SEVERANCE AGREEMENT
This Severance Agreement (this "Agreement"), is made and entered
into as of November 30, 1998, by and between The Xxxxxx Group Inc., a British
Columbia corporation (the "Company"), and Xxxxxx X. Xxxxxxxx (the
"Executive").
WITNESSETH:
WHEREAS, the Executive is a senior executive of the Company and has
made and is expected to continue to make major contributions to the short-
and long-term profitability, growth and financial strength of the Company;
WHEREAS, the Company desires to assure itself of both present and
future continuity of management and to establish certain retention bonus and
severance benefits for certain of its senior executives, including the
Executive, applicable in the event of a Change in Control;
WHEREAS, the Company desires to ensure that its senior executives
are not practically disabled from discharging their duties in respect of a
proposed or actual transaction involving a Change in Control; and
WHEREAS, the Company desires to provide additional inducement for
the Executive to continue to remain in the ongoing employ of the Company.
NOW, THEREFORE, the Company and the Executive agree as follows:
1. CERTAIN DEFINED TERMS: In addition to terms defined elsewhere
herein, the following terms have the following meanings when used in this
Agreement with initial capital letters:
(a) "Base Pay" means the Executive's annual base salary at a rate not
less than the Executive's annual fixed or base compensation as in affect
for Executive immediately prior to the occurrence of a Change in Control
or such higher rate as may be determined from time to time by the
Board of Directors of the Company (the "Board") or a committee thereof.
(b) "Cause" means that, prior to any termination pursuant to Section
3(b) or Section 3(c), the Executive shall have committed:
(i) an intentional act of fraud, embezzlement or theft in
connection with his duties or in the course of his employment with
the Company or any Subsidiary;
(ii) intentional wrongful damage to property of the Company or
any Subsidiary;
(iii) intentional wrongful disclosure of secret processes or
confidential information of the Company or any Subsidiary; or
(iv) intentional wrongful engagement in any Competitive Activity;
and any such act shall have been materially harmful to the company. For
purposes of this Agreement, no act or failure to act on the part of the
Executive shall be deemed "intentional" if it was due primarily to an
error in judgment or negligence, but shall be deemed "intentional" only
if done or omitted to be done by the Executive not in good faith and
without reasonable belief that his action or omission was in the best
interest of the Company. Notwithstanding the foregoing, the Executive
shall not be deemed to have been terminated for "Cause" hereunder unless
and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than
two-thirds of the Board then in office at a meeting of the Board called
and held for such purpose, after reasonable notice to the Executive and
an opportunity for the Executive, together with his counsel (if the
Executive chooses to have counsel present at such meeting), to be heard
before the Board, finding that, in the good faith opinion of the Board,
the Executive had committed an act constituting "Cause" as herein
defined and specifying the particulars thereof in detail. Nothing
herein will limit the right of the Executive or his beneficiaries to
contest the validity or propriety of any such determination.
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(c) "Change in Control" means the occurrence during the Term of any
of the following events:
(i) The Company is merged, consolidated of reorganized into or
with another corporation or other legal person, and as a result of
such merger, consolidation or reorganization less than two-thirds of
the combined voting power of the then-outstanding securities
entitled to vote generally in the election of directors ("Voting
Stock") of such corporation or person immediately after such
transaction are held in the aggregate by the holders of Voting Stock
of the Company immediately prior to such transaction;
(ii) The Company sells or otherwise transfers all or
substantially all of its assets to another corporation or other
legal person, and as a result of such sale or transfer less than
two-thirds of the combined voting power of the then-outstanding
Voting Stock of such corporation or person immediately after such
sale or transfer is held in the aggregate by the holders of Voting
Stock of the Company immediately prior to such sale or transfer;
(iii) There is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), each as promulgated
pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), disclosing that any person (as the term "person" is
used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act),
other than Xxxxxxx X. Xxxxxx, a person including Xxxxxxx X. Xxxxxx,
or a person whose beneficial ownership of Voting Stock of the
Company is shared with Xxxxxxx X. Xxxxxx, has become the beneficial
owner (as the term "beneficial owner" is defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act)
of securities representing 25% or more of the combined voting power
of the then-outstanding Voting Stock of the Company;
(iv) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to Form 8-K or Schedule 14A (or any successor
schedule,
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form or report or item therein) that a charge in control of the
Company has occurred or will occur in the future pursuant to any
then-existing contract or transaction; or
(v) If, during any period of two consecutive years, individuals
who at the beginning of any such period constitute the directors of
the Company, cease for any reason to constitute at least a majority
thereof; PROVIDED, HOWEVER, that for purposes of this clause (v)
each director who is first elected, or first nominated for election
by the Company's stockholders, by a vote of at least two-thirds of
the directors of the Company (or a committee thereof) then still in
office who were directors of the Company at the beginning of any
such period will be deemed to have been a director of the Company at
the beginning of such period.
Notwithstanding the foregoing provisions of Sections 1(c)(iii) or
1(c)(iv), unless otherwise determined in a specific case by majority
vote of the Board, a "Charge in Control" shall not be deemed to have
occurred for purposes of Section 1(c)(iii) or 1(c)(iv) solely because
(A) the Company, (B) an entity in which the Company directly or
indirectly beneficially owns 50% or more of the outstanding Voting Stock
(a "Subsidiary"), or (C) any Company-sponsored employee stock ownership
plan or any other employee benefit plan of the Company or any Subsidiary
either files or becomes obligated to file a report or a proxy statement
under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or
Schedule 14A (or any successor schedule, form or report or item therein)
under the Exchange Act disclosing beneficial ownership by it of shares
of Voting Stock, whether in excess of 25% or otherwise, or because the
Company reports that a change in control of the Company has occurred or
will occur in the future by reason of such beneficial ownership.
(d) "Employee Benefits" means the perquisites, benefits and service
credit for benefits as provided under any and all employee retirement
income and welfare benefit policies, plans, programs or arrangements in
which Executive is entitled to participate, including without limitation
any stock option, stock purchase, stock appreciation, savings,
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pension, supplemental executive retirement, or other retirement income
or welfare benefit, deferred compensation, incentive compensation, group
or other life, health, medical/hospital or other insurance (whether
funded by actual insurance or self-insured by the Company), disability,
salary continuation, expense reimbursement and other employee benefit
policies, plans, programs or arrangements that may now exist or any
equivalent successor policies, plans, programs or arrangements that may
be adopted hereafter by the Company, providing perquisites, benefits and
service credit for benefits at least as great in the aggregate as are
payable thereunder prior to a Change in Control.
(e) "Incentive Pay" means an annual amount equal to not less than
the greatest aggregate annual bonus, incentive or other payments of cash
compensation, in addition to Base Pay, made or to be made in regard to
services rendered in any calendar year during the three calendar years
immediately preceding the year in which the Change in Control occurred
pursuant to any bonus, incentive, profit-sharing, performance,
discretionary pay or similar agreement, policy, plan, program or
arrangement (whether or not funded) of the Company, or any successor
thereto providing benefits at least as great as the benefits payable
thereunder prior to a Change in Control.
(f) "Severance Period" means the period of time commencing on the
date of the first occurrence of a Change in Control and continuing until
the earliest of (i) the second anniversary of the occurrence of the
Change in Control or (ii) the Executive's death; PROVIDED, HOWEVER, that
commencing on each anniversary of the occurrence of the Change in
Control, the Severance Period will automatically be extended for an
additional year unless, not later than 90 calendar days prior to such
anniversary date, either the Company or the Executive shall have given
written notice to the other that the Severance Period is not to be so
extended.
(g) "Target Annual Bonus" means the aggregate amount of all
payments in the nature of annual cash bonus to which the Executive would
be entitled in respect of any particular year if (i) the Executive were
employed throughout the entirety of such year and (ii) with respect to
any such
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payment that is contingent in whole or in part upon the achievement of
one or more specified performance targets, a performance level equal to
the minimum performance target established to determine whether any
bonus would be payable (in the event that only one performance target
applicable thereto shall have been established) or a performance level
equal to the midpoint of the minimum and maximum performance targets
established to determine the amount of any bonus that would be payable
(in the event that two or more performance targets applicable thereto
shall have been established) were achieved in respect of that year.
(h) "Term" means the period commencing as of the date hereof and
expiring as of the later of: (i) the close of business on December 31,
1999, or (ii) the expiration of the Severance Period; PROVIDED, HOWEVER,
that (A) commencing on January 1, 2000 and each January 1 thereafter,
the term of this Agreement will automatically be extended for an
additional year unless, not later than September 30 of the immediately
preceding year, the Company or the Executive shall have given notice
that it or the Executive, as the case may be, does not wish to have the
Term extended and (B) subject to the last sentence of Section 9, if,
prior to a Change in Control, the Executive ceases for any reason to be
an employee of the Company and any Subsidiary, thereupon without further
action the Term shall be deemed to have expired and this Agreement will
immediately terminate and be of no further effect. For purposes of this
Section 1(h), the Executive shall not be deemed to have ceased to be an
employee of the Company and any Subsidiary by reason of the transfer of
Executive's employment between the Company and any Subsidiary, or among
any Subsidiaries.
2. OPERATION OF AGREEMENT: This Agreement will be effective and
binding immediately upon its execution, but, anything in this Agreement to the
contrary notwithstanding, this Agreement will not be operative unless and until
a Change in Control occurs. Upon the occurrence of a Change in Control at any
time during the Term, without further action, this Agreement shall become
immediately operative.
3. TERMINATION FOLLOWING A CHANGE IN CONTROL: (a) In the event of
the occurrence of a Change in Control, the Executive's employment may be
terminated by the Company during the Severance Period and the Executive
shall be entitled to the
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benefits provided by Section 4(b) unless such termination is the result
of the occurrence of one or more of the following events:
(i) The Executive's death;
(ii) If the Executive becomes permanently disabled within the
meaning of, and begins actually to receive disability benefits
pursuant to, the long-term disability plan in effect for, or
applicable to, Executive immediately prior to the Change in Control;
or
(iii) Cause.
If, during the Severance Period, the Executive's employment is
terminated by the Company or any Subsidiary otherwise than pursuant to
Section 3(a)(i), 3(a)(ii) or 3(a)(iii), the Executive will be entitled
to the benefits provided by Section 4(h) hereof.
(b) In the event of the occurrence of a Change in Control, the
Executive may terminate employment with the Company and any Subsidiary
during the Severance Period with the right to severance compensation as
provided in Section 4(b) upon the occurrence of one or more of the
following events (regardless of whether any other reason, other than
Cause as hereinabove provided, for such termination exists or has
occurred, including without limitation other employment):
(i) Failure to elect or reelect or otherwise to maintain the
Executive in the office or the position, or a substantially
equivalent office or position, of or with the Company and/or a
Subsidiary, as the case may be, which the Executive held immediately
prior to a Change in Control, or the removal of the Executive as a
director of the Company (or any successor thereto) if the Executive
shall have been a director of the Company immediately prior to the
Change in Control;
(ii) (A) A significant adverse change in the nature or scope of
the authorities, powers, functions, responsibilities or duties
attached to the position with the Company and any Subsidiary which
the Executive held immediately prior to the Change in Control,
(B) a reduction in the aggregate of the Executive's Base Pay
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and Incentive Pay received from the Company and any Subsidiary, or
(C) the termination or denial of the Executive's rights to Employee
Benefits or a reduction in the scope or value thereof, any of which
is not remedied by the Company within 10 calendar days after receipt
by the Company of written notice from the Executive of such change,
reduction or termination, as the case may be;
(iii) A determination by the Executive (which determination will
be conclusive and binding upon the parties hereto provided it has
been made in good faith and in all events will be presumed to have
been made in good faith unless otherwise shown by the Company by
clear and convincing evidence) that a change in circumstances has
occurred following a Change in Control, including, without
limitation, a change in the scope of the business or other
activities for which the Executive was responsible immediately prior
to the Change in Control, which has caused Executive to suffer a
substantial reduction in any of the authorities, powers, functions,
responsibilities or duties attached to the position held by the
Executive immediately prior to the Change in Control, which
situation is not remedied within 10 calendar days after written
notice to the Company from the Executive of such determination;
(iv) The liquidation, dissolution, merger, consolidation or
reorganization of the Company or transfer of all or substantially
all of its business and/or assets, unless the successor or
successors (by liquidation, merger, consolidation, reorganization,
transfer or otherwise) to which all or substantially all of its
business and/or assets have been transferred (directly or by
operation of law) assumed all duties and obligations of the Company
under this Agreement pursuant to Section 11(a);
(v) The Company relocates its principal executive offices, or
requires the Executive to have his principal location of work
changed, to any location which is in excess of 25 miles from the
location thereof immediately prior to the Change of Control, or
requires the Executive to travel away from his office
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in the course of discharging his responsibilities or duties
hereunder at least 20% more (in terms of aggregate days in any
calendar year or in any calendar quarter when annualized for
purposes of comparison to any prior year) than was required of
Executive in any of the three full years immediately prior to the
Change of Control without, in either case, his prior written
consent; or
(vi) Without limiting the generality or effect of the foregoing,
any material breach of this Agreement by the Company or any
successor thereto.
(c) A termination by the Company pursuant to Section 3(a) or by the
Executive pursuant to Section 3(b) will not affect any rights which the
Executive may have pursuant to any agreement, policy, plan, program or
arrangement of the Company providing Employee Benefits, which rights shall
be governed by the terms thereof (subject in all events to the provisions
of Section 6).
4. RETENTION BONUS AND SEVERANCE COMPENSATION: (a) If (i) the
Executive remains employed by the Company or any Subsidiary for 30 days
after the first occurrence of a Change in Control (the "Bonus Date") or
(ii) the Executive's employment with the Company or any Subsidiary is
terminated pursuant to Section 3(a)(i) or 3(a)(ii) following the first
occurrence of a Change in Control but prior to the 31st day after the
first occurrence of a Change in Control, the Company will pay to the
Executive, within 10 business days after the Bonus Date, a lump sum
payment (the "Retention Bonus Payment") in an amount equal to the
multiple set forth under Item I on Annex A hereto times the sum of Base
Pay and Target Annual Bonus (at the highest combined rate in effect for
any period prior to the Bonus Date).
(b) If, following the occurrence of a Change in Control, the
Company terminates the Executive's employment during the Severance
Period other than pursuant to Section 3(a), or it the Executive
terminates his employment pursuant to Section 3(b), the Company will pay
to the Executive the following amounts within 10 business days after the
date (the "Termination Date") that the Executive's employment is
terminated (the effective date of which shall be the date of
termination, or such other date that may be
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specified by the Executive if, the termination is pursuant to section
3(b)) and continue to provide to the Executive the following benefits:
(i) A lump sum payment (the "Severance Payment") in an amount
equal to (A) the multiple set forth under Item II on Annex A hereto
times the sum of Base Pay and Target Annual Bonus (at the highest
combined rate in effect for any period prior to the Termination
Date) minus (B) the amount of any Retention Bonus Payment actually
paid to the Executive pursuant to Section 4(a).
(ii) (A) for the number of months set forth under Item III on
Annex A hereto (the "Continuation Period") following the Termination
Date, the Company will arrange to provide the Executive with
Employee Benefits that are health or welfare benefits (but not stock
option, stock purchase, stock appreciation or similar compensatory
benefits) substantially similar to those which the Executive was
receiving or entitled to receive immediately prior to the Termination
Date, and (B) such Continuation Period will be considered service
with the Company for the purpose of determining service credits and
benefits due and payable to the Executive under any retirement
income, supplemental executive retirement and other benefit plans of
the Company applicable to the Executive, his dependents or his
beneficiaries immediately prior to the Termination Date. If and to
the extent that any benefit described in subsection (A) or (B) of
this Section 4(b)(ii) is not or cannot be paid or provided under any
policy, plan, program or arrangement of the Company or any
Subsidiary, as the case may be, then the Company will itself pay or
provide for the payment to the Executive, his dependents and
beneficiaries, of such Employee Benefits. Notwithstanding the
foregoing, Employee Benefits otherwise receivable by the Executive
pursuant to subsection (A) of this Section 4(b)(ii) will be reduced
to the extent comparable health or welfare benefits are actually
received by the Executive from another employer during the
Continuation Period following the Executive's Termination Date, and
any such benefits actually received by the Executive shall be
reported by the Executive to the Company.
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(c) Without limiting the rights of the Executive at law or in
equity, if the Company fails to make any payment or provide any benefit
required to be made or provided hereunder on a timely basis, the Company
will pay interest on the amount or value thereof at an annualized rate
of interest equal to the so-called composite "prime rate" as quoted from
time to time during the relevant period in the Northeast Edition of THE
WALL STREET JOURNAL. Such interest will be payable as it accrues on
demand. Any change in such prime rate will be effective on and as of
the date of such change.
(d) Promptly following the date hereof, the Company will (if it has
not already done so) establish a trust (the "Trust") for the purpose of
assuring the payment of amounts that may become payable to the Executive
under Sections 4(a) and (b) together, at the Company's election, with
amounts that may become payable under other retention bonus or
change-in-control severance agreements or plans to which the Company is
a party or under which the Company is an obligor. A reputable
commercial bank or trust company selected by the Company shall serve as
trustee of the Trust (the "Trustee") pursuant to a written trust
agreement between the Company and the Trustee. Prior to the occurrence
of a Change in Control, the Company shall deposit with the Trustee cash
and/or a letter of credit in an amount sufficient to fund all amounts
which may become payable to the Executive under Sections 4(a) and (b),
together with all amounts that may become payable under all other
retention bonus or change-in-control severance agreements or plans that
are intended to be secured by the Trust, and shall thereafter make such
additional deposits, if any, as may be necessary to result in the Trust
holding at all times a combination of cash and/or letters of credit
sufficient for the payment of all such amounts. Any letter of credit
deposited with the Trustee pursuant to this Section 4(d) shall be issued
by a reputable commercial bank having combined capital and surplus of at
least $500 million, shall be irrevocable and shall entitle the Trustee
to draw all amounts payable thereunder immediately upon the occurrence
of a Change in Control. Without limiting the Company's obligations
under the preceding provisions of this Section 4(d), in the event that
the Company shall have failed to fully fund the Trust as provided herein
prior to the occurrence of a Change in Control, the Company shall do so
as promptly as practicable
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thereafter. All amounts required to be deposited with the Trustee
pursuant to this Section 4(d) that are so deposited after the occurrence
of a Change in Control shall be deposited solely in the form of cash.
No failure by the Company to satisfy any of its obligations under this
Section 4(d) shall limit the rights of the Executive hereunder.
Notwithstanding the foregoing provisions of this Section 4(d), with
respect to any and all amounts which may become payable to the Executive
under this Agreement, the Executive shall have the status of a general
unsecured creditor of the Company and shall have no right to, or
security interest in, any assets of the Company.
(e) Notwithstanding any other provision of this Agreement to the
contrary, the parties' respective rights and obligations under this
Section 4 and under Sections 5 and 8 will survive any termination or
expiration of this Agreement or the termination of the Executive's
employment following a Change in Control for any reason whatsoever.
5. LIMITATION ON PAYMENTS AND BENEFITS: Notwithstanding any
provision of this Agreement to the contrary, if any amount or benefit to be
paid or provided under this Agreement (taking into account all other amounts
and benefits to be paid or provided to or for the benefit of the Executive by
the Company or any affiliate thereof under this Agreement or otherwise as
though all such other amounts and benefits had already been so paid or
provided) would be an "Excess Parachute Payment," within the meaning of
Section 280G of the United States Internal Revenue Code of 1986, as amended
(the "Code"), or any successor provision thereto, but for the application of
this sentence, then the payments and benefits to be paid or provided under
this Agreement shall be reduced to the minimum extent necessary (but in no
event to less than zero) so that no portion of any such payment or benefit,
as so reduced, constitutes an Excess Parachute Payment; provided, however,
that the foregoing reduction shall be made only if and to the extent that
such reduction would result in an increase in the aggregate payment and
benefits to be provided, determined on an after-tax basis (taking into
account the excise tax imposed pursuant to Section 4999 of the Code, or any
successor provision thereto, any tax imposed by any comparable provision of
United States state law, and any applicable United States federal, state and
local income taxes). The determination of whether any reduction in such
payments or benefits to be provided under this Agreement is
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required pursuant to the preceding sentence shall be made at the expense of
the Company, if requested by the Executive or the Company, by the Company's
independent accountants. The fact that the Executive's right to payments or
benefits may be reduced by reason of the limitations contained in this
Section 5 shall not of itself limit or otherwise affect any other rights of
the Executive other than pursuant to this Agreement. In the event that any
payment or benefit intended to be provided under this Agreement is required
to be reduced pursuant to this Section 5, the Executive shall be entitled to
designate the payments and/or benefits to be so reduced in order to give
effect to this Section 5. The Company shall provide the Executive with all
information reasonably requested by the Executive to permit the Executive to
make such designation. In the event that the Executive fails to make such
designation within 5 business days of the Bonus Date or the Termination Date,
as applicable, the Company may effect such reduction in any manner it deems
appropriate.
6. WAIVER BY EXECUTIVE OF CERTAIN RIGHTS: The Executive hereby
irrevocably waives any and all rights that the Executive may have pursuant to
any agreement (other than this Agreement), policy, plan, program or
arrangement of the Company or any affiliate (as the term "affiliate" is
defined under Rule 12b-2 promulgated under the Exchange Act) of the Company
in effect as of the date hereof to receive payments and/or benefits in the
nature of severance payments or benefits.
7. NO MITIGATION OBLIGATION: The Company hereby acknowledges that
it will be difficult and may be impossible for the Executive to find
reasonably comparable employment following the Termination Date. Accordingly,
the payment of the severance compensation by the Company to the Executive in
accordance with the terms of this Agreement is hereby acknowledged by the
Company to be reasonable, and the Executive will not be required to mitigate
the amount of any payment provided for in this Agreement by seeking other
employment or otherwise, nor will any profits, income, earnings or other
benefits from any source whatsoever create any mitigation, offset, reduction
or any other obligation on the part of the Executive hereunder or otherwise,
except as expressly provided in the last sentence of Section 4(a)(ii).
8. LEGAL FEES AND EXPENSES: It is the intent of the Company that
the Executive not be required to incur legal fees and the related expenses
associated with the interpretation,
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enforcement or defense of Executive's rights under this Agreement by
litigation or otherwise because the cost and expense thereof would
substantially detract from the benefits intended to be extended to the
Executive hereunder. Accordingly, if it should appear to the Executive that
the Company has failed to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes or
threatens to take any action to declare this Agreement void or unenforceable,
or institutes any litigation or other action or proceeding designed to deny,
or to recover from, the Executive the benefits provided or intended to be
provided to the Executive hereunder, the Company irrevocably authorizes the
Executive from time to time to retain counsel of Executive's choice, at the
expense of the Company as hereafter provided, to advise and represent the
Executive in connection with any such interpretation, enforcement or defense,
including without limitation the initiation or defense of any litigation or
other legal action, whether by or against the Company or any Director,
officer, stockholder or other person affiliated with the Company, in any
jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company irrevocably
consents to the Executive's entering into an attorney-client relationship
with such counsel, and in that connection the Company and the Executive agree
that a confidential relationship shall exist between the Executive and such
counsel. Without respect to whether the Executive prevails, in whole or in
part, in connection with any of the foregoing, the Company will pay and be
solely financially responsible for any and all attorneys' and related fees
and expenses incurred by the Executive in connection with any of the
foregoing.
9. EMPLOYMENT RIGHTS: Nothing expressed or implied in this
Agreement will create any right or duty on the part of the Company or the
Executive to have the Executive remain in the employment of the Company or
any Subsidiary prior to or following any Change in Control. Any termination
of employment of the Executive or the removal of the Executive from the
office or position in the Company or any Subsidiary following the
commencement of any discussion with a third person that ultimately results in
a Change in Control shall be deemed to be a termination or removal of the
Executive after a Change in Control for purposes of this Agreement.
10. WITHHOLDING OF TAXES: The Company may withhold from any
amounts payable under this Agreement all federal,
00
xxxxxxxxxx, xxxxx, xxxx or other taxes as the Company is required to withhold
pursuant to any law or government regulation or ruling.
11. SUCCESSORS AND BINDING AGREEMENT: (a) The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all
of the business or assets of the Company, by agreement in form and
substance satisfactory to the Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent the
Company would be required to perform if no such succession had taken
place. This Agreement will be binding upon and inure to the benefit of
the Company and any successor to the Company, including without
limitation any persons acquiring directly or indirectly all or
substantially all of the business or assets of the Company whether by
purchase, merger, consolidation, reorganization or otherwise (and such
successor shall thereafter be deemed the "Company" for the purposes of
this Agreement), but will not otherwise be assignable, transferable or
delegable by the Company.
(b) This Agreement will inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and legatees.
(c) This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in Sections 11(a) and 11(b). Without limiting the
generality or effect of the foregoing, the Executive's right to receive
payments hereunder will not be assignable, transferable or delegable,
whether by pledge, creation of a security interest, or otherwise, other
than by a transfer by Executive's will or by the laws of descent and
distribution and, in the event of any attempted assignment or transfer
contrary to this Section 11(c), the Company shall have no liability to
pay any amount so attempted to be assigned, transferred or delegated.
12. NOTICES: For all purposes of this Agreement, all
communications, including without limitation notices, consents, requests or
approvals, required or permitted to be given
15
hereunder will be in writing and will be deemed to have been duly given when
hand delivered or dispatched by electronic facsimile transmission (with
receipt thereof orally confirmed), or five business days after having been
mailed by registered or certified mail, return receipt requested, postage
prepaid, or three business days after having been sent by a nationally
recognized overnight courier service such as Federal Express, UPS, or
Purolator, addressed to the Company (to the attention of the Secretary of the
Company) at its principal executive office and to the Executive at his
principal residence, or to such other address as any party may have furnished
to the other in writing and in accordance herewith, except that notices of
changes of address shall be effective only upon receipt.
13. GOVERNING LAW: The validity, interpretation, construction and
performance of this Agreement will be governed by and construed in accordance
with the substantive laws of British Columbia, without giving affect to the
principles of conflict of laws thereof.
14. VALIDITY: If any provision of this Agreement or the
application of any provision hereof to any person or circumstances is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement
and the application of such provision to any other person or circumstances
will not be affected, and the provision so held to be invalid, unenforceable
or otherwise illegal will be reformed to the extent (and only to the extent)
necessary to make it enforceable, valid or legal.
15. MISCELLANEOUS: No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by the Executive and the Company. No waiver
by either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed
by such other party will be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, expressed or implied with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. References to Sections are to
references to Sections of this Agreement.
16. COUNTERPART: This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an
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original but all of which together will constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered as of the date first above written.
THE XXXXXX GROUP INC.
By: /s/ XXXXXXX X. XXXX
---------------------------
Its: Senior Vice President, Law
--------------------------
/s/ XXXXXX X. XXXXXXXX
-------------------------------
Xxxxxx X. Xxxxxxxx
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ANNEX A
I. MULTIPLE OF BASE PAY AND TARGET ANNUAL BONUS.
One times.
II. MULTIPLE OF BASE PAY AND TARGET ANNUAL BONUS.
Three times.
III. MONTHS OF HEALTH AND WELFARE BENEFIT CONTINUATION
AND ADDITIONAL RETIREMENT INCOME SERVICE CREDIT.
36 months.
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