EXHIBIT 10-I
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this "Agreement") is
made and entered into by and between Veritas DGC Inc., a Delaware corporation
(hereinafter referred to as "Employer"), and Xxxx X.X. XxxxxxXxxxx, an
individual currently resident in Houston, Texas (hereinafter referred to as
"Employee"), effective as of October 22, 2001 (the "Effective Date").
WITNESSETH:
WHEREAS, attendant to Employee's employment by Employer, Employer and
Employee wish for there to be a complete understanding and agreement between
Employer and Employee with respect to, among other terms, Employee's duties and
responsibilities to Employer; the compensation and benefits owed to Employee;
the fiduciary duties owed by Employee to Employer; Employee's obligation to
avoid conflicts of interest, disclose pertinent information to Employer, and
refrain from using or disclosing Employer's information; and the term of
Employee's employment;
WHEREAS, Employer considers the establishment and maintenance of a
sound and vital management to be essential to protecting and enhancing its best
interests and the best interests of its stockholders;
WHEREAS, Employer recognizes that, because Employer is a publicly held
company and as is the case with many such companies, the possibility of a change
in control may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or
distraction of management personnel to the detriment of Employer and its
stockholders;
WHEREAS, the Board of Directors of Employer (the "Board") has
determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of Employer's management,
including Employee, to their assigned duties without distraction in the face of
the potentially disturbing circumstances arising from the possibility of a
change in control of Employer;
WHEREAS, Employer recognizes that Employee could suffer adverse
financial and professional consequences if a change in control of Employer were
to occur;
WHEREAS, Employer and Employee have previously entered into that
certain Employment Agreement effective as of August 30, 1996 (the "Original
Employment Agreement"); and
WHEREAS, Employer and Employee wish to enter into this Agreement to
amend and restate the Original Employment Agreement to, among other things,
protect Employee if a change in control of Employer occurs, thereby encouraging
Employee to remain in the employ of Employer and not to be distracted from the
performance of his duties to Employer by the possibility of a change in control
of Employer;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Employer and Employee agree as
follows:
Section 1. General Duties of Employer and Employee.
(a) Employer agrees to employ Employee and Employee agrees to
accept employment by Employer and to serve Employer in an executive capacity as
its Vice President -- Business Development. At the commencement of this
Agreement, Employee will report to the Chairman & Chief Executive Officer of
Employer. The powers, duties and responsibilities of Employee as Vice President
-- Business Development include those duties that are the usual and customary
powers, duties and responsibilities of such office, including those powers,
duties and responsibilities specified in Employer's Bylaws, and such other and
further duties appropriate to such position as may from time to time be assigned
to Employee by the Chairman & Chief Executive Officer of Employer or the Board.
(b) While employed hereunder, Employee will devote
substantially all reasonable and necessary time, efforts, skills and attention
for the benefit of and with his primary attention to the affairs of Employer in
order that he may faithfully perform his duties and obligations. The preceding
sentence will not, however, be deemed to restrict Employee from attending to
matters or engaging in activities not directly related to the business of
Employer, provided that (i) such activities or matters are reasonable in scope
and time commitment and not otherwise in violation of this Agreement, and (ii)
Employee will not become a director of any corporation or other entity
(excluding charitable or other non-profit organizations) without prior written
disclosure to, and consent of, Employer.
(c) Employee is currently based at Employer's headquarters
located at 00000 Xxxx Xxxx, Xxxxxxx, Xxxxx (the "Place of Employment").
(d) Employee agrees and acknowledges that during the term of
this Agreement, he owes a fiduciary duty of loyalty, fidelity and allegiance to
act at all times in the best interests of Employer and to do no act knowingly
which would injure Employer's business, its interests or its reputation.
Section 2. Compensation and Benefits.
(a) Employer will pay to Employee during the term of this
Agreement a base salary at the rate of $168,000 per annum (such base salary as
increased by the Compensation Committee of the Board as hereinafter provided is
referred to herein as the "Base Salary"). The Compensation Committee of the
Board will review the Base Salary from time to time and, during the term of this
Agreement, may increase, but may not decrease, the Base Salary. The Base Salary
will be paid to Employee in equal installments every two weeks or on such other
schedule as Employer may establish from time to time for its management
personnel.
(b) During each fiscal year during the term of this Agreement,
Employee will be eligible to participate in that year's Key Contributor
Incentive Compensation Plan or other replacement incentive or bonus plan
Employer establishes for its key executives.
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(c) Employee will be eligible for option grants to purchase
shares of Employer's common stock, $.01 par value ("Common Stock"), or other
equity securities of Employer as provided under Employer's Key Contributor
Incentive Compensation Plan (or other replacement incentive or bonus plan
Employer establishes for its key executives).
(d) Employee will be entitled to paid vacation of not less
than four (4) weeks each year. Vacation may be taken by Employee at the time and
for such periods as may be mutually agreed upon between Employer and Employee.
(e) provided that as of the Date of Termination Employee has
not received his "green card" from the U.S. Immigration and Naturalization
Service allowing him permanent residency status in the United States, Employer
shall reimburse Employee once each year for the cost of one least cost airline
ticket from Houston, Texas or his then current place of employment to Calgary,
Alberta for each of Employee, his spouse and children.
(f) Employee will be reimbursed in accordance with Employer's
normal expense reimbursement policy for all of the actual and reasonable costs
and expenses incurred by him in the performance of his services and duties
hereunder, including, but not limited to, travel and entertainment expenses.
Employee will furnish Employer with all invoices and vouchers reflecting amounts
for which Employee seeks Employer's reimbursement.
(g) Employee will be entitled to participate in all insurance
and retirement plans, incentive compensation plans (at a level appropriate to
his position) and such other benefit plans or programs as may be in effect from
time to time for the key management employees of Employer including, without
limitation, those related to savings and thrift, retirement, welfare, medical,
dental, disability, salary continuance, accidental death, travel accident, life
insurance, incentive bonus, membership in business and professional
organizations, and reimbursement of business and entertainment expenses.
(h) All Base Salary, bonus and other payments made by Employer
to Employee pursuant to this Agreement will be subject to such payroll and
withholding deductions as may be required by law and other deductions applied
generally to employees of Employer for insurance and other employee benefit
plans in which Employee participates.
Section 3. Fiduciary Duty; Confidentiality.
(a) In keeping with Employee's fiduciary duties to Employer,
Employee agrees that he will not knowingly take any action that would create a
conflict of interest with Employer, or upon discovery thereof, allow such a
conflict to continue. In the event that Employee discovers that such a conflict
exists, Employee agrees that he will disclose to the Board any facts which might
involve a conflict of interest that has not been approved by the Board.
(b) As part of Employee's fiduciary duties to Employer,
Employee agrees to protect and safeguard Employer's information, ideas,
concepts, improvements, discoveries, and inventions and any proprietary,
confidential and other information relating to Employer or its business
(collectively, "Confidential Information") and, except as may be required by
Employer, Employee will not knowingly, either during his employment by Employer
or thereafter, directly
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or indirectly, use for his own benefit or for the benefit of another, or
disclose to another, any Confidential Information, except (i) with the prior
written consent of Employer; (ii) in the course of the proper performance of
Employee's duties under this Agreement; (iii) for information that becomes
generally available to the public other than as a result of the unauthorized
disclosure by Employee; (iv) for information that becomes available to Employee
on a nonconfidential basis from a source other than Employer or its affiliated
companies who is not bound by a duty of confidentiality to Employer; or (v) as
may be required by any applicable law, rule, regulation or order.
(c) Upon termination of his employment with Employer, Employee
will immediately deliver to Employer all documents in Employee's possession or
under his control which embody any of Employer's Confidential Information.
(d) In addition to the foregoing provisions of this Section 3,
and effective as of the Effective Date, Employee agrees to enter into an
Employee Confidentiality and Intellectual Property Agreement with Employer, a
copy of which is attached hereto as Exhibit A.
Section 4. Term.
Employee's employment with Employer, having previously commenced, will
continue until terminated in accordance with Section 5.
Section 5. Termination.
(a) Employee's employment with Employer hereunder will
terminate upon the first to occur of the following:
(1) The death or "Disability" (as defined in Section
5 (b) hereof) of Employee;
(2) Employer terminates such employment for "Cause"
(as defined in Section 5(c) hereof);
(3) Employee terminates such employment for "Good
Reason" (as defined in Section (d) hereof);
(4) Employer terminates such employment for any
reason other than Cause or for no reason at all;
(5) Employee terminates such employment for any
reason other than Good Reason or for no reason at all; or
(6) Employee's sixty-fifth (65th) birthday, at which
time Employee will continue to be employed by Employer as an
employee at will.
(b) As used in this Agreement, "Disability" means permanent
and total disability (within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended (the "Code"), or any successor provision) which
has existed for at least 180 consecutive days.
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(c) As used in this Agreement, "Cause" means:
(1) the willful and continued failure by Employee to
substantially perform his obligations under this Agreement
(other than any such failure resulting from his Disability)
after a demand for substantial performance has been delivered
to him by the Board which specifically identifies the manner
in which the Board believes Employee has not substantially
performed such provisions and Employee has failed to remedy
the situation within ten (10) days after such demand;
(2) Employee's willfully engaging in conduct
materially and demonstrably injurious to the property or
business of Employer, including without limitation, fraud,
misappropriation of funds or other property of Employer, other
willful misconduct, gross negligence or conviction of a felony
or any crime of moral turpitude; or
(3) Employee's material breach of this Agreement
which breach has not been remedied by Employee within ten (10)
days after receipt by Employee of written notice from Employer
that he is in material breach of the Agreement, specifying the
particulars of such breach.
For purposes of this Agreement, no act, or failure to act, on the part of
Employee shall be deemed "willful" or engaged in "willfully" if it was due
primarily to an error in judgment or negligence, but shall be deemed "willful"
or engaged in "willfully" only if done, or omitted to be done, by Employee not
in good faith and without reasonable belief that his action or omission was in
the best interest of Employer. Notwithstanding the foregoing, Employee shall not
be deemed to have been terminated as a result of "Cause" hereunder unless and
until there shall have been delivered to Employee a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the Board
then in office at a meeting of the Board called and held for such purpose (after
reasonable notice to Employee and an opportunity for Employee, together with his
counsel, to be heard before the Board), finding that, in the good faith opinion
of the Board of Directors, Employee has committed an act set forth above in this
Section 5(c) and specifying the particulars thereof in detail. Nothing herein
shall limit the right of Employee or his legal representatives to contest the
validity or propriety of any such determination.
(d) As used in this Agreement, "Good Reason" means:
(1) Employer's failure to comply with any of the
provisions of Section 2 of this Agreement (including, but not
limited to, such a failure resulting from any reduction in the
Base Salary) which failure is not remedied within ten (10)
days after receipt of written notice from Employee specifying
the particulars of such breach;
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(2) Employer's breach of any other material provision
of this Agreement which is not remedied within ten (10) days
after receipt by Employer of written notice from Employee
specifying the particulars of such breach;
(3) the assignment to Employee of any duties
materially inconsistent with Employee's position (including
status, offices, titles, and reporting requirements), duties,
functions, responsibilities, or authority as contemplated by
Section 1 of this Agreement or other action by Employer that
results in a diminution (other than an isolated,
inconsequential or insubstantial diminution which is remedied
by Employer promptly after receipt of written notice thereof
given by Employee) in such position, duties, functions,
responsibilities or authority; or
(4) the relocation of Employee's principal place of
performance of his duties and responsibilities under this
Agreement to a location more than one hundred miles (100)
miles from the Place of Employment;
(5) After a "Change in Control" (as defined in
Section 6(g) hereof), (i) Employer's failure to continue in
effect any benefit or compensation plan (including, but not
limited to, any bonus, incentive, retirement, supplemental
executive retirement, savings, profit sharing, pension,
performance, stock option, stock purchase, deferred
compensation, life insurance, medical, dental, health,
hospital, accident or disability plans) in which Employee is
participating at the time of such Change in Control (or plans
providing to Employee, in the aggregate, substantially similar
benefits as the benefits enjoyed by Employee under the benefit
and compensation plans in which Employee is participating at
the time of such Change in Control), or (ii) the taking of any
action by Employer that would adversely affect Employee's
participation in or materially reduce Employee's benefits
under any of such plans or deprive Employee of any material
fringe benefit enjoyed by Employee at the time of such Change
in Control;
(6) Any failure by Employer to comply with Section
11(c); or
(7) Any purported termination of Employee's
employment by Employer which is not effected pursuant to a
Notice of Termination satisfying the requirements of Section
5(e) hereof (and for purposes of this Agreement, no such
purported termination shall be effective).
(e) Any termination by Employer or Employee of Employee's
employment with Employer (other than any such termination occurring on
Employee's sixty-fifth (65th) birthday) shall be communicated by written notice
(a "Notice of Termination") to the other party that shall:
(1) indicate the specific provision of this Agreement
relied upon for such termination;
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(2) indicate the specific provision of this Agreement
pursuant to which Employee is to receive compensation and
other benefits as a result of such termination; and
(3) otherwise comply with the provisions of this
Section 5(e) and Section 13(a).
If a Notice of Termination states that Employee's employment with Employer has
been terminated as a result of Employee's Disability, the notice shall (i)
specifically describe the basis for the determination of Employee's Disability,
and (ii) state the date of the determination of Employee's Disability, which
date shall be not more than ten (10) days before the date such notice is given.
If the notice is from Employer and states that Employee's employment with
Employer is terminated by Employer as a result of the occurrence of Cause, the
Notice of Termination shall specifically describe the action or inaction of
Employee that Employer believes constitutes Cause and shall be accompanied by a
copy of the resolution satisfying Section 5(c). If the Notice of Termination is
from Employee and states that Employee's employment with Employer is terminated
by Employee as a result of the occurrence of Good Reason, the Notice of
Termination shall specifically describe the action or inaction of Employer that
Employee believes constitutes Good Reason. Any purported termination by Employer
of Employee's employment with Employer shall be ineffective unless such
termination shall have been communicated by Employer to Employee by a Notice of
Termination that meets the requirements of this Section 5(e) and the provisions
of Section 13(a).
(f) As used in this Agreement, "Date of Termination" means:
(1) if Employee's employment with Employer is
terminated for Disability, sixty (60) days after Notice of
Termination is received by Employee or any later date
specified therein, provided that within such sixty (60) day
period Employee shall not have returned to full-time
performance of Employee's duties;
(2) if Employee's employment with Employer is
terminated as a result of Employee's death, the date of death
of Employee;
(3) if Employee's employment with Employer is
terminated for Cause, the date Notice of Termination,
accompanied by a copy of the resolution satisfying Section
5(c), is received by Employee or any later date specified
therein, provided that Employer may, in its discretion,
condition Employee's continued employment upon such
considerations or requirements as may be reasonable under the
circumstances and place a reasonable limitation upon the time
within which Employee will comply with such considerations or
requirements;
(4) if Employee's employment with Employer is
terminated upon the occurrence of Employee's sixty-fifth
(65th) birthday, the date of such birthday, at which time
Employee will continue to be employed by Employer as an
employee at will; or
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(5) if Employee's employment with Employer is
terminated for any reason other than Employee's Disability,
Employee's death, Cause or the occurrence of Employee's
sixty-fifth (65th) birthday, or for no reason, the date that
is fourteen (14) days after the date of receipt of the Notice
of Termination.
Section 6. Effect of Termination.
(a) Upon termination of Employee's employment by Employer for
Cause, or by Employee for no reason or any reason other than Good Reason, all
compensation and benefits will cease upon the Date of Termination other than:
(1) those benefits that are provided by retirement
and benefit plans and programs specifically adopted and
approved by Employer for Employee that are earned and vested
by the Date of Termination as provided in Section 10;
(2) Employee's Base Salary through the Date of
Termination;
(3) any incentive compensation due Employee if, under
the terms of the relevant incentive compensation arrangement,
such incentive compensation was due and payable to Employee on
or before the Date of Termination;
(4) medical and similar benefits the continuation of
which is required by applicable law or provided by the
applicable benefit plan;
(5) provided that as of the Date of Termination
Employee has not received his "green card" from the U.S.
Immigration and Naturalization Service allowing him permanent
residency status in the United States, Employer shall pay
Employee a lump-sum cash payment equal to
(i) one-twelfth of his Base Salary;
(ii) the cost of one least cost airline
ticket from Houston, Texas or his
then current place of employment to
Calgary, Alberta for each of
Employee, his spouse and children;
and,
(iii) the cost of shipping, by ground
transportation, of Employee's and
his immediate family's personal
effects from Houston, Texas or his
then current place of employment to
Calgary, Alberta; and
(6) provided that as of the Date of Termination
Employee has not received his "green card" from the U.S.
Immigration and Naturalization Service allowing him permanent
residency status in the United States, Employer shall
reimburse Employee for real estate commissions paid by
Employee in selling his residence at or near the Place of
Employment, provided that such reimbursement shall not exceed
an amount equal to six percent (6%) of the sales price of the
residence;
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(7) provided that as of the Date of Termination
Employee has not received his "green card" from the U.S.
Immigration and Naturalization Service allowing him permanent
residency status in the United States, Employer will provide
or reimburse Employee for the cost of preparation by a public
accounting firm of Employee's U.S. and Canadian personal
income tax returns for the year in which the Date of
Termination occurred.
(b) Upon termination of Employee's employment due to the death
of Employee or upon termination by Employer due to the Disability of Employee,
all compensation and benefits will cease upon the Date of Termination other
than:
(1) those benefits that are provided by retirement
and benefit plans and programs specifically adopted and
approved by Employer for Employee that are earned and vested
by the Date of Termination as provided in Section 10;
(2) Employee's Base Salary through the Date of
Termination;
(3) any incentive compensation due Employee if, under
the terms of the relevant incentive compensation arrangement,
such incentive compensation was due and payable to Employee on
or before the Date of Termination;
(4) medical and similar benefits the continuation of
which is required by applicable law or provided by the
applicable benefit plan;
(5) provided that as of the Date of Termination
Employee has not received his "green card" from the U.S.
Immigration and Naturalization Service allowing him permanent
residency status in the United States, Employer shall pay
Employee or his surviving spouse a lump-sum cash payment equal
to
(i) one-twelfth of his Base Salary;
(ii) the cost of one least cost airline
ticket from Houston, Texas or his
then current place of employment to
Calgary, Alberta for each of
Employee, his spouse and children;
and,
(iii) the cost of shipping, by ground
transportation, of Employee's and
his immediate family's personal
effects from Houston, Texas or his
then current place of employment to
Calgary, Alberta; and
(6) provided that as of the Date of Termination
Employee has not received his "green card" from the U.S.
Immigration and Naturalization Service allowing him permanent
residency status in the United States, Employer shall
reimburse Employee or his surviving spouse for real estate
commissions paid in selling Employee's residence at or near
the Place of Employment, provided that such reimbursement
shall not exceed an amount equal to six percent (6%) of the
sales price of the residence;
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(7) provided that as of the Date of Termination
Employee has not received his "green card" from the U.S.
Immigration and Naturalization Service allowing him permanent
residency status in the United States, Employer will provide
or reimburse Employee or his surviving spouse for the cost of
preparation by a public accounting firm of Employee's U.S. and
Canadian personal income tax returns for the year in which the
Date of Termination occurred.
(c) Upon termination of this Agreement due to Employee's
reaching his sixty-fifth (65th) birthday, Employee will continue to be employed
by Employer as an employee at will.
(d) Except as otherwise provided in Section 6(e), if
Employee's employment with Employer is terminated (i) by Employer for no reason
or for any reason other than Cause, the death or Disability of Employee, or
Employee's reaching his sixty-fifth (65th) birthday, or (ii) by Employee for
Good Reason, the obligations of Employer and Employee under Sections 1 and 2
will terminate as of the Date of Termination, and Employer will pay or provide
to Employee the following:
(1) Employee's Base Salary through the Date of
Termination;
(2) incentive compensation due Employee, if any,
under the terms of the relevant incentive compensation
arrangement;
(3) during the twelve-month period ending on last day
of the twelfth month after the Date of Termination, Employer
shall pay to Employee an aggregate amount (the "Severance
Payment") equal to one (1) times Employee's Base Salary at the
highest annual rate in effect on or before the Date of
Termination (but prior to giving effect to any reduction
therein which precipitated such termination), which Severance
Payment will be paid to Employee in equal installments every
two weeks during such twelve-month period; provided, however,
that at any time during such twelve-month period Employer may,
in its discretion, elect to pay to Employee the then remaining
balance of the Severance Payment in the form of a lump sum
cash payment;
(4) provided that as of the Date of Termination
Employee has not received his "green card" from the U.S.
Immigration and Naturalization Service allowing him permanent
residency status in the United States, a lump-sum cash payment
equal to
(i) one-twelfth of his Base Salary;
(ii) the cost of one least cost airline
ticket from Houston, Texas or his
then current place of employment to
Calgary, Alberta for each of
Employee, his spouse and children;
and,
(iii) the cost of shipping, by ground
transportation, of Employee's and
his immediate family's personal
effects
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from Houston, Texas or his then
current place of employment to
Calgary, Alberta; and
(5) provided that as of the Date of Termination
Employee has not received his "green card" from the U.S.
Immigration and Naturalization Service allowing him permanent
residency status in the United States, Employer shall
reimburse Employee for real estate commissions paid by
Employee in selling his residence at or near the Place of
Employment, provided that such reimbursement shall not exceed
an amount equal to six percent (6%) of the sales price of the
residence;
(6) provided that as of the Date of Termination
Employee has not received his "green card" from the U.S.
Immigration and Naturalization Service allowing him permanent
residency status in the United States, Employer will provide
or reimburse Employee for the cost of preparation by a public
accounting firm of Employee's U.S. and Canadian personal
income tax returns for the year in which the Date of
Termination occurred;
(7) if immediately prior to the Date of Termination
Employee (and, if applicable, his spouse and/or dependents)
was covered under Employer's group medical, dental, health and
hospital plan in effect at such time, then Employer shall, at
its election, pay or provide to Employee one (but not both) of
the following:
(i) for one (1) year after the Date of
Termination, and provided that
Employee has timely elected under
the Consolidated Omnibus Budget
Reconciliation Act of 1985, as
amended ("COBRA"), to continue
coverage under such plan, Employer
will, at no greater cost or expense
to Employee than was the case
immediately prior to the Date of
Termination, maintain such
continued coverage in full force
and effect; or
(ii) pay to Employee a lump sum cash
payment (the "Section 6(d)(5)(ii)
Payment") equal to the sum of:
(A) an amount equal to (I)
twelve (12), multiplied by
(II) the amount of the
applicable monthly COBRA
premium (determined based
upon the applicable COBRA
premium rate in effect
immediately after the Date
of Termination) Employee
would pay if Employee
elected under COBRA to
maintain coverage
identical to the coverage
Employee (and, if
applicable, his spouse
and/or dependents) had
under such plan
immediately prior to the
Date of Termination; plus
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(B) an amount equal to the
excess of (I) an amount
determined by dividing (x)
the amount determined
under Section
6(d)(5)(ii)(A) above, by
(y) one (1) minus the sum
of the following which
shall be determined for
the calendar year that
includes the date of
payment of the Section
6(d)(5)(ii) Payment and
shall be expressed as a
decimal: (i) the highest
marginal U.S. federal
income tax rate applicable
to individuals for such
calendar year, plus (ii)
the highest foreign,
state, provincial and/or
local individual income
tax rate or rates, if any,
to which the Section
6(d)(5)(ii) Payment is
subject for such calendar
year (which shall be
determined based on the
assumption that Employee
pays income tax to any
such foreign, state,
provincial or local
jurisdiction at the
highest marginal rate of
income tax imposed by such
jurisdiction on
individuals), plus, (iii)
the Hospital (Medicare)
Insurance tax rate under
Section 3101(b) of the
Code (or any corresponding
successor statute) for
such calendar year, over
(II) the amount determined
under Section
6(d)(5)(ii)(A) above.
Except as otherwise provided above and in Section 10, all other compensation and
benefits will cease upon the Date of Termination other than the following: (i)
those benefits that are provided by retirement and benefit plans and programs
specifically adopted and approved by Employer for Employee that are earned and
vested by the Date of Termination, (ii) any rights Employee or his survivors may
have under any grants of options to purchase Employer's Common Stock or under
any grants of restricted stock of Parent; and (iii) medical and similar benefits
the continuation of which is required by applicable law or as provided by the
applicable benefit plan. As a condition to making the payments and providing the
benefits specified in this Section 6(d), Employer will require that Employee
execute a release of all claims Employee may have against Employer at the time
of Employee's termination. Such release will be in substantially the same form
as Exhibit B attached hereto.
(e) If (i) a "Change in Control" (as defined in Section 6(g)
hereof) shall have occurred, and (ii) within two (2) years after such Change in
Control Employee's employment with Employer is terminated (x) by Employer for no
reason or for any reason other than Cause, the death or Disability of Employee,
or Employee's reaching his sixty-fifth (65th) birthday, or (y) by Employee for
Good Reason, the obligations of Employer and Employee under Sections 1 and 2
will terminate as of the Date of Termination, Section 6(d) above shall not
apply, and Employer will pay or provide to Employee:
(1) Employee's Base Salary through the Date of
Termination;
(2) incentive compensation due Employee, if any,
under the terms of the relevant incentive compensation
arrangement;
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(3) within thirty (30) days after the Date of
Termination, a lump sum cash payment equal to two (2) times
the sum of:
(i) Employee's Base Salary at the
highest annual rate in effect on or
before the Date of Termination (but
prior to giving effect to any
reduction therein which
precipitated such termination),
plus
(ii) An amount equal to the greater of:
(A) the average of the
incentive bonuses paid to
Employee for the last
three (3) full fiscal
years of Employer ending
before the Date of
Termination (or, if
Employee was not employed
by Employer hereunder for
such last three (3) full
fiscal years, the average
of the incentive bonuses
paid to Employee for the
number of full fiscal
years of Employer ending
before the Date of
Termination during which
Employee was employed by
Employer hereunder);
(B) the incentive bonus paid
to Employee for the last
full fiscal year of
Employer ending before the
Date of Termination; or
(C) an amount equal to
Employee's Base Salary
described in Section
6(e)(3)(i) multiplied by
Employee's target
percentage under the Key
Contributor Incentive
Compensation Plan or other
replacement incentive or
bonus plan of Employer for
the fiscal year which
includes the Date of
Termination; and
(4) provided that as of the Date of Termination
Employee has not received his "green card" from the U.S.
Immigration and Naturalization Service allowing him permanent
residency status in the United States, a lump-sum cash payment
equal to
(i) one-twelfth of his Base Salary;
(ii) the cost of one least cost airline
ticket from Houston, Texas or his
then current place of employment to
Calgary, Alberta for each of
Employee, his spouse and children;
and,
(iii) the cost of shipping, by ground
transportation, of Employee's and
his immediate family's personal
effects from Houston, Texas or his
then current place of employment to
Calgary, Alberta; and
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(5) provided that as of the Date of Termination
Employee has not received his "green card" from the U.S.
Immigration and Naturalization Service allowing him permanent
residency status in the United States, Employer shall
reimburse Employee for real estate commissions paid by
Employee in selling his residence at or near the Place of
Employment, provided that such reimbursement shall not exceed
an amount equal to six percent (6%) of the sales price of the
residence;
(6) provided that as of the Date of Termination
Employee has not received his "green card" from the U.S.
Immigration and Naturalization Service allowing him permanent
residency status in the United States, Employer will provide
or reimburse Employee for the cost of preparation by a public
accounting firm of Employee's U.S. and Canadian personal
income tax returns for the year in which the Date of
Termination occurred;
(7) if immediately prior to the Date of Termination
Employee (and, if applicable, his spouse and/or dependents)
was covered under Employer's group medical, dental, health and
hospital plan in effect at such time, then Employer shall, at
its election, pay or provide to Employee one (but not both) of
the following:
(i) for eighteen (18) months after the
Date of Termination, and provided
that Employee has timely elected
under COBRA to continue coverage
under such plan, Employer will, at
no greater cost or expense to
Employee than was the case
immediately prior to the Date of
Termination, maintain such
continued coverage in full force
and effect; or
(ii) pay to Employee a lump sum cash
payment (the "Section 6(e)(5)(ii)
Payment") equal to the sum of:
(A) an amount equal to (I)
eighteen (18), multiplied
by (II) the amount of the
applicable monthly COBRA
premium (determined based
upon the applicable COBRA
premium rate in effect
immediately after the Date
of Termination) Employee
would pay if Employee
elected under COBRA to
maintain coverage
identical to the coverage
Employee (and, if
applicable, his spouse
and/or dependents) had
under such plan
immediately prior to the
Date of Termination; plus
(B) an amount equal to the
excess of (I) an amount
determined by dividing (x)
the amount determined
under Section
6(e)(5)(ii)(A) above, by
(y) one (1) minus the sum
of the following which
shall be
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determined for the
calendar year that
includes the date of
payment of the Section
6(e)(5)(ii) Payment and
shall be expressed as a
decimal: (i) the highest
marginal U.S. federal
income tax rate applicable
to individuals for such
calendar year, plus (ii)
the highest foreign,
state, provincial and/or
local individual income
tax rate or rates, if any,
to which the Section
6(e)(5)(ii) Payment is
subject for such calendar
year (which shall be
determined based on the
assumption that Employee
pays income tax to any
such foreign, state,
provincial or local
jurisdiction at the
highest marginal rate of
income tax imposed by such
jurisdiction on
individuals), plus, (iii)
the Hospital (Medicare)
Insurance tax rate under
Section 3101(b) of the
Code (or any corresponding
successor statute) for
such calendar year, over
(II) the amount determined
under Section
6(e)(5)(ii)(A) above; and
(8) the following shall occur immediately upon the
occurrence of such Change in Control:
(i) each option to acquire Common Stock
or other equity securities of
Employer held by Employee
immediately prior to such Change in
Control shall become fully
exercisable, regardless of whether
or not the vesting conditions set
forth in the relevant stock option
agreement have been satisfied in
full, and shall remain fully
exercisable for the remainder of
the ten-year term of such option;
and
(ii) all restrictions on any restricted
Common Stock or other equity
securities of Employer granted to
Employee prior to such Change in
Control shall be removed and such
Common Stock or other equity
securities shall be freely
transferable (subject to applicable
securities laws), regardless of
whether the conditions set forth in
the relevant restricted stock
agreements have been satisfied in
full.
As a condition to making the payments and providing the benefits specified in
this Section 6(e), Employer will require that Employee execute a release of all
claims Employee may have against Employer at the time of Employee's termination.
Such release will be in substantially the same form as Exhibit B attached
hereto.
(f) Notwithstanding anything contained in this Agreement to
the contrary, if following the commencement of any discussion with a third
person that ultimately results in a
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Change in Control, (i) Employee's employment with Employer is terminated by
Employer for no reason or for any reason other than Cause, (ii) Employee is
removed from any material duties or position with Employer, or (iii) Employer
fails to comply with any of the provisions of Section 2 of this Agreement, then
for all purposes of this Agreement, such Change in Control shall be deemed to
have occurred on the date immediately prior to the date of such termination,
removal, or failure.
(g) For purposes of this Agreement, a "Change in Control"
shall mean the occurrence of any of the following after the Effective Date:
(1) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended from time to
time (the "Exchange Act"), or any successor statute) (a
"Covered Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 25% or
more of either (i) the then outstanding shares of Common Stock
(the "Outstanding Company Common Stock"), or (ii) the combined
voting power of the then outstanding voting securities of
Employer entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this Section 6(g)(1),
the following acquisitions shall not constitute a Change in
Control: (i) any acquisition directly from Employer, (ii) any
acquisition by Employer, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by
Employer or any entity controlled by Employer, or (iv) any
acquisition by any corporation pursuant to a transaction which
complies with Section 6(g)(3)(i), (ii) or (iii); or
(2) individuals who, as of the Effective Date,
constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the Effective Date whose election, or nomination
for election by Employer's stockholders, was approved by a
vote of at least two-thirds of the directors then comprising
the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Covered Person other than the Board; or
(3) consummation of (xx) a reorganization, merger,
amalgamation, consolidation, sale or other form of business
combination of Employer or any subsidiary of Employer, or (yy)
a sale, lease, exchange, disposition or other transfer of all
or substantially all of the assets of Employer (a "Business
Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more
than 75% of, respectively, the then
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outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation
which as a result of such transaction owns Employer or all or
substantially all of Employer's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such
Business Combination of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be,
(ii) no Covered Person (excluding any employee benefit plan
(or related trust) of Employer or such corporation resulting
from such Business Combination) beneficially owns, directly or
indirectly, 25% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then
outstanding voting securities of such corporation, except to
the extent that such ownership existed prior to the Business
Combination, and (iii) at least a majority of the members of
the board of directors of the corporation resulting from such
Business Combination, were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the
action of the Board of Directors, providing for such Business
Combination; or
(4) approval by the stockholders of Employer of a
complete liquidation or dissolution of Employer.
Section 7. Excise Tax.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by, or benefit from, Employer or any of its affiliates to or for
the benefit of Employee, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (any such payments,
distributions or benefits being individually referred to herein as a "Payment,"
and any two or more of such payments, distributions or benefits being referred
to herein as "Payments"), would be subject to the excise tax imposed by Section
4999 of the Code (such excise tax, together with any interest thereon, any
penalties, additions to tax, or additional amounts with respect to such excise
tax, and any interest in respect of such penalties, additions to tax or
additional amounts, being collectively referred herein to as the "Excise Tax"),
then Employee shall be entitled to receive an additional payment or payments
(individually referred to herein as a "Gross-Up Payment" and any two or more of
such additional payments being referred to herein as "Gross-Up Payments") in an
amount such that after payment by Employee of all taxes (as defined in Section
7(k)) imposed upon the Gross-Up Payment, Employee retains an amount of such
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 7(c) through (i), any
determination (individually, a "Determination") required to be made under this
Section 7(b), including whether a Gross-Up Payment is required and the amount of
such Gross-Up Payment, shall initially be made, at Employer's expense, by
nationally recognized tax counsel selected by Employer ("Tax Counsel"). Tax
Counsel shall provide detailed supporting legal authorities, calculations, and
documentation both to Employer and Employee within 15 business days of the
termination of
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Employee's employment, if applicable, or such other time or times as is
reasonably requested by Employer or Employee. If Tax Counsel makes the initial
Determination that no Excise Tax is payable by Employee with respect to a
Payment or Payments, it shall furnish Employee with an opinion reasonably
acceptable to Employee that no Excise Tax will be imposed with respect to any
such Payment or Payments. Employee shall have the right to dispute any
Determination (a "Dispute") within 15 business days after delivery of Tax
Counsel's opinion with respect to such Determination. The Gross-Up Payment, if
any, as determined pursuant to such Determination shall, at Employer's expense,
be paid by Employer to or for the benefit of Employee within five business days
of Employee's receipt of such Determination. The existence of a Dispute shall
not in any way affect Employee's right to receive the Gross-Up Payment in
accordance with such Determination. If there is no Dispute, such Determination
shall be binding, final and conclusive upon Employer and Employee, subject in
all respects, however, to the provisions of Section 7(c) through (i) below. As a
result of the uncertainty in the application of Sections 4999 and 280G of the
Code, it is possible that Gross-Up Payments (or portions thereof) which will not
have been made by Employer should have been made ("Underpayment"), and if upon
any reasonable written request from Employee or Employer to Tax Counsel, or upon
Tax Counsel's own initiative, Tax Counsel, at Employer's expense, thereafter
determines that Employee is required to make a payment of any Excise Tax or any
additional Excise Tax, as the case may be, Tax Counsel shall, at Employer's
expense, determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by Employer to or for the benefit of
Employee.
(c) Employer shall defend, hold harmless, and indemnify
Employee on a fully grossed-up after tax basis from and against any and all
claims, losses, liabilities, obligations, damages, impositions, assessments,
demands, judgements, settlements, costs and expenses (including reasonable
attorneys', accountants', and experts' fees and expenses) with respect to any
tax liability of Employee resulting from any Final Determination (as defined in
Section 7(j)) that any Payment is subject to the Excise Tax.
(d) If a party hereto receives any written or oral
communication with respect to any question, adjustment, assessment or pending or
threatened audit, examination, investigation or administrative, court or other
proceeding which, if pursued successfully, could result in or give rise to a
claim by Employee against Employer under this Section 7 ("Claim"), including,
but not limited to, a claim for indemnification of Employee by Employer under
Section 7(c), then such party shall promptly notify the other party hereto in
writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Employee ("Employee
Claim"), Employee shall take or cause to be taken such action in connection with
contesting such Employee Claim as Employer shall reasonably request in writing
from time to time, including the retention of counsel and experts as are
reasonably designated by Employer (it being understood and agreed by the parties
hereto that the terms of any such retention shall expressly provide that
Employer shall be solely responsible for the payment of any and all fees and
disbursements of such counsel and any experts) and the execution of powers of
attorney, provided that:
(1) within 30 calendar days after Employer receives
or delivers, as the case may be, the Tax Claim Notice relating
to such Employee Claim (or such
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earlier date that any payment of the taxes claimed is due from
Employee, but in no event sooner than five calendar days after
Employer receives or delivers such Tax Claim Notice), Employer
shall have notified Employee in writing ("Election Notice")
that Employer does not dispute its obligations (including, but
not limited to, its indemnity obligations) under this
Agreement and that Employer elects to contest, and to control
the defense or prosecution of, such Employee Claim at
Employer's sole risk and sole cost and expense; and
(2) Employer shall have advanced to Employee on an
interest-free basis, the total amount of the tax claimed in
order for Employee, at Employer's request, to pay or cause to
be paid the tax claimed, file a claim for refund of such tax
and, subject to the provisions of the last sentence of Section
7(g), xxx for a refund of such tax if such claim for refund is
disallowed by the appropriate taxing authority (it being
understood and agreed by the parties hereto that Employer
shall only be entitled to xxx for a refund and Employer shall
not be entitled to initiate any proceeding in, for example,
United States Tax Court) and shall indemnify and hold Employee
harmless, on a fully grossed-up after tax basis, from any tax
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and
(3) Employer shall reimburse Employee for any and all
costs and expenses resulting from any such request by Employer
and shall indemnify and hold Employee harmless, on fully
grossed-up after-tax basis, from any tax imposed as a result
of such reimbursement.
(f) Subject to the provisions of Section 7(e) hereof, Employer
shall have the right to defend or prosecute, at the sole cost, expense and risk
of Employer, such Employee Claim by all appropriate proceedings, which
proceedings shall be defended or prosecuted diligently by Employer to a Final
Determination; provided, however, that (i) Employer shall not, without
Employee's prior written consent, enter into any compromise or settlement of
such Employee Claim that would adversely affect Employee, (ii) any request from
Employer to Employee regarding any extension of the statute of limitations
relating to assessment, payment, or collection of taxes for the taxable year of
Employee with respect to which the contested issues involved in, and amount of,
Employee Claim relate is limited solely to such contested issues and amount, and
(iii) Employer's control of any contest or proceeding shall be limited to issues
with respect to Employee Claim and Employee shall be entitled to settle or
contest, in his sole and absolute discretion, any other issue raised by the
Internal Revenue Service or any other taxing authority. So long as Employer is
diligently defending or prosecuting such Employee Claim, Employee shall provide
or cause to be provided to Employer any information reasonably requested by
Employer that relates to such Employee Claim, and shall otherwise cooperate with
Employer and its representatives in good faith in order to contest effectively
such Employee Claim. Employer shall keep Employee informed of all developments
and events relating to any such Employee Claim (including, without limitation,
providing to Employee copies of all written materials pertaining to any such
Employee Claim), and Employee or his authorized representatives shall be
entitled, at Employee's expense, to participate in all conferences, meetings and
proceedings relating to any such Employee Claim.
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(g) If, after actual receipt by Employee of an amount of a tax
claimed (pursuant to an Employee Claim) that has been advanced by Employer
pursuant to Section 7(e)(2) hereof, the extent of the liability of Employer
hereunder with respect to such tax claimed has been established by a Final
Determination, Employee shall promptly pay or cause to be paid to Employer any
refund actually received by, or actually credited to, Employee with respect to
such tax (together with any interest paid or credited thereon by the taxing
authority and any recovery of legal fees from such taxing authority related
thereto), except to the extent that any amounts are then due and payable by
Employer to Employee, whether under the provisions of this Agreement or
otherwise. If, after the receipt by Employee of an amount advanced by Employer
pursuant to Section 7(e)(2), a determination is made by the Internal Revenue
Service or other appropriate taxing authority that Employee shall not be
entitled to any refund with respect to such tax claimed and Employer does not
notify Employee in writing of its intent to contest such denial of refund prior
to the expiration of 30 days after such determination, then such advance shall
be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of any Gross-Up Payments
and other payments required to be paid hereunder.
(h) With respect to any Employee Claim, if Employer fails to
deliver an Election Notice to Employee within the period provided in Section
7(e)(1) hereof or, after delivery of such Election Notice, Employer fails to
comply with the provisions of Section 7(e)(2) and (3) and (f) hereof, then
Employee shall at any time thereafter have the right (but not the obligation),
at his election and in his sole and absolute discretion, to defend or prosecute,
at the sole cost, expense and risk of Employer, such Employee Claim. Employee
shall have full control of such defense or prosecution and such proceedings,
including any settlement or compromise thereof. If requested by Employee,
Employer shall cooperate, and shall cause its Affiliates to cooperate, in good
faith with Employee and his authorized representatives in order to contest
effectively such Employee Claim. Employer may attend, but not participate in or
control, any defense, prosecution, settlement or compromise of any Employee
Claim controlled by Employee pursuant to this Section 7(h) and shall bear its
own costs and expenses with respect thereto. In the case of any Employee Claim
that is defended or prosecuted by Employee, Employee shall, from time to time,
be entitled to current payment, on a fully grossed-up after tax basis, from
Employer with respect to costs and expenses incurred by Employee in connection
with such defense or prosecution.
(i) In the case of any Employee Claim that is defended or
prosecuted to a Final Determination pursuant to the terms of this Section 7(i),
Employer shall pay, on a fully grossed-up after tax basis, to Employee in
immediately available funds the full amount of any taxes arising or resulting
from or incurred in connection with such Employee Claim that have not
theretofore been paid by Employer to Employee, together with the costs and
expenses, on a fully grossed-up after tax basis, incurred in connection
therewith that have not theretofore been paid by Employer to Employee, within
ten calendar days after such Final Determination. In the case of any Employee
Claim not covered by the preceding sentence, Employer shall pay, on a fully
grossed-up after tax basis, to Employee in immediately available funds the full
amount of any taxes arising or resulting from or incurred in connection with
such Employee Claim at least ten calendar days before the date payment of such
taxes is due from Employee, except where payment of such taxes is sooner
required under the provisions of this Section 7(i), in which case payment of
such taxes (and payment, on a fully grossed-up after tax basis, of any costs and
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expenses required to be paid under this Section 7(i) shall be made within the
time and in the manner otherwise provided in this Section 7(i).
(j) For purposes of this Agreement, the term "Final
Determination" shall mean (A) a decision, judgment, decree or other order by a
court or other tribunal with appropriate jurisdiction, which has become final
and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.
(k) For purposes of this Agreement, the terms "tax" and
"taxes" mean any and all taxes of any kind whatsoever (including, but not
limited to, any and all Excise Taxes, income taxes, and employment taxes),
together with any interest thereon, any penalties, additions to tax, or
additional amounts with respect to such taxes and any interest in respect of
such penalties, additions to tax, or additional amounts.
Section 8. Expenses of Enforcement.
Upon demand by Employee made to Employer, Employer shall reimburse
Employee for the reasonable expenses (including attorneys' fees and expenses)
incurred by Employee after a Change in Control in enforcing or seeking to
enforce the payment of any amount or other benefit to which Employee shall have
become entitled under this Agreement as a result of the termination of
Employee's employment with Employer within two (2) years after such Change in
Control, including, but not limited to, those incurred in connection with any
arbitration concerning same initiated pursuant to Section 14 (regardless of the
outcome of such arbitration). To the extent that any such reimbursement would be
subject to the Excise Tax, then Employee shall be entitled to receive Gross-Up
Payments in an amount such that after payment by Employee of all taxes imposed
on such Gross-Up Payments, Employee retains an amount equal to the Excise Tax
imposed upon the reimbursement, and the other provisions of Section 7 hereof
shall also apply to such circumstance unless the context thereof otherwise
indicates.
Section 9. No Obligation to Mitigate; No Rights of Offset.
(a) Employee shall not be required to mitigate the amount of
any payment or other benefit required to be paid to Employee pursuant to this
Agreement, whether by seeking other employment or otherwise, nor shall the
amount of any such payment or other benefit be reduced on account of any
compensation earned by Employee as a result of employment by another person.
(b) Employer's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which Employer may have against Employee or others.
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Section 10. No Effect on Other Rights.
Nothing in this Agreement shall prevent or limit Employee's continuing
or future participation in any plan, program, policy or practice of or provided
by Employer or any of its affiliates and for which Employee may qualify, nor
shall anything herein limit or otherwise affect such rights as Employee may have
under any stock option or other agreements with Employer or any of its
affiliates. Amounts which are vested benefits or which Employee is otherwise
entitled to receive under any plan, program, policy or practice of or provided
by, or any other contract or agreement with, Employer or any of its affiliates
at or subsequent to the Date of Termination shall be payable or otherwise
provided in accordance with such plan, program, policy or practice or contract
or agreement except as explicitly modified by this Agreement.
Section 11. Successors; Binding Agreement.
(a) This Agreement is personal to Employee and without the
prior written consent of Employer shall not be assignable by Employee otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
(b) This Agreement shall inure to the benefit of and be
binding upon Employer and its successors and assigns.
(c) Employer will require any successor (whether direct or
indirect, by purchase, merger, amalgamation, consolidation or otherwise) to all
or substantially all of the business and/or assets of Employer, by agreement in
form and substance reasonably satisfactory to Employee, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
Employer would be required to perform it if no such succession had taken place.
As used in this Agreement, "Employer" shall mean Employer as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by execution and delivery of the
agreement provided for in this Section 11(c) or which otherwise becomes bound by
the terms and provisions of this Agreement by operation of law or otherwise.
Section 12. Non-Competition; Non-Solicitation; No Hire.
(a) Employee agrees that, effective as of the Effective Date
and for a period that includes the term of this Agreement and (i) twelve (12)
months thereafter in the event of a termination of Employee's employment with
Employer described in Section 6(e), and (ii) six (6) months thereafter in all
other events (such applicable period being referred to herein as the
"Non-Compete Period"), Employee shall not, without the prior written consent of
Employer, directly or indirectly, anywhere in the world, engage, invest, own any
interest, or participate in, consult with, render services to, or be employed by
any business, person, firm or entity that is in competition with the "Business"
(as defined in Section 12(d)) of Employer or any of its subsidiaries or
affiliates, except for the account of Employer and its subsidiaries and
affiliates; provided, however, that during the Non-Compete Period Employee may
acquire, solely as a passive investment, not more than five percent (5%) of the
outstanding shares or other units of any security of any entity subject to the
requirements of Section 13 or 15(d) of the Exchange Act.
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Employee acknowledges that a remedy at law for any breach or attempted breach of
this covenant not to compete will be inadequate and further agrees that any
breach of this covenant not to compete will result in irreparable harm to
Employer, and, accordingly, Employer shall, in addition to any other remedy that
may be available to it, be entitled to specific performance and temporary and
permanent injunctive and other equitable relief (without proof of actual damage
or inadequacy of legal remedy) in case of any such breach or attempted breach.
Employee acknowledges that this covenant not to compete is being provided as an
inducement to Employer to enter into this Agreement and that this covenant not
to compete contains reasonable limitations as to time, geographical area and
scope of activity to be restrained that do not impose a greater restraint than
is necessary to protect the goodwill or other business interest of Employer.
Whenever possible, each provision of this covenant not to compete shall be
interpreted in such a manner as to be effective and valid under applicable law
but if any provision of this covenant not to compete shall be prohibited by or
invalid under applicable law, such provision of this covenant not to compete
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remaining provisions of this covenant not to compete. If any
provision of this covenant not to compete shall, for any reason, be judged by
any court of competent jurisdiction to be invalid or unenforceable, such
judgment shall not affect, impair or invalidate the remainder of this covenant
not to compete but shall be confined in its operation to the provision of this
covenant not to compete directly involved in the controversy in which such
judgment shall have been rendered. In the event that the provisions of this
covenant not to compete should ever be deemed to exceed the time or geographic
limitations permitted by applicable laws, then such provision shall be reformed
to the maximum time or geographic limitations permitted by applicable law.
(b) In addition to the restrictions set forth in Section
12(a), Employee agrees that, effective as of the Effective Date and for a period
that includes the term of this Agreement and twelve (12) months thereafter,
Employee will not, either directly or indirectly, (i) make known to any person,
firm or entity that is in competition with the Business of Employer or any of
its subsidiaries or affiliates the names and addresses of any of the suppliers
or customers of Employer or any of its subsidiaries or affiliates, potential
customers of Employer or any of its subsidiaries or affiliates upon whom
Employer or any of its subsidiaries or affiliates has called upon in the last
twelve (12) months or contacts of Employer or any of its subsidiaries or
affiliates or any other information pertaining to such persons, or (ii) call on,
solicit, or take away, or attempt to call on, solicit or take away any of the
suppliers or customers of Employer or any of its subsidiaries or affiliates,
whether for Employee or for any other person, firm or entity.
(c) Effective as of the Effective Date and for a period that
includes the term of this Agreement and twelve (12) months thereafter, Employee
will not, either on his own account or for any other person, firm, partnership,
corporation, or other entity (i) solicit any employee of Employer or any of its
subsidiaries or affiliates to leave such employment; or (ii) induce or attempt
to induce any such employee to breach her or his employment agreement with
Employer or any of its subsidiaries or affiliates.
(d) As used in this Agreement, "Business" means the business
of acquiring, processing and/or interpreting geophysical data and/or producing
and/or conducting geophysical surveys, including, but not limited to, (x) the
business of surface seismic acquisition and/or
-23-
surface seismic data processing and/or interpretation for the purpose of
providing and/or interpreting seismic images of the subsurface of the earth, and
(y) the following activities and services: (i) all forms of surface land,
marine, ocean bottom cable and transition zone seismic data acquisition; (ii)
all forms of surface seismic data processing, including the processing of two,
three and/or four dimensional vertical seismic profiling; (iii) recording of
data from wellbore seismic arrays performed during simultaneous acquisition of
surface two, three and/or four dimensional data; (iv) trenched in, buried near
surface or seabed permanent array installation and acquisition; (v) surface
seismic acquisition, processing, interpretation and/or sales, in each case, of
multiclient surveys; (vi) maintenance of surface seismic data processing
centers, including licensing and support of surface seismic processing software;
(vii) equipment design and manufacture for surface seismic acquisition,
processing and interpretation; (viii) research and development programs for any
of the items described in this Section 12(d) and seismically-assisted reservoir
solutions, including software relating thereto; (ix) surface seismic data
management services; (x) interpretation activities related to or in support of
acquisition and processing activities described in this Section 12(d); (xi)
borehole seismic acquisition and installation and acquisition of data from
wellbore seismic arrays; (xii) reservoir management; (xiii) commercial
seismically-assisted reservoir solutions; and (xiv) non-seismic data management
and non-seismic dynamic reservoir characterization and performance prediction.
Section 13. Miscellaneous.
(a) All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith will be in writing
and will be delivered by hand or by registered or certified mail, return receipt
requested to the addresses set forth below in this Section 13(a):
If to Employer, to:
Veritas DGC Inc.
00000 Xxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
If to Employee, to:
Xx. Xxxx X.X. XxxxxxXxxxx
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
or to such other names or addresses as Employer or Employee, as the case may be,
designate by notice to the other party hereto in the manner specified in this
Section.
(b) With the exception of the Indemnity Agreement by and
between Employer and Employee dated as of March 7, 2000 which is specifically
not superceded or replaced by or merged into this Agreement, this Agreement
(including the Exhibits attached hereto) supersedes, replaces and merges all
previous agreements and discussions relating to the same or similar subject
matters between Employee and Employer (including any such agreements or
discussions
-24-
between Employee and any past or present subsidiary or affiliate of Employer)
and constitutes the entire agreement between Employee and Employer with respect
to the subject matter of this Agreement. Specifically, this Agreement supercedes
and replaces the Original Employment Agreement. This Agreement may not be
modified in any respect by any verbal statement, representation or agreement
made by any employee, officer, or representative of Employer or by any written
agreement unless signed by an officer of Employer who is expressly authorized by
the Board to execute such document.
(c) If any provision of this Agreement or application thereof
to anyone or under any circumstances should be determined to be invalid or
unenforceable, such invalidity or unenforceability will not affect any other
provisions or applications of this Agreement which can be given effect without
the invalid or unenforceable provision or application. In addition, if any
provision of this Agreement is held by an arbitration panel or a court of
competent jurisdiction to be invalid, unenforceable, unreasonable, unduly
restrictive or overly broad, the parties intend that such arbitration panel or
court modify said provision so as to render it valid, enforceable, reasonable
and not unduly restrictive or overly broad.
(d) The internal laws of the State of Texas will govern the
interpretation, validity, enforcement and effect of this Agreement without
regard to the place of execution or the place for performance thereof.
Section 14. Arbitration.
(a) Employer and Employee agree to submit to final and binding
arbitration any and all disputes or disagreements concerning the interpretation
or application of this Agreement. Any such dispute or disagreement will be
resolved by arbitration in accordance with the National Rules for the Resolution
of Employment Disputes of the American Arbitration Association (the "AAA
Rules"). Arbitration will take place in Houston, Texas, unless the parties
mutually agree to a different location. Within 30 calendar days of the
initiation of arbitration hereunder, each party will designate an arbitrator.
The appointed arbitrators will then appoint a third arbitrator. Employee and
Employer agree that the decision of the arbitrators will be final and binding on
both parties. Any court having jurisdiction may enter a judgment upon the award
rendered by the arbitrators. In the event the arbitration is decided in whole or
in part in favor of Employee, Employer will reimburse Employee for his
reasonable costs and expenses of the arbitration (including reasonable
attorneys' fees); provided, however, that Employer shall reimburse Employee in
accordance with Section 8 for the reasonable expenses (including attorneys' fees
and expenses) incurred by Employee in enforcing or seeking to enforce in any
arbitration the payment of any amount or other benefit described in Section 8
regardless of the outcome of such arbitration. Regardless of the outcome of any
arbitration, Employer will pay all fees and expenses of the arbitrators and all
of Employer's costs of such arbitration.
(b) Notwithstanding the provisions of Section 14(a), Employer
may, if it so chooses, bring an action in any court of competent jurisdiction
for injunctive relief to enforce Employee's obligations under Sections 3(b),
3(c), 3(d) or 12 hereof.
-25-
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as to be effective as of the Effective Date.
EMPLOYER:
VERITAS DGC INC.
By:
----------------------------------
Xxxxx X. Xxxxxx
Chairman & Chief Executive Officer
EMPLOYEE:
--------------------------------------
Xxxx X.X. XxxxxxXxxxx
-26-
[VERITAS LOGO]
EMPLOYEE CONFIDENTIALITY
AND
INTELLECTUAL PROPERTY AGREEMENT
As part of the consideration for my employment or continued employment with
Veritas DGC Inc. or any company affiliated with Veritas (collectively referred
to as "Veritas"), I agree to the following:
1. CONFIDENTIAL INFORMATION. I understand that during my employment with
Veritas, I will have access to Confidential Information that belongs to
Veritas. Some examples of the types of Confidential Information I may
receive include:
(a). Customer lists, customer requirements, customer contracts and
service agreements, customer profitability and other financial
information;
(b). Business plans, pricing and marketing techniques and
strategies, product information, business software and
computer programs, costing methodologies and allocation
modeling, and methods of business operation or procedure;
(c). Suppliers, business associates, business connections and
opportunities and information concerning the financial status
and private affairs of Veritas; and
(d). Trade secrets, inventions, improvements, developments,
technical data, test results, designs, and materials for which
Veritas may or may not have obtained patent, copyright or
trademark protection.
I may receive Confidential Information in writing, orally, or
electronically.
2. CONFIDENTIALITY AGREEMENT. I agree to hold all Confidential Information
in confidence during and following my employment. I will not divulge it
to anyone without the express written authorization of the Company. I
further agree that if my employment ceases, I will not take any
Confidential Information with me or disclose it to anyone not
authorized by the Company.
CONFIDENTIALITY AND INTELLECTUAL PROPERTY AGREEMENT PAGE 1
EXHIBIT A
3. ASSIGNMENT OF INTELLECTUAL PROPERTY. I assign to Veritas all
inventions, novel ideas (including ideas relating to new products, new
services, or new methods of doing business), improvements or
discoveries which I conceive or make, either alone or with others: (a)
with the use of Veritas' time, materials, or facilities; or (b)
resulting from or suggested by my work for Veritas; or (c) in any way
related to any business Veritas is engaged in or plans to engage in.
All such inventions, improvements, and developments will automatically
become the property of Veritas immediately as I make them or conceive
them. I agree to assign to Veritas the rights to such inventions,
improvements and developments at any time Veritas requests, even after
my employment terminates.
4. EXECUTION OF DOCUMENTS. At any time Veritas requests, either during my
employment or after termination, and without charge to Veritas, but at
its expense, I agree to execute, acknowledge, and deliver all
additional papers (including applications for patents and assignments
of patents) and to perform such other lawful acts as Veritas may deem
reasonably necessary to obtain or maintain patents for such inventions
in any country and to vest title to such inventions in Veritas.
5. This Agreement may not be modified, released, discharged, abandoned or
terminated, except as agreed in writing between Veritas and the
undersigned employee.
IN WITNESS WHEREOF this Agreement has been signed and delivered this ________
day of ____________________, 20___.
--------------------------------- -----------------------------------
WITNESS EMPLOYEE SIGNATURE
--------------------------------- -----------------------------------
PRINTED NAME PRINTED NAME
CONFIDENTIALITY AND INTELLECTUAL PROPERTY AGREEMENT PAGE 2
AGREEMENT AND RELEASE OF ALL CLAIMS
This Agreement, entered into as of the date written by Employee's
signature below, is by and between Veritas DGC Inc. ("Veritas"), a Delaware
corporation, and _______________ ("Employee"). (As used in this Agreement, the
term "Veritas" includes Veritas DGC Inc., and all of its subsidiary and
affiliated companies).
Veritas and Employee agree as follows:
Section 1. Within 5 business days after the Separation Date, as defined
in Section 3 below, and whether or not Employee executes and returns this
Agreement, Veritas will pay Employee the following amounts:
o Employee's regular base salary prorated through the Separation
Date;
o Employee's vacation pay accrued as of the Separation Date; and
o any expense reimbursement owed to Employee under Veritas
policy.
All of the above amounts will be REDUCED by applicable taxes and withholding.
Section 2. [Insert Option A or Option B, whichever is applicable:]
[Option A: During the twelve-month period ending on the last day of the
twelfth month after the Separation Date, Employer shall pay to Employee an
aggregate amount (the "Severance Payment") equal to one and one (1) times
Employee's Base Salary (as defined in the Employment Agreement between Employer
and Employee dated October 22, 2001, the "Employment Agreement") at the highest
annual rate in effect on or before the Separation Date (but prior to giving
effect to any reduction therein which precipitated such termination), which
Severance Payment will be paid to Employee in equal installments every two weeks
during such twelve-month period; provided, however, that at any time during such
twelve-month period Employer may, in its discretion, elect to pay to Employee
the then remaining balance of the
Severance Payment in the form of a lump sum cash payment. All amounts so paid
will be REDUCED by applicable taxes and withholding.
In addition, Employer will pay or provide for Employee's medical,
dental, health, and hospital coverage for one year or pay Employee a lump cash
payment in lieu of such coverage, in accordance with Section 6(d)(5) of the
Employment Agreement. Further, Employer will provide or pay Employee those
relocation benefits specified in Section 6(d)(4)-(6) of the Employment
Agreement. All amounts so paid will be REDUCED by applicable taxes and
withholding;]
[Option B: Within 30 calendar days after the Effective Date, as defined
in Section 15 below, Veritas will pay to Employee a lump sum equal to
__________. This amount will be REDUCED by applicable taxes and withholding.
In addition, Employer will pay or provide for Employee's medical,
dental, health, and hospital coverage for eighteen months or pay Employee a lump
cash payment in lieu of such coverage, in accordance with Section 6(e)(5) of the
Employment Agreement by and between Employer and Employee effective October 22,
2001 (the "Employment Agreement"). Further, Employer will provide or pay
Employee those relocation benefits specified in Section 6(e)(4)-(6) of the
Employment Agreement. All amounts so paid will be REDUCED by applicable taxes
and withholding;]
Section 3. Employee's termination from employment will be effective at
the close of business on the Separation Date. The SEPARATION DATE as used in
this Agreement means _________.
Section 4. Employee agrees to release Veritas from any claims he has or
may have against Veritas as of the date he signs this Agreement. The claims he
is releasing include all of the following:
o any claims under any bonus or incentive plans;
o any claims for tortious action or inaction of any sort
("tortious action or inaction" means, among other things,
claims for such things as negligence, fraud, libel, or
slander);
o any claims arising under the Age Discrimination in Employment
Act of 1967 as amended (29 U.S.C. Section 621, et seq.) (the
Age Discrimination in Employment Act of 1967 prohibits, in
general, discrimination against employees on the basis of
age);
o any claims arising under Title VII of the Civil Rights Act of
1964 as amended (42 U.S.C. Section 2000e, et seq.), or the
Texas Commission on Human Rights Act (Texas Labor Code Section
21.001, et seq.) (both of these statutes, in general, prohibit
discrimination in employment on the basis of race, religion,
national origin or gender);
o any claims arising under the Americans with Disabilities Act
of 1990, as amended (42 U.S.C. Section 12101, et seq.) (the
Americans with Disabilities Act of 1990 prohibits, in general,
discrimination in employment on the basis of an employee's or
applicant's disability);
o any claims arising under Texas Labor Code Sections 451.001, et
seq. for retaliation or discrimination in connection with a
claim for workers' compensation benefits; and,
o any claims for breach of contract, wrongful discharge,
constructive discharge, retaliation, or conspiracy; and
o any claims relating to Employee's employment or termination of
his employment
including any and all claims for damages, costs, salary,
wages, termination pay, severance pay, vacation pay,
commissions, expenses, allowances, insurance, or any other
benefit arising out of Employee's employment with Veritas,
with the exception of those benefits specifically excluded
below in this Section 4.
Employee acknowledges that the execution of this Agreement and
Release of All Claims has the effect of precluding the consideration of
any complaint by the Alberta Human Rights Commission pursuant to the
Alberta Human Rights, Citizenship and Multicultualism Act, or any other
applicable human rights legislation.
The release contained in this Section 4 WILL NOT affect any of
the following:
o Employee's rights or benefits under Veritas' 401(k) retirement
savings plan, Veritas' Employee Stock Purchase Plan, or any
pension or retirement plan in which Employee is a participant
on the Separation Date (Employee's rights and benefits will be
determined by the applicable plan documents);
o Employee's right to elect continued health and/or dental
benefits under the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA");
o Employee's right to exercise any options to purchase Veritas
DGC Inc. common stock in accordance with the terms of the
applicable stock option grant, including any terms of the
grant modified by Section 6(e)(5) of the Employment Agreement;
o Employee's rights under any restricted stock agreement between
Employee and Veritas DGC Inc. under the terms of which
Employee has been granted Veritas DGC Inc. restricted stock,
including any terms of the grant modified by Section 6(e)(5)
of the Employment Agreement;
o Employee's right to claim and receive reimbursement for or
indemnity from excise taxes in accordance with Section 7 of
the Employment Agreement;
o Employee's rights to indemnity under that one certain
Indemnity Agreement effective March 7, 2000, by and between
Employer and Employee;
o Any other benefit to which Employee may be entitled under any
other health or benefit plan in accordance with the applicable
plan documents; or
o Employee's rights under any workers' compensation statue; the
Xxxxx Act, 46 U.S.C. Appx. Section 688, as amended; general
maritime law or similar laws; and any other right Employee may
have with respect to bodily injury.
Section 5. Veritas and Employee agree that this Agreement is a binding
contract. The purpose of the Agreement is to compromise doubtful or disputed
claims, avoid litigation, and buy peace. Employee agrees that although Veritas
is making payment to Employee in exchange for a release of claims, Veritas does
not admit any wrongdoing of any kind.
Section 6. Employee agrees to assist Veritas in defending any legal
proceedings against Veritas arising out of matters which occurred on or prior to
the Separation Date. Veritas agrees to reimburse Employee for his time and
expense or costs he may incur in that regard.
Section 7. Employee confirms that after the Effective Date he remains
subject to and agrees to comply with:
o those obligations of confidentiality contained in Section 3(b)
and 3(c) of the Employment Agreement;
o the provisions relating to competition with Employer contained
in Section 12 of the Employment Agreement;
o the provisions relating to solicitation or hiring of
Employer's employees contained in Section 12 of the Employment
Agreement; and
o the terms of the Employee Confidentiality and Intellectual
Property Agreement with Employer which Employee signed
effective October 22, 2001.
Section 8. This Agreement has been delivered to Employee on
_____________.
o Employee will have 21 calendar days from ___________ or until
the close of business on ___________ to decide whether to sign
and return this Agreement and be bound by its terms. In the
event Employee has not signed and returned this Agreement to
Veritas on or before __________, this Agreement will become
null and void.
o Veritas and Employee agree that if they agree to change the
terms of this Agreement in any manner after it is delivered to
Employee, even if the changes are material, the 21-day period
specified in the previous paragraph will not restart or be
extended.
o After signing this Agreement, Employee will have the right to
revoke the Agreement for a period of 7 calendar days after
signing it by (a) notifying Veritas in writing that Employee
revokes the Agreement and (b) returning to Veritas any
consideration paid Employee under Section 2 above. In the
event Employee revokes the Agreement, it will become null and
void.
Section 9. Employee acknowledges that he has read this Agreement. He
understands that, except for the exceptions set out in Section 4 above, this
Agreement will have the effect of waiving any claim he may pursue against
Veritas.
Section 10. Employee acknowledges that he makes this Agreement
knowingly and voluntarily.
Section 11. This Agreement constitutes the entire understanding between
Veritas and Employee with respect to the subject matter hereof.
Section 12. This Agreement will benefit and be binding upon Veritas and
its successors and assigns and Employee and his successors and legal
representatives. Employee will not assign or attempt to assign any of his rights
under this Agreement.
Section 13. If a court determines that any provision of this Agreement
is invalid, the other provisions will remain in effect.
Section 14. This Agreement will be governed by, construed under, and
enforced in accordance with the laws of the State of Texas, not including,
however, its conflicts of law rules that might otherwise refer to the law of
another forum or jurisdiction.
Section 15. This Agreement will become effective and enforceable only
after a period of 7 days has expired following Employee's execution and delivery
of this Agreement to Veritas (this date is referred to in this Agreement as the
"EFFECTIVE DATE").
THIS AGREEMENT IS SUBJECT TO ARBITRATION IN
ACCORDANCE WITH THE FOLLOWING SECTION
Section 16. Employer and Employee agree to submit to final and binding
arbitration any and all disputes or disagreements concerning the interpretation
or application of this Agreement. Any such dispute or disagreement will be
resolved by arbitration in accordance with the National Rules for the Resolution
of Employment Disputes of the American Arbitration Association (the "AAA
Rules"). Arbitration will take place in Houston, Texas, unless the parties
mutually agree to a different location. Within 30 calendar days of the
initiation of arbitration
hereunder, each party will designate an arbitrator. The appointed arbitrators
will then appoint a third arbitrator. Employee and Employer agree that the
decision of the arbitrators will be final and binding on both parties. Any court
having jurisdiction may enter a judgment upon the award rendered by the
arbitrators. In the event the arbitration is decided in whole or in part in
favor of Employee, Employer will reimburse Employee for his reasonable costs and
expenses of the arbitration (including reasonable attorneys' fees). Regardless
of the outcome of any arbitration, Employer will pay all fees and expenses of
the arbitrators and all of Employer's costs of such arbitration.
Notwithstanding the provisions of the previous paragraph, Employer
may, if it so chooses, bring an action in any court of competent jurisdiction
for injunctive relief to enforce Employee's obligations under Section 7 of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the Effective Date.
VERITAS:
VERITAS DGC INC.
and subsidiary and affiliated companies
By:
---------------------------------------
NOTICE TO EMPLOYEE
BY SIGNING THIS DOCUMENT, YOU MAY BE GIVING UP IMPORTANT LEGAL RIGHTS. YOU ARE
ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING AND RETURNING THIS DOCUMENT
TO VERITAS.
EMPLOYEE:
--------------------------------------------
Date:
--------------------------------------
