EXHIBIT 10.3
EMPLOYMENT AGREEMENT
AGREEMENT, by and between POLAROID CORPORATION, a Delaware corporation,
together with its permitted successors and assigns (the "Company"), and XXXX X.
XXXXXXX (the "Executive") entered effective July 1, 2001.
W I T N E S S E T H:
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WHEREAS, the Executive has important management responsibilities which
benefit the Company and the Company believes that its best interests will be
served if the Executive is encouraged to remain with the Company; and
WHEREAS, the Company desires to continue the employment of the
Executive and the Executive desires to continue such employment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Company and the Executive (individually a "Party" and
together the "Parties") agree to enter into the following agreement (this
"Agreement"):
1. DEFINITIONS.
(a) "ANNUAL BONUS" shall mean a bonus amount payable under the
Company's executive annual bonus plan (currently the Polaroid
Incentive Plan for Executives).
(b) "BASE SALARY" shall mean the annualized rate of base pay
Executive is entitled to receive as determined by the Board
from time to time.
(c) "BOARD" shall mean the Board of Directors of the Company.
(d) "CAUSE" means:
(i) Executive's willful malfeasance having a material
adverse effect on the Company; or,
(ii) Breach of a material policy of the Company; or
(iii) Executive's conviction of a felony;
provided, that any action or refusal by Executive shall not
constitute "Cause" if Executive shall be entitled, under
applicable law or under an applicable Certificate of
Incorporation or By-Laws of the Company, as they may be
amended or restated from time to time, to be indemnified with
respect to such action or refusal.
(e) "CONSTRUCTIVE TERMINATION" shall occur when the Executive
voluntarily terminates his employment with the Company or
retires after the occurrence of one or more of the following
events without the Executive's consent:
(i) a reduction in Base Salary or the elimination of or
reduction of any benefit under any bonus, incentive
or other employee benefit plan, or the Executive's
participation or membership in the same, without an
economically equivalent replacement, unless benefit
or compensation adjustments apply to all executives
receiving such benefit;
(ii) the reassignment of Executive without Executive's
consent to a location more than fifty (50) miles from
Executive's regular workplace or the provision of
significantly less favorable working conditions;
(iii) the reduction in the Executive's job title or level
as a Executive Vice President; or
(iv) a significant diminution in duties or
responsibilities or the reassignment of Executive to
duties which represent a position of lesser
responsibility.
(f) "SEVERANCE PERIOD" shall mean the period of twenty-four (24)
months following such termination.
(g) "STOCK" shall mean the outstanding shares of Common Stock of
the Company and any other shares of capital stock of the
Company into which the Common Stock shall be reclassified or
changed.
(h) "SUBSIDIARY OR SUBSIDIARIES" of the Company shall mean any
corporation of which the Company owns, directly or indirectly,
more than fifty percent (50%) of the Voting Stock.
(i) "TERMINATION DATE" shall mean the date of the Executive's
termination of employment from the Company.
(j) "VOTING STOCK" shall mean capital stock of any class or
classes having general voting power under ordinary
circumstances, in the absence of contingencies, to elect the
directors of a corporation.
2. POSITION, DUTIES AND RESPONSIBILITIES. The Executive shall be employed
as an executive vice president of the Company; this position and the
Executive's responsibilities may be changed from time to time by the
Company as it deems necessary, excluding any change that may
constitute a Constructive Termination. The Executive shall dedicate
full time to carrying out Executive's responsibilities and shall act
in the best interests of the Company at all times. The Executive
shall comply with the Company's policies and procedures.
3. BASE SALARY AND EMPLOYEE BENEFIT PROGRAMS. During the term of
employment, the Executive shall be entitled to receive a Base Salary
and to participate in all Company plans and programs made available to
executives at a similar level, as such plans or programs may be in
effect from time to time, including, without limitation, annual bonus,
vacation, financial planning, long term incentive plan(s), pension,
savings and other retirement plans
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or programs, medical, dental, hospitalization, short-term and
long-term disability and life insurance.
4. RETIREMENT PLANS.
(a) The Executive is eligible to make 401(K) and voluntary
after-tax contributions through the Company's current Polaroid
Retirement Savings Plan subject to change by the Company. Any
portion of Executive's contribution that cannot be made into
the Retirement Savings Plan due to the IRS limits shall be
contributed into the Polaroid Elective Deferred Compensation
Plan, a supplemental executive retirement plan.
(b) Executive is eligible to participate in Polaroid's Pension
Plan, which is subject to change by the Company. Amounts
contributed in excess of the IRS statutory limits shall be
placed in the current supplemental executive retirement plan.
(c) As of the date of this Agreement, all time-based retirement
benefits shall vest under any Company retirement vehicle,
including but not limited to pension, retirement savings,
elective deferred and all other supplemental executive
retirement plans ("SERPS").
5. SUPPLEMENTAL PENSION. In addition to the Executive's pension benefits
set forth in the Polaroid Pension Plan as described above, the Company
shall provide a retirement crediting rate equal to three (3) years of
credited benefit accrual for each year of credited benefit accrual
earned, for a period of up to seven (7) years from the Executive's
original date of hire.
6. CHANGE IN CONTROL. The Executive's Change in Control Agreement executed
effective April 7, 1999 will remain in full force and effect and will
not be affected by this Agreement.
7. TERMINATION DUE TO DISABILITY OR DEATH. In the event the Executive's
employment is terminated due to Executive's disability or death,
Executive, or Executive's estate or beneficiaries, as the case may be,
shall be entitled to:
(a) ANNUAL BONUS. Pro-rata portion of the Annual Bonus for the
year in which the Executive's disability or death occurs; and,
(b) OTHER BENEFITS. Other benefits or entitlements in accordance
with applicable plans and programs of the Company.
8. TERMINATION BY THE COMPANY FOR CAUSE. In the event the Company
terminates the Executive's employment for Cause, the Executive shall be
entitled to Base Salary through the date of the termination. Executive
will not be entitled to receive any severance or any other benefits and
all long-term incentive awards shall be forfeited.
9. TERMINATION OR CONSTRUCTIVE TERMINATION BY THE COMPANY WITHOUT CAUSE.
If prior to a Change in Control, the Executive's employment is
terminated by the Company without
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Cause or upon a Constructive Termination, upon the execution of a full
and complete release, the Executive shall be entitled to:
(a) SEVERANCE PAYMENT. Base Salary, at the annualized rate in
effect on the date of termination of the Executive's
employment, in a stream of payments in accordance with the
Company's regular payroll schedule beginning on the regular
payroll distribution date next succeeding Executive's
Termination Date, for the Severance Period;
(b) ANNUAL BONUS. Annual Bonus payments for the period from the
beginning of the year in which the termination occurs through
the end of the Severance Period based on the actual
performance of the Company without regard to any other factors
(such as personal performance factors) that could reduce the
ultimate distribution; any such payment for a period of less
than a full year shall be pro-rated by the number of days for
which payment is made;
(c) INSURANCE. Medical, dental and executive life insurance
benefits (collectively "Insurance Benefits") at the same rate
as to actively employed officers of the Company for a period
equal to twenty-four (24) months following the Executive's
Termination Date or until the Executive is eligible to receive
such Insurance Benefits through another employer (this benefit
shall run coterminous with COBRA rights), whichever occurs
first;
(d) DISABILITY COVERAGE. Short- and long-term disability coverage
that is reasonably comparable to the coverage provided to the
Executive on his Termination Date and which can be purchased
on the open market shall be for a period equal to the lesser
of twenty-four (24) months following the Executive's
Termination Date or until the Executive is eligible to receive
comparable benefits through another employer;
(e) OPTIONS. For all options granted through Executive's
Termination Date the Executive shall have an exercise period
being the lesser of two (2) years from the Executive's
Termination Date or the exercise period stated in the
Executive's applicable Option or Supplemental Option Agreement
and subject to all other terms of such agreements governing
the Options;
(f) PERFORMANCE AWARDS. A distribution of a pro-rata portion of
Performance Awards (including but not limited to Performance
Shares, PARS, and Restricted Stock) as earned through the
Executive's Termination Date will be made when distributions
from similar awards are made to active employees. The
Performance Award distributions, as adjusted for the pro-rata
period, shall be based on the Company's actual performance
during the performance period for such award. Determination of
award distributions shall be on the same basis as applied to
senior officers employed by the Company at the time such
awards are delivered. Notwithstanding the foregoing, no less
than seventy-five percent (75%) of all Restricted Stock Awards
granted on the effective date of this Agreement shall vest;
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(g) FINANCIAL PLANNING AND OUTPLACEMENT COUNSELING. Financial
planning and outplacement services will be available to the
Executive. For reimbursement of these expenses Executive will
submit the necessary supporting documentation to Human
Resources. Specifically, the Company agrees to reimburse the
Executive up to a maximum of seventy five thousand dollars
($75,000) for expenses that are related to the Executive's
financial planning and/or search for a new position, and/or
for expenses related to the Executive's setting himself up to
do independent consulting; including, but not limited to,
outplacement services, membership in and travel to
professional associations, home office equipment, supplies,
and financial planning. Such reimbursement shall be made upon
the submission by the Executive of periodic expense reports
accompanied by receipts for expenditures. The Executive's
entitlement to such outplacement services will end on the
earlier of one (1) year from the Executive's Termination Date
or the date the Company has reimbursed a total of seventy five
thousand dollars ($75,000).
(h) OTHER BENEFITS. Other benefits or entitlements in accordance
with applicable plans and programs of the Company; and,
(i) SURVIVOR BENEFITS. Should the Executive become eligible to
receive payments and benefits under this Section and die prior
to receipt of all such payments and benefits, the residual
payments shall be made to the Executive's beneficiary(ies).
Any residual family medical and dental benefits which the
Executive was receiving on the Executive's date of death shall
continue to the family members the Executive had covered in
such medical and dental plans on such date.
Modifications to this Section may be made by the Company or its
successors; however, any modifications which decrease the benefits or
restrict the eligibility conditions require twelve (12) months prior
written notice by the Company.
10. INDEMNIFICATION; DIRECTOR'S AND OFFICER'S LIABILITY INSURANCE. The
Executive shall, after the Termination Date, retain all rights to
indemnification under applicable law or under the Company's Certificate
of Incorporation or By-Laws, as they may be amended or restated from
time to time. In addition, the Company shall maintain Director's and
Officer's liability insurance on behalf of the Executive, at the better
of the level in effect immediately prior to the Change in Control or
the Executive's Termination Date, for the two (2) year period following
the Termination Date, and throughout the period of any applicable
statute of limitations.
11. NON-COMPETITION. During employment or any Severance Period pursuant to
the provisions of paragraph 9, or in no event for a period less than
twelve (12) months following any other termination of employment, the
Executive shall not engage in any activity directly or indirectly with
Xxxxxxx Kodak Company or Fuji, whether as a principal, partner,
executive, consultant, shareholder, director (other than as a holder of
not in excess of one percent (1%) of the outstanding voting shares of
any publicly traded company) or otherwise.
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12. NON-SOLICITATION OF CUSTOMERS. For a period of one (1) year from the
separation date, the Executive shall not directly or indirectly solicit
customers of the Company ("Customers") for the sale to the Customers of
products or services that compete with the Company's businesses. For
purposes of this paragraph, the Company's businesses shall be limited
to silver halide film, cameras and instant printing media.
Notwithstanding the foregoing, however, this paragraph shall not
preclude the Executive from directly or indirectly soliciting the sale
to the Customers of products or services that compete with the
Company's businesses if such products or services are ancillary to
products or services that do not compete with the Company's businesses.
For example, if the Executive were to directly or indirectly solicit to
the Customer the sale of cellular phones and a thermal printer and
media is offered for sale to the Customer as an accessory product or
service, such accessory product or service shall not be considered as
competing with the Company's businesses. The foregoing is intended to
be illustrative only.
13. CONFIDENTIALITY. Without the prior written consent of the Company,
except to the extent required by an order of a court having competent
jurisdiction or under subpoena from an appropriate government agency,
the Executive shall comply with the Confidentiality Agreement Executive
executed when Executive was hired and further shall not disclose any
trade secrets, customer lists, drawings, designs, information regarding
product development, marketing plans, sales plans, manufacturing plans,
management organization information (including data and other
information relating to members of the Board and management), operating
policies or manuals, business plans, financial records or other
financial, commercial, business or technical information relating to
the Company or information designated as confidential or proprietary
that the Company may receive belonging to suppliers, customers or
others who do business with any of its Subsidiaries (collectively,
"Confidential Information") to any third person unless such
Confidential Information has been previously disclosed to the public by
the Company; is in the public domain (other than by reason of
Executive's breach of this Agreement); or has been disclosed to the
Executive prior to the date hereof from sources not breaching any
agreement with the Company.
14. COMPANY PROPERTY. Promptly following the Executive's termination of
employment, the Executive shall return to the Company all property of
the Company including but not limited to computer(s), identification
badge, and business cards, credit cards, and all copies of Confidential
Information in the Executive's possession or under Executive's control
whether on paper or electronic storage media.
15. MISCELLANEOUS ADJUSTMENTS UPON TERMINATION. Upon termination of the
Executive's employment, the Company shall have the right to deduct from
any cash payment due to Executive, all amounts required by applicable
law to be withheld and in addition, any amounts which Executive may owe
to the Company as of the Executive's Termination Date, including but
not limited to items such as company store, corporate credit card
obligations and Company property issued to Executive and not otherwise
accounted for or returned.
16. NON-SOLICITATION OF EMPLOYEES. During employment or any Severance
Period pursuant to the provisions of paragraph 9, or in no event for a
period less than twelve (12) months following any other termination of
employment, the Executive shall not directly or indirectly
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induce any employee of the Company to terminate employment with the
Company, and shall not directly or indirectly, either individually or
as owner, agent, consultant, director, officer, shareholder or
otherwise, employ or offer employment to any person who is employed by
the Company.
17. COMPANY POLICIES. The Executive agrees that Executive shall be bound by
all written policies established by the Company and by any written
personnel manual or written policy statement even though such policy
may be unilaterally amended, terminated or modified at the sole
discretion of the Company.
18. DISPUTE RESOLUTION. The Executive agrees that should any dispute arise
under the terms of this Agreement or in any manner directly or
indirectly resulting from the Executive's employment with the Company,
to seek to resolve Executive's dispute by first exhausting any
applicable internal remedies as provided by written Company policy.
(a) If a dispute under the terms of this Agreement should remain,
or if any dispute should remain involving a legally-protected
right (including but not limited to discrimination) or
involving the Executive's termination at the Company's
initiative for any reason, subject to equitable relief, if
any, sought by the Company in accordance with paragraph 19,
the Executive agrees to submit Executive's claim to final and
binding arbitration pursuant to the National Rules for the
Resolution of Employment Disputes of the American Arbitration
Association. Such action will take place in the Commonwealth
of Massachusetts. The Executive hereby waives any right
Executive might otherwise have had to file suit in a court of
law on any dispute arising out of the Executive's employment.
This waiver shall not, however, apply to any claim for
workers' compensation, or any dispute in connection with a
Company benefit plan adopted pursuant to the federal Employee
Retirement Income Security Act (ERISA).
(b) The Executive's agreement to arbitrate these claims and waive
the right to bring such action in court includes a waiver of
any rights or claims that the Executive may have under the Age
Discrimination in Employment Act of 1967, as amended (29
U.S.C. ss.621) or under Massachusetts General Laws, Chapter
151B.
(c) From the date that the Executive receives this Agreement, the
Executive acknowledges that Executive is entitled to
twenty-two (22) days to consider it; in signing this Agreement
prior to the expiration of this twenty-two (22) day period,
the Executive expressly waives the right to the balance of
this period for such consideration. Upon signing the
Agreement, the Executive has seven (7) days following the
signing in which to revoke the Agreement; should Executive so
revoke it during the seven (7) day period, then this Agreement
shall be null and void.
(d) The Executive is advised to consult with an attorney prior to
signing this Agreement. Executive acknowledges that Executive
has been given a reasonable and adequate amount of time to
consult with an attorney.
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19. EQUITABLE REMEDIES. The Executive acknowledges that the covenants and
obligations with respect to Non-competition, Non-disclosure and
Non-solicitation relate to special, unique, and extraordinary matters
and that a violation of any of the terms of such covenants and
obligations will cause the Company irreparable injury for which
adequate remedies are not available at law. Therefore, the Executive
agrees that if Executive shall breach any of these covenants, the
Company shall have no further obligation to pay any benefits or
otherwise make payments hereunder, and the Company shall be entitled to
an injunction, restraining order, or such other equitable relief
(without the requirement to post a bond) restraining Executive from
committing any violation of the covenants and obligations contained in
this Agreement. The remedies in the preceding sentence are cumulative
and are in addition to any other rights and remedies the Company may
have at law or in equity as an arbitrator (or court) shall reasonably
determine. Executive further agrees that such injunction, restraining
order, or other equitable relief may be had in any appropriate court of
the Commonwealth of Massachusetts having jurisdiction over either Party
to this Agreement or over the subject matter of this Agreement, and
more particularly, may be enforced by a proceeding in any such court of
the Commonwealth of Massachusetts.
20. INTENTION OF THE PARTIES. If any provision of this Agreement is
determined by an arbitrator (or a court of competent jurisdiction) not
to be enforceable, the Executive agrees that it is the intention of the
Parties that such provision should be enforced to the maximum extent
possible under applicable law and that such arbitrator (or court) shall
reform such provision to make it enforceable with the intent of the
Parties.
21. GENERAL COVENANTS.
(a) During employment and the Severance Period or twelve (12)
months following a termination of employment, whichever is
greater, the Executive agrees on Executive's own behalf and on
behalf of Executive's agents and representatives, not to
engage in any public criticism regarding Executive's
employment with the Company or to make any negative,
detrimental, or derogatory comments concerning the Company or
its stockholders, directors, officers or employees, past and
present.
(b) The Executive shall not disclose the terms of this Agreement
unless required to do so by law; provided, however, that the
terms of this Agreement may be disclosed in confidence to
Executive's attorneys and tax or financial consultants. Before
disclosing the terms of this Agreement to anyone as permitted
under this paragraph, the Executive shall first obtain an
agreement from the person receiving the information that he or
she will not disclose the terms of the Agreement to any other
person. The unauthorized disclosure of the terms of this
Agreement by any person shall constitute a violation of this
Agreement by the Party who initially disclosed the terms of
this Agreement. If and when this Agreement becomes a public
document, this paragraph shall become null and void.
22. ASSIGNMENT. Except as otherwise provided herein, this Agreement shall
be binding upon, inure to the benefit of and be enforceable by the
Company and the Executive and their respective heirs, legal
representatives, successors and assigns. If the Company shall be
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merged into or consolidated with another entity, the provisions of
this Agreement shall be binding upon and inure to the benefit of the
entity surviving such merger or resulting from such consolidation.
23. ENTIRE AGREEMENT. This Agreement, with the plans and grant agreements
referenced herein, along with the Change in Control Agreement
referenced in paragraph 6, contains the entire understanding and
agreement between the Parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the
Parties with respect thereto.
24. AMENDMENT OR WAIVER. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by the
Executive and an authorized officer of the Company. No waiver by either
Party of any breach by the other Party of any condition or provision
contained in this Agreement shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the
Executive or an authorized officer of the Company, as the case may be.
25. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any
reason, in whole or in part, the remaining provisions of this Agreement
shall be unaffected thereby and shall remain in full force and effect
to the fullest extent permitted by law.
26. SURVIVORSHIP. The respective rights and obligations of the Parties
hereunder shall survive any termination of the Executive's employment
to the extent necessary to the intended preservation of such rights and
obligations.
27. BENEFICIARIES/REFERENCES. The Executive shall be entitled to select
(and change, to the extent permitted under any applicable law) a
beneficiary or beneficiaries to receive any compensation or benefit
payable hereunder following the Executive's death by giving the Company
written notice thereof. In the event of the Executive's death or a
judicial determination of Executive's incompetence, reference in this
Agreement to the Executive shall be deemed, where appropriate, to refer
to Executive's beneficiary, estate or other legal representative.
Absent any written notice the beneficiary shall be the Executive's
estate.
28. GOVERNING LAW. This Agreement shall be governed by, construed, and
interpreted in accordance with the laws of Massachusetts without
reference to principles of conflict of laws.
29. NOTICES. Any notice given to a Party 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, if to the Company, to the corporate
headquarters, attention: Vice President, Human Resources, with a copy
to the General Counsel; and, if to the Executive, at the Executive's
home address on record with the Company.
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30. HEADINGS. The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.
31. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts.
32. WITHHOLDING. The Company may, to the extent required by law, withhold
applicable federal, state and local income and other taxes from any
payments due to the Executive hereunder.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
POLAROID CORPORATION
By: /S/ XXXX X. XXXXXXXXX
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Name: Xxxx X. XxXxxxxxx
Title: Chief Executive Officer
/S/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
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