EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of December 1, 2004,
is made and entered into by and between Scottish Holdings, Inc., a Delaware
company (the "Company") and Xxxxxxx X. Xxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to ensure that it retains the Executive's
management and executive services by directly engaging Executive as its
Executive Vice President - Chief Information Officer;
WHEREAS, in order to induce the Executive to continue to serve in such
position, the Company desires to provide the Executive with compensation and
other benefits on the terms and conditions set forth in this Agreement; and
WHEREAS, the Executive is willing to accept such employment and perform
services for the Company, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the agreements and covenants herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto covenant and agree as follows:
1. Certain Defined Terms.
In addition to terms defined elsewhere herein, the following terms have the
following meanings when used in this Agreement with initial capital letters:
(a) "Act" means the Securities Exchange Act of 1934, as amended.
(b) "Board" means the Board of Directors of Scottish Holdings, Inc.
(c) "Change in Control" means the occurrence during the Term of any of the
following events:
(i) the acquisition by any individual, entity or group, within the
meaning of Section 13(d)(3) or 14(d)(2) of the Act (a
"Person"), including as a result of a Business Combination (as
defined in Section 1(c)(iii)), of beneficial ownership, within
the meaning of Rule 13d-3 promulgated under the Act, of 25% or
more of the combined voting power of the then outstanding
Voting Stock of Scottish Re Group Limited ("Holdings");
provided, however, that for purposes of this Section, the
following acquisitions shall not constitute a Change in
Control: (A) any acquisition by Holdings of Voting Stock of
Holdings, or (B) any acquisition of Voting Stock of
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Holdings by any employee benefit plan (or related trust)
sponsored or maintained by Holdings or any Subsidiary; or
(ii) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board," (as modified by this Section
1(c)(ii))) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a Director subsequent to the date hereof whose
election, or nomination for election by the shareholders of
Holdings, was approved by a vote of at least two-thirds of the
Directors then comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of
Holdings in which such person is named as a nominee for
director, without objection to such nomination) shall be
deemed to have been a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or
threatened election contest (within the meaning of Rule 14a-11
of the Act) with respect to the election or removal of
Directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board; or
(iii) consummation of a reorganization, merger or consolidation, a
sale or other disposition of all or substantially all of the
assets of Holdings, or other transaction (each, a "Business
Combination"), unless, in each case, immediately following
such Business Combination, either (A)(I) the individuals and
entities who were the beneficial owners of Voting Stock of
Holdings immediately prior to such Business Combination
beneficially own in the aggregate, directly or indirectly,
more than 50% of the combined voting power of the then
outstanding shares of Voting Stock of the entity resulting
from such Business Combination (including, without limitation,
an entity which as a result of such transaction owns Holdings
or all or substantially all of the assets of Holdings either
directly or through one or more subsidiaries), (II) no Person
(other than Holdings, such entity resulting from such Business
Combination, or any employee benefit plan (or related trust)
sponsored or maintained by Holdings, any Subsidiary or such
entity resulting from such Business Combination) beneficially
owns, directly or indirectly, 25% or more of the combined
voting power of the then outstanding shares of Voting Stock of
the entity resulting from such Business Combination, and (III)
at least a majority of the members of the Board of Directors
of the entity resulting from such Business Combination were
members of the
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Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board providing for such
Business Combination, or (B) the same as Section 1(c)(iii)(A),
except in clause (I), substituting "one-third" for "50%," and in
clause (III), substituting "two-thirds" for "a majority";
(iv) approval by the shareholders of Holdings of a complete
liquidation or dissolution of Holdings, except pursuant to a
Business Combination that complies with clause (A) or (B) of
Section 1(c)(iii); or
(v) a sale or other disposition of (A) shares of Voting Stock of
the Company representing at least 50% of the combined voting
power of the then outstanding shares of Voting Stock of the
Company, or (B) all or substantially all of the assets of the
Company, unless, in either case, the individuals and entities
who were the beneficial owners of Voting Stock of Holdings
immediately prior to such sale or disposition continue to
beneficially own in the aggregate, directly or indirectly,
more than 50% of the combined voting power of the then
outstanding shares of Voting Stock of the entity acquiring
such Voting Stock or assets of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Competitive Activity" means the Executive's participation, without
the written consent of the Board of the Company, in the management of
any business enterprise if such enterprise engages in substantial and
direct competition with the Company and such enterprise engages in
substantial and direct competition with the Company if such
enterprise's sales of any product or service competitive with any
product or service of the Company amounted to 10% of such enterprise's
net sales for its most recently completed fiscal year and if the
Company's net sales of said product or service amounted to 10% of the
Company's net sales for its most recently completed fiscal year.
"Competitive Activity" shall not include (i) the mere ownership of
securities in any such enterprise and the exercise of rights
appurtenant thereto or (ii) participation in the management of any
such enterprise other than in connection with the competitive
operations of such enterprise.
(f) "Director" means a member of the Board.
(g) "Ordinary Shares" means the ordinary shares, par value $0.01 per
share, of Holdings.
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(h) "Subsidiary" means an entity in which Holdings directly or indirectly
beneficially owns 50% or more of the outstanding Voting Stock.
(i) "Total Cash Compensation" means the sum of the (i) highest annual Base
Salary in effect during the Term; and (ii) highest annual Incentive
Bonus (as set forth in Section 6(b)) earned during the prior three (3)
fiscal years.
(j) "Voting Stock" means securities entitled to vote generally in the
election of directors.
2. Employment.
The Company hereby agrees to employ Executive, and Executive hereby agrees
to be employed with the Company for the Term, upon the terms and conditions
herein set forth.
3. Term.
The term of employment under this Agreement (the "Initial Term") shall
commence on December 1, 2004 ("Commencement Date") and subject to earlier
termination pursuant to Section 7, expire on the second anniversary of the
Commencement Date; provided, however, that commencing on the first anniversary
of the Commencement Date and each succeeding anniversary date, this Agreement
will automatically be renewed for successive one-year periods (the "Additional
Term"), subject to earlier termination pursuant to Section 7, unless either
party provides written notice of non-renewal to the other pursuant to Section 14
at least ninety (90) days prior to the end of the Initial Term or any Additional
Term. The Initial Term and any Additional Term shall be referred to under this
Agreement as the "Term"; provided, however, that if a Change in Control occurs
during the Term (as determined without regard to this clause), then the Term
shall include the period ending on the second anniversary of the first
occurrence of a Change in Control.
4. Positions and Duties.
(a) During the Term, Executive will serve in the position of Executive
Vice President - Chief Information Officer of the Company, or such
other position as may be agreed upon by the Company and the Executive,
and will have such duties, functions, responsibilities and authority
as are (i) reasonably assigned to him by the President of Holdings,
consistent with Executive's position as the Company's Executive Vice
President -Chief Information Officer or (ii) assigned to his office in
the Company's Charter. Executive will report directly to the President
of Holdings.
(b) During the Term, Executive will be the Company's full-time employee
and, except as may otherwise be approved in advance in writing by the
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Board of the Company, and except during vacation periods and
reasonable periods of absence due to sickness, personal injury or
other disability, Executive will devote substantially all of his
business time and attention to the performance of his duties to the
Company. Notwithstanding the foregoing, Executive may (i) subject to
the approval of the Board of the Company, serve as a director of a
company, provided such service does not constitute a Competitive
Activity, (ii) serve as an officer, director or otherwise participate
in purely educational, welfare, social, religious, charitable and
civic organizations, (iii) serve as an officer, director or trustee
of, or otherwise participate in, any organizations and activities with
respect to which Executive's participation was disclosed to the
Company in writing prior to the date hereof and (iv) manage personal
and family investments.
5. Place of Performance.
In connection with his employment during the Term, unless otherwise agreed
by Executive, Executive will be based at the Company's principal executive
offices in Charlotte, North Carolina; provided, however, that Executive agrees
and acknowledges that in view of the nature of Company's business operations,
Executive may be required in the performance of his duties to undertake
substantial travel on behalf of the Company.
6. Compensation and Related Matters.
As compensation and consideration for the performance by Executive of his
obligations pursuant to this Agreement, Executive shall be entitled to the
following:
(a) Base Salary. During the Term, the Company shall pay Executive an
annual base salary ("Base Salary") of US $275,000, payable at the
times and in the manner consistent with the Company's policies
regarding compensation of executive employees. The Company agrees to
review such compensation not less frequently than annually during the
Term. Once increased, the Base Salary may not be decreased. The Base
Salary as increased from time to time shall be referred to herein as
"Base Salary".
(b) Incentive Bonus. For 2005 and each calendar year that begins during
the Term, the Company shall pay a cash bonus to Executive based upon
pre-established performance goals established by the Company (the
"Incentive Bonus"). Any Incentive Bonus shall be payable at the times
and in the manner consistent with the Company's policies regarding
compensation of executive employees.
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(c) Guaranteed Bonus. For the calendar year ending on December 31, 2004,
Executive shall receive a guaranteed minimum bonus equal to $100,000
(the "Guaranteed Bonus") payable in February 2004.
(d) Executive Benefits. During the Term, the Company will make available
to Executive and his eligible dependents, participation in all
Company-sponsored employee benefit plans including all employee
retirement income and welfare benefit policies, plans, programs or
arrangements in which senior executives of the Company participate,
including any stock option, stock purchase, stock appreciation,
savings, pension, supplemental executive retirement or other
retirement income or welfare benefit, disability, salary continuation,
and any other deferred compensation, incentive compensation, group
and/or executive life, health, medical/hospital or other insurance,
expense reimbursement or other employee benefit policies, plans,
programs or arrangements, including without limitation financial
counseling services or any equivalent successor policies, plans,
programs or arrangements that may now exist or be adopted hereafter by
the Company.
(e) Expenses. The Company will promptly reimburse Executive for all
reasonable business expenses Executive incurs in order to perform his
duties to the Company under this Agreement in a manner commensurate
with Executive's position and level of responsibility with the
Company, and in accordance with the Company's policy regarding
substantiation of expenses.
(f) Vacation and Holidays. Executive shall be entitled to four (4) weeks
of paid vacation per annum, in accordance with the Company's vacation
policy.
(g) Indemnification. The Executive shall be offered an opportunity to
enter into Holdings' Indemnification Agreement substantially in the
form attached hereto as Exhibit A effective as of the Commencement
Date.
(h) Relocation Expenses. The Company shall reimburse the Executive for his
reasonable relocation costs to Charlotte, North Carolina in accordance
with the Company's Relocation Policy. Reasonable relocation costs are
not to exceed $75,000.
(i) Initial Equity Compensation Grant. The Company shall grant Executive
an option (the "Option") to purchase 6,700 Ordinary Shares of
Holdings. Additionally, the Company shall grant Executive 3,400
restricted shares (the "Restricted Shares") of Holdings. Any grant to
Executive under the 2004 Equity Incentive Compensation Plan shall be
subject to the terms and
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conditions of the plan as well as the performance requirements
expressly adopted by the Holdings' Board and/or Compensation
Committee. A copy of the 2004 Equity Incentive Compensation Plan is
attached hereto as Exhibit B.
7. Termination.
(a) Termination by the Company with Cause. The Company shall have the
right to terminate Executive's employment at any time with Cause. For
purposes of this Agreement, "Cause" shall mean: (i) habitual drug or
alcohol use which impairs Executive's ability to perform his or her
duties hereunder; (ii) Executive's conviction during the Term by a
court of competent jurisdiction, or a pleading of "no contest" or
guilty to an arrestable criminal offense resulting in the imposition
of a custodial sentence; (iii) Executive's engaging in fraud,
embezzlement or any other illegal conduct with respect to the Company
or Holdings, which acts are materially harmful to, either financially,
or to the business reputation of the Company or Holdings; (iv)
Executive's willful breach of Section 10 hereof; (v) Executive's
continued failure or refusal to perform his duties hereunder (other
than such failure caused by Executive's Disability); or (vi) Executive
otherwise breaches any material provision of this Agreement. No act or
failure to act on the part of Executive shall be deemed "intentional"
if it was due primarily to an error in judgment or negligence, but
shall be deemed "intentional" only if done or omitted to be done by
Executive not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company and
Holdings.
(b) Death. In the event Executive dies during the Term, his employment
shall automatically terminate effective on the date of his death, such
termination shall not be deemed to be a breach of this Agreement, and
the Company shall pay or provide to the Executive's beneficiaries or
estate, as appropriate, as soon as practicable after the Executive's
death, the amounts and benefits provided for in Section 8(d).
(c) Disability. In the event Executive shall suffer from a mental or
physical disability which shall have prevented him from performing his
material duties hereunder for a period of at least one-hundred eighty
(180) non-consecutive days within any 365 day period, the Company
shall have the right to terminate Executive's employment for
"Disability," such termination to be effective upon the giving of
notice thereof to the Executive in accordance with Section 7(g)
hereof, such termination shall not be deemed to be a breach of this
Agreement, and the Company shall provide to the Executive the amounts
and benefits provided for in
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Section 8(d). Executive's employment hereunder shall terminate
effective on the 30th day after receipt of such notice by Executive
(the "Disability Effective Date"); provided that Executive shall not
have returned to full-time performance of his duties hereunder within
thirty (30) days following receipt of such notice.
(d) Good Reason.
(i) Executive may terminate his employment with the Company for
"Good Reason" and such termination shall not be deemed to be a
breach of this Agreement. Executive shall have Good Reason if
Executive has knowledge that one of the events described in
Section 7(d)(ii) has occurred without Executive's written
consent and (A) if the event is not curable, Executive gives a
Notice of Termination to the Company pursuant to Section 7(g)
within sixty (60) days after having knowledge of the event, or
(B) if the event is curable, (I) Executive gives written
notice to the Company thereof in accordance with Section 14
within sixty (60) days after having knowledge of the event,
(II) such event has not been cured within a reasonable period
after notice, but in all events within thirty (30) days after
the Executive gives notice of the event to the Company, and
(III) Executive gives a Notice of Termination to the Company
in accordance with Section 7(g) within thirty (30) days after
the expiration of the Company's 30-day cure period.
(ii) For purposes of this Agreement, "Good Reason" shall mean (A)
prior to a Change in Control, (I) a failure by the Company to
comply with any material provision of this Agreement; (II) the
liquidation, dissolution, merger, consolidation or
reorganization of the Company or all of its business and/or
assets, unless the successor(s) assume all duties and
obligations of the Company pursuant to Section 13(a); or (III)
upon the provision of notice by the Company under Section 3 of
non-renewal of the Agreement, and (B) on or after a Change in
Control, (I) any of the events set forth in Section
7(d)(ii)(A); (II) any material and adverse change to
Executive's duties or authority which are inconsistent with
his title and position set forth herein; (III) a diminution of
Executive's title or position; (IV) the relocation of
Executive's office; (V) a reduction in Executive's Base
Salary; or (VI) a material reduction of Executive's benefits
provided pursuant to Section 6 other than a reduction
permitted under terms and conditions of the applicable Company
policy or benefit plan.
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(e) Without Good Reason. Executive may voluntarily terminate his
employment with the Company without Good Reason by giving written
notice to the Company as provided in Section 7(g). Such notice must be
provided to the Company at least thirty (30) days prior to such
termination. Such termination shall not be deemed to be a breach of
this Agreement.
(f) Without Cause. This Company shall have the right to terminate
Executive's employment hereunder without Cause by providing written
notice to Executive as provided in Section 7(g), and such termination
shall not be deemed to be a breach of this Agreement. "Without Cause"
shall mean for any reason other than Cause, death or Disability, as
provided in Sections 7(a), 7(b) and 7(c).
(g) Notice of Termination.
Any termination of Executive's employment by the Company pursuant to
Section 7(a), 7(c) or 7(f), or by Executive pursuant to Section 7(d)
or 7(e), shall be communicated by a Notice of Termination to the other
party hereto in accordance with this Section 7(g) and Section 14. For
purposes of this Agreement, a "Notice of Termination" means a written
notice that (A) indicates the specific termination provision in this
Agreement relied upon, (B) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provision so indicated and (C) if the Date of Termination (as defined
in Section 7(h)) is other than the date of receipt of such notice,
specifies the Date of Termination. The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or
circumstance that contributes to a showing of Good Reason or Cause
shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing
the Executive's or Company's rights hereunder.
(h) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause or by
the Executive for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein (but not more than
thirty (30) days thereafter), as the case may be (although such Date
of Termination shall retroactively cease to apply if the circumstances
providing the basis of termination for Cause or Good Reason are cured
in accordance with Section 7(a) or 7(d) of this Agreement, as the case
may be), (ii) if Executive's employment is terminated by the Company
other than for Cause or Disability, the Date of Termination shall be
the date set forth in the Notice of Termination (iii) if
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Executive's employment is terminated by Executive without Good Reason,
the Date of Termination shall be the date set forth in the Notice of
Termination, but no sooner than thirty (30) days after such Notice of
Termination is received by the Company and (iv) if Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of the Executive's death or the
Disability Effective Date, as the case may be.
8. Compensation upon Termination.
If the Company or Executive terminates the Executive's employment during
the Term, the Company shall pay to the Executive the amount(s) set forth below
in a lump sum in cash upon the later of (i) five (5) business days after the
Date of Termination or date of expiration of this Agreement, as the case may be,
(ii) the effective date of a release (if a release is required by this Section
8) or (iii) at the Executive's option, a date later than the dates specified in
clauses (i) and (ii).
(a) Compensation upon Termination for Cause or Without Good Reason. In the
event of termination of Executive's employment by the Company for
Cause or by the Executive without Good Reason, or by reason of
expiration of the Term (if applicable), the Company shall pay the
Executive his accrued, but unpaid Base Salary, accrued vacation pay
and unpaid business expenses through the Date of Termination (the
"Compensation Payments"), and the Executive shall be entitled to no
other compensation, except as otherwise due to the Executive under
applicable law. The Executive shall not be entitled to the payment of
any bonus or other incentive compensation for any portion of the
fiscal year in which such termination occurs.
(b) Compensation upon Termination by the Company Without Cause or upon
Termination by the Executive for Good Reason. Subject to Section 8(c),
in the event of the termination of the Executive's employment by the
Company without Cause or upon termination of the Executive's
employment by the Executive for Good Reason, the Company shall pay the
Executive the Compensation Payments. In addition, conditioned upon
receipt of the Executive's release of claims substantially in the form
attached hereto as Exhibit C, subject to such changes as may be
required to preserve the intent thereof for changes in applicable law,
the Company shall pay or provide to the Executive (i) as severance
pay, an amount equal to the sum of the Total Cash Compensation that
Executive would have received during the remaining Term of the
Agreement, such amount to be calculated from the date the Executive's
employment was terminated to the date that is the first anniversary of
the Commencement Date (the "Severance Calculation Period"), (ii)
earned, but unpaid
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Incentive Bonus for the year of termination, as determined in the good
faith opinion of the Company based upon the relative achievement of
performance targets through the Date of Termination (the "Termination
Bonus"), and (iii) the welfare benefits set forth in Section 8(f).
Notwithstanding the foregoing provisions of this Section 8(b), (x)
where the Severance Calculation Period is for twelve (12) calendar
months or less, the Company shall pay the Executive under Section
8(b)(i) an amount equal to the sum of one (1) full year's Total Cash
Compensation, (y) upon termination by the Executive for Good Reason
due to Section 7(d)(ii)(A)(III) (Company's notice of non-renewal of
the Agreement), the Company shall pay the Executive under Section
8(b)(i) an amount not less than one (1) full year's Total Cash
Compensation, and (z) any right of the Executive to receive
termination payments and benefits under Section 8(b) shall be
forfeited to the extent of any amounts payable or benefits to be
provided after a material breach of any covenant set forth in Section
10.
(c) Compensation upon Termination in Connection with a Change in Control
of the Company. If, within the period of time commencing on the date
of the first occurrence of a Change in Control and continuing until
the second anniversary of such occurrence of a Change in Control or,
if earlier, until the Executive's death, the Executive's employment is
terminated by the Company without Cause or by the Executive for Good
Reason, then the provisions of Section 8(b) shall be applicable. For
purposes of the preceding sentence, if a Change in Control occurs and
not more than one-hundred twenty (120) days prior to the date on which
the Change in Control occurs, the Executive's employment is terminated
by the Company without Cause, such termination of employment shall be
deemed a termination of employment after a Change in Control if such
termination of employment (i) was at the request of a third party who
has taken steps reasonably calculated to effect a Change in Control,
or (ii) otherwise arose in connection with or in anticipation of a
Change in Control.
(d) Compensation upon Death or Disability. In the event of the Executive's
death or the termination of employment due to Disability, the Company
shall pay to the Executive (or beneficiaries, or estate, as the case
may be) an amount equal to the sum of (i) the Compensation Payments
and (ii) the Termination Bonus. Executive shall be entitled to any
other rights, compensation and/or benefits as may be due to Executive
in accordance with the terms and provision of any agreements, plans or
programs of the Company.
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(e) Set-Off, Counterclaim or Late Payment. There shall be no right of
set-off or counterclaim in respect of any claim, debt or obligation
against any payment to or benefit for the Executive provided for in
this Agreement. Without limiting the rights of the Executive at law or
in equity, if the Company fails to make any payment required to be
made hereunder on a timely basis, the Company shall pay interest on
the amount or value thereof at an annualized rate of interest equal to
the "prime rate" as set forth from time to time during the relevant
period in The Wall Street Journal "Money Rates" column, plus four
(4)%. Such interest shall be payable as it accrues on demand. Any
change in such prime rate shall be effective on and as of the date of
such change.
(f) Welfare Benefits. If the Executive becomes entitled to the benefits
provided by Section 8(b) or 8(c), then in addition to such benefits,
for a period following the Date of Termination equal to the greater of
the remaining Term or twelve (12) months (the "Continuation Period"),
the Company shall arrange to provide the Executive with health
insurance, life insurance, and other medical benefits substantially
similar to those that the Executive was receiving or entitled to
receive immediately prior to the Date of Termination (or, if greater,
immediately prior to the reduction, termination, or denial described
in Section 7(d)(ii)(B)(VI), if applicable). If and to the extent that
any benefit described in this Section 8(f) is not or cannot be paid or
provided under any policy, plan, program or arrangement of the
Company, then the Company will itself pay or provide for the payment
to the Executive, his dependents and beneficiaries, of such benefits
along with, in the case of any benefit described in this Section 8(f)
that is subject to tax because it is not or cannot be paid or provided
under any such policy, plan, program or arrangement of the Company, an
additional amount such that after payment by the Executive, or his
dependents or beneficiaries, as the case may be, of all taxes so
imposed, the recipient retains an amount equal to such taxes.
Notwithstanding the foregoing, or any other provision of the
Agreement, for purposes of determining the period of continuation
coverage to which the Executive or any of his dependents is entitled
pursuant to Section 4980B of the Code under the Company's medical,
dental and other group health plans, or successor plans, the
Executive's "qualifying event" will be the termination of the
Continuation Period and the Executive will be considered to have
remained actively employed on a full-time basis through that date.
(g) Scope and Nonduplication. The provision or payment of termination
benefits under this Section 8 shall not affect any rights the
Executive may have pursuant to any agreement, plan, policy, program or
arrangement of
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the Company providing employee benefits, which rights shall be
governed by the terms thereof or by the release described in Section
8; provided, however, that to the extent, and only to the extent, a
payment or benefit that is paid or provided under this Section 8 would
also be paid or provided under the terms of any applicable plan,
program, or arrangement, including, without limitation, any severance
program, such applicable plan, program, agreement or arrangement shall
be deemed to have been satisfied by the payment made or benefit
provided under this Agreement.
(h) Mitigation. In the event of the termination of the Executive by the
Company without Cause, or by the Executive with Good Reason, the
Executive shall not be required to mitigate damages by seeking other
employment or otherwise as a condition to receiving termination
payments or benefits under this Agreement. No amounts earned by the
Executive after the Executive's termination by the Company without
Cause or by the Executive with Good Reason, whether from
self-employment, as a common law employee, or otherwise, shall reduce
the amount of any payment or benefit under any provision of this
Agreement. Notwithstanding the foregoing, the Executive's coverage
under the Company's group medical insurance as provided in Section
8(f) shall be reduced to the extent comparable welfare benefits are
actually received by the Executive as soon as the Executive becomes
covered under any group medical plan made available by another
employer. The Executive shall report to the Company any such coverage
actually received by the Executive.
(i) Resignations. Except to the extent requested by the Company, upon any
termination of the Executive's employment with the Company, the
Executive shall immediately resign all positions and directorships
with the Company, Holdings and each of their subsidiaries and
affiliates.
(j) Reimbursement of Guaranteed Bonus and Relocation Expenses. If the
Executive terminates this Agreement without Good Reason, the Executive
shall reimburse to the Company a pro rata share of the guaranteed
bonus and relocation expense according to the following schedule:
(i) Prior to the expiration of six (6) months from December 1,
2004, the Executive shall reimburse 50% of the guaranteed
bonus and relocation expense to the Company; and
(ii) Prior to the expiration of twelve (12) months from December 1,
2004, the Executive shall reimburse 25% of the guaranteed
bonus and relocation expense to the Company.
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9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event that it shall be determined (as hereafter provided) that any
payment (other than the Gross-Up payments provided for in this Section
9) or distribution by the Company, Holdings or any of their affiliates
to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement
or otherwise pursuant to or by reason of any other agreement, policy,
plan, program or arrangement, including without limitation any stock
option, performance share, performance unit, stock appreciation right
or similar right, or the lapse or termination of any restriction on or
the vesting or exercisability of any of the foregoing (a "Payment"),
would be subject to the excise tax imposed by Section 4999 of the Code
by reason of being considered "contingent on a change in ownership or
control" of the Company or Holdings, within the meaning of Section
280G of the Code or to any similar tax imposed by state or local law,
or any interest or penalties with respect to such tax (such tax or
taxes, together with any such interest and penalties, being hereafter
collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment or payments
(collectively, a "Gross-Up Payment"); provided; however, that no
Gross-up Payment shall be made with respect to the Excise Tax, if any,
attributable to (i) any incentive stock option, as defined by Section
422 of the Code ("ISO") granted prior to the execution of this
Agreement, or (ii) any stock appreciation or similar right, whether or
not limited, granted in tandem with any ISO described in clause (i).
The Gross-Up Payment shall be in an amount such that, after payment by
the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including any Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payment. For
purposes of determining the amount of the Gross-Up Payment, the
Executive will be considered to pay (x) federal income taxes at the
highest rate in effect in the year in which the Gross-Up Payment will
be made and (y) state and local income taxes at the highest rate in
effect in the state or locality in which the Gross-Up Payment would be
subject to state or local tax, net of the maximum reduction in federal
income tax that could be obtained from deduction of such state and
local taxes.
(b) Subject to the provisions of Section 9(f), all determinations required
to be made under this Section 9, including whether an Excise Tax is
payable by the Executive and the amount of such Excise Tax and whether
a Gross-Up Payment is required to be paid by the Company to the
Executive and the
Page 14 of 26
amount of such Gross-Up Payment, if any, shall be made by a nationally
recognized accounting firm (the "Accounting Firm") selected by the
Executive in his sole discretion. The Executive shall direct the
Accounting Firm to submit its determination and detailed supporting
calculations to both the Company and the Executive within thirty (30)
calendar days after the Date of Termination, if applicable, and any
such other time or times as may be requested by the Company or the
Executive. If the Accounting Firm determines that any Excise Tax is
payable by the Executive, the Company shall pay the required Gross-Up
Payment to the Executive within five (5) business days after receipt
of such determination and calculations with respect to any Payment to
the Executive. If the Accounting Firm determines that no Excise Tax is
payable by the Executive with respect to any material benefit or
amount (or portion thereof), it shall, at the same time as it makes
such determination, furnish the Company and the Executive an opinion
that the Executive has substantial authority not to report any Excise
Tax on his federal, state or local income or other tax return. As a
result of the uncertainty in the application of Section 4999 of the
Code and the possibility of similar uncertainty regarding applicable
state or local tax law at the time of any determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which
will not have been made by the Company should have been made (an
"Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts or fails to pursue
its remedies pursuant to Section 9(f) and the Executive thereafter is
required to make a payment of any Excise Tax, the Executive shall
direct the Accounting Firm to determine the amount of the Underpayment
that has occurred and to submit its determination and detailed
supporting calculations to both the Company and the Executive as
promptly as possible. Any such Underpayment shall be promptly paid by
the Company to, or for the benefit of, the Executive within five (5)
business days after receipt of such determination and calculations.
(c) The Company and the Executive shall each provide the Accounting Firm
access to and copies of any books, record and documents in the
possession of the Company or the Executive, as the case may be,
reasonably requested by the Accounting Firm, and-otherwise cooperate
with the Accounting Firm in connection with the preparation and
issuance of the determinations and calculations contemplated by
Section 9(b). Any determination by the Accounting Firm as to the
amount of the Gross-Up Payment shall be binding upon the Company and
the Executive.
(d) The federal, state and local income or other tax returns filed by the
Executive shall be prepared and filed on a consistent basis with the
Page 15 of 26
determination of the Accounting Firm with respect to the Excise Tax
payable by the Executive. The Executive shall report and make proper
payment of the amount of any Excise Tax, and at the request of the
Company, provide to the Company true and correct copies (with any
amendments) of his federal income tax return as filed with the
Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority,
and such other documents reasonably requested by the Company,
evidencing such payment. If prior to the filing of the Executive's
federal income tax return, or corresponding state or local tax return,
if relevant, the Accounting Firm determines that the amount of the
Gross-Up Payment should be reduced, the Executive shall within five
(5) business days pay to the Company the amount of such reduction.
(e) The fees and expenses of Accounting Firm for its services in
connection with the determinations and calculations contemplated by
Section 9(b) shall be borne by the Company. If such fees and expenses
are initially paid by the Executive, the Company shall reimburse the
Executive the full amount of such fees and expenses within five (5)
business days after receipt from the Executive of a statement therefor
and reasonable evidence of his payment thereof.
(f) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by the Company of a Gross-Up
Payment. Such notification shall be given as promptly as practicable
but no later than thirty (30) business days after the Executive
actually receives notice of such claim and the Executive shall further
apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid (in each case, to the extent known
by the Executive). The Executive shall not pay such claim prior to the
earlier of (i) the expiration of the 30-calendar-day period following
the date on which he gives such notice to the Company and (ii) the
date that any payment of amount with respect to such claim is due. If
the Company notified the Executive in writing prior to the expiration
of such period that it desires to contest such claim, the Executive
shall:
(i) provide the Company with any written records or documents in
his possession relating to such claim reasonably requested by
the Company;
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to
time, including without limitation accepting legal
representation with
Page 16 of 26
respect to such claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order effectively
to contest such claim; and
(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including interest and
penalties) incurred in connection with such contest and shall
indemnify and hold harmless the Executive, on an after-tax
basis, for and against any Excise Tax or income or other tax,
including interest and penalties with respect thereto, imposed
as a result of such representation and payment of costs and
expenses. Without limiting the foregoing provisions of this
Section 9(f), the Company shall control all proceedings taken
in connection with the contest of any claim contemplated by
this Section 9(f) and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect
of such claim (provided, however, that the Executive may
participate therein at his own cost and expense) and may, at
its option, either direct the Executive to pay the tax claimed
and xxx for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however, that if the
Company directs the Executive to pay the tax claimed and xxx
for a refund, the Company shall advance the amount of such
payment to the Executive on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income or other tax, including
interest or penalties with respect thereto, imposed with
respect to such advance; and provided further, however, that
any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with
respect to which the contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the
Company's control of any such contested claim shall be limited
to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be entitled to
settle or contest as the case may be, any other issue raised
by the Internal Revenue Service or any other taxing authority.
(g) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(f), the Executive receives any refund
with respect to such claim, the Executive shall (subject to the
Company's
Page 17 of 26
complying with the requirements of Section 9(f)) promptly pay to the
Company the amount of such refund (together with any interest paid or
credited thereon after any taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Company pursuant
to Section 9(f), a determination is made that the Executive shall not
be entitled to any refund with respect to such claim and the Company
does not notify the Executive in writing of its intent to contest such
denial or refund prior to the expiration of thirty (30) calendar days
after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of any such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid by the Company to the Executive pursuant to this
Section 9.
(h) Notwithstanding any provision of this Agreement to the contrary, but
giving effect to any redetermination of the amount of Gross-Up
payments otherwise required by this Section 9, if (i) but for this
sentence, the Company would be obligated to make a Gross-Up Payment to
the Executive and (ii) the aggregate "present value" of the "parachute
payments" to be paid or provided to the Executive under this Agreement
or otherwise does not exceed three times the Executive's "base amount"
by more than $50,000, then the payments and benefits to be paid or
provided under this Agreement will be reduced (or repaid to the
Company, if previously paid or provided) to the minimum extent
necessary so that no portion of any payment or benefit to the
Executive, as so reduced or repaid, constitutes an "excess parachute
payment." For purposes of this Section 9(h), the terms "excess
parachute payment," "present value," "parachute payment," and "base
amount" will have the meanings assigned to them by Section 280G of the
Code. The determination of whether any reduction in or repayment of
such payments or benefits to be provided under this Agreement is
required pursuant to this Section 9(h) will be made at the expense of
the Company, if requested by the Executive or the Company, by the
Accounting Firm. Appropriate adjustments shall be made to amounts
previously paid to Executive, or to amounts not paid pursuant to this
Section 9(h), as the case may be, to reflect properly a subsequent
determination that the Executive owes more or less Excise Tax than the
amount previously determined to be due. In the event that any payment
or benefit intended to be provided under this Agreement or otherwise
is required to be reduced or repaid pursuant to this Section 9(h), the
Executive shall be entitled to designate the payments and/or benefits
to be so reduced or repaid in order to give effect to this Section
9(h). The Company shall provide the Executive with all information
reasonably requested by the Executive to permit the Executive to make
such designation. In the event that the Executive fails
Page 18 of 26
to make such designation within 10 business days prior to the Date of
Termination or other due date, the Company may effect such reduction
or repayment in any manner it deems appropriate.
10. Competitive Activity; Confidentiality; Non-solicitation.
(a) Executive acknowledges that during the course of his employment with
the Company the Executive will learn business information valuable to
the Company and will form substantial business relationships with the
Company's clients. To protect the Company's legitimate business
interests in preserving its valuable confidential business information
and client relationships, the Executive shall not without the prior
written consent of the Company, which consent shall not be
unreasonably withheld, (i) engage in any Competitive Activity during
the Term and (ii) if the Executive shall have received or shall be
receiving benefits under Section 8(b) or 8(c), engage in any
Competitive Activity for a period ending on the first anniversary of
the earlier of the Date of Termination or the date of expiration of
this Agreement.
(b) During the Term, and in consideration for the Executive's agreement to
enter into this Agreement, the Company agrees that it will disclose or
cause to be disclosed to Executive its Confidential or Proprietary
Information (as defined in this Section 10(b)) to the extent necessary
for Executive to carry out his obligations to the Company. The
Executive hereby acknowledges the Company has a legitimate business
interest in protecting its Confidential or Proprietary Information and
hereby covenants and agrees that he will not without the prior written
consent of the Company, during the Term or thereafter (i) disclose to
any person not employed by the Company, or use in connection with
engaging in competition with the Company, any Confidential or
Proprietary Information of the Company or (ii) remove, copy or retain
in his possession any Company files or records. For purposes of this
Agreement, the term "Confidential or Proprietary Information" will
include all information of any nature and in any form that is owned by
the Company or by Holdings and that is not publicly available (other
than by Executive's breach of this Section 10(b)) or generally known
to persons engaged in businesses similar or related to those of the
Company or Holdings. Confidential or Proprietary Information will
include, without limitation, the Company's and Holdings' financial
matters, customers, employees, industry contracts, strategic business
plans, product development (or other proprietary product data),
marketing plans, and all other secrets and all other information of a
confidential or proprietary nature. Confidential or Proprietary
Information shall not be deemed to have become public for purposes of
this Agreement where it has been
Page 19 of 26
disclosed or made public by or through anyone acting in violation of a
contractual, ethical, or legal responsibility to maintain its
confidentiality. The foregoing obligations imposed by this Section
10(b) shall not apply (x) during the Term, in the course of the
business of and for the benefit of the Company or Holdings, (y) if
such Confidential or Proprietary Information will have become, through
no fault of the Executive, generally known to the public or (z) if the
Executive is required by law to make disclosure (after giving the
Company notice and an opportunity to contest such requirement).
(c) The Executive hereby covenants and agrees that during the Term and for
one (1) year after the Date of Termination Executive will not, without
the prior written consent of the Company, which consent shall not
unreasonably be withheld, on behalf of Executive or on behalf of any
person, firm or company, directly or indirectly, attempt to influence,
persuade or induce, or assist any other person in so persuading or
inducing, any employee of the Company or Holdings to give up
employment or a business relationship with the Company or Holdings,
and the Executive shall not directly or indirectly solicit or hire
employees of the Company or Holdings for employment with any other
employer.
(d) The Executive agrees that on or before the Date of Termination the
Executive shall return all Company property, including without
limitation all credit, identification and similar cards, keys and
documents, books, records and office equipment. The Executive agrees
that he shall abide by, through the Date of Termination, the Company's
and Holdings' policies and procedures for worldwide business conduct.
(e) Executive and the Company agree that the covenants contained in this
Section 10 are reasonable under the circumstances, and further agree
that if in the opinion of any court of competent jurisdiction any such
covenant is not reasonable in any respect, such court will have the
right, power and authority to excise or modify any provision or
provisions of such covenants as to the court will appear not
reasonable and to enforce the remainder of the covenants as so
amended. Executive acknowledges and agrees that the remedy at law
available to the Company for breach of any of his obligations under
this Section 10 would be inadequate and that damages flowing from such
a breach may not readily be susceptible to being measured in monetary
terms. Accordingly, Executive acknowledges, consents and agrees that,
in addition to any other rights or remedies that the Company may have
at law, in equity or under this Agreement, upon adequate proof of his
violation of any such provision of this Agreement, the Company will be
entitled to immediate injunctive
Page 20 of 26
relief and may obtain a temporary order restraining any threatened or
further breach, without the necessity of proof of actual damage.
(f) Representations of the Executive. The Executive represents and
warrants to the Company that:
(i) (A) There are no restrictions, agreements or understandings
whatsoever to which the Executive is a party that would
prevent or make unlawful the Executive's execution of this
Agreement or the Executive's employment under this Agreement,
or that is or would be inconsistent, or in conflict with this
Agreement or the Executive's employment under this Agreement,
or would prevent, limit or impair in any way the performance
by the Executive of the obligations under this Agreement; and
(B) the Executive has disclosed to the Company all restraints,
confidentiality commitments or other employment restrictions
that the Executive has with any other employer, person or
entity.
(ii) Upon and after the Executive's termination or cessation of
employment with the Company, and until such time as no
obligations of the Executive to the Company hereunder exist,
the Executive: (A) shall provide a complete copy of this
Agreement to any prospective employer or other person, entity
or association in a competing business with whom or which the
Executive proposes to be employed, affiliated, engaged,
associated or to establish any business or remunerative
relationship prior to the commencement thereof, provided that
Executive shall first cause the compensation amounts hereunder
to be deleted or not disclosed; and (B) shall notify the
Company of the name and address of any such person, entity or
association prior to the Executive's employment, affiliation,
engagement, association or the establishment of any business
or remunerative relationship.
11. Withholding of Taxes.
The Company may withhold from any amounts payable under this Agreement all
applicable taxes that the Company is required to withhold pursuant to any
applicable law, regulation or ruling.
12. Dispute Resolution.
Any dispute between the parties under this Agreement shall be resolved
(except as provided below) through informal arbitration by an arbitrator
selected under the rules of the American Arbitration Association for arbitration
of employment disputes
Page 21 of 26
(located in Charlotte, North Carolina) and the arbitration shall be conducted in
that location under the rules of said Association. Each party shall be entitled
to present evidence and argument to the arbitrator. The arbitrator shall have
the right only to interpret and apply the provisions of this Agreement and may
not change any of its provisions, except as expressly provided in Section 16 and
only in the event the Company has not brought an action in a court of competent
jurisdiction to enforce the covenants in Section 10. The arbitrator shall permit
reasonable pre-hearing discovery of facts, to the extent necessary to establish
a claim or a defense to a claim, subject to supervision by the arbitrator. The
determination of the arbitrator shall be conclusive and binding upon the parties
and judgment upon the same may be entered in any court having jurisdiction
thereof. The arbitrator shall give written notice to the parties stating the
arbitrator's determination, and shall furnish to each party a signed copy of
such determination. The expenses of arbitration shall be borne equally by the
Company and the Executive or as the arbitrator equitably determines consistent
with the application of state or federal law; provided, however, that the
Executive's share of such expenses shall not exceed the maximum permitted by law
and shall be paid by the Company if the arbitrator determines that the Company
has acted substantially without merit. Any arbitration or action pursuant to
this Section 12 shall be governed by and construed in accordance with the
substantive laws of the State of North Carolina and, where applicable, federal
law, without giving effect to the principles of conflict of laws of such State.
Notwithstanding the foregoing, the Company shall not be required to seek or
participate in arbitration regarding any actual or threatened breach of the
Executive's covenants in Section 10, but may pursue its remedies, including
injunctive relief, for such breach in a court of competent jurisdiction in
Charlotte, North Carolina, or in the sole discretion of the Company, in a court
of competent jurisdiction where the Executive has committed or is threatening to
commit a breach of the Executive's covenants, and no arbitrator may make any
ruling inconsistent with the findings or rulings of such court.
13. Successors and Binding Agreement.
(a) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization or otherwise) to all
or substantially all of the business or assets of the Company, by
agreement in form and substance reasonably satisfactory to Executive,
expressly to assume and agree to perform this Agreement in the same
manner and to the same extent the Company would be required to perform
if no such succession had taken place. This Agreement will be binding
upon and inure to the benefit of the Company and any successor to the
Company, including without limitation any persons acquiring directly
or indirectly all or substantially all of the business or assets of
the Company whether by purchase, merger, consolidation, reorganization
or otherwise (and such
Page 22 of 26
successor shall thereafter be deemed the "Company" for the purposes of
this Agreement), but will not otherwise be assignable, transferable or
delegable by the Company.
(b) This Agreement will inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and legatees.
(c) This Agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign, transfer or delegate
this Agreement or any rights or obligations hereunder except as
expressly provided in Sections 13(a) and 13(b). Without limiting the
generality or effect of the foregoing, Executive's right to receive
payments hereunder will not be assignable, transferable or delegable,
whether by pledge, creation of a security interest, or otherwise,
other than by a transfer by Executive's will or by the laws of descent
and distribution and, in the event of any attempted assignment or
transfer contrary to this Section 13(c), the Company shall have no
liability to pay any amount so attempted to be assigned, transferred
or delegated.
14. Notices.
For all purposes of this Agreement, all communications, including without
limitation notices, consents, requests or approvals, required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given
when hand delivered or dispatched by electronic facsimile transmission (with
receipt thereof orally confirmed), or five (5) business days after having been
mailed by United States registered or certified mail, return receipt requested,
postage prepaid, or three (3) business days after having been sent by an
internationally recognized overnight courier service, addressed to the Company
(to the attention of the Chief Executive Officer of the Company) at its
principal executive office and to Executive at his principal residence, or to
such other address as any party may have furnished to the other in writing and
in accordance herewith, except that notices of changes of address shall be
effective only upon receipt.
15. Governing Law.
The validity, interpretation, construction and performance of this
Agreement will be governed by and construed in accordance with the substantive
laws of the State of North Carolina and federal law, without giving effect to
the principles of conflict of laws, except as expressly provided herein. In the
event the Company exercises its discretion under Section 10(e) to bring an
action to enforce the covenants contained in Section 10 in a court of competent
jurisdiction where the Executive has breached or threatened to breach such
covenants, and in no other event, the parties agree that the
Page 23 of 26
court may apply the law of the jurisdiction in which such action is pending in
order to enforce the covenants to the fullest extent permissible.
16. Validity.
Any provision of this Agreement that is deemed invalid, illegal or
unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective, to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provisions of this Agreement
invalid, illegal or unenforceable in any other jurisdiction. If any covenant in
Section 10 should be deemed invalid, illegal or unenforceable because its time,
geographical area, or restricted activity, is considered excessive, such
covenant shall be modified to the minimum extent necessary to render the
modified covenant valid, legal and enforceable.
17. Miscellaneous.
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by the
Executive and the Company. No waiver by either party hereto at any time of any
breach by the other party hereto or compliance with any condition or provision
of this Agreement to be performed by such other party will be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, expressed
or implied with respect to the subject matter hereof have been made by either
party that are not set forth expressly in this Agreement. The headings used in
this Agreement are intended for convenience or reference only and shall not in
any manner amplify, limit, modify or otherwise be used in the construction or
interpretation of any provision of this Agreement. References to Sections are
references to Sections of this Agreement. Any reference in this Agreement to a
provision of a statute, rule or regulation shall also include any successor
thereto.
18. Survival.
Notwithstanding any provision of this Agreement to the contrary, the
parties' respective rights and obligations under Sections 8, 9, 10, 11, 12 and
13(b) will survive any termination or expiration of this Agreement or the
termination of the Executive's employment for any reason whatsoever.
19. Beneficiaries.
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,
and may change such election, in either case by giving the Company written
notice thereof in accordance with Section 14. In the event of the Executive's
death or a judicial determination of the
Page 24 of 26
Executive's incompetence, reference in this Agreement to the "Executive" shall
be deemed, where appropriate, to the Executive's beneficiary, estate or other
legal representative.
20. Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same agreement.
21. Entire Agreement.
The terms of this Agreement are intended by the parties to be the final
expression of their agreement with respect to the Executive's employment by the
Company and may not be contradicted by evidence of any prior or contemporaneous
agreement. The parties further intend that this Agreement shall constitute the
complete and exclusive statement of its terms and that no extrinsic evidence
whatsoever may be introduced in any judicial, administrative, or other legal
proceedings to vary the terms of this Agreement.
Page 25 of 26
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first written above.
/s/ Xxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxx X. Xxxxx
SCOTTISH HOLDINGS, INC.
By: /s/ Xxxx Xxxxxxx
----------------------------------
Name: Xxxx Xxxxxxx
Title: General Counsel
Page 26 of 26
