIP bonus (or amounts in lieu thereof) pursuant to
Section 5, payable for the fiscal year in which Xxxxxxx'x death occurs, shall be
determined by the Compensation Committee at its meeting following the end of
such fiscal year pro rata to the date of death and promptly paid to Xxxxxxx'x
estate. All awards of restricted stock, stock options and any other benefits
under the Long-Term Incentive Plans shall be handled in accordance with the
terms of the relevant plan and agreements entered into between Xxxxxxx and the
Company with respect to such awards.
9.2 Disability. If
Xxxxxxx shall become permanently incapacitated by reasons of sickness, accident
or other physical or mental disability, as such incapacitation is certified by a
physician chosen by the Company and reasonably acceptable to Xxxxxxx (if he is
then able to exercise sound judgment), and shall therefore be unable to perform
any substantial gainful activity, then the employment of Xxxxxxx hereunder and
this Agreement may be terminated by Xxxxxxx or the Company upon thirty (30)
days' written notice to the other party following such certification. Should
Xxxxxxx not acquiesce (or should he be unable to acquiesce) in the selection of
the certifying doctor, a doctor chosen by Xxxxxxx (or if he is not then able to
exercise sound judgment, by his spouse or personal representative) and
reasonably acceptable to the Company shall be required to concur in the medical
determination of incapacitation, failing which the two doctors shall designate a
third doctor whose decision shall be determinative as of the end of the calendar
month in which such concurrence or third-doctor decision, as the case may be, is
made. After the final certification is made and the 30-day written notice is
provided, the Company shall pay to Xxxxxxx, at such times as Base Salary
provided for in Section 3 of this Agreement would normally be paid, 100% of Base
Salary for the first twelve months following such termination, 75% of Base
Salary for the next twelve-month period and 50% of Base Salary for the remaining
period of what would have constituted the current Term of employment but for
termination by reason of disability (but in no event beyond June 30, 2011) with
each installment treated as a separate “payment” for purposes of Section 409A of
the Code, such that any payment that would otherwise be payable during the Short
Term Deferral Period is exempt from Section 409A of the Code. Following the
termination pursuant to this Section 9.2, the Company shall pay or provide to
Xxxxxxx such other rights and benefits of participation under the employee
benefit plans and programs of the Company to the extent that such continued
participation is not otherwise prohibited by applicable law or by the express
terms and provisions of such plans and programs. Furthermore, nothing contained
in this Section 9.2 shall preclude Xxxxxxx from receiving the benefit of his
target MIP bonus and Stay Bonus for the initial year in which a short-term
disability occurs pursuant to the provisions of Section 6. All benefits provided
under this Section 9.2 shall be in replacement of and not in addition to
benefits payable under the Company's short-term and long-term disability plans,
except to the extent such disability plans provide greater benefits than the
disability benefits provided under this Agreement, in which case the applicable
disability plan(s) would supersede the applicable provisions of this Agreement.
All awards of restricted stock, stock options and any other benefits under the
Long-Term Incentive Plans shall be handled in accordance with the terms of the
relevant plan and agreements entered into between Xxxxxxx and the Company with
respect to such awards.
9.3 Due
Cause. The Company may terminate Xxxxxxx'x employment, remove
him as an officer of the Company and terminate this Agreement at any time for
Due Cause. In the event of such termination for Due Cause, Xxxxxxx shall
continue to receive Base Salary and Stay Bonus payments provided for in this
Agreement only through the date of such termination for Due
Cause. Xxxxxxx shall be entitled to no further benefits under this
Agreement, except that any rights and benefits Xxxxxxx may have under the
employee benefit plans and programs of the Company, in which Xxxxxxx is a
participant, shall be determined in accordance with the terms and provisions of
such plans and programs. Xxxxxxx understands and agrees that in the event of the
termination of employment, removal as an officer and termination of this
Agreement pursuant to this Section 9.3: (a) All awards of restricted stock,
stock options and any other benefits under the Long-Term Incentive Plans shall
be handled in accordance with the terms of the relevant plan and agreements
entered into between Xxxxxxx and the Company with respect to such awards and (b)
the Company shall have no further obligation to pay any bonus to Xxxxxxx under
the terms of the MIP or this Agreement, but that the obligations of Xxxxxxx
under Section 10 shall remain in full force and effect. The term “Due Cause”
shall mean (i) the willful and continued failure of Xxxxxxx to attempt to
perform substantially his duties with the Company (other than any such failure
resulting from Disability), after a demand for substantial performance is
delivered to Xxxxxxx, which specifically identifies the manner in which Xxxxxxx
has not attempted to substantially perform his duties and for those matters
which are subject to cure, a ten (10) day notice to cure is provided, or (ii)
the engaging by Xxxxxxx in willful misconduct which is materially injurious to
the Company, monetarily or otherwise. For purposes of this
definition, no act, or failure to act, on the part of Xxxxxxx shall be
considered “willful” unless it is done, or omitted to be done, by Xxxxxxx in bad
faith and without reasonable belief that Xxxxxxx’x action or omission was in 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 based upon
the advice of counsel for the Company shall be conclusively presumed to be done,
or omitted to be done, by Xxxxxxx in good faith and in the best interests of the
Company.
9.4 Without Cause. The
other provisions of this Agreement notwithstanding, the Company may terminate
Xxxxxxx'x employment, remove him as an officer and terminate this Agreement at
any time for whatever reason it deems appropriate, with or without cause and
with or without prior notice. In the event of such a termination of Xxxxxxx'x
employment and this Agreement, Xxxxxxx shall have no further obligations of any
kind under or arising out of the Agreement (except for the obligations of
Xxxxxxx under Section 10) and the Company shall be obligated only to promptly
pay Xxxxxxx within the Short Term Deferral Period the following in a lump sum
payment: (a) 180 percent of Base Salary, and the Stay Bonus amounts provided in
Section 5 of this Agreement through the end of the then current Term of this
Agreement (the "Remaining Term") as provided for under Section 2 of this
Agreement, but no less than a total of twenty-one months of 180 percent of Base
Salary, and Stay Bonus; and (b) any other amounts due and owing not then paid;
provided, however, that in the event that as a result of such termination of
employment Xxxxxxx would otherwise be entitled to a severance payment (a "Change
of Control Severance Payment") under Section 4 of the Amended and Restated
Severance Agreement dated as of the 30th day of December, 2008, between Xxxxxxx
and the Company (the "Severance Agreement"), Xxxxxxx shall be entitled to the
amounts described in clause (b) above and the greater of: (i) the cash severance
benefits described in clause (a) of this sentence and (ii) the cash severance
benefits described in Section 4(a) of the Severance Agreement, but in no event
to both payments.
After the
date of termination under this Section 9.4 or Section 9.6, Xxxxxxx shall not be
treated as an employee for purposes of the Company's employee benefit plans or
programs even though he may continue to receive payments as provided in this
Section 9.4, except: that Xxxxxxx and his eligible dependents shall
continue, to the extent permitted by law, to be covered by health and welfare
insurance plans or programs in which Xxxxxxx and his eligible dependents
participate immediately prior to Xxxxxxx'x termination of employment for the
Remaining Term; provided, however, that if during such time period Xxxxxxx
should enter into employment with a new employer and become eligible to receive
comparable insurance benefits, the continued insurance benefits described herein
shall automatically cease. In the event that Xxxxxxx is ineligible, for whatever
reason, to continue to be so covered with respect to any of the above-referenced
plans or programs, the Company shall provide substantially equivalent coverage
through other sources (determined on an after-tax basis). In the
event Xxxxxxx would otherwise be entitled to a Change of Control Severance
Payment under the Severance Agreement as a result of a termination of employment
under this Section 9.4, Xxxxxxx may elect to receive the continued health and
welfare insurance benefits under this Section 9.4 or under Section 4(b) of the
Severance Agreement, but in no event both benefits.
Furthermore,
in the event of a termination Without Cause, Xxxxxxx shall be presumed to have
met eligibility requirements specified in Section 2.4 of the Xxxxxxxx
Replacement Benefit Plan and the Xxxxxxxx Supplemental Benefit Plan or any
successor thereto and he shall be entitled to the amounts that have accrued
under such plans through the date of his termination without
cause. All awards of restricted stock and stock options shall
automatically vest and be exercisable for the full unexpired term of the
option.
Xxxxxxx
agrees that the payments described in this Section 9.4 shall be full and
adequate compensation to Xxxxxxx for all damages Xxxxxxx may suffer as a result
of the termination of his employment pursuant to this Sections 9.4 or 9.6, and
in consideration of the payments and benefits provided in this Section 9.4,
Xxxxxxx agrees to execute a Waiver and Release Agreement in the form attached
hereto as Attachment A; provided, however, that, except as specifically provided
for under this Section 9.4, any rights and benefits Xxxxxxx may have under the
employee benefit plans and programs of the Company, in which Xxxxxxx is a
participant, shall be determined in accordance with the terms and provisions of
such plans and programs.
9.5 Employee
Voluntary. In the event Xxxxxxx terminates his employment of
his own volition prior to the end of the term of this Agreement, except for a
termination as described in Section 9.6 and except for termination for Good
Reason as specifically provided otherwise in the Severance Agreement, such
termination shall constitute a voluntary termination and in such event the
Company's only obligation to Xxxxxxx shall be to make Base Salary payments
provided for in this Agreement through the date of such voluntary
termination. Any rights and benefits Xxxxxxx may have under the
employee benefit plans and programs of the Company, in which he is a
participant, shall be determined in accordance with the terms and provisions of
such plans and programs. Xxxxxxx understands and agrees that in the
event of the termination of employment pursuant to this Section 9.5: (a) All
awards of restricted stock, stock options and any other benefits under the
Long-Term Incentive Plans shall be handled in accordance with the terms of the
relevant plan and agreements entered into between Xxxxxxx and the Company with
respect to such awards; and (b) the Company shall have no further obligation to
pay any bonuses to Xxxxxxx under the terms of the MIP or this
Agreement.
9.6 Change in Title, Duties,
Reporting Relationship or Location. If at any time prior to the end of
the Term of this Agreement (a) an adverse change is made to Xxxxxxx'x title as
President, Xxxxxxxx Publishing Group, (b) an adverse material change is made
with respect to Xxxxxxx'x having such responsibility and authority as has
historically attached to being President, Xxxxxxxx Publishing Group, (c) a
change is made in Xxxxxxx'x reporting relationship to Xxxxx Xxxx or his
successor, or (d) an involuntary change is made to the location of Xxxxxxx'x
principal office more than twenty-five (25) miles from its current location or
more than twenty-five (25) miles from where he maintains his primary residence,
Xxxxxxx shall have the right to terminate his employment with the Company after
first giving the Company written notice of the violation within ninety (90) days
of its initial existence and providing a period of thirty (30) days in which the
violation may be cured and by thereafter, if such violation has not been
corrected or cured, by giving written notice within ninety (90) days of his
termination, and such termination shall be deemed to be termination by the
Company without "Due Cause," and such termination shall be treated in accordance
with the terms of Section 9.4 above.
9.7 The
Company agrees to continue Xxxxxxx’x coverage under such directors and officers’
liability insurance policies as shall from time to time be in effect for active
officers and employees for not less than six years following Xxxxxxx’x
termination of employment.
10. Covenants of
Xxxxxxx.
10.1 Xxxxxxx
acknowledges that as a result of the services to be rendered to the Company
hereunder, Xxxxxxx will be brought into close contact with many confidential
affairs of the Company, its subsidiaries and affiliates, not readily available
to the public. Xxxxxxx further acknowledges that the services to be performed
under this Agreement are of a special, unique, unusual, extraordinary and
intellectual character; that the business of the Company is international in
scope; that its goods and services are marketed throughout the United States and
various parts of the world and that the Company competes with other
organizations that are or could be located in nearly any part of the United
States and in various parts of the world.
10.2 In
recognition of the foregoing, Xxxxxxx covenants and agrees that, except as is
necessary in providing services under this Agreement or to the extent necessary
to comply with law or the valid order of a court or government agency of
competent jurisdiction, Xxxxxxx will not knowingly use for his own benefit nor
knowingly divulge any Confidential Information and Trade Secrets of the Company,
its subsidiaries and affiliated entities, which are not otherwise in the public
domain and, so long as they remain Confidential Information and Trade Secrets
not in the public domain, will not intentionally disclose them to anyone outside
of the Company either during or after his employment. For the purposes of this
Agreement, "Confidential Information and Trade Secrets" of the Company means
information which is secret to the Company, its subsidiaries and affiliated
entities. It may include, but is not limited to, information relating to the
magazines, books, publications, products, services, television stations, real
estate franchise operations, new and future concepts and business of the
Company, its subsidiaries and affiliates, in the form of memoranda, reports,
computer software and data banks, customer lists, employee lists, books,
records, financial statements, manuals, papers, contracts and strategic plans.
As a guide, Xxxxxxx is to consider information originated, owned, controlled or
possessed by the Company, its subsidiaries or affiliated entities which is not
disclosed in printed publications stated to be available for distribution
outside the Company, its subsidiaries and affiliated entities as being secret
and confidential. In instances where doubt does or should reasonably be
understood to exist in Xxxxxxx'x mind as to whether information is secret and
confidential to the Company, its subsidiaries and affiliated entities, Xxxxxxx
agrees to request an opinion, in writing, from Meredith's Chief Executive
Officer.
10.3 Anything
to the contrary in this Section 10 notwithstanding, Xxxxxxx shall disclose to
the public and discuss such information as is customary or legally required to
be disclosed by a Company whose stock is publicly traded, or that is otherwise
legally required to disclose, or that is in the best interests of the Company to
do so.
10.4 Xxxxxxx
will deliver promptly to the Company on the termination of his employment with
the Company, or at any other time the Company may so request, all memoranda,
notes, records, reports and other documents relating to the Company, its
subsidiaries and affiliated entities, and all property owned by the Company, its
subsidiaries and affiliated entities, which Xxxxxxx obtained while employed by
the Company, and which Xxxxxxx may then possess or have under his
control.
10.5 During
and for a period of twenty-four (24) months after the termination of employment
with the Company (except that the time period of such restrictions shall be
extended by any period during which Xxxxxxx is in violation of this Section
10.5), Xxxxxxx will not knowingly interfere with, disrupt or attempt to disrupt,
any then existing relationship, contractual or otherwise between the Company,
its subsidiaries or affiliated entities, and any customer, client, supplier, or
agent, or knowingly solicit, or assist any other entity in soliciting for
employment, any person known to Xxxxxxx to be an agent or executive employee of
the Company, its subsidiaries, or affiliated entities, it being understood that
the right to seek or enter into contractual arrangements with independent
contractors, including, without limitation, consultants, professionals, authors,
advertisers and the like, shall not be abridged by reason of this Section 10. In
addition, in the event of a voluntary termination under Section 9.5, during and
for a period of twenty-four (24) months after the termination of employment with
the Company, Xxxxxxx will not render services directly or indirectly as an
employee, officer, director, consultant, independent contractor or in any other
capacity to any person or entity that is a competitor of the Company, including,
but not limited to, those entities identified on Schedule A.
10.6 Xxxxxxx
will promptly disclose to the Company all inventions, processes, original works
of authorship, trademarks, patents, improvements and discoveries related to the
business of the Company, its subsidiaries and affiliated entities (collectively
"Developments"), conceived or developed during Xxxxxxx'x employment with the
Company and based upon information to which he had access during the term of
employment, whether or not conceived during regular working hours, through the
use of the Company time, material or facilities or otherwise. All such
Developments shall be the sole and exclusive property of the Company, and upon
request Xxxxxxx shall deliver to the Company all outlines, descriptions and
other data and records relating to such Developments, and shall execute any
documents deemed necessary by the Company to protect the Company's rights
hereunder. Xxxxxxx agrees upon request to assist the Company to
obtain United States or foreign letters patent and copyright registrations
covering inventions and original works of authorship belonging to the Company
hereunder. If the Company is unable because of Xxxxxxx'x mental or physical
incapacity to secure Xxxxxxx'x signature to apply for or to pursue any
application for any United States or foreign letters patent or copyright
registrations covering inventions and original works of authorship belonging to
the Company hereunder, then Xxxxxxx hereby irrevocably designates and appoints
the Company and its duly authorized officers and agents as his agent and
attorney in fact, to act for and in his behalf and stead to execute and file any
such applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent or copyright registrations thereon
with the same legal force and effect as if executed by him. Xxxxxxx hereby
waives and quitclaims to the Company any and all claims, of any nature
whatsoever, that he may hereafter have for infringement of any patents or
copyright resulting from any such application for letters patent or copyright
registrations belonging to the Company hereunder.
10.7 Xxxxxxx
agrees that the remedy at law for any breach or threatened breach of any
covenant contained in this Section 10 may be inadequate and that the Company, in
addition to such other remedies as may be available to it, in law or in equity,
shall be entitled to injunctive relief without bond or other
security.
10.8 Although
the restrictions contained in Sections 10.1, 10.2, 10.4 and 10.5 above are
considered by the parties hereto to be fair and reasonable in the circumstances,
it is recognized that restrictions of such nature may fail for technical
reasons, and accordingly it is hereby agreed that if any of such restrictions
shall be adjudged to be void or unenforceable for whatever reason, but would be
valid if part of the wording thereof were deleted, or the period thereof reduced
or the area dealt with thereby reduced in scope, the restrictions contained in
Section 10.1, 10.2, 10.4 and 10.5 shall be enforced to the maximum extend
permitted by law, and the parties consent and agree that such scope or wording
may be accordingly judicially modified in any proceeding brought to enforce such
restrictions.
10.9 Notwithstanding
that Xxxxxxx'x employment hereunder may expire or be terminated as provided in
Sections 2 or 9 above, this Agreement shall continue in full force and effect
insofar as is necessary to enforce the covenants and agreements of Xxxxxxx
contained in this Section 10. In addition, the Company obligations under
Sections 9, 11 and 19 shall continue in full force and effect with respect to
Xxxxxxx or his estate.
11. Arbitration.
The
parties shall use their best efforts and good will to settle all disputes by
amicable negotiations. The Company and Xxxxxxx agree that, with the
express exception of any dispute or controversy arising under Section 9.2 or
Section 10 of this Agreement or as may be required under Section 3(g) of the
Severance Agreement, any controversy or claim arising out of or in any way
relating to Xxxxxxx'x employment with the Company, including, without
limitation, any and all disputes concerning this Agreement and the termination
of this Agreement that are not amicably resolved by negotiation, shall be
settled by arbitration in New York, New York, or such other place agreed to by
the parties, as follows:
(a) Any
such arbitration shall be heard before an arbitrator who shall be
impartial. Except as the parties may otherwise agree, the arbitrator
shall be appointed by the American Arbitration Association, from its panel of
commercial arbitrators, in accordance with its rules and procedures. In
determining the appropriate background of the arbitrator, the appointing
authority shall give due consideration to the issues to be resolved, but its
decision as to the identity of the arbitrator shall be final.
(b) An
arbitration may be commenced by any party to this Agreement by the service of a
written Request for Arbitration upon the other affected party. Such
Request for Arbitration shall summarize the controversy or claim to be
arbitrated, and shall be referred by the complaining party to the appointing
authority for appointment of arbitrators ten (10) days following such
service. If an arbitrator is not appointed by the appointing
authority within sixty (60) days following such reference, any party may apply
to any court within the State of New York for an order appointing arbitrators
qualified as set forth below. No Request for Arbitration shall be
valid if it relates to a claim, dispute, disagreement or controversy that would
have been time barred under the applicable statute of limitations had such
claim, dispute, disagreement or controversy been submitted to the courts of the
State of New York.
(c) Judgment
on the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
(d) It
is intended that controversies or claims submitted to arbitration under this
Section 11 shall remain confidential, and to that end it is agreed by the
parties that neither the facts disclosed in the arbitration, the issues
arbitrated, nor the views or opinions of any persons concerning them, shall be
disclosed by third persons at any time, except to the extent necessary to
enforce an award or judgment or as required by law or in response to legal
process or in connection with such arbitration. In addition, Xxxxxxx shall be
entitled to disclose the facts disclosed in arbitration, the issues arbitrated,
and the views or opinions of any persons concerning them to legal and tax
advisors so long as such advisors agree to be bound by the terms of this
Agreement.
12. Successors and
Assigns.
12.1 Assignment by the
Company. This Agreement shall inure to the benefit of and
shall be binding upon the successors and assigns of the Company.
12.2 Assignment by
Xxxxxxx. Xxxxxxx may not assign this Agreement or any part
thereof; provided, however, that nothing herein shall preclude one or more
beneficiaries of Xxxxxxx from receiving any amount that may be payable following
the occurrence of his legal incompetency or his death and shall not preclude the
legal representative of his estate from receiving such amount or from assigning
any right hereunder to the person or persons entitled thereto under his will or,
in the case of intestacy, to the person or persons entitled thereto under the
laws of the intestacy applicable to his estate.
13. Governing
Law.
This
Agreement shall be deemed a contract made under, and for all purposes shall be
construed in accordance with, the laws of the State of New York without
reference to the principles of conflict of laws.
14. Entire
Agreement.
This
Agreement and those plans and agreements referenced herein, including, but not
limited to, the Severance Agreement entered into between the Company and Xxxxxxx
on the 30th day
of December,
2008, contain
all the understandings and representations between the parties hereto pertaining
to the subject of the employment of Xxxxxxx by the Company and supersede all
undertakings and agreements, whether oral or in writing, if any there be,
previously entered into by them with respect thereto.
15. Amendment or Modification;
Waiver.
No
provision of this Agreement may be amended or modified unless such amendment or
modification is agreed to in writing, signed by Xxxxxxx and by a duly authorized
officer of the Company and approved in advance by the Compensation
Committee. Except as otherwise specifically provided in this
Agreement, no waiver by either party hereto of any breach by the other party of
any condition or provision of the 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.
16. Notices.
Any
notice to be given hereunder shall be in writing and delivered personally or
sent by overnight mail, such as Federal Express, addressed to the party
concerned at the address indicated below or to such other address as such party
may subsequently give notice of hereunder in writing:
If to
Company:
Xxxxx
Xxxx
President
and CEO
Xxxxxxxx
Corporation
0000
Xxxxxx Xxxxxx
Xxx
Xxxxxx, Xxxx 00000-0000
with a
copy to:
Xxxx
Xxxxxx, Esquire
Chief
Development Officer, General Counsel
&
Secretary
Xxxxxxxx
Corporation
0000
Xxxxxx Xxxxxx
Xxx
Xxxxxx, Xxxx 00000-0000
If to
Xxxxxxx:
Xxxx
Xxxxxxx
000
Xxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
with a
copy to:
Xxxxxx
Xxxx
Xxxxxx
& Xxxxxx P.C.
000 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
17. 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.
18. Withholding.
Anything
to the contrary notwithstanding, all payments required to be made by the Company
hereunder to Xxxxxxx or his beneficiaries, including his estate, shall be
subject to withholding and deductions as the Company may reasonably determine it
should withhold or deduct pursuant to any applicable law or regulation. In lieu
of withholding or deducting, such amounts, in whole or in part, the Company may,
in its sole discretion, accept other provision for payment as permitted by law,
provided it is satisfied in its sole discretion that all requirements of law
affecting its responsibilities to withhold such taxes have been
satisfied.
19. Deferred
Payments.
Any
amounts required under this Agreement to be paid to Xxxxxxx that Xxxxxxx can and
does elect to defer under any Company benefit plan or program shall be deemed to
have been paid to him for purposes of this Agreement; provided, however, that if
the Company breaches the terms of any deferred compensation plan, arrangement or
agreement with respect to which such amounts are to be paid, Xxxxxxx may claim a
breach of this Agreement.
Notwithstanding
anything in this Agreement or elsewhere to the contrary:
(a) If
payment or provision of any amount or other benefit that is “deferred
compensation” subject to Section 409A of the Code at the time otherwise
specified in this Agreement or elsewhere would subject such amount or benefit to
additional tax pursuant to Section 409A(a)(1)(B) of the Code, and if payment or
provision thereof at a later date would avoid any such additional tax, then the
payment or provision thereof shall be postponed to the earliest date on which
such amount or benefit can be paid or provided without incurring any such
additional tax. In the event this Section requires a deferral of any
payment, such payment shall be accumulated and paid in a single lump sum on such
earliest date together with interest for the period of delay, compounded
annually, equal to the prime rate (as published in The Wall Street Journal), and
in effect as of the date the payment should otherwise have been
provided.
(b) If
any payment or benefit permitted or required under this Agreement, or otherwise,
is reasonably determined by either party to be subject for any reason to a
material risk of additional tax pursuant to Section 409A(a)(1)(B) of the Code,
then the parties shall promptly agree in good faith on appropriate provisions to
avoid such risk without materially changing the economic value of this Agreement
to either party.
20. Survivorship.
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.
21. Duty to Mitigate:
Set-off.
Xxxxxxx
shall not be required to seek employment, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by
Xxxxxxx as the result of employment by another employer after the date of
termination of Xxxxxxx'x employment, or otherwise, except as may be provided
under Section 9.4 with respect to health and welfare insurance benefits. 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 that the
Company may have against Xxxxxxx or others, except to be extent such employment
violates Section 10.5.
22. Headings.
Headings
of the sections of this Agreement are intended solely for convenience and no
provision of this Agreement is to be construed by reference to the title of any
section.
23. Knowledge and
Representation.
Xxxxxxx
acknowledges that the terms of this Agreement have been fully explained to him,
that Xxxxxxx understands the nature and extent of the rights and obligations
provided under this Agreement, and that Xxxxxxx has been represented by legal
counsel in the negotiation and preparation of this Agreement.
IN
WITNESS WHEREOF, the parties hereto have re-executed and acknowledged this
Agreement as of the date set forth below.
XXXXXXXX
CORPORATION
By: /s/ Xxxxxxx X.
Xxxx
XXXX
XXXXXXX
/s/ Xxxx
Xxxxxxx
Date: August
24, 2009
