EXHIBIT 10.20
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of the 1st day of January, 2001 (this "Agreement"), by
and between X.X. Xxxxx & Co.-Xxxx., a Connecticut corporation (the "Company"),
and Xxxx X. Xxxxxx (the "Executive").
WHEREAS, Executive has served as the President and Chief Executive Officer
of the Company since November 1, 1998 and as Chairman since January 1999.
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that, in light of increased risks and financial uncertainties facing
the Company and the industry as a whole, it is in the best interests of the
Company and its shareholders to continue to employ Executive, in the capacity
and on the terms and conditions hereinafter set forth.
WHEREAS, Executive is willing to accept continued employment with the
Company in light of such increased risks and financial uncertainties, on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
This Agreement specifies the terms and conditions of Executive's continued
employment with the Company as Chairman, President and Chief Executive Officer,
which have been approved by the Board and/or the Compensation Committee of the
Board (the "Compensation Committee"), as applicable.
1. POSITION AND DUTIES
At all times throughout the Employment Term (as defined below), Executive
shall serve as the Company's Chairman, President and Chief Executive Officer.
Executive's principal obligations, duties and responsibilities shall be those
that are generally inherent in those offices and titles. In this regard, all
employees of the Company (and its subsidiaries) shall continue to report
directly or indirectly to Executive. Executive's office shall continue to be
located at the Company's headquarters in Columbia, Maryland.
2. TERM OF AGREEMENT
a) The initial term of Executive's employment under this Agreement shall
be from the date hereof through December 31, 2002, unless Executive's
employment is sooner terminated for any reason (the "Initial Term").
b) Unless Executive or the Company provides written notice to the contrary
at least 180 days prior to the expiration of the Initial Term, or any renewal
term, Executive's employment shall be extended for an additional one-year
renewal term following the expiration of the Initial Term or such renewal term.
The Initial Term, together with any and all renewal terms, are collectively
referred to herein as the "Employment Term." The Employment Term (including any
renewal term) shall terminate upon Executive's termination of employment for
any reason. During any renewal term, Executive's annual base salary and target
percentages under the
Company's annual incentive compensation program (the "Annual Incentive
Compensation Program") and the Company's long-term incentive compensation
program shall be no less favorable to Executive, in the aggregate, than those
applicable to Executive as of the date hereof, and Executive shall continue to
participate in all benefit plans and programs for which he is eligible
(according to the terms of such plans and programs) on terms no less favorable
than those applicable to the most senior executives of the Company from time to
time. Not later than 120 days prior to the commencement of any renewal term, the
Company shall communicate to Executive any change in the annual base salary and
the target percentages under the Annual Incentive Compensation Program and the
Company's long-term incentive compensation program that shall apply to Executive
during such renewal term, consistent with the requirements of this Section 2(b).
3. COMPENSATION
In consideration for, among other things, Executive's continued services
to the Company, Executive's opportunities lost as a result of his continued
employment with the Company, and any risks associated with Executive's
continued employment with the Company, the following compensation provisions
shall apply, except as otherwise indicated, throughout the Employment Term:
a) Executive's annual base salary shall be not less than $875,000.00,
subject to withholding of all taxes and similar charges required by applicable
law to be withheld and subject to annual review by the Board or the
Compensation Committee for possible increase. Executive's salary shall cease to
accrue immediately upon his termination of employment with the Company for any
reason.
b) Subject to Section 2(b), Executive shall continue to participate in the
Company's Annual Incentive Compensation Program, on terms no less favorable
than those applicable to the Company's other most senior executives. The awards
under this Program are in cash, are contingent upon individual performance, are
paid on a calendar year basis and shall be determined by the financial results
of the Company as a whole. In addition, all annual incentive compensation
awards are subject to approval by the Compensation Committee or the Board.
Executive shall be eligible for a targeted award under the program of 75% (or
higher, if deemed appropriate by the Compensation Committee) of Executive's
annual base salary. For the calendar year in which Executive's employment
terminates for any reason (other than Cause), Executive or his beneficiary
shall receive an award under the Annual Incentive Compensation Program at the
time that Executive would have received such award had his employment with the
Company not terminated, in an amount equal to the product of (i) the award to
which Executive would be entitled by operation of the Annual Incentive
Compensation Program for performance in the year of Executive's employment
termination, as if his employment had not terminated, and (ii) a fraction, the
numerator of which is the number of days in the current fiscal year through
Executive's employment termination date, and the denominator of which is 365.
Except as set forth in the preceding sentence, immediately upon Executive's
termination of employment with the Company for any reason, Executive shall
cease to be eligible for awards under the Annual Incentive Compensation
Program.
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c) The final installment of Executive's non-statutory stock option grant
made on November 1, 1998 (covering 146,342 shares) will vest on November 1,
2001. However, these options will vest immediately upon earlier termination of
Executive's employment by the Company without Cause or termination of
employment by Executive on the basis of Constructive Discharge (each, as
defined below), including following a "change in control" of the Company, as
defined in the Executive Severance Agreement (the "Executive Severance
Agreement") dated as of November 1, 1998 between the Company and Executive and
as may be subsequently amended (a "Change in Control"), or upon Executive's
death or disability ("Disability") as defined under the Company's Long-Term
Disability Income Plan (the "LTD Plan"), and Executive shall have a period of
three years after the date of Executive's termination of employment to exercise
those options.
d) The Compensation Committee shall consider Executive for future stock
option grants at such times as grants are considered for other officers of the
Company or at such other appropriate times as the Compensation Committee shall
deem appropriate.
e) The restrictions on the final installment of Executive's restricted
stock award made on November 1, 1998 (covering 56,911 of Grace Common Stock)
will lapse on November 1, 2001. Executive may choose to receive this award in
the form of unrestricted shares or may convert the award to cash in the amount
of $10.25 for each unrestricted share; provided, however, that this restricted
stock award will vest immediately upon termination of Executive's employment by
the Company without Cause, by Executive on the basis of Constructive Discharge
(including following a Change in Control), or by reason of Executive's death or
Disability. Executive will continue to be eligible to vote such shares during
the period of restriction and receive applicable dividends, if any, on such
shares.
f) Within five business days of the date of the execution of this
Agreement, Executive shall have received, for services to be rendered through
December 31, 2001, an $875,000 retention bonus (the "Initial Retention Bonus").
(The $875,000 equals Executive's annual base salary as of the date hereof.) In
addition, if Executive's employment with the Company pursuant to this Agreement
has not sooner been terminated, Executive shall become entitled to receive, and
shall receive: (i) on December 31, 2001, for services to be rendered through
December 31, 2002, a $500,000 retention bonus; and (ii) on December 31, 2002,
an additional $500,000 retention bonus. The payments described in clauses (i)
and (ii) of the immediately preceding sentence are herein collectively referred
to as the "Retention Bonus." If Executive's employment is terminated by the
Company for Cause or by Executive other than on the basis of Constructive
Discharge (including following a Change in Control), death or Disability,
Executive shall forfeit any unpaid portion of the Retention Bonus that
Executive was not entitled to receive on or before the date of such
termination. If Executive's employment is terminated by Executive on the basis
of Constructive Discharge (including following a Change in Control), death or
Disability, or by the Company without Cause, the Company shall pay to Executive
any unpaid portion of the Retention Bonus within five business days of such
termination.
4. CLAWBACK
If Executive terminates his employment prior to December 31, 2001 other
than on the basis of Constructive Discharge (including following a Change in
Control), death, or Disability,
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Executive agrees to repay to the Company a pro rata portion of the Initial
Retention Bonus previously paid to Executive equal to the product of (a)
$875,000 and (b) a fraction, the numerator of which is the number of days in the
period beginning on the date of such employment termination and ending on
December 31, 2001, and the denominator of which is 365. If Executive terminates
his employment after December 31, 2001 and prior to December 31, 2002 other than
on the basis of Constructive Discharge (including following a Change in
Control), death, or Disability, Executive agrees to repay to the Company a pro
rata portion of the Retention Bonus previously paid to Executive equal to the
product of (a) $500,000 and (b) a fraction, the numerator of which is the number
of days in the period beginning on the date of such employment termination and
ending on December 31, 2002, and the denominator of which is 365.
5. SPECIAL STOCK APPRECIATION PAYMENT
a) The Company shall make a stock appreciation payment to Executive
calculated as described in the next sentence, in the event that Executive
exercises any portion of the stock option described in Section 3(c) of this
Agreement that becomes vested (such vested options are referred to below as the
"Vested Initial Options"), at a time when the market value of a share of Grace
Common Stock is greater than the option price per share of the grant. With
regard to any such Vested Initial Options exercised by Executive, the stock
appreciation payment by the Company will be equal to the result of the
following equation: (i) the number of Vested Initial Options exercised,
multiplied by (ii) a dollar amount equal to the option price per share of the
grant minus $10.25.
b) In addition, the Company shall make a stock appreciation payment to
Executive in the event that Executive cancels any portion of his Vested Initial
Options before exercise of such portion and at a time when the market value of
a share of Grace Common Stock is less than (or equal to) the option price per
share of the grant but greater than $10.25. In order to receive such a payment
for canceled options, Executive must inform the Company's chief human resources
officer in writing of Executive's election to cancel any portion of his Vested
Initial Options, and such cancellation shall be effective on the date such
writing is received by that officer. With regard to any Vested Initial Options
cancelled in accordance with that procedure, the payment by the Company under
this Section 5(b) will be equal to the result of the following equation: (i)
the number of Vested Initial Options that are canceled, multiplied by (ii) a
dollar amount equal to the "Fair Market Value" (as defined in the 1998 Grace
Stock Incentive Plan) of a share of Grace common stock on the date that the
cancellation is effective minus $10.25.
c) In the event of Executive's death at a time when Executive's estate (or
other authorized person) is entitled to exercise Vested Initial Options, in
accordance with the terms of the 1998 Stock Incentive Plan, then the payments
and procedures described in this section shall apply with regard to such
person.
6. SEVERANCE PAY ARRANGEMENT
In the event that Executive's employment is terminated by the Company
without Cause or by Executive on the basis of Constructive Discharge during the
Employment Term, Executive shall be entitled to receive a severance payment of
two times the dollar amount that equals 175%
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of Executive's annual base salary at the rate in effect at the time his
employment is terminated. The parties hereby acknowledge that the severance
payment provided for in this Section 6 shall be earned by Executive upon
termination of his employment with the Company and that such severance payment
is intended by the parties to compensate Executive for the hardships he may
suffer as a result of his termination of employment with the Company. The
severance payment shall be paid to Executive in a single lump sum immediately
after Executive's date of employment termination, but in no event later than
five business days after such date. Notwithstanding any language to the contrary
contained in the Executive Severance Agreement, the LTD Plan, and/or the Grace
Executive Salary Protection Plan (the "ESP Plan"), any payments Executive is
entitled to receive under such agreement or plans shall be reduced,
dollar-for-dollar, but not below zero, by any payments actually paid to
Executive pursuant to this Section 6. Similarly, any payments previously paid to
Executive pursuant to the Executive Severance Agreement, the LTD Plan and/or the
ESP Plan Executive shall reduce, dollar-for-dollar, but not below zero, the
amount of Executive's claim for payments owing to him under this Section 6
(which reduction shall be applied first to any portion of such claim that is not
allowable in any bankruptcy case to which the Company is subject).
7. SUPPLEMENTAL PENSION ARRANGEMENT
a) Except as otherwise provided below, Executive shall receive a
supplemental pension from the Company, which considers all of Executive's prior
years of actual service (i) with X.X. Xxxxx & Co. from February 1968 to May
1969 and from February 8, 1971 to August 5, 1981, and (ii) with AlliedSignal
from August 1989 to October 1998 (the "Prior Years of Service"), as if such
service had been continuous service with the Company. The supplemental pension
will be payable from the general assets of the Company and it will not be
pre-funded in any manner.
b) The supplemental pension shall be calculated by applying the Grace
Salaried Retirement Plan and the X.X. Xxxxx & Co. Supplemental Executive
Retirement Plan, effective October 4, 1984, as amended through the date hereof
(the "SERP"), benefit formula to the Prior Years of Service and all of
Executive's years of service with the Company from and after November 1, 1998,
and using Executive's "final average compensation" (as defined by those plans)
to derive a total retirement benefit (the "TRB"); provided, that in determining
"final average compensation," only compensation earned by Executive with
respect to periods from and after November 1, 1998 shall be taken into account.
The Company shall then pay to Executive a supplemental pension equal to the
excess of the TRB over any retirement benefits to which Executive is Entitled
(as defined below) under the Grace Salaried Retirement Plan, the SERP and any
AlliedSignal defined-benefit retirement plans. For purposes of this Agreement,
Executive is "Entitled" to a benefit or payment under a plan, program or other
arrangement to the extent that Executive retains an actual right to receive
such benefit or payment, taking into consideration any reduction of such right
pursuant to any bankruptcy case to which the Company is subject. In the event
Executive does not actually receive a SERP benefit to which Executive is
Entitled, the Company shall pay such benefit to Executive as part of
Executive's supplemental pension benefit pursuant to this Section 7(b).
c) In the event that, prior to November 1, 2001, Executive terminates his
employment other than on the basis of Constructive Discharge (including
following a Change in Control), death, or
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Disability, or Executive is terminated by the Company for Cause, Executive shall
not be entitled to receive the supplemental pension payments provided for in
this Section 7.
d) In the event that the Grace Salaried Retirement Plan is amended during
the Employment Term in a manner that affects the calculation of benefits
provided for in this Section 7, then the supplemental pension shall be adjusted
in an equitable manner consistent with such amendment. Any such adjustment
shall be determined by the actuary for the Grace Salaried Retirement Plan;
provided, however, that such adjustment shall not, in any event, decrease
Executive's supplemental pension below the amount that would be calculated
pursuant to this Section 7 based on Executive's Prior Years of Service, all of
his years of service with the Company from and after November 1, 1998, and his
"final average compensation" as of the day immediately preceding the effective
date of such amendment.
e) Notwithstanding anything to the contrary in this Agreement or in any
plan or program relating to Executive's retirement benefits, in the event of
Executive's termination of employment with the Company on or after November 1,
2001, the Company shall, immediately after the date of Executive's termination
of employment with the Company, but in no event later than 30 business days
after such date, pay to Executive, in a lump sum (such lump sum determined,
except to the extent otherwise set forth in Section 7(b), in accordance with
the methodology and assumptions specified under the Grace Salaried Retirement
Plan), all supplemental retirement benefits payable to Executive by the Company
(including pursuant to the supplemental pension arrangement and the SERP),
whether or not payable pursuant to a plan of the Company. Notwithstanding
anything herein to the contrary, in the event Executive's employment with the
Company is terminated on the basis of Constructive Discharge (including
following a Change in Control), the Company shall use all commercially
reasonable efforts to pay Executive the lump sum payment specified in this
Section 7(e) within five business days after the date of Executive's
termination of employment, but in no event later than 30 business days after
such date.
8. CAUSE
"Cause," for purposes of this Agreement, means:
a) Commission by Executive of a criminal act (i.e., any act which, if
successfully prosecuted by the appropriate authorities would constitute a crime
under state or federal law) or of significant misconduct, in each case which
has had or will have a direct material adverse effect upon the business
affairs, properties, reputation, operations, or results of operations or
financial condition of Company,
b) Refusal or failure of Executive to comply with the mandates of the
Board (unless any such Board mandate constitutes a ground for Constructive
Discharge pursuant to Section 9 and, prior to Executive's failure to comply
with such mandate, Executive provides written notice to the Board indicating
that such mandate constitutes a ground for Constructive Discharge), or failure
by Executive substantially to perform Executive's duties hereunder, other than
any failure resulting from Executive's total or partial incapacity due to
physical or mental illness, which refusal or failure has not been cured within
30 days after written notice thereof has been given to Executive, or
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c) Any material breach of any of the terms of this Agreement by Executive,
which breach has not been cured within 30 days after written notice thereof has
been given to Executive.
9. CONSTRUCTIVE DISCHARGE
"Constructive Discharge," for purposes of this Agreement, means the
occurrence of any of the following without Executive's prior written consent:
a) any change in Executive's title from that set forth in Section 1 of
this Agreement,
b) the relocation of the Company's headquarters to a location more than 35
miles away from its current site, as set forth in Section 1 of this Agreement,
c) any material diminution in Executive's level of authority and freedom to
exercise the authority delegated to Executive by the Board, other than an
isolated, insubstantial and inadvertent action that is not made in bad faith and
is remedied by the Company within 30 days after written notice thereof has been
given by Executive,
d) the assignment to Executive of any duties inconsistent with Executive's
status as Chairman, President and Chief Executive Officer of the Company, other
than an isolated, insubstantial and inadvertent failure that is not made in bad
faith and is remedied by the Company within 30 days after written notice
thereof has been given by Executive,
e) the Company fails, within 60 days following the entry of an order for
relief with respect to a bankruptcy case (to which the Company is subject) to
properly file a motion to assume this Agreement and all of the Company's
obligations hereunder with the court having jurisdiction over such case,
f) the Company fails to obtain, within 90 days following the entry of an
order for relief with respect to a bankruptcy case (to which the Company is
subject) from the court having jurisdiction over such case, authorization to
assume this Agreement and to pay the compensation and other amounts owing to
Executive under this Agreement when and as such amounts become due and payable
in accordance with the provisions hereof,
g) any material breach of this Agreement by the Company, which breach has
not been cured within 30 days after notice thereof has been given to the
Company by Executive,
h) in accordance with Section 2(b), written notice by the Company to
Executive indicating that the Company does not wish to extend the Initial Term,
or any renewal term, or
i) the determination by Executive that the compensation arrangements
applicable to him during any future renewal term do not comply with Section
2(b) of this Agreement, after notice by Executive to the Company thereof and
failure by the Company to remedy such noncompliance within 30 days of receipt
of such notice; provided, however, that any such notice shall be delivered by
Executive to the Company not later than 90 days prior to the scheduled
commencement of such renewal term.
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Any good faith determination of "Constructive Discharge" made by Executive
shall be conclusive.
A termination of employment by Executive on the basis of Constructive Discharge
shall be effectuated by giving the Company written notice of the termination,
setting forth in reasonable detail the specific conduct of the Company that
constitutes Constructive Discharge and the specific provision(s) of this
Agreement on which Executive relies. A termination of employment by Executive
on the basis of Constructive Discharge pursuant solely to Section(s) 9(a),
9(b), and/or 9(e) shall be effective on the fifth business day following the
date such notice is given, unless the notice sets forth a later date (which
date shall in no event be later than 30 days after the notice is given). A
termination of employment by Executive on the basis of Constructive Discharge
pursuant to Section 9(c), 9(d) or 9(f) shall be effective 30 days after such
notice is given.
Executive's failure or delay, at any time throughout the Employment Term, to
exercise Executive's right to terminate his employment on the basis of
Constructive Discharge, shall not be deemed a waiver of any such right, and,
except as otherwise provided in this Section 9, Executive shall continue to
possess such right to terminate his employment based on Constructive Discharge
at any time during the Employment Term.
A termination of Executive's employment by Executive other than on the basis of
Constructive Discharge shall be effectuated by giving the Company written
notice of the termination.
10. RELOCATION ASSISTANCE
Subject to the restrictions set forth in this Section 10, the Company
shall, upon written request from Executive received by the Company after the
date of Executive's termination of employment with the Company, provide to
Executive all relocation assistance described in the Headquarters Office
Relocation Policy (the "Policy") for current employees in effect as of the date
of this Agreement (copy attached hereto). The Company's obligation to provide
relocation assistance to Executive pursuant to this Section 10 shall continue
for a period of two years from the later of the date of Executive's termination
of employment with the Company or the date of termination of Executive's
service as a member of the Board. The relocation assistance to be provided to
Executive pursuant to this Section 10 shall be available only for relocation
within the continental United States. Notwithstanding anything contained in the
Policy to the contrary, the Company shall provide Executive with two months'
salary, grossed up for federal, state and local income taxes, to cover
incidental relocation expenses. In addition, Executive's "capital loss
protection" (in the event Executive sells his current residence) shall be
grossed up for federal, state and local income taxes and shall not be subject
to the limitations set forth in the Policy. Notwithstanding the foregoing, if,
prior to October 31, 2001, Executive terminates his employment other than on
the basis of Constructive Discharge (including following a Change in Control),
death, or Disability, then the Company shall not be required to provide any
relocation assistance to Executive pursuant to this Section 10.
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11. LEGAL EXPENSES
The Company agrees to reimburse Executive for reasonable legal expenses,
not to exceed $30,000, that Executive incurs with respect to negotiating this
Agreement.
12. FINANCIAL COUNSELING PROGRAM
As an officer of the Company, Executive shall, throughout the Employment
Term, continue to be eligible to participate in the Company's Financial
Counseling Program. This Program provides Executive with financial and estate
planning and income tax preparation assistance. The Company shall pay up to
$10,000 per calendar year for reasonable expenses relating to such assistance.
13. COMPANY CAR
Throughout the Employment Term, the Company shall continue to arrange for
Executive to lease, at the Company's expense, an automobile of Executive's
choice similar to the automobile currently used by Executive at Company
expense, for Company business and for Executive's personal use.
14. EXECUTIVE PHYSICAL PROGRAM
As an officer of the Company, Executive shall, throughout the Employment
Term, continue to be entitled to receive a Company-paid annual executive
physical examination.
15. CLUB MEMBERSHIP
Throughout the Employment Term, the Company shall continue to
provide Executive with membership at Cattail Creek Country Club of Xxxxxx
County, Maryland (or, during the Employment Term, any successor country or
luncheon club of Executive's choice) (the "Club"), in addition to any corporate
club memberships maintained by the Company. With respect to the Club, the
Company shall pay Executive's membership deposit and Executive shall pay any
annual dues applicable to his Club membership. The Company shall not seek to
obtain a refund of any deposit made by the Company to the Club for so long as
Executive continues to pay his annual dues, including during periods following
the Employment Term.
16. VACATION
As an officer of the Company, Executive shall continue to be entitled to
four weeks of paid vacation per full calendar year during the Employment Term
and may carry over unused vacation time in accordance with applicable Company
policy.
17. MISCELLANEOUS FRINGE BENEFITS
As an employee and senior officer of the Company, Executive shall, at all
times throughout his Employment Term, participate in all Company fringe benefit
plans and
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programs, as in effect from time to time (subject to the terms and conditions of
each such plan or program) on terms and conditions no less favorable than those
applicable to the Company's other most senior officers.
18. SECURITY
During the Employment Term, the Company shall continue to provide
appropriate security for Executive, Executive's spouse and Executive's primary
residence.
19. INDEMNIFICATION COMMITMENT
The Company shall, to the extent permitted by applicable law, indemnify
Executive and hold Executive harmless from and against any and all losses and
liabilities Executive may incur as a result of his performance of his duties
hereunder in accordance with the provisions of this Agreement (except those
liabilities that result from any behavior by Executive that is enumerated in
the "Cause" definition of this Agreement). In addition, the Company shall
indemnify and hold Executive harmless against any and all losses and
liabilities that Executive may incur, directly or indirectly, as a result of
any third party claims brought against Executive (other than by any taxing
authority) with respect to the Company's performance of (or failure to perform)
any commitment made to Executive in Section 3 of this Agreement. The Company
shall obtain such policy or policies of insurance as it reasonably may deem
appropriate to effect this indemnification; provided, however, that in no event
shall the Company modify its insurance coverage with respect to Executive in a
manner that renders such coverage less favorable to Executive than that in
force as of the date hereof.
20. AIR TRAVEL
In addition to the usual Company policies regarding air travel by senior
officers on Company business, the Company shall continue to provide Executive
with travel by chartered aircraft or with travel on an aircraft fractionally
owned by the Company, at times requested by Executive including reasonable
personal travel that is included as taxable income to Executive.
21. NOTICES
Executive and the Company agree that any notices and other communications
permitted or required under this Agreement shall be in writing and shall be
given by hand delivery to the other party or sent by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:
Xxxx X. Xxxxxx
X.X. Xxxxx & Co.
0000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
If to the Company:
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X.X. Xxxxx & Co.
Attention: General Counsel
0000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
with a copy to:
Xxxxxx X. Xxxxxxxxxx, Esq.
Wachtell, Lipton, Xxxxx & Xxxx
00 X. 00xx Xx.
Xxx Xxxx, XX 00000
or to such other address as either party furnishes to the other in writing in
accordance with this Section 21. Notices and communications shall be effective
when actually received by the addressee.
22. GOVERNING LAW AND DISPUTE RESOLUTION
a) Any dispute, controversy or claim arising out of or relating to this
Agreement, a breach thereof or the coverage or enforceability of this Section
22 shall be settled by arbitration in accordance with the laws of the State of
Maryland, without respect to the conflict of laws rules thereof, and the
arbitration shall be conducted in Maryland or such other location as the
Company and Executive may mutually agree in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, as such rules are in
effect in New York, NY on the date of delivery of demand for arbitration, which
demand shall be provided in accordance with Section 21 of this Agreement. The
parties expressly acknowledge that they are waiving their rights to seek
remedies in court, including without limitation the right (if any) to a jury
trial.
b) There shall be three arbitrators, one to be chosen by each party at
will within 10 business days from the date of delivery of demand for
arbitration and the third arbitrator to be selected by the two arbitrators so
chosen. If the two arbitrators are unable to select a third arbitrator within
10 business days after the last of the two arbitrators is chosen by the
parties, the third arbitrator shall be designated, on application by either
party, by the American Arbitration Association.
c) The decision of a majority of the arbitrators shall be final and
binding on both parties and their respective heirs, executors, administrators,
personal representatives, successors and assigns. Judgment upon any award of
the arbitrators may be entered in any court of competent jurisdiction, or
application may be made to any such court for the judicial acceptance of the
award and for an order of enforcement.
d) The Company shall pay the fees and expenses incurred in connection with
any arbitration arising out of this Agreement, including attorney's fees,
unless a majority of the arbitrators concludes that such arbitration procedure
was not instituted in good faith by Executive, in which case each party shall
bear its own expenses.
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23. SUCCESSORS
a) Except as otherwise provided herein, this Agreement is personal to
Executive, and without the prior written consent of the Company, shall not be
assignable by Executive other than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by Executive's legal representatives.
b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns. Except as provided in Section 23(c),
this Agreement shall not be assignable by the Company without the prior written
consent of Executive.
c) The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
"Company" means the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid that assumes and agrees to perform this
Agreement by operation of law or otherwise.
24. EXECUTIVE'S RIGHTS; SURVIVAL
In no event shall Executive be obligated to seek other employment or take
any other action to mitigate the amounts payable to Executive under this
Agreement, nor shall the amount of any payment required hereunder be reduced by
any compensation or other payment earned or received by Executive as a result
of his employment with any other employer. Except as otherwise provided herein,
all of Executive's rights under Sections 3, 4, 5, 6, 7, 10, 11, 15, 17, 19, 22,
23, 24, 25 and 26 of this Agreement, to the extent applicable, shall survive
the termination of his employment and/or the termination of this Agreement.
25. SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable in
whole or in part, such provision, to the extent it is invalid or unenforceable,
shall be revised to the extent necessary to make the provision, or part
thereof, valid and enforceable, consistent with the intentions of the parties
hereto. Any provision of this Agreement that is held invalid or unenforceable,
in whole or in part, shall not affect the validity and enforceability of the
other provision of this agreement, which shall remain in full force and effect.
26. MISCELLANEOUS
a) The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.
b) This Agreement may be amended, superseded or canceled only by a written
instrument specifically stating that it amends, supersedes or cancels this
Agreement, executed by Executive and the Company.
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c) Executive and the Company acknowledge that this Agreement contains the entire
understanding of the parties concerning the subject matter hereof, and that this
Agreement supersedes the letter agreement between Executive and the Company
dated October 26, 1998. Except as expressly otherwise provided herein, this
Agreement shall not adversely affect Executive's right to participate in, or
receive any benefit under, any incentive, severance or other benefit plan or
program in which Executive may from time to time participate.
IN WITNESS WHEREOF, Executive has hereunto set his hand and,
pursuant to the authorization from the Board, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.
/s/ Xxxx X. Xxxxxx
-------------------------------------------------------
Xxxx X. Xxxxxx
X.X. XXXXX & CO.
By: /s/ W. Xxxxx XxXxxxx
Name:
---------------------------------------------------
W. Xxxxx XxXxxxx
Title: Senior Vice President
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