RETENTION AGREEMENT
AGREEMENT by and between Tyco International Ltd. (the "Parent") and
Xxxxxxx X. Xxxxxx (the "Executive"), effective as of the Effective Date (as
hereinafter defined).
W I T N E S S E T H
WHEREAS, Parent considers it essential to the best interests of its
stockholders to xxxxxx the continuous employment of Executive by Tyco Healthcare
Group LP (the "Company") and to encourage and reinforce the dedication and
efforts of Executive; and
WHEREAS, Parent has determined to offer Executive the benefits
described in this Agreement to provide an incentive to encourage Executive to
remain in the employ of the Company so that the Company may receive his
continued dedication and assure the continued availability of his advice and
counsel and to assure that he will not provide services for a competing business
in accordance with the terms hereof; and
WHEREAS, Executive has agreed to serve the Company pursuant to the
terms and conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, Parent and Executive hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
respective meanings set forth below:
(a) "Affiliate" means any entity that directly or indirectly is
controlled by, controls or is under common control with the Company or Parent.
(b) "Cause" means Executive's conviction of a felony that is
materially and demonstrably injurious to the Company or any of its Affiliates,
monetarily or otherwise. The Company must notify Executive of an event
constituting Cause within 90 days following the Board's knowledge of its
existence or such event shall not constitute Cause under this Agreement.
(c) "Change in Control" means the first to occur of any of the
following events:
(1) Any "person" (as that term is used in Sections 13 and
14(d)(2) of the Securities Exchange Act of 1934 ("Exchange Act"))
becomes the beneficial owner (as that term is used in Section 13(d) of
the Exchange Act), directly or indirectly, of 30% or more of Parent's
capital stock entitled to vote in the election of directors;
(2) Persons who, as of the Effective Date constitute the
Board (the "Incumbent Directors") cease for any reason, including,
without limitation, as a result of
a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority thereof, provided that any person
becoming a director of Parent subsequent to the Effective Date shall be
considered an Incumbent Director if such person's election or
nomination for election was approved by a vote of at least
three-quarters of the Incumbent Directors; but provided further, that
any such person whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election
of members of the Board or other actual or threatened solicitation of
proxies or consents by or on behalf of a "person" (as that term is used
in Sections 13 and 14(d)(2) of the Exchange Act) other than the Board,
including by reason of agreement intended to avoid or settle any such
actual or threatened contest or solicitation, shall not be considered
an Incumbent Director;
(3) The shareholders of Parent approve any consolidation or
merger of Parent, other than a merger of Parent in which the holders of
the common stock of Parent immediately prior to the merger hold more
than 50% of the common stock of the surviving corporation immediately
after the merger;
(4) The shareholders of Parent approve any plan or proposal
for the liquidation or dissolution of Parent; or
(5) Substantially all of the assets of Parent are sold or
otherwise transferred to parties that are not within a "controlled
group of corporations" (as defined in Section 1563 of the Internal
Revenue Code of 1986, as amended (the "Code")) in which Parent is a
member.
(d) "Company" means Tyco Healthcare Group LP and the successor
to, or transferee of all or substantially all of the assets of, the Company.
(e) "Date of Termination" means (1) the effective date on which
Executive's employment by the Company terminates as specified in a Notice of
Termination by the Company or Executive, as the case may be, or (2) if
Executive's employment by the Company terminates by reason of death, the date of
death of Executive. Notwithstanding the previous sentence, (i) if Executive's
employment is terminated for Disability (as defined in Section 3(b)), then such
Date of Termination shall be no earlier than 30 days following the date on which
a Notice of Termination is received, and (ii) if Executive's employment is
terminated by the Company other than for Cause or by Executive other than for
Good Reason, then such Date of Termination shall be no earlier than 30 days
following the date on which a Notice of Termination is received.
(f) "Effective Date" means the execution date of this Agreement.
(g) "Good Reason" means, without Executive's express written
consent, the occurrence of any of the following events:
(1) a material and adverse change in Executive's titles,
offices, duties or responsibilities with the Company as in effect on
the Effective Date;
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(2) a reduction by the Company in Executive's rate of annual
base salary as in effect immediately prior to the Effective Date or as
the same may be increased from time to time thereafter;
(3) the failure of the Company to provide Executive and his
dependents with employee and fringe benefits at least as generous as
those in effect on the Effective Date;
(4) the failure of the Company to obtain the assumption
agreement from any successor as contemplated in Section 13; or
(5) the relocation of Executive's principal place of
employment to a location more than 60 miles from Executive's principal
place of employment immediately prior to the Effective Date or the
Company's requiring Executive to be based anywhere other than such
principal place of employment (or permitted relocation thereof) except
for required travel on the Company's business to an extent
substantially consistent with Executive's present business travel
obligations.
Notwithstanding the foregoing, an isolated and inadvertent action taken
in good faith and which is remedied by the Company within ten days after receipt
of notice thereof given by Executive shall not constitute Good Reason.
(h) "Notice of Termination" means the written notice described in
Section 14(b).
(i) "Parent" means Tyco International Ltd., a Bermuda
corporation, and the successor to, or transferee of all or substantially all of
the assets of, Parent.
2. RETENTION PERIOD.
POSITION. Executive agrees to continue to serve as President of the
Company from the Effective Date until February 28, 2005 or, if earlier, the Date
of Termination (the "Retention Period").
3. TERMINATION OF EMPLOYMENT.
Executive's employment hereunder may be terminated on or prior to June
1, 2005 under the following circumstances:
(a) DEATH. Executive's employment with the Company shall
terminate upon his death.
(b) DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been absent from his duties for
the Company on a full-time basis for 180 calendar days in the aggregate in any
12-month period, the Company may terminate Executive's employment with the
Company for Disability. Any question as to the existence of any physical or
mental illness referred to above which the Company and Executive cannot agree
shall be determined by a qualified independent physician selected by the Company
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and reasonably acceptable to Executive. The determination of such a physician
made in writing to the Company and to Executive shall be final and conclusive
for purposes of this Agreement.
(c) TERMINATION BY COMPANY FOR CAUSE. Subject to the provisions
of Section 1(b) hereof and upon a Notice of Termination to Executive, the
Company may terminate Executive's employment with the Company for Cause.
(d) TERMINATION BY COMPANY WITHOUT CAUSE. Upon a Notice of
Termination to Executive, the Company may terminate Executive's employment with
the Company without Cause.
(e) TERMINATION BY EXECUTIVE. Upon a Notice of Termination to the
Company, Executive may terminate his employment with the Company for any reason,
including but not limited to Good Reason.
4. COMPENSATION UPON TERMINATION.
(a) TERMINATION GENERALLY. If Executive's employment with the
Company is terminated for any reason on or prior to June 1, 2005, the Company
shall pay or provide to Executive (or to his authorized representatives or
estate) any earned but unpaid base salary, incentive compensation earned but not
yet paid, unpaid expense reimbursements, accrued but unused vacation and any
vested benefits that Executive may have under any employee benefit plan of the
Company, including without limitation, executive compensation, insurance and
retirement plans or arrangements (the "Accrued Benefits").
(b) TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR
GOOD REASON. In the event of a termination by the Company without Cause or upon
Executive's Disability or by Executive for Good Reason prior to February 28,
2005, subject to signing by Executive of a general release of employment claims
in a form and manner satisfactory to the Company and the expiration of any
legally required waiting period, the Company shall pay to Executive (in addition
to the Accrued Benefits) not later than ten (10) days following the Date of
Termination, (i) an amount equal to three times the sum of (x) Executive's then
current annual base salary plus (y) the average of the cash bonus received by
Executive for four preceding fiscal years of the Company, plus (z) the greater
of ten percent (10%) of Executive's then current base salary or $20,000, and
(ii) an amount equal to the product of (A) the maximum annual bonus that
Executive would have been eligible to earn under the Company's annual bonus plan
for the bonus measurement period during which the Date of Termination occurs,
and (B) a fraction, the numerator of which is the number of days from the first
day of such period through the Date of Termination and the denominator of which
is the total number of days in such measurement period, together with a
similarly pro rated bonus with respect to any applicable long term incentive
plan then in effect. During the three-year period beginning on the Date of
Termination, the Company shall provide Executive with the following benefits:
medical and dental insurance (subject to Executive's payment of premiums
required of active employees similarly situated), life insurance, contribution
credits under the Company's Supplemental Executive Retirement Plan (including
contribution credits equivalent to the matching contributions that would have
been provided to Executive under the Company's Retirement Savings and Investment
Plan had Executive remained employed by the Company during such period) and
access to the Company's
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aircraft for up to 150 hours a year (hereinafter, the "Continuing Benefits").
All Continuing Benefits shall be provided to Executive at a level similar to
that provided on the Date of Termination. The Company shall also provide
Executive with executive outplacement services for one year.
(c) TREATMENT OF EQUITY UPON TERMINATION. Upon the occurrence of
any termination of Executive's employment with the Company on or prior to
February 28, 2005 (other than a termination by the Company for Cause or a
termination by Executive without Good Reason), during the three-year period
beginning on the Date of Termination, Executive shall continue to vest in any
shares of restricted stock previously granted to Executive by Parent that are
still subject to risk of forfeiture and any options to purchase common shares of
Parent that remain unvested and unexercisable.
(d) DEATH. If Executive's employment is terminated by reason of
his death on or prior to June 1, 2005, the Company shall pay Executive's estate
the Accrued Benefits. The Company shall also pay Executive's estate cash
severance and a pro rata bonus in a lump sum in the manner calculated pursuant
to Section 4(b). Executive's spouse and dependent children may continue in the
Company's medical and dental plans for up to 36 months from the Date of
Termination, subject to payment of premiums required of active employees
similarly situated.
(e) TERMINATION BY COMPANY WITH CAUSE OR BY EXECUTIVE WITHOUT
GOOD REASON. If Executive's employment is terminated by the Company with Cause
under Section 3(c) or by Executive without Good Reason under Section 3(e) on or
prior to February 28, 2005, the Company shall have no further obligation to
Executive other than for the Accrued Benefits.
(f) CHANGE IN CONTROL. Upon the occurrence of a Change in Control
or a sale of the Company (or all or substantially all of the assets of the
Company) by Parent on or prior to June 1, 2005, all shares of restricted stock
previously granted to Executive by Parent (or the Company) that are still
subject to risk of forfeiture shall become fully vested and nonforfeitable and
all options to purchase common shares of Parent (or the Company) that remain
unexercisable shall become fully exercisable and vested.
(g) TERMINATION SUBSEQUENT TO FEBRUARY 28, 2005. If Executive's
employment is terminated by Executive for any reason or by the Company without
Cause or upon Executive's Disability at any time subsequent to February 28, 2005
and prior to June 1, 2005 (the "Extension Period"), subject to signing by
Executive of a general release of employment claims in a form and manner
satisfactory to the Company and the expiration of any legally required waiting
period, and adhering to the terms set forth in Sections 7, 8, 9, 11, (i) the
Company shall pay to Executive (in addition to the Accrued Benefits) not later
than ten (10) days following the Date of Termination, all payments set forth in
Section 4(b) and, during the three (3) year period beginning on the Date of
Termination, shall provide to Executive all Continuing Benefits, and (ii) during
the three (3) year period beginning on the Date of Termination, Executive shall
continue to vest in any shares of restricted stock previously granted to
Executive by Parent that are still subject to risk of forfeiture and any options
to purchase common shares of Parent that remain unvested and unexercisable, and
shall continue to have the right to sell any such vested shares and exercise any
such vested options during such three year period. Notwithstanding the
foregoing, the Company shall not be obligated to make any payments or
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provide any Continuing Benefits pursuant to this Section 4(g) in the event that
Executive and Parent shall have executed a mutually acceptable employment or
retention agreement in replacement hereof prior to the expiration of the
Extension Period.
5. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) GROSS-UP PAYMENT. If it shall be determined that any payment
or distribution of any type to or in respect of Executive, by the Company or any
other person, whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise (the "Total Payments"), is or will
be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") or any interest or penalties are incurred
by Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are collectively referred to as the "Excise Tax"),
then Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such taxes) imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Total Payments.
(b) DETERMINATION BY ACCOUNTANT.
(1) All computations and determinations relevant to this
Section shall be made by a national accounting firm selected by the
Company from among the five (5) largest accounting firms in the United
States (the "Accounting Firm"), and reasonably acceptable to Executive,
which firm may be the Company's accountants. All fees and expenses of
the Accounting Firm shall be borne solely by the Company. Such
determinations shall include whether any of the Total Payments are
"parachute payments" (within the meaning of Section 280G of the Code).
In making the initial determination hereunder as to whether a Gross-Up
Payment is required, the Accounting Firm shall be required to determine
that no Gross-Up Payment is required if, but only if, the Accounting
Firm (A) concludes that (i) there has not occurred a change in the
ownership or effective control of the Company or a change in the
ownership of a substantial portion of the assets of the Company (as
such terms are defined in Section 280G of the Code) or (ii) no portion
of the Total Payments constitutes "parachute payments" (within the
meaning of said Section 280G), in either case on the basis of
"substantial authority" (within the meaning of Section 6230 of the
Code), and (B) provides an opinion to that effect to both the Company
and Executive, including the reasons therefor and an opinion that
Executive has substantial authority not to report any Excise Tax on his
federal income tax return. If the Accounting Firm determines that a
Gross-Up Payment is required, the Accounting Firm shall provide its
determination (the "Determination"), together with detailed supporting
calculations regarding the amount of any Gross-Up Payment and any other
relevant matter both to the Company and Executive by no later than ten
(10) days following the Date of Termination, or such earlier time as is
requested by the Company or Executive (if Executive reasonably believes
that any of the Total Payments may be subject to the Excise Tax).
(2) If a Gross-Up Payment is determined to be payable, it
shall be paid to Executive within 20 days after the Determination is
delivered to the Company by the
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Accounting Firm. Any determination by the Accounting Firm shall be
binding upon the Company and Executive, absent manifest error.
Notwithstanding the foregoing, a Gross-up Payment shall be made as soon
as practicable following a determination by the Internal Revenue
Service that any portion of the Total Payments is subject to the Excise
Tax.
(3) As a result of uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments not
made by the Company should have been made ("Underpayment"), or that
Gross-Up Payments will have been made by the Company which should not
have been made ("Overpayments"). In either such event, the Accounting
Firm shall determine the amount of the Underpayment or Overpayment that
has occurred. In the case of an Underpayment, the amount of such
Underpayment (together with any interest and penalties payable by
Executive as a result of such Underpayment) shall be promptly paid by
the Company to or for the benefit of Executive.
(4) In the case of any Overpayment, Executive shall, at the
direction and expense of the Company, take such steps as are reasonably
necessary (including the filing of returns and claims for refund),
follow reasonable instructions from, and procedures established by, the
Company, and otherwise reasonably cooperate with the Company to correct
such Overpayment, provided, however, that (i) Executive shall not in
any event be obligated to return to the Company an amount greater than
the net after-tax portion of the Overpayment that he has retained or
has recovered as a refund from the applicable taxing authorities and
(ii) this provision and all other provisions in this Agreement shall be
interpreted in a manner consistent with the intent of this Section,
which is to make Executive whole, on an after-tax basis, from the
application of the Excise Taxes, it being acknowledged and understood
that the correction of an Overpayment may result in Executive repaying
to the Company an amount which is less than the Overpayment.
(5) Executive shall notify the Company in writing of any
claim by the Internal Revenue Service relating to the possible
application of the Excise Tax under Section 4999 of the Code to any of
the payments and amounts referred to herein and shall afford the
Company, at its expense, the opportunity to control the defense of such
claims.
(6) Executive shall cooperate with any reasonable requests by
the Company in connection with any contests or disputes with the
Internal Revenue Service in connection with the Excise Tax and shall be
reimbursed by the Company, on an after-tax basis, for all costs,
expenses, interest and penalties incurred by Executive in connection
with any such contest or dispute.
6. WITHHOLDING TAXES.
The Company may withhold from all payments due to Executive (or his
beneficiary or estate) hereunder all taxes which, by applicable federal, state,
local or other law, the Company is required to withhold therefrom.
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7. CONFIDENTIAL INFORMATION.
Executive agrees that he shall not, directly or indirectly, use, make
available, sell, disclose or otherwise communicate to any person, other than in
the course of Executive's assigned duties and for the benefit of the Company,
either during the period of Executive's employment or at any time thereafter,
any nonpublic, proprietary or confidential information, knowledge or data
relating to the Company, or any of its Affiliates, which shall have been
obtained by Executive during Executive's employment by the Company. The
foregoing shall not apply to information that (a) was known to the public prior
to its disclosure to Executive; (b) becomes known to the public subsequent to
disclosure to Executive through no wrongful act of Executive or any
representative of Executive; or (c) Executive is required to disclose by
applicable law, regulation or legal process (provided that Executive provides
the Company with prior notice of the contemplated disclosure and reasonably
cooperates with the Company at its expense in seeking a protective order or
other appropriate protection of such information). Notwithstanding clauses (a)
and (b) of the preceding sentence, Executive's obligation to maintain such
disclosed information in confidence shall not terminate where only portions of
the information are in the public domain.
8. NON-SOLICITATION AGREEMENT.
During Executive's employment with the Company and continuing for any
period following the Date of Termination during which Executive is receiving
Continuing Benefits pursuant to this Agreement, Executive agrees that he will
not, directly or indirectly, individually or on behalf of any other person,
firm, corporation or other entity, knowingly solicit, aid or induce (a) any
managerial level employee of the Company or any of its Affiliates to leave such
employment in order to accept employment with or render services to or with any
other person, firm, corporation or other entity unaffiliated with the Company or
knowingly take any action to materially assist or aid any other person, firm,
corporation or other entity in identifying or hiring any such employee or (b)
any customer of the Company to purchase goods or services then sold by the
Company or any of its Affiliates from another person, firm, corporation or other
entity or assist or aid any other persons or entity in identifying or soliciting
any such customer.
9. NONCOMPETITION AGREEMENT.
Executive acknowledges that he performs services of a unique nature for
the Company that are irreplaceable, and that his performance of such services to
a competing business will result in irreparable harm to the Company.
Accordingly, during Executive's employment hereunder, and continuing for any
period following the Date of Termination during which Executive is receiving
Continuing Benefits pursuant to this Agreement, Executive agrees that Executive
will not be employed by any business of the same type as any business in which
the Company is engaged on the Date of Termination or in which they have
proposed, on or prior to such date, to be engaged in on or after such date and
in which Executive has been involved to any extent (other than DE MINIMIS) at
any time during the 12-month period ending with the Date of Termination, in any
locale of any country in which the Company conducts business.
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10. ACKNOWLEDGEMENTS RESPECTING RESTRICTIVE COVENANTS.
(a) NO ADEQUATE REMEDY AT LAW. Executive acknowledges that it is
impossible to measure in money the damages that will accrue to the Company in
the event that Executive breaches any of the restrictive covenants and that any
such damages, in any event, would be inadequate and insufficient. Therefore, if
Executive breaches any restrictive covenant, the Company and any of its
Affiliates shall be entitled to an injunction restraining Executive from
violating such restrictive covenant. If the Company or any of its Affiliates
shall institute any action or proceeding to enforce a restrictive covenant,
Executive hereby waives, and agrees not to assert in any such action or
proceeding, the claim or defense that the Company or any of its respective
Affiliates have an adequate remedy at law.
(b) INJUNCTIVE RELIEF NOT EXCLUSIVE REMEDY. In the event of a
breach of any of the restrictive covenants, Executive agrees that, in addition
to any injunctive relief as described in Section 10(a), the Company shall be
entitled to any other appropriate legal or equitable remedy.
(c) THIS SECTION REASONABLE, FAIR AND EQUITABLE. Executive agrees
that this Section 10 is reasonable, fair and equitable in light of his duties
and responsibilities under this Agreement and the benefits to be provided to him
under this Agreement and that it is necessary to protect the legitimate business
interests of the Company and that Executive has had independent legal advice in
so concluding.
(d) CONSTRUCTION. If any of the restrictions contained in
Sections 7, 8 or 9 hereof are deemed by a court of competent jurisdiction to be
unenforceable by reason of their extent, duration or geographical scope or
otherwise, Executive and Company contemplate that the court shall revise such
extent, duration, geographical scope or other provision but only to the extent
required in order to render such restrictions enforceable, and enforce any such
restriction in its revised form for all purposes in the manner contemplated
hereby.
(e) CHANGE IN CONTROL. The parties hereto agree that the
restrictive covenants contained in Section 9 of this Agreement shall be null and
void and shall not be enforceable against Executive following any termination of
Executive's employment on or after a Change in Control of the Company.
11. NONDISPARAGEMENT.
Each of Executive and the Company (for purposes hereof, the Company
shall mean only the executive officers and directors thereof and not any other
employees) agrees not to make any public statements that disparage the other
party or, in the case of the Company, its respective affiliates, employees,
officers, directors, products or services. Notwithstanding the foregoing,
statements made in the course of sworn testimony in administrative, judicial or
arbitral proceedings (including, without limitation, depositions in connection
with such proceedings) shall not be subject to this Section 11.
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12. INDEMNIFICATION.
To the fullest extent permitted by law, the Company shall indemnify
Executive (including the advancement of expenses) for any judgments, fines,
amounts paid in settlement and reasonable expenses, including reasonable
attorneys' fees, incurred by Executive in connection with the defense of any
lawsuit or other claim to which he is made a party by reason of being an
officer, director, employee or consultant of the Company or any of its
Affiliates. The provisions of this Section 12 shall survive the termination of
this Agreement.
13. SUCCESSORS; BINDING AGREEMENT.
(a) The provisions of this Agreement shall be binding upon the
surviving or resulting corporation in any merger, consolidation,
recapitalization or similar corporate transaction or the person or entity to
which all or substantially all of the Company's assets are transferred.
(b) In addition to any obligations imposed by law upon any
successor to the Company, the Company and Parent shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
(c) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive shall die while any amounts would be payable to Executive hereunder
had Executive continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by Executive to receive such amounts or,
if no person is so appointed, to Executive's estate.
14. NOTICE.
(a) For purposes of this Agreement, all notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered or five days after deposit in the
United States mail, certified and return receipt requested, postage prepaid,
addressed as follows:
If to Executive:
To the most recent address set forth in the personnel records of the Company;
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If to the Company:
Tyco Healthcare Group LP
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Corporate Secretary
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
(b) A written notice of Executive's Date of Termination by the
Company or Executive, as the case may be, to the other, shall (i) indicate the
specific termination provision in this Agreement relied upon, (ii) to the extent
applicable, set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the provision
so indicated and (iii) specify the Date of Termination. The failure by Executive
or the Company to set forth in such notice any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
Executive or the Company hereunder or preclude Executive or the Company from
asserting such fact or circumstance in enforcing Executive's or the Company's
rights hereunder.
15. FULL SETTLEMENT.
The Company's obligation to make any payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against Executive or others. In no event
shall Executive be obligated to seek other employment or take other action by
way of mitigation of the amounts payable to Executive under any of the
provisions of this Agreement, and such amounts shall not be reduced whether or
not Executive obtains other employment.
16. GOVERNING LAW; VALIDITY.
The validity, interpretation, and enforcement of this Agreement shall
be governed by the laws of the State of New York. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which other
provisions shall remain in full force and effect.
17. ARBITRATION; LEGAL FEES.
Any dispute or controversy under this Agreement shall be settled
exclusively by arbitration in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitration award in any court having jurisdiction. The Company shall bear all
costs and expenses arising in connection with any arbitration proceeding
pursuant to this Section 17 (including, without limitation, all reasonable legal
fees incurred by Executive in connection with such arbitration).
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18. AMENDMENT.
No provision of this Agreement may be amended, waived or discharged
except by the mutual written agreement of the parties.
19. ENTIRE AGREEMENT.
This Agreement supersedes and replaces any prior agreement, whether
oral or written, relating to the subject matter of this Agreement. To the extent
that the terms of this Agreement are inconsistent with the terms of any employee
benefit plan, company policy, stock option agreement or restricted stock
agreement, the terms of this Agreement shall supercede and control over any such
inconsistent term.
20. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original and all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this 14th day of February, 2002.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
EXECUTIVE TYCO INTERNATIONAL LTD.
By:
------------------------------- -------------------------------------
Xxxxxxx X. Xxxxxx Chairman and Chief Executive Officer
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