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Exhibit 10.24
EMPLOYMENT AGREEMENT
AGREEMENT dated as of January 2, 1987 by and
between XXXXX XXXXXX GROUP INC., a Delaware
corporation with its principal office at 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("PWG"),
PAINEWEBBER INCORPORATED, a Delaware corporation with
its principal office at 0000 Xxxxxx xx xxx Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 ("PWI"), as the employers,
and XXXX X. XXXX, who resides at 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, as the employee (the
"Executive").
WHEREAS, the Executive has been serving as President of PW
International; and
WHEREAS, PWG and PWI each desire to assure the Executive of his rights
to compensation and benefits that are granted to him because of his service in
the foregoing capacities, and Executive desires to continue to serve in such
capacities in consideration of the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein and for other good and valuable consideration, PWG,
PWI and the Executive hereby agree as follows:
1. Definitions.
(a) "Cause shall mean (i) the Executive is convicted of a crime
involving moral turpitude, or (ii) the Executive, in carrying out his duties, is
guilty of (A) willful gross neglect or (B) willful gross misconduct resulting,
in either case, in material harm to PWG or PWI unless such act, or failure to
act, was believed by the Executive in good faith to be in the best interests of
PWG or PWI.
(b) a "Change in Control" shall be deemed to have occurred if:
(i) any "person", as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange
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Act of 1934 (the "Act"), becomes a beneficial owner, as such term is used
in Rule 13d-3 promulgated under the Act, of securities of PWG or PWI
representing 20% or more of the combined voting power of the outstanding
securities of PWG or PWI, as the case may be, having the right to vote in
the election of directors (any such owner being herein referred to as an
"Acquiring Person");
(ii) a majority of the Board of Directors of PWG ("PWG Board") at
any time consists of individuals elected to membership at a PWG Board
meeting or a PWG shareholders' meeting other than individuals nominated or
approved by a majority of the Disinterested Directors;
(iii) all or substantially all the business of PWI is disposed of
pursuant to a merger, consolidation or other transaction (other than a
merger, consolidation or other transaction with a company of which 50% or
more of the combined voting power of the outstanding securities having a
right to vote at the election of directors is owned, directly or
indirectly, by PWG both before and immediately after the merger,
consolidation or other transaction) in which PWI is not the surviving
corporation or PWG is materially or completely liquidated; or
(iv) PWG or PWI combines with another company and is the surviving
corporation (other than a merger, consolidation or other transaction with a
company of which 50% or more of the combined voting power of the
outstanding securities having a right to vote at the election of directors
is owned, directly or indirectly, by PWG both before and immediately after
the merger, consolidation or other transaction) but, immediately after the
combination, the shareholders of PWG hold, directly or indirectly, less
than 50% of the total outstanding securities of the combined company
having the right to vote in the election of directors.
(c) "Disinterested Director" shall mean any member of the PWG Board (i)
who is not an officer or employee of PWG, PWI or any of their subsidiaries, (ii)
who is not an Acquiring Person or an affiliate or associate of an Acquiring
Person or a nominee or representative of an Acquiring Person or of any such
affiliate or associate and (iii) who was a member of the PWG Board prior to the
date of this Agreement or was recommended for election or elected by a
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majority of the Disinterested Directors then on the PWG Board.
(d) "Constructive Termination" shall mean that, without the Executive's
prior written consent, one or more of the following events occurs and, within
six months thereafter, the Executive, on his own initiative, terminates his
employment:
(i) The Executive is not reelected to or is otherwise removed from
the position of President of PW International as described in Section 2(a)
for any reason other than his termination of employment under Section
10(a), 10(b) or 10(d).
(ii) The Executive is assigned any duties or responsibilities that
are inconsistent, in any significant respect, with the scope of duties and
responsibilities associated with his position as described in Section 2(a).
(iii) The Executive suffers a reduction in the authorities, duties
and responsibilities associated with his position as described in Section
2(a) on the basis of which he makes a determination in good faith that he
can no longer carry out such position in the manner contemplated at the
time this Agreement was entered into.
(iv) The Executive's base salary or annual bonus decreases below
the minimum level provided in Section 3 or 4, as the case may be, or his
benefits under any employee benefit plan or program of PWG or PWI, or his
incentive opportunity under any incentive program of PWG or PWI is
materially reduced below the level, or opportunity, as the case may be, in
effect on the Operative Date, unless PWG or PWI provides the Executive with
a comparable plan or program having the economic equivalent thereof.
(v) The principal office of PWG or PWI or the Executive's own
office location as assigned to him by PWG or PWI is relocated outside an
area within ten miles of the headquarters of PWI in Manhattan on the date
hereof.
(e) "Disability" shall mean the Executive's inability to render for a
period of six consecutive months, full and effective services hereunder by
reason of permanent
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disability, whether resulting from illness, accident or otherwise; provided,
however, that in no event will the Executive be considered disabled for the
purposes of this Agreement unless he is deemed disabled pursuant to the PWG Long
Term Disability Plan.
(f) "Operative Date" shall mean the date, if any, following a Change in
Control that has been designated in a resolution adopted by a majority of the
Disinterested Directors, in their sole discretion, as the Operative Date.
(g) "Pro Rata Bonus" shall mean an amount equal to the annual bonus
otherwise payable with respect to the fiscal year in question multiplied by a
fraction, the numerator of which is the number of days in such fiscal year
during which the Executive is employed, and the denominator of which is 365.
(h) "Term of this Agreement" shall mean the period between the
Operative Date and the third anniversary thereof, but only if the Executive is
employed by PWG or PWI on the Operative Date.
2. Positions and Duties.
(a) During the Term of this Agreement, the Executive shall be employed
as President of PW International. The Executive shall report during the Term of
this Agreement to the Chief Executive Officer of PWI and shall direct and
control PWI's International Businesses in Securities Sales and Trading. He shall
during the Term of this Agreement recommend objectives, policies and plans for
these areas. During the Term of this Agreement and subject to the provisions of
Section 2(b), the Executive shall devote his full business time and attention to
the business and affairs of PWG and PWI and shall use his best efforts, skills
and abilities to promote their interests.
(b) Anything herein to the contrary notwithstanding, nothing shall
preclude the Executive from serving on the boards of directors of other
companies, engaging in charitable and community affairs and managing his
personal investments, provided that such activities do not materially interfere
with the performance of his duties or responsibilities hereunder.
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3. Salary.
During the Term of this Agreement, the Executive shall be paid by PWI a
base salary payable no less frequently than in equal semi-monthly installments
at an annualized rate of no less than the annual salary being paid to the
Executive on the Operative Date. Such base salary shall be reviewed annually for
increase in the discretion of the Compensation Committee of the PWG Board (the
"Committee"), taking into account such factors as corporate and individual
performance, salary increases for other senior officers and increases, if any,
in the Consumer Price Index for New York (the "Consumer Price Index").
4. Annual Bonus.
For each fiscal year during the Term of this Agreement, PWI shall pay
the Executive an annual bonus of not less than the average of the three annual
bonuses awarded to him for the three fiscal years of PWI next preceding the
Operative Date or such larger amount as the Committee in its discretion shall
determine, taking into account such factors as corporate and individual
performance, bonuses for other senior officers and increases, if any, in the
Consumer Price Index. For the period of employment during the last fiscal year
in which falls the Term of this Agreement, PWI shall pay the Executive a Pro
Rata Bonus. All bonuses shall be paid to the Executive at the same time bonuses
are paid to other senior officers of PWI, unless the Executive has elected to
defer receipt of all or part of the bonus to which he is entitled in respect of
such fiscal year in accordance with the terms of the PWI Deferred Compensation
Program.
5. Restricted Stock.
During the Term of this Agreement, the Executive shall be entitled to
participate in the Restricted Stock Award program under the Xxxxx Xxxxxx Group
Inc. 1986 Stock Award Plan (the "Stock Award Plan"), or any successor program or
programs. Size and frequency of awards shall be determined in accordance with
administrative policies consistent with those followed in the past.
6. Stock Option and Stock Appreciation Rights Awards.
During the Term of this Agreement, the Executive shall be entitled to
participate in the Stock Option program
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under the Stock Award Plan, or any successor program or programs. Size and
frequency of awards shall be determined in accordance with administrative
policies consistent with those followed in the past.
7. PW Partners L.P.
During the Term of this Agreement, the Executive shall be eligible to
participate in PW Partners L.P.
8. Employee Benefit Programs.
During the Term of this Agreement, the Executive shall be entitled to
participate in all employee benefit programs of PWG or PWI now or hereafter made
available to PWG or PWI executives or salaried employees generally, as such
programs may be in effect from time to time, including, without limitation,
pension and other retirement plans, profit sharing plans, group life insurance,
accidental death and dismemberment insurance, hospitalization, surgical, major
medical coverage, sick leave (including salary continuation arrangements),
long-term disability, vacations, holidays and other employee benefit programs
sponsored by PWG or PWI.
9. Business Expense Reimbursement and Perquisites.
(a) During the Term of this Agreement, the Executive shall be entitled
to receive proper reimbursement by PWG or PWI for all reasonable, out-of-pocket
expenses incurred by him (in accordance with the policies and procedures
established by PWG or PWI for their senior executives) in performing services
under this Agreement, provided that the Executive submits reasonable
documentation with respect to such expenses.
(b) During the Term of this Agreement, the Executive shall also be
entitled to any of the PWG or PWI executive perquisites in accordance with the
terms and provisions of such arrangements as are in effect and applicable on the
Operative Date.
10. Termination of Employment.
(a) Termination Due to Death or Disability. In the event the
Executive's employment terminates during the
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Term of this Agreement as a result of death or termination by PWG or PWI due to
Disability, the Executive or his legal representative, as the case may be, shall
be entitled to:
(i) base salary as provided in Section 3, at the rate in effect at
the time of his termination through the date of termination of employment;
(ii) any bonus awarded but not yet paid under Section 4;
(iii) a Pro Rata Bonus for the fiscal year in which death or
disability occurs;
(iv) any deferred bonus as provided in Section 4, including
interest or other credits on the deferred amounts;
(v) reimbursement for expenses incurred pursuant to Section 9(a)
prior to termination; and
(vi) such rights to other compensation and benefits as may be
provided in applicable plans and programs of PWG or PWI, including without
limitation restricted stock as provided in Section 5, stock options as
provided in Section 6 and interests in PW Partners L.P. as provided in
Section 7, as well as applicable employee benefit plans and programs as
provided in Section 8.
(b) Termination by PWG or PWI for Cause. In the event PWG or PWI
terminates the Executive's employment during the Term of this Agreement for
Cause, he shall be entitled to:
(i) base salary as provided in Section 3 at the rate in effect at
the time of his termination through the date of termination of employment;
(ii) any bonus awarded but not yet paid under Section 4;
(iii) any deferred bonus as provided in Section 4, including
interest or other credits on the deferred amounts;
(iv) reimbursement for expenses incurred pursuant to Section 9(a)
prior to termination; and
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(v) such rights to other compensation and benefits as may be
provided in applicable plans and programs of PWG or PWI, including without
limitation restricted stock as provided in Section 5, stock options as
provided in Section 6, and interests in PW Partners L.P. as provided in
Section 7, as well as applicable employee benefit plans and programs as
provided in Section 8.
In any case described in this Section 10(b), the Executive shall be
given written notice, authorized by a vote of at least a majority of the members
of the PWG Board (excluding the Executive), that PWG or PWI intends to terminate
his employment for Cause under this Section 10(b). Such written notice shall
specify the particular acts, or failures to act, on the basis of which the
decision to so terminate employment has been made. The Executive shall be given
the opportunity within 20 days of the receipt of such notice to meet with the
PWG Board to defend such acts, or failures to act, and the Executive shall be
given seven days after such meeting to correct such acts or failures to act.
Upon failure of the Executive, within seven days, to correct such acts or
failures to act, the Executive's employment by PWG and PWI shall automatically
be terminated for Cause under this Section 10(b).
(c) Termination Without Cause or Constructive Termination.
(i) In the event that during the Term of this Agreement (A) either PWG
or PWI terminates the Executive's employment without Cause, other than due to
Disability, or (B) there is a Constructive Termination, the Executive shall
thereupon be entitled to (x) a lump sum payment equal to the present value of:
(aa) base salary until the end of the Term of this Agreement at the
rate in effect immediately prior to the termination of employment;
(bb) a bonus for the year of termination and bonuses for each year
until the end of the Term of this Agreement, at an annualized rate equal to
the average of the bonuses awarded to him with respect to the three years
preceding the year in which termination occurs: and
(cc) any bonus awarded but not yet paid (including deferred bonus);
and (y) such rights to
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compensation, benefits and reimbursements as may be provided in applicable
plans, programs and policies of PWG or PWI, including without limitation
restricted stock as provided in Section 5, stock options as provided in
Section 6 and interests in PW Partners L.P. as provided in Section 7, as
well as applicable employee benefit plans and programs as provided in
Section 8. To the extent that, because of his termination under this
Section 10(c), the Executive is ineligible for continued employee benefit
coverage under the employee benefit programs as provided in Section 8, PWI
shall provide him with the economic equivalent thereof.
(ii) Notwithstanding anything herein to the contrary, if
(A) any amounts due under Section 10(c)(i) constitute "Parachute
Payments" within the meaning of Section 280G(b)(2) of the Internal Revenue
Code (the "Code"), or successor provision, and
(B) the amount of the Parachute Payments, reduced by all Federal,
state and local taxes applicable with respect thereto, including the excise
tax imposed pursuant to Section 4999 of the Code, is less than the amount
he would receive, after taxes, if he were paid only 2.99 times his "Base
Amount" within the meaning of Section 280G(b)(3), then, in lieu of the
Parachute Payments the Executive shall be paid an amount in cash equal to
2.99 times the Base Amount. The determinations made with respect to this
Section 10(c)(ii) shall be made by an independent auditor (the "Auditor")
jointly selected by PWG and the Executive, or his legal representatives.
The Auditor shall be a nationally recognized United States public
accounting firm which has not, during the two years preceding the date of
its selection, acted in any way on behalf of PWG or its affiliates.
(iii) Any payments to which the Executive shall be entitled under this
Section 10(c) shall be made as promptly as possible following the termination of
the Executive's employment hereunder.
(d) Voluntary Termination. A "Voluntary Termination" under this Section
10(d) shall mean a termination of employment, during the Term of this Agreement,
by the Executive on his own initiative other than (i) a termination due to
disability under Section 10(a) or (ii) a Constructive
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Termination under Section 10(c). Such a termination shall not be deemed a breach
of the Agreement and shall entitle the Executive to all of the rights and
benefits to which he would be entitled in the event of a termination for Cause
as described in Section 10(b).
(e) No Mitigation; No Offset. In the event of any termination under
this Section 10, the Executive shall be under no obligation to seek other
employment and there shall be no offset against amounts due the Executive under
this Section 10 on account of any remuneration attributable to any subsequent
employment that the Executive may obtain. Any amounts due under this Section 10
are in the nature of severance payments, or liquidated damages, or both, and are
not in the nature of a penalty.
11. Indemnification.
PWG and PWI represent that, while the Executive is employed under this
Agreement, he shall be serving as an officer of PWI at the request of PWG for
purposes of the provisions of Article IX of the Restated Certificate of
Incorporation of PWG as proposed to the PWG stockholders to be amended at the
1987 Annual Meeting of Stockholders of PWG and as an officer of PWI for purposes
of the provisions of Article X of the Restated Certificate of Incorporation of
PWI as in effect on the date hereof. If either Certificate is amended so as to
remove or diminish the protection therein accorded to covered officers, PWG
and/or PWI will notify the Executive within five days of such removal or
diminution. PWG and PWI further agree to maintain the same liability insurance
coverage for the Executive with respect to all periods during which the
Executive serves or served as an officer of PWG or PWI as is maintained with
respect to such periods for other senior executives of PWG and PWI.
12. Disputes
Any controversy or claim arising out of or relating to this Agreement,
or any breach thereof, shall be settled by arbitration in accordance with the
rules of the American Arbitration Association then in effect in the State of New
York, and judgment upon such award rendered by the arbitrator(s) may be entered
in any court having jurisdiction thereof. The arbitration shall be held in
Manhattan. The cost of the arbitration including, but not limited to, any
reasonable legal fees or other expenses incident thereto, shall be determined by
the arbitrator(s) and shall be borne by the parties to the arbitration. To the
extent the
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Executive's position is upheld, any reasonable expenses (including costs of
witnesses, evidence, and attorneys) incurred by the Executive in connection with
the arbitration shall be reimbursed to the Executive by PWG or PWI.
13. Assignability
No rights or obligations under this Agreement may be assigned or
transferred by the Executive except (a) the Executive's rights to compensation
and benefits hereunder shall, in the event of death, pass to his estate, or to
this designated beneficiary, and may be transferred by will or operation of law,
and (b) the Executive's rights under PWI and PWG plans, programs and policies as
described in Sections 5, 6, 7 and 8 may be assigned or transferred in accordance
with such plans, policies or practices. No rights or obligations of PWI or PWG
under this Agreement may be assigned or transferred except that such rights or
obligations may be assigned or transferred by operation of law in situations
described in Section 368 of the Code, as amended, or successor provision, in
liquidation, in dissolution or otherwise where PWI or PWG is not the continuing
entity, provided the assignee or transferee is the successor to all or
substantially all the assets of PWI or PWG and such assignee or transferee
assumes the rights, duties and liabilities of PWI or PWG, as contained in this
Agreement, either contractually or as a matter of law.
14. Governing Law.
This agreement shall be governed by the laws of the State of New York
without reference to the principles of conflict of laws.
15. Entire Agreement
Except as otherwise specifically provided herein, this Agreement
contains all the legally binding understandings and representations between PWG,
PWI and the Executive pertaining to the subject matter hereof and supersedes all
undertakings and agreements, if any, whether oral or in writing, previously
entered into by PWG, PWI and the Executive with respect to such subject matter.
16. Amendment or Modification; Waiver.
No provision of this Agreement may be amended or waived unless such
amendment or waiver is agreed to in
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writing, signed by the Executive and by a duly authorized officer of PWI or PWG.
Except as otherwise specifically provided in this Agreement, no waiver by PWG,
PWI or the Executive of any breach by the other of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar provision or condition at the same or any prior or
subsequent time.
17. Notices.
Any notice required or permitted to be given under this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
or sent by certified or registered mail, postage prepaid, return receipt
requested, duly addressed to the party concerned at the address indicated below
or to such changed address as such party may subsequently give notice of:
If to PWG or PWI:
PaineWebber Group Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Secretary
If to the Executive:
Xxxx X. Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
18. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions or portions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
19. Survivorship. To the extent contemplated by this Agreement, the
respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.
20. Representations.
(a) By the Executive. The Executive represents and warrants that the
performance of his duties under this
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Agreement will not violate any agreement between him and any other person, firm
or organization
(b) By PWG and PWI. PWG and PWI represent and warrant that they are
fully authorized and empowered to enter into this Agreement.
21. Impact of Agreement on Other Benefits.
Nothing in this Agreement shall curtail the Executive's entitlement to
full participation in the executive compensation, employee benefit and other
programs of PWG and PWI in which senior executives of PWG and PWI are eligible
to participate.
22. References.
In the event of the Executive's death or a judicial determination of
his incompetence, reference in this Agreement to the Executive will be deemed,
where appropriate, to refer to his legal representative, or, where appropriate,
to his beneficiary or beneficiaries.
23. Headings.
Headings to the sections in this Agreement are intended solely for
convenience and no provision of this Agreement shall be construed by reference
to any heading.
24. Counterparts.
This agreement may be executed in one or more counterparts.
IN WITNESS WHEREOF, the Executive, PWG and PWI have caused this
Agreement to be executed as of the day and year first above written.
XXXXX XXXXXX GROUP INC.
by /s/ Xxxxxx X. Xxxxxx
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PAINEWEBBER INCORPORATED
by /s/ Xxxxxx X. Xxxxxxxx
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/s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
