SUPPLEMENTAL EMPLOYMENT AGREEMENT
THIS
SUPPLEMENTAL EMPLOYMENT AGREEMENT
(this
“Agreement”) dated as of November 12, 2007, is among XXXXXX
XXXXXXX CONTINENTAL EUROPE S.r.L.,
an
Italian company (the “Company”), XXXXXX
XXXXXXX LTD.,
a
Bermuda company (the “Parent”), and
FRANCO BASEOTTO (the
“Executive”).
WHEREAS,
the
Executive is currently employed by the Company, and the Executive and the
Company wish to continue their employment relationship;
WHEREAS,
Executive’s
employment relationship with the Company is governed by Italian law, the
Contratto
Collettivo Nazionale Dirigenti Aziende Industriali which
is
set to expire on December 31, 2008, and any extension thereto or successor
contract (the “National Contract”), the pre-existing individual employment
contract, dated May 25, 1998, and the applicable Company policies and procedures
(the “Employment Contract”);
WHEREAS,
Executive,
in addition to the duties and responsibilities currently carried out on behalf
of the Company, has been elected as Executive Vie President and Chief Financial
Officer of
Parent
pursuant to a Board of Directors Resolution of Parent (the “Corporate
Position”);
WHEREAS,
the
Company wishes to continue Executive’s employment with Company (subject to the
provisions of the employment relationship as defined under the second Whereas
clause above), and to further expand Executive’s duties to include those duties
arising from the Corporate Position; and
WHEREAS,
the
Company, as Executive’s employer, and Parent wish to equalize Executive’s
compensation and benefits under the Employment Contract by providing a
comparable employment arrangement to Executive as is generally provided to
the
other “Executive Officers” of the Parent, with the intent being to ultimately
provide Executive with the benefits offered to other executive officers of
the
Parent where any such benefit is greater than the benefit to which the Executive
is entitled under the Employment Contract and thereby supplement the benefits
under the Employment Contract with respect to the Corporate
Position.
NOW
THEREFORE, BE IT RESOLVED, accordingly,
the Company, Parent and the Executive by executing this Agreement hereby agree
as follows:
1. Term
of This Agreement.
The
term
of this Agreement (the “Term”) shall commence on November 12, 2007 (the
“Effective Date”), and shall end on the date on which the employment
relationship between the Executive and the Company is terminated for any
reason.
2. Additions
to Compensation/Benefits.
In
addition to the compensation and benefits provided to the Executive under the
Employment Contract, the Executive shall also be entitled to the following
during the Term of this Agreement:
2.1 Perquisites.
During
the Term, the Executive shall be provided by the Company with the following
perquisites:
2.1.1 home
office equipment and associated services for business use in Executive’s homes
not to exceed US$5,000 per year (which amount includes any applicable gross-up
for any taxes and social security contributions to be paid by the Executive
due
for such payment);
2.1.2 annual
reimbursement for the reasonable fees associated with financial planning and
income tax advice and document preparation not to exceed US$5,000 per year
(which amount includes any applicable gross-up for any taxes and social security
contributions to be paid by the Executive due for such payment);
and
2.1.3 reimbursement
for a one-time cost of estate planning services, at a time selected by the
Executive during the Term, not to exceed US$10,000 in the aggregate (which
amount includes any applicable gross-up for any taxes and social security
contributions to be paid by the Executive due for such payment).
Notwithstanding
anything in this Agreement to the contrary, any dollar limitation specified
on
any perquisite under this Section 2.1 shall be automatically adjusted upward
each year for a 5% cost of living adjustment (which amount includes any
applicable gross-up for any taxes and social security contributions to be paid
by the Executive due for such adjustment).
2.2 Change
of Control.
The
Executive shall be covered under the Change in Control Agreement hereto attached
to this Agreement. Any amounts and/or benefits payable, paid or provided to
the
Executive under such Change in Control Agreement shall be in lieu of and not
in
addition to amounts and/or benefits payable or provided under this Agreement.
This Agreement is not intended to preclude benefits payable under the Change
in
Control Agreement should the events described therein occur.
2.3 Social
Security Contributions.
For
the
avoidance of doubt, it is understood that, with respect to any payments/benefits
under Section 2.1, the Company shall be responsible for and pay any social
security contributions (whether the responsibility of the employer or the
Executive under the applicable law) but, with respect to the Executive’s portion
of any social security contributions, such amount shall only be covered up
to
the relevant dollar limitation imposed under each of paragraphs 2.1.1, 2.1.2
and
2.1.3 above.
3.Termination.
3.1 General
Rule.
Termination
of the Executive’s employment shall be governed by Italian law and the National
Contract, pursuant to the definitions set forth under Subsection 3.1.1 below
and
the specific provisions under the subsequent Subsection 3.1.2.
3.1.1 Definitions. Below
are
the definitions used within this Agreement and which are used within the English
version of this Agreement pursuant to Section 8.1 below.
(i) Licenziamento
Per Giusta Causa
as such
term is defined under Italian law and the National Contract; in order to
facilitate the understanding of non Italian readers, Licenziamento
Per Giusta Causa is
roughly equivalent to termination by the Company “For Cause”;
(ii) Licenziamento
Senza Giusta Causa
as such
term is defined under Italian law and the National Contract; in order to
facilitate the understanding of non Italian readers, Licenziamento
Senza Giusta Causa is
roughly equivalent to termination by the Company “Without Cause”;
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(iii) Licenziamento
Ingiustificato as
such
term is defined under Italian law and the National Contract; in order to
facilitate the understanding of non Italian readers, Licenziamento
Ingiustificato is
roughly and mainly equivalent to termination by the Company which is not
supported by an organizational/business reason, without prejudice to any
additional meaning established by Italian law;
(iv) Licenziamento
Giustificato as
such
term is defined under Italian law and the National Contract; in order to
facilitate the understanding of non Italian readers, Licenziamento
Giustificato is
roughly and mainly equivalent to termination by the Company which is supported
by an organizational/business reason, without prejudice to any additional
meaning established by Italian law;
(v) Dimissioni
Per Giusta Causa as
such
term is defined under Italian law and the National Contract and supplemented
by
the following Section 3.1.2; in order to facilitate the understanding of non
Italian readers, Dimissioni
Per Giusta Causa is
roughly equivalent to Resignation by the Executive from the Company “For Good
Reason”;
(vi) Dimissioni
Senza Giusta Causa as
such
term is defined under Italian law and the National Contract; in order to
facilitate the understanding of non Italian readers, Dimissioni
Senza Giusta Causa is
roughly equivalent to Resignation by the Executive from the Company “Without
Good Reason”; and
(vii) Retribuzione
Annua Lorda,
for
purposes of this Agreement and for the avoidance of doubt, is intended to mean
roughly the same thing as base salary in the United States and more specifically
means exclusively the fixed annual compensation of the Executive for services
rendered as approved by the Parent’s Board of Directors, specifically excluding
any bonus/payment/entitlement due under any Xxxxxx Xxxxxxx short-term incentive
plan as in place from time to time, any Xxxxxx Xxxxxxx long-term incentive
plan
as in place from time to time, and any other plan of the Company, Parent or
Xxxxxx Xxxxxxx controlled group. By way of example, Executive’s Retribuzione
Annua Lorda
is
€236,600 as of August 1, 2007.
3.1.2 Dimissioni
Per Giusta Causa.
For
the
sole purpose of this Agreement, “Dimissioni
Per Giusta Causa”
shall
have the meaning established by Italian law and the National Contract and,
additionally, shall include the following, if they occur without the Executive’s
consent:
(i) material
diminution in title and/or duties and/or responsibilities and/or authority
within the Company or Parent with respect to the positions held by the
Executive;
(ii) reduction
of Retribuzione
Annua Lorda
and
benefits, except for across-the-board changes affecting all the “Executive
Officers” of the Company and/or Parent at the Executive’s level;
(iii) exclusion
from executive benefit/compensation plans (e.g.,
bonuses,
long-term incentives);
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(iv) change
of
the Executive’s principal business location by the Company of greater than fifty
(50) miles;
(v) material
breach of the Agreement by the Company and/or Parent that is not cured within
thirty (30) days after the Executive has provided the Company and/or Parent
notice of the material breach, which notice shall be given within sixty (60)
days of the Executive’s knowledge of the occurrence of the material breach;
or
(vi) resignation
in compliance with securities/corporate governance applicable law (such as
the
US Xxxxxxxx-Xxxxx Act) or rules of professional conduct specifically applicable
to such Executive.
3.1.3 Definition
of Termination Date.
The
date
upon which the Executive’s employment relationship with the Company is
terminated for any reason shall be the Executive’s “Termination Date” for all
purposes of this Agreement.
3.2 Payments
Upon Termination with Company.
Without
prejudice to Section 4 of this Agreement, in case of termination of the
employment relationship between the Company and the Executive, the Executive
shall be entitled to the following payments:
3.2.1 Entitlements
Upon Termination by the Company Falling Under the Definition of
Licenziamento
Per Giusta Causa
or Dimissioni
Senza Giusta Causa.
Following termination of the Executive’s employment by the Company falling under
the definition of Licenziamento
Per Giusta Causa (as
defined under Section 3.1.1(i) above), or resignation from the employment by
the
Executive falling under the definition of Dimissioni
Senza Giusta Causa (as
defined under Section 3.1.1(vi) above), the Company shall pay or provide to
the
Executive the Trattamento
di Fine Rapporto (Severance
Indemnity) and
any
other payments or benefits required and due pursuant to the Employment Contract.
3.2.2 Entitlements
Upon Termination Falling Under the Definition of Licenziamento
Senza Giusta Causa, Licenziamento Ingiustificato or
Licenziamento
Giustificato,
or Upon Dimissioni
Per Giusta Causa.
Following termination of the Executive’s employment by the Company, falling
under the definition of Licenziamento
Senza Giusta Causa (as
defined under Section 3.1.1(ii) above),
Licenziamento Ingiustificato (as
defined under Section 3.1.1(iii) above),
Licenziamento Giustificato
(as
defined under Section 3.1.1(iv) above),
or
resignation from the employment by the Executive falling under the definition
of
Dimissioni
Per Giusta Causa (as
defined under Section 3.1.1(v) above), the Executive shall be entitled
to:
(i) Trattamento
di Fine Rapporto (Severance
Indemnity) and
any
final payments due by law (such as the indemnity in lieu of the accrued
paid-leave, quota of 13 monthly compensation) AND
(ii) One
of
the following, at the Executive’s exclusive choice:
(A) any
other
payments or benefits required and due under the Employment Contract;
OR
(B) the
following benefits:
(I) the
balance of any awarded (i.e.,
the
amount and payment of the specific award has been fully approved by the
Compensation Committee of the Parent’s Board of Directors) but as yet unpaid,
bonus and/or other incentive awards, in cash or in kind, for any calendar year
prior to the calendar year during which the Executive’s Termination Date
occurs;
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(II) benefit
continuation and conversion rights to which the Executive is entitled under
the
Company’s employee benefit plans and, in particular, Fasi coverage for two
years, Xxxxx Xxxxxx, one Medical Check-Up and life
and
accident insurance coverage for two years similar to the insurance coverage
in
force pursuant to the Employment Contract;
(III) monthly
payments, for twenty-four months after the Termination Date, of an amount equal
to 1/12 of the sum of Retribuzione
Annua Lorda
plus the
relevant Trattamento
di Fine Rapporto
(Severance Indemnity) accrual;
(IV) payment
of the following amounts:
(1) for
the
calendar year that includes the Executive’s Termination Date, an amount equal to
the Executive’s Bonus Opportunity (defined as the short-term incentive target
percentage opportunity) for such calendar year, multiplied
by
the
Executive’s Retribuzione
Annua Lorda
in
effect on his Termination Date multiplied
by the
multiplier for Parent’s Corporate Center approved by the Parent’s Compensation
Committee for such calendar year plus an additional amount equal to the
relevant Trattamento di Fine Rapporto (Severance Indemnity) accrual that would
have been made if such Executive’s employment had not been
terminated;
and
(2) for
the
calendar year immediately following the calendar year that includes the
Executive’s Termination Date, an amount equal to the Executive’s Bonus
Opportunity for the calendar year that included the Executive’s Termination Date
multiplied
by the
Executive’s Retribuzione
Annua Lorda
in
effect on his Termination Date plus an additional amount equal to the
relevant Trattamento di Fine Rapporto (Severance Indemnity) accrual that would
have been made if such Executive’s employment had not been
terminated.
For
the
purpose of calculating the amounts under clauses (1) and (2) immediately above,
it is understood that the Executive’s Bonus Opportunity has, prior to the
execution of this Agreement, been agreed to be 60% as of August 1, 2007 and
increased to 75% as of July 1, 2008. With respect to both relevant calendar
years for purposes of clauses (1) and (2) immediately above, such annual cash
incentive payments shall be payable at the time that the Company pays annual
cash incentive payments to other recipients of such payments;
(3) the
amount corresponding to two years of INPS and PREVINDAI social security
contributions to be calculated on the basis of the Retribuzione
Annua Lorda
in
effect on his Termination Date;
(V) except
as
prohibited by law, removal of transfer and any other restrictions related to
the
full availability of all shares of capital stock of the Parent registered in
the
Executive’s name and /or granted to the Executive but not yet
vested;
(VI) full
vesting of all vested and unvested stock options to purchase shares of capital
stock of the Parent;
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(VII) executive
level career transition assistance services by a firm selected by the Executive
and approved by the Company in an amount not to exceed US$8,000 in the aggregate
(which amount includes any applicable gross-up for any income taxes due for
such
payment); notwithstanding anything in this Agreement to the contrary, any dollar
limitation specified under this subclause (VII) shall be automatically adjusted
upward each year for a 5% cost of living adjustment (which adjustment equally
includes any applicable gross-up for any income taxes
due
for such adjustment);
For
the
avoidance of doubt, it is understood that, with respect to any payments/benefits
under Clauses (I) through (VII) immediately above, the Executive shall pay
any
social security contributions that are typically the responsibility of the
employee under the applicable law, while the Company shall exclusively be
responsible for and pay the social security contributions that are typically
the
responsibility of the employer under the applicable law.
3.2.3 Executive
Acknowledgements Regarding Entitlements Under Subsection
3.2.2(ii)(B).
Should
the Executive choose the package under Section 3.2.2(ii)(B) above, the Executive
fully acknowledges and agrees that:
(i) the
entitlements under Subsection 3.2.2(ii)(B) above include the amount the
Executive would have been entitled to as Indennità
Sostitutiva del Preavviso (Indemnity
in Lieu of Notice) due under Italian law and the National Contract (including
any social security contributions to be borne by the Company with respect to
such amount);
(ii) the
entitlements under Subsection 3.2.2(ii)(B) above shall be in full satisfaction
of any possible claim of the Executive related to the termination of the
employment relationship, save for Trattamento
di Fine Rapporto
and the
final payments due by law (such as the indemnity in lieu of accrued paid-leave,
quota of 13 monthly compensation); therefore, by accepting such entitlements
and
fulfilling the requirements of paragraph (iii) immediately below, the Executive
shall waive any claims or actions he may bring in relation to the termination
of
the employment relationship and, in particular and by way of example, the
Executive shall waive any claim for payment of the Indennità
Supplementare
and for
payment of any further compensation for damages, if any;
(iii) payment
of the entitlements under Subsection 3.2.2(ii)(B) above shall be carried out
only upon formalization of a settlement agreement which both the Executive
and
the Company agree in good faith to execute within a short period of time before
the appropriate authorities in order to make such settlement agreement final
and
unchallengeable under Italian law; in this respect, the Executive, by executing
this Agreement, expressly gives his consent to such formalization and to appear
before the appropriate authorities upon the Company’s request. In such
situation, the Company shall provide a form of settlement agreement that the
Executive shall execute before the Italian authorities (including Direzione
Provinciale del Lavoro
or
Executive’s Union Associations, at the Company’s choice). It is intended by the
parties to mutually agree upon the terms of the settlement agreement when and
if
it is ever necessary to enter into such settlement agreement and to enter into
it in good faith and within a short period of time to accomplish the objective
of this paragraph (iii); and
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(iv) for
the
avoidance of doubt, the intent of this Section 3.2.3 is to make it clear that
the Executive:
(A) upon
termination of the employment relationship with the Company, is always entitled
to Trattamento
di Fine Rapporto (Severance
Indemnity) and the final payments due by law; but
(B) has
an
exclusive choice of receiving either the benefits under Section 3.2.2(ii)(A)
or
the benefits under Section 3.2.2(ii)(B), but not both.
4.
Protection
of Confidential Information; Non-Competition and
Non-Solicitation.
4.1 Confidential
Information.
The
Executive acknowledges that the Executive’s services will be unique, that they
will involve the development of Parent and Company-subsidized relationships
with
key customers, suppliers, and service providers as well as with key employees
of
Parent and Company and that the Executive’s work for Parent and the Company will
give the Executive access to highly confidential information not available
to
the public or competitors, including trade secrets and confidential marketing,
sales, product development and other data and information which it would be
impracticable for Parent and/or the Company to effectively protect and preserve
in the absence of this Section 4 and the disclosure or misappropriation of
which could materially adversely affect Parent and the Company. Accordingly,
the
Executive agrees:
4.1.1 except
for the purpose of performing the Executive’s duties or in case of information
which is or will become known to the public, not at any time, whether before,
during or after the Executive’s employment with the Company, to divulge to any
other entity or person any confidential information acquired by the Executive
concerning Parent’s, the Company’s or its and their subsidiaries’ or affiliates’
financial affairs or business processes or methods or its and their research,
development or marketing programs or plans, or any other of its or their trade
secrets. The foregoing prohibitions shall include, without limitation, directly
or indirectly publishing (or causing, participating in, assisting or providing
any statement, opinion or information in connection with the publication of)
any
diary, memoir, letter, story, photograph, interview, article, essay, account
or
description (whether fictionalized or not) concerning any of the foregoing,
publication being deemed to include any presentation or reproduction of any
written, verbal or visual material in any communication medium, including any
book, magazine, newspaper, theatrical production or movie, or television or
radio programming or commercial. In the event that the Executive is requested
or
required to make disclosure of information subject to this Section 4.1.1
under any court order then, except as prohibited by law, the Executive will
promptly notify Parent and the Company, take all reasonable steps, except as
prohibited by law, requested by Parent and the Company to defend against the
compulsory disclosure and permit Parent and/or the Company to control with
counsel of its choice any proceeding relating to the compulsory disclosure.
The
Executive acknowledges that all information, the disclosure of which is
prohibited by this section, is of a confidential and proprietary character
and
of great value to Parent, the Company and its and their subsidiaries and
affiliates;
4.1.2 to
deliver promptly to the Company on termination of the Executive’s employment
with the Company, or at any time that Parent or the Company may so request,
all
confidential memoranda, notes, records, reports, manuals, drawings, software,
electronic/digital media records, blueprints and other documents (and all copies
thereof) relating to Parent’s and the Company’s (and its and their subsidiaries’
and affiliates’) business and all property associated therewith, which the
Executive may then possess or have under the Executive’s control.
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4.2 Company
Protections.
In
consideration of the Parent’s and Company’s entering into this Agreement, the
Executive agrees that at all times during the Term and thereafter for the time
period described hereinbelow, the Executive shall not, directly or indirectly,
for Executive or on behalf of or in conjunction with, any other person, company,
partnership, corporation, business, group, or other entity (each, a
“Person”):
4.2.1 Non-Competition:
until
the
first anniversary of the Termination Date, given the Company’s and Parent’s
global operations and Executive’s position with respect thereto, engage in any
activity for or on behalf of a Competitor, as director, employee, shareholder
(excluding any such share holding by the Executive of no more than five percent
(5%) of the shares of common stock of a publicly traded company), consultant
or
otherwise, which is the same as or similar to activity in which Executive
engaged at any time during the last two (2) years of employment by the Company;
notwithstanding the foregoing, although the intent of the parties is to have
a
global, worldwide noncompete, solely in the event a court holds that the
foregoing global noncompete is unenforceable due to its scope, the Executive
voluntarily agrees to be subject to a revised noncompete which instead covers
any activity which is the same as or similar to activity in which Executive
engaged at any time during the last two (2) years of employment by the Company
within the territory of the European Union, Saudi Arabia and Singapore;
4.2.2 Non-Solicitation:
until
the
second anniversary of the Termination Date:
(i) Of
Employees:
call
upon
any Person who is, at such Termination Date, engaged in activity on behalf
of
Parent, the Company or any subsidiary or affiliate of Parent or the Company
for
the purpose or with the intent of enticing such Person to cease such activity
on
behalf of Parent, the Company or such subsidiary or affiliate; or
(ii) Of
Customers:
solicit,
induce, or attempt to induce any customer of Parent or the Company to cease
doing business in whole or in part with or through Parent, the Company or a
subsidiary or affiliate, or to do business with any Competitor.
For
purposes of this Agreement, “Competitor” means a person or entity who or which
is engaged in a material line of business conducted by Parent or the Company.
For purposes of this Agreement, “a material line of business conducted by Parent
or the Company” means an activity of Parent or the Company generating gross
revenues to Parent or the Company of more than twenty-five million dollars
(US$25,000,000) in the immediately preceding fiscal year of Parent or the
Company.
4.2.3 Consideration
for Entering into the Non-Compete and Non-Solicitation.
As
consideration for agreeing to the restrictive covenants set forth in Sections
4.2.1 and 4.2.2 above (the “Consideration”), the Company agrees to pay the
Executive, the following:
(i) a
payment
equal to 30% of Executive’s Retribuzione
Annua Lorda in
effect
as of Executive’s Termination Date, to be made on the first day of the month
immediately following the month which includes Executive’s Termination Date (or
within ten (10) days thereof); and
8
(ii) another
payment equal to 10% of Executive’s Retribuzione
Annua Lorda
in
effect as of Executive’s Termination Date to be paid on the one-year anniversary
of the payment date under paragraph (i) immediately above.
It
is
understood that the payments under this Section 4.2.3 are in addition to, and
not in lieu of, any other payments due to the Executive under this Agreement.
Notwithstanding the foregoing, the Company shall not be required to make any
payments hereunder if the Executive commits a breach or threatens to breach
any
of the provisions of Section 4.2.1 or 4.2.2 hereof.
4.3 Remedies.
4.3.1 Injunctive
Relief.
If
the
Executive commits a breach of or threatens to breach any of the provisions
of
Section 4.2.1 or 4.2.2 hereof, Parent and the Company shall have the right
and remedy to have the provisions of this Agreement specifically enforced by
injunction or otherwise by any court having jurisdiction, it being acknowledged
and agreed that any such breach will cause irreparable injury to Parent and/or
the Company in addition to money damage and that money damages alone will not
provide a complete or adequate remedy to Parent and the Company. It being
further agreed that such right and remedy shall be in addition to, and not
in
lieu of, any other rights and remedies available to Parent and the Company
under
law or in equity.
4.3.2 Monetary
Penalty.
The
Executive acknowledges and agrees that, if he commits a breach of or threatens
to breach any of the provisions of Subsection 4.2.1 or 4.2.2 above, Parent
and/or the Company shall be entitled to obtain the immediate restitution of
the
Consideration already paid, if any, as well as payment, by way of penalty,
of an
amount of four (4) times the Consideration set forth under Subsection 4.2.3
for
each and every breach, without prejudice to claim additional damages, if
any.
4.4 Severability.
If any
of the covenants contained in Sections 4.1, 4.2 or 4.3, or any part
thereof, hereafter are construed to be invalid or unenforceable, the same shall
not affect the remainder of the covenant or covenants, which shall be given
full
effect, without regard to the invalid portions.
4.5 Choice
of Forum and Modification by Court.
Notwithstanding the provisions of Section 8.3 only, with specific respect to
any
of the covenants contained in Article 4, or any part thereof, it is agreed
that
any court anywhere in the world has jurisdiction to hear those particular
issues. If any of the covenants contained in Article 4 are held to be
unenforceable, the parties agree that the court making such determination shall
have the power to revise or modify such provision to make it enforceable to
the
maximum extent permitted by applicable law and, in its revised or modified
form,
said provision shall then be enforceable.
4.6 Modification
by One Court Not to Affect Covenants in Another Country.
The
parties hereto intend to and hereby confer jurisdiction only to enforce the
specific covenants contained in Article 4 upon the courts of any country within
the geographical scope of such covenants. In the event that the courts of any
one or more of such countries hold such covenants wholly unenforceable by reason
of the breadth of such covenants or otherwise, it is the intention of the
parties’ hereto that such determination not bar or in any way affect the
Company’s right to the relief provided above in the courts of any other
countries within the geographical scope of such covenants as to breaches of
such
covenants in such other respective jurisdictions, the above covenants as they
relate to each country being for this purpose severable into diverse and
independent covenants.
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5.Intellectual
Property.
5.1 Company’s
Rights.
Notwithstanding
and without limiting the provisions of Section 4, the Company shall be the
sole owner of all the products and proceeds of the Executive’s services
hereunder, including, but not limited to, all materials, ideas, concepts,
formats, suggestions, developments, arrangements, packages, programs and other
intellectual properties that the Executive may acquire, obtain, develop or
create in connection with or during the Term, free and clear of any claims
by
the Executive (or anyone claiming under the Executive) of any kind or character
whatsoever (other than the Executive’s right to receive payments hereunder). The
Executive shall, at the request of the Company, execute such assignments,
certificates or other instruments as the Company may from time to time deem
necessary or desirable to evidence, establish, maintain, perfect, protect,
enforce or defend its right, title or interest in or to any such
properties.
6. Indemnification.
6.1 Executive
Indemnification.
In
addition to any rights to indemnification to which the Executive is entitled
under the Parent’s charter and bye-laws, to the extent permitted by applicable
law, the Parent will indemnify, from the assets of the Parent supplemented
by
insurance in an amount determined by the Parent, the Executive at all times,
during and after the Term, and, to the maximum extent permitted by applicable
law, shall pay the Executive’s expenses (including reasonable attorneys’ fees
and expenses, which shall be paid in advance by the Parent and/or Company as
incurred, subject to recoupment in accordance with applicable law) in connection
with any threatened or actual action, suit or proceeding to which the Executive
may be made a party, brought by any shareholder of the Parent directly or
derivatively or by any third party by reason of any act or omission or alleged
act or omission in relation to any affairs of the Parent or any subsidiary
or
affiliate of the Parent of the Executive as an officer, director or employee
of
the Parent or of any subsidiary or affiliate of the Parent. The Parent shall
use
its best efforts to maintain during the Term and thereafter insurance coverage
sufficient in the determination of the Parent to satisfy any indemnification
obligation of the Parent arising under this Section 6.
7. Notices.
7.1 To
the Company and/or Parent.
All
notices, requests, consents and other communications required or permitted
to be
given hereunder shall be in writing and shall be carried out by overnight
courier or by first class, prepaid, registered or certified mail, as follows
(or
to such other address as either party shall designate by notice in writing
to
the other in accordance herewith):
If
to the
Company and/or Parent, to:
Xxxxxx
Xxxxxxx Continental Europe S.r.L.
c/o
Xxxxxx Xxxxxxx, Inc.
Xxxxxxxxxx
Xxxxxxxxx Xxxx
Xxxxxxx,
XX 00000-0000
Attention:
Executive Vice President and General Counsel
7.2 To
the Executive.
If
to the
Executive, to the Executive’s principal residence as reflected in the records of
the Company.
10
8. General.
8.1 Language: This
Agreement shall be interpreted in accordance with the Italian Language, provided
however that Article 4 and 10.2 shall be interpreted in accordance with the
typical meaning ascribed to those provisions under the English language in
accordance with the English translation of this Agreement. In other words,
if an
issue of interpretation of the provisions in Article 4 and 10.2 shall ever
arise
between the parties, the English language and interpretation of those provisions
shall be given preference over any contrary construction or interpretation
under
Italian language.
8.2 Choice
of Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of Italy.
8.3 Choice
of Forum.
Except
as
otherwise provided in Article 4, the Court of Milan shall have exclusive
jurisdiction over any dispute arising from this Agreement.
8.4
Headings.
The
Section headings contained herein are for reference purposes only and shall
not in any way affect the meaning or interpretation of this
Agreement.
8.5 Assignability.
8.5.1 Nonassignability
by Executive.
This
Agreement, and the Executive’s rights and obligations hereunder, may not be
assigned by the Executive, nor may the Executive pledge, encumber or anticipate
any payments or benefits due hereunder, by operation of law or
otherwise.
8.5.2 Assignability
by Company.
Subject
to any mandatory provisions set forth by Italian law, the Company may assign
its
rights, together with its obligations,:
(i) to
any
affiliate; or
(ii) to
a
third party in connection with any sale, transfer or other disposition of all
or
substantially all of any business to which the Executive’s services are then
principally devoted; provided,
however,
that no
assignment pursuant to this paragraph shall relieve the Company and Parent
from
its obligations hereunder to the extent the same are not timely discharged
by
such assignee.
8.6 Survival.
The
respective rights and obligations of the parties hereunder, specifically and
expressly with respect to Section 4 of this Agreement, shall survive any
termination of this Agreement or the Term to the extent necessary to the
intended preservation of such rights and obligations.
8.7 Amendment.
This
Agreement may be amended, modified, superseded, canceled, renewed or extended
and the terms or covenants hereof may be waived, only by a written instrument
executed by all of the parties hereto, or in the case of a waiver, by the party
waiving compliance. The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the right at
a
later time to enforce the same. No waiver by either party of the breach of
any
term or covenant contained in this Agreement, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
11
8.8 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
he
deemed to be an original but all of which together will constitute one and
the
same instrument.
8.9 Acknowledgement
of Ability to Have Counsel Review.
The
parties acknowledge that this Agreement is the result of arm’s-length
negotiations between sophisticated parties each afforded the opportunity to
utilize representation by legal counsel. Each and every provision of this
Agreement shall be construed as though all parties participated equally in
the
drafting of same, and any rule of construction that a document shall be
construed against the drafting party shall not be applicable to this
Agreement.
9. US
Code Section 409A Legal Requirement.
9.1 Reason
for Section 9.
While
the
parties do not presently contemplate that this Section 9 will apply to
Executive, in the event that it may ever apply in the future, this Section
9 is
designed to protect Executive from negative U.S. income tax
consequences.
9.2 Six
Month Delay in Payment.
Notwithstanding
anything to the contrary in this Agreement, if the Executive participates in
any
nonqualified deferred compensation arrangement which is subject to Section
409A
of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and during
such participation Executive constitutes a “specified employee” as defined and
applied in Code Section 409A as of his Termination Date, any payments which
are
immediately due under this Agreement upon termination of employment which are
required to be delayed under Code Section 409A and its regulatory guidance
may
not commence to Executive until the first day following the sixth month
anniversary of Executive’s Termination Date; provided, however, that any
payments delayed during this six-month period shall be paid in the aggregate
as
soon as administratively practicable following the sixth month anniversary
of
the Executive’s Termination Date. Notwithstanding the foregoing, in the event
that the Executive would challenge such payment delay in an Italian Court,
Company agrees to abide by the original payment schedule but Executive shall
be
responsible for any taxes and penalties due as required under Code Section
409A.
10. Company
and Parent Financial Responsibilities.
10.1 Company
Financial Responsibilities.
The
Company, as Executive’s employer, is the sole obligor with respect to any
payments made under this Agreement.
10.2 Parent
Financial Responsibilities.
Parent
is the parent company of Company. In that capacity, Parent unconditionally
guarantees the payment in full of all obligations of the Company under this
Agreement.
12
IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date first above
written.
|
XXXXXX
XXXXXXX CONTINENTAL EUROPE
S.r.L.
|
||
| |
|
|
| By: | /s/ Xxxxxxx xxxxx Xxxx | |
|
Name: Xxxxxxx xxxxx Xxxx |
||
| Title: Chairman and CEO | ||
| XXXXXX XXXXXXX LTD. | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxxxx | |
|
Name: Xxxxxxx X. Xxxxxxxxxx |
||
| Title: Chairman and CEO | ||
| /s/ Franco Baseotto | ||
|
FRANCO BASEOTTO |
||
13
