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Exhibit (c)(6)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of
March 22, 1999, among United States Filter Corporation (the "Company"), Vivendi
("Parent") and Xxxxxx X. Xxxxxx (the "Employee").
WITNESSETH
WHEREAS, Employee is currently President and Chief Operating
Officer - Wastewater Group of the Company; and
WHEREAS, the Company has entered, as of even date herewith,
into that certain Agreement and Plan of Merger (the "Merger Agreement") by and
among Parent, Eau Acquisition Corp. and the Company, dated as of March 22, 1999,
pursuant to which, among other things, the Company shall become a subsidiary of
Parent (such transaction or series of transactions, the "Transaction"); and
WHEREAS, Parent desires to insure the continued availability
to the Company of the Employee's services, managerial skills and business
experience following consummation of the Transaction and his commitment not to
compete with the Company for a certain period of time, and the Employee is
willing to render such services and provide such commitment, all upon and
subject to the terms and conditions contained in this Agreement; and
WHEREAS, the Employee and the Company previously entered into
a certain written Employment Agreement, effective as of August 26, 1998 (the
"Prior Agreement"), and now desire to supercede the Prior Agreement in its
entirety, contingent upon consummation of the Transaction; and
WHEREAS, in addition to the terms and conditions of employment
set forth herein, the parties wish to set forth herein provisions with respect
to certain payments being made to the Employee pursuant to the Prior Agreement
and the Merger Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants set forth in this Agreement, the Company and the Employee agree as
follows:
1. EMPLOYMENT AND EMPLOYMENT TERM.
(a) EMPLOYMENT.
Subject to the terms and provisions set forth in this
Agreement, the Company hereby employs the Employee during the Employment Term
(as hereinafter defined) as President and Chief Operating Officer - Wastewater
Group of the Company.
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(b) EMPLOYMENT TERM.
The period of employment under this Agreement (the "Employment
Term") shall commence as of the date on which the Effective
Time (as defined in the Merger Agreement) occurs (the
"Effective Date") and shall continue for a period of three (3)
years thereafter, or until earlier terminated as herein
provided.
2. POSITIONS, RESPONSIBILITIES AND DUTIES.
(a) IN GENERAL.
During the Employment Term, the Employee shall be employed as,
and the Company shall at all times cause the Employee to be,
the President and Chief Operating Officer - Wastewater Group
of the Company. The Executive's duties, responsibilities and
authority shall be consistent with the Executive's position
and shall include such other duties, responsibilities and
authority as may be assigned to the Executive by the Board of
Directors of the Company (the "Board") or the Chief Executive
Officer of the Company.
(b) TIME.
During the Employment Term, the Employee shall devote such
time as is reasonably necessary to perform the duties
associated with his offices and positions as set forth herein
and shall use his best efforts to perform faithfully and
efficiently the duties and responsibilities contemplated by
this Agreement. Notwithstanding the foregoing, the Employee
may devote reasonable time to activities other than those
required under this Agreement, including the supervision of
his personal investments, and activities involving
professional, charitable, educational, religious and similar
types of organizations, speaking engagements, membership on
the boards of directors of other corporations, and similar
type activities, to the extent that such other activities do
not inhibit or prohibit the performance of the Employee's
duties under this Agreement or conflict in any way with the
business of the Company; provided, however, that the Employee
shall not serve on the board of any commercial business or
hold any other position with respect to any commercial
business without the consent of the Board, which consent shall
not be unreasonably withheld.
3. COMPENSATION AND BENEFITS.
(a) BASE SALARY.
During the Employment Term, the Employee shall receive an
initial base salary ("Base Salary") of $350,000 per annum,
payable in accordance with the Company's payroll practices
generally applicable to the Company's senior executives. Such
Base Salary shall be reviewed for increase but not decrease by
the Board not less frequently than annually during the
Employment Term. In conducting any
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such annual review, the Board shall take into account any
change in the Employee's responsibilities, increases in the
compensation of other senior executives of the Company or of
its competitors or other comparable executives and companies,
the performance of the Employee and other pertinent factors.
If increased, such increased Base Salary shall then constitute
"Base Salary" for purposes of this Agreement.
(b) BONUSES, INCENTIVE, SAVINGS AND RETIREMENT PLANS, WELFARE
BENEFIT PLANS.
The Employee shall be entitled to participate in all annual
and long-term bonuses and incentive, savings and retirement
plans generally available to other similarly situated
executive employees of the Company. The Employee, and the
Employee's family as the case may be, shall be eligible to
participate in and receive all benefits under welfare benefit
plans, practices, programs and policies provided to other
similarly situated executive employees of the Company.
(c) EQUITY GRANT.
In consideration for the Employee's services hereunder and the
covenants set forth in Section 7, the Company shall, or the
Parent shall on behalf of the Company, deliver to the Employee
an aggregate of 50,370 shares of Parent common stock (the
"Stock Grant"), subject to the terms of this Section 3(c). On
each of the first three (3) anniversaries of the Effective
Date (each, a "Grant Date"), the Company shall, or the Parent
shall on behalf of the Company, deliver to the Employee 16,790
shares of Parent common stock, representing one third (1/3) of
the Stock Grant, if the Employee is employed hereunder as of
such Grant Date; provided, however, that in the event that the
Employee's employment hereunder is terminated because of his
death or Disability, that portion of the Stock Grant not
already delivered to the Employee shall be immediately
delivered to the Employee (or his estate or beneficiaries, if
applicable); and provided, further, that if the Employee's
employment hereunder is terminated by the Employee for Good
Reason (as defined in Section 4(b)(iv)) or by the Company
without Cause (as defined in Section 4(b)(vii)), the portions
of the Stock Grant not already delivered shall be delivered on
the scheduled Grant Dates so long as the Employee is not in
violation of Section 7(b) (as determined, if applicable, by
arbitration under Section 9(i)) and the Employee provides
consulting services to the Company during the remainder of the
scheduled Employment Term, as may be reasonably requested by
the Parent Executive Committee from time to time, for which
services the Company shall reimburse the Employee for his
reasonable expenses incurred in the performance thereof. In
the event that the Employee's employment hereunder is
terminated by the Employee without Good Reason (as defined in
Section 4(b)(iv)), or by the Company for Cause (as defined in
Section 4(b)(vii)) or the Employee violates Section 7(b) (as
determined, if applicable, by arbitration under Section 9(i)),
the Employee shall forfeit all rights to receive any portion
of the Stock Grant for which the Grant Date had not occurred
as of the Date of Termination. The number and
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kind of shares to be granted under this Section 3(c) shall be
equitably adjusted to reflect changes in Parent's
capitalization, such as a stock split or extraordinary
dividend, or corporate transactions, such as a merger,
spin-off, recapitalization or consolidation. With respect to
each share of Parent common stock to be granted under this
Section 3(c) that has not been forfeited and with respect to
which the Employee (or his estate or beneficiaries, if
applicable) has not yet become a shareholder, the Company
shall pay to the Employee an amount in cash equal to the
regular quarterly cash dividend, if any, paid by the Parent on
its common stock. Such payment shall be made within ten (10)
days following the applicable dividend payment date.
(d) VACATION AND FRINGE BENEFITS.
(i) During the Employment Term, the Employee shall be
entitled to paid vacation and fringe benefits as
provided generally to similarly situated executive
employees of the Company.
(ii) The Employee shall be entitled to the full time use
of an automobile, including reimbursement for all
operating and maintenance costs, consistent with
the Company's corporate policy on automobiles as in
effect from time to time.
(e) OFFICE AND SUPPORT STAFF.
During the Employment Term, the Employee shall be entitled to
an office or offices of a size and with furnishings and other
appointments, and to personal secretarial and other
assistance, at least substantially equivalent to that provided
to the Employee as of the date of this Agreement.
(f) EXPENSE REIMBURSEMENT.
During the Employment Term, the Employee shall be entitled to
receive prompt reimbursement for all usual, customary and
reasonable, business-related expenses incurred by the Employee
in performing his duties and responsibilities hereunder in
accordance with the practices and procedures of the Company as
in effect with respect to senior executives of the Company.
(g) INDEMNIFICATION.
The Company shall maintain directors and officers liability
insurance in commercially reasonable amounts (as reasonably
determined by the Board) to the extent provided as of the date
of this Agreement, and the Employee shall be covered under
such insurance to the same extent as other similarly situated
executive employees of the Company. The Employee shall be
eligible for indemnification by the Company under the Company
by-laws as currently in effect, and the Company
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agrees that it shall not take any action that would impair the
Employee's rights to indemnification under the Company
by-laws, as currently in effect.
(h) PAYMENT AND BENEFITS IN CONNECTION WITH THE TRANSACTION.
The Employee shall, as of the Effective Date, be entitled to
receive a lump sum in cash from the Company equal to three (3)
times the sum of (x) his Base Salary in effect as of the
Effective Date (provided such amount has not been paid under
the Prior Agreement), plus (y) the Employee's target bonus
under the Company's Annual Incentive Compensation Plan for the
year in which the Effective Date occurs. Such amount shall be
paid to the Employee within five (5) business days following
the Effective Date but in no event shall such amount exceed
$2,100,000. In addition, the Employee's benefit in the U.S.
Filter Supplemental Executive Retirement Plan shall become
fully vested as of the Effective Date.
4. TERMINATION OF EMPLOYMENT.
(a) TERMINATION DUE TO DEATH OR DISABILITY.
The Company may terminate the Employee's employment hereunder
due to Disability (as hereinafter defined). In the event of
the Employee's death or a termination of the Employee's
employment by the Company due to Disability, the Employee or
his estate or his legal representative, as the case may be,
shall be entitled to receive from the Company:
(i) any unpaid Base Salary through the Date of
Termination (as defined in Section 4(b)(iv));
(ii) an immediate lump sum in cash equal to the minimum
annual incentive (determined without regard to any
performance goals) provided by Section 3(b)(ii) for
the year in which the Date of Termination (as
defined in Section 4(b)(iv)) occurs multiplied by a
fraction, the numerator of which is the number of
days of such fiscal year through such Date of
Termination and the denominator of which is 365;
(iii) an immediate lump sum amount equal to the sum of
(A) 150 percent (150%) times the minimum annual
incentive (determined without regard to any
performance goals) provided by Section 3(b)(ii) for
the year in which the Date of Termination (as
defined in Section 4(b)(iv)) occurs plus (B) 150
percent (150%) times the annual rate of Base Salary
at the rate in effect on the Date of Termination
(as defined in Section 4(b)(iv));
(iv) a lump sum amount, payable within five (5) days
following the Date of Termination (as defined in
Section 4(b)(iv)), in respect of any deferred
compensation (including, without limitation,
interest or other credits on such deferred
amounts), any accrued vacation pay and any
reimburse-
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ment for expenses incurred but not yet paid prior
to such Date of Termination; and
(v) any other compensation or benefits which may be
owed or provided to or in respect of the Employee
in accordance with the terms and provisions of this
Agreement or any plans and programs of the Company.
For purposes of this Agreement, "Disability" means the
Employee's inability to render, for a period of six (6)
consecutive months, services hereunder by reason of permanent
disability, as determined by the written medical opinion of an
independent medical physician mutually acceptable to the
Employee and the Company. If the Employee and the Company
cannot agree as to such an independent medical physician each
shall appoint one medical physician and those two physicians
shall appoint a third physician who shall make such
determination.
(b) TERMINATION FOR ANY OTHER REASON.
(i) In the event that the Employee's employment hereunder
is terminated by the Employee for Good Reason (as
defined in Section 4(b)(v)) or by the Company without
Cause (as defined in Section 4(b)(vii)) (other than
for Disability), then the Company shall pay the
Employee (A) any unpaid Base Salary through the Date
of Termination (as defined in Section 4(b)(iv)), plus
(B) an amount equal to the minimum annual incentive
(determined without regard to any performance goals)
provided in Section 3(b)(ii) for the year in which
the Date of Termination (as defined in Section
4(b)(iv)) occurs multiplied by a fraction, the
numerator of which is the number of days from the
beginning of such fiscal year through such Date of
Termination (as defined in Section 4(b)(iv)), and the
denominator of which is 365, plus (C) any previously
vested benefits, such as previously vested retirement
benefits, plus (D) any deferred compensation
(including, without limitation, interest or other
credits on such deferred amounts), any accrued
vacation pay and any reimbursement for expenses
incurred but not yet paid prior to such Date of
Termination (collectively, the "Accrued
Obligations").
(ii) Furthermore, and in addition to the foregoing, in the
event that the Employee's employment with the Company
is terminated by the Employee for Good Reason or by
the Company without Cause (other than Disability),
then the Company shall also pay the Employee, within
five (5) business days following the Date of
Termination (as defined in Section 4(b)(iv)), a lump
sum in cash equal to the number of years (including
fractions thereof) remaining in the Employment Term
(without taking into account such early termination
thereof) multiplied by the sum of (x) his then
current Base Salary plus (y) the target annual
incentive bonus
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for the year in which such Date of Termination occurs
(determined without regard to any performance goals).
(iii) In the event that the Employee's employment hereunder
is terminated by the Employee without Good Reason or
by the Company for Cause, the Company shall pay the
Employee the Accrued Obligations (other than the
amounts under Section 4(b)(i)(B)).
(iv) For purposes of this Agreement, "Date of Termination"
means (A) in the case of Disability, the last day of
the six (6) month period referred to in Section 4(a),
and (B) in all other cases, the actual date on which
the Employee's employment terminates during the Term
of Employment.
(v) For purposes of this Agreement, "Good Reason" for the
Employee's termination of his employment hereunder
shall mean, without the Employee's prior written
consent, (A) the relocation of the Company's
principal offices more than 150 miles from its
location immediately prior to the Effective Date or
the Company requiring the Employee to be based at any
location other than such principal offices, (B) a
breach by the Company of any material provision of
this Agreement which is not cured within five (5)
business days following written notification of such
breach, or (C) the occurrence of a Change in Control
(as defined in Section 4(b)(vi)).
(vi) "Change in Control" shall mean the occurrence of any
of the following:
(A) the acquisition by any Person (including any
group deemed to be a "person" under Section
13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor provision
to either of the foregoing) of direct or
indirect "beneficial ownership" (within the
meaning of Rule 13d-3 under the Exchange
Act) of securities of the Parent
representing 50% or more of the combined
voting power of the securities of the
Parent;
(B) during any period of two (2) consecutive
years (not including any period prior to the
Effective Date), individuals who at the
beginning of such period constitute the
board of directors of Parent (the "Parent
Board"), and any new director (other than a
director whose initial assumption of office
is in connection with an actual or
threatened election contest, including but
not limited to a consent solicitation,
relating to the election of directors of
Parent) whose election by the Parent Board
or nomination for election by the Parent's
stockholders was approved by a vote of at
least two-thirds of the directors then still
in office who either were directors at the
beginning of the period or whose election or
nomina-
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tion for election was previously so
approved, cease for any reason to constitute
at least a majority thereof;
(C) there is consummated a merger,
consolidation, recapitalization,
reorganization or other similar transaction
(any such transaction, a "Business
Combination") between the Parent or any
direct or indirect subsidiary of the Parent
and any other corporation, other than (1) a
Business Combination which would result in
the voting securities of the Parent
outstanding immediately prior to such merger
or consolidation continuing to represent
(either by remaining outstanding or by being
converted into voting securities of the
surviving entity or any parent thereof) at
least 50% of the combined voting power of
the securities of the Parent or such
surviving entity or any parent thereof
outstanding immediately after such Business
Combination, or (2) a merger or
consolidation effected to implement a
recapitalization of the Parent (or similar
transaction) in which no Person is or
becomes the "beneficial owner," directly or
indirectly, of securities of the Parent
representing 50% or more of the combined
voting power of the Parent's then
outstanding securities;
(D) the Parent is placed under judicial
administration or supervision in connection
with the Parent's filing for bankruptcy;
(E) there is consummated an agreement for the
sale or disposition by the Parent of all or
substantially all of the Parent's assets,
other than a sale or disposition by the
Parent of all or substantially all of the
Parent's assets to an entity, at least 50%
of the combined voting power of the voting
securities of which are owned by
stockholders of the Parent in substantially
the same proportions as their ownership of
the Parent immediately prior to such sale;
(F) the Parent ceases to be the beneficial
owner, directly or indirectly, of securities
of the Company representing more than 50% of
the combined voting power of the Company's
securities; or
(G) there is consummated a sale or other
disposition of all or substantially all of
the assets of the Company, other than a sale
or disposition of all or substantially all
of the Company's assets to an entity, at
least 50% of the combined voting power of
the voting securities of which are owned by
stockholders of the Parent in substantially
the same proportions as their ownership of
the Parent immediately prior to such sale.
(vii) Termination by the Company of the Employee for
"Cause" as used in this Agreement shall be limited to
the following: the Employee's con-
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viction of, or a plea of guilty to, a felony
involving moral turpitude or willful violation of
Section 7(b) or the Employee's willful gross
negligence, material misconduct or material breach of
this Agreement, resulting in material injury to the
Company. For purposes of this definition, no act, or
failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without
reasonable belief that the Executive's act, or
failure to act, was in the best interest of the
Company. No termination for Cause shall be effective
without (A) a resolution adopted by a majority of the
Parent Executive Committee which sets forth the act
(or failure to act) constituting Cause for
termination, (B) if such act or failure to act is
susceptible to cure, a reasonable period to effect
such cure, and (C) opportunity for a hearing in
arbitration, using the rules of the American
Arbitration Association, as such rules are in effect
in Los Angeles, California on the date of delivery of
demand for arbitration, and otherwise in accordance
with Section 9(i).
(c) CONTINUATION OF EMPLOYEE BENEFITS.
Upon the termination of the Employee's employment hereunder for
any reason, the Company shall continue, until the third
anniversary of the Effective Date, to cover the Employee and/or
the Employee's family under those life, disability, accident
and health insurance benefits that were applicable to the
Employee on the Date of Termination at benefit levels and on
terms and conditions (including with respect to cost to the
Employee and/or the Employee's family) no less favorable than
that to which the Employee and/or his family was entitled
immediately prior to his Date of Termination (except for any
changes made with respect to active senior executives of the
Company); provided, however, that, in the event Employee's
employment hereunder is terminated for Disability, such
coverage shall continue for eighteen (18) months following the
Date of Termination. In the event that the Employee and/or the
Employee's family's participation in any such program is
barred, the Company shall arrange to provide the Employee
and/or the Employee's family with benefits substantially
similar to those which the Employee and/or the Employee's
family would otherwise have been entitled to receive under such
plans and programs from which continued participation is
barred. Following the continuation period described in this
subsection, the Employee and the Employee's family shall be
entitled to elect continuation coverage under Section 601 et
seq. of the Employee Retirement Income Security Act, as
amended, if permitted by applicable law.
(d) NO MITIGATION OR OFFSET.
The Company agrees that, if the Employee's employment with the
Company terminates, the Employee is not required to seek other
employment or to attempt in any way to reduce any amounts
payable to or in respect of the Employee by the
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Company pursuant to this Agreement. Further, the amount of any
payment or benefit provided for in this Agreement shall not be
reduced by any compensation earned by the Employee as the
result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by
the Employee to the Company or otherwise, except with respect
to Section 4(c) benefits to the extent the Employee receives
substantially equivalent benefits from a successor employer.
5. ADDITIONAL TAX PAYMENTS.
(a) EXCISE TAX GROSS-UP.
If any payment or benefit to which the Employee becomes
entitled in connection with the Transaction pursuant to this
Agreement, the Merger Agreement or otherwise (the "Total
Payments") will be subject to the tax imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (the "Code")
(or any successor tax that may hereafter be imposed) (the
"Excise Tax"), the Company shall pay to the Employee at the
time specified below, an additional amount (the "Gross-up
Payment") such that the net amount retained by the Employee,
after deduction of any Excise Tax on the Total Payments and
any taxes on the Total Payments other than the Excise Tax and
any federal, state and local income and employment tax and
Excise Tax upon the payment provided for by this subsection,
shall be equal to the Total Payments. For purposes of
determining whether any of such payments or benefits will be
subject to the Excise Tax, and the amount of such Excise Tax,
the Company and the Employee shall rely upon the assumption
and determinations of Xxxxxx Xxxxxxxx LLP or such other
certified accounting firm as may be mutually agreed upon by
the Employee and the Company (the "Accounting Firm"). All fees
and expenses of the Accounting Firm shall be borne solely by
the Company. Any determinations by the Accounting Firm shall
be binding upon the Company and the Employee, and they agree
to take a position consistent with such determination (i) on
any return, report, information return or other document
(including, without limitation, any related or supporting
information) with respect to taxes of the Company or the
Employee, (ii) in any proceeding, formal or informal, before
any taxing authority, and (iii) otherwise. In the event that
the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder at the time the Gross-Up
Payment is determined, the Employee shall repay to the Company
at the time that the amount of such reduction in Excise Tax is
finally determined the portion of the Gross-Up Payment
attributable to such reduction (plus the portion of the
Gross-Up Payment attributable to the Excise Tax and federal
and state and local income and employment tax imposed on the
Gross-Up Payment being repaid by him if such repayment results
in reduction in Excise Tax and/or a federal and state and
local income and employment tax deduction) plus interest on
the amount of such repayment at the rate provided in section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder
at the time the Gross-Up Payment is determined (including
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by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the
Company shall make an additional Gross-Up Payment in respect
of such excess (plus any interest payable with respect to such
excess at the rate provided in section 1274(b)(2)(B) of the
Code) at the time that the amount of such excess is finally
determined. The Gross-Up Payment shall be paid within five (5)
business days after the amount thereof is determined, but in
no event later than thirty (30) days prior to the date on
which payment of the Excise Tax in respect of which such
Gross-Up Payment is determined is due. If the amounts of any
payments under this Agreement cannot be finally determined on
or before the payment date otherwise scheduled for payment,
the Company shall pay to the Employee on such date an
estimate, as determined in good faith by the Company, of the
minimum amount of such payment and shall pay the remainder of
such payments (together with interest at the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined. In the event that the amount of the
estimated payments exceeds the amount subsequently determined
to have been due, such excess shall constitute a loan by the
Company to the Employee payable on the fifth day after demand
by the Company (together with interest at the rate provided in
section 1274(b)(2)(B) of the Code).
Notwithstanding the foregoing, and subject to the Company's
and Parent's obligations under Section 5(b), the Company shall
not be required to pay a Gross-Up Payment with respect to an
amount of the Excise Tax equal to the excess of (i) over (ii),
where (i) equals the Excise Tax that actually becomes due with
respect to the Total Payments and (ii) equals that amount of
Excise Tax that would have become due with respect to the
Total Payments assuming that, with respect to the Company
stock options granted to the Employee on October 9, 1998 (the
"October Grant"), (x) the cash payout of the October Grant
pursuant to Section 2.9 of the Merger Agreement was subject to
Q&A 24(c) of the proposed Treasury Regulations promulgated
under section 280G of the Code (the "Regulations") and (y) for
purposes of Q&A 24(c)(2) under the Regulations, the percentage
used to calculate the amount reflecting the lapse of the
obligation to continue to perform services was one percent
(1%) (such excess amount shall hereinafter be referred to as
the "Option Excise Tax").
(b) COMPANY'S TAX POSITION.
The Company shall, and the Parent shall cause the Company to,
take the position (i) on any return, report, information
return or other document (including, without limitation, any
related or supporting information) with respect to taxes of
the Company or the Employee, (ii) in any proceeding, formal or
informal, before any taxing authority, and (iii) otherwise,
that the Option Excise Tax is not due, and the Company shall
not, nor shall the Parent cause the Company to, withhold any
amounts in respect thereof without the prior written consent
of the Employee. The Company shall, at its own expense,
contest in good faith any assessment or proposed assessment by
the Internal Revenue Service (the "IRS") against the Com-
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pany in respect of the Excise Tax with respect to the Option
Excise Tax. The Employee shall notify the Company in writing
of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Employee or the
Company of the Option Excise Tax. Such notification shall be
given as soon as practicable but no later than ten (10)
business days after the Employee is informed in writing of
such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be
paid. The Employee shall also give the Company any information
reasonably requested by the Company relating to such claim;
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 respect to such claim by an attorney
reasonably selected by the Company' cooperate with the Company
in good faith in order effectively to contest such claim; and
permit the Company to participate in any proceedings relating
to such claim. Such contest shall include pursuing any and all
administrative and judicial remedies available to the Company.
In the event that there is a Final Determination (as defined
below) pursuant to which the IRS makes an assessment against
the Company in respect of the Option Excise Tax, the Company
shall remit such amount to the IRS and the Company shall be
entitled to reimbursement of such amount. The Company shall
effect such reimbursement only by means of withholding from
the final tranche of the Stock Grant a number of shares having
a value equal to the amount of the Option Excise Tax (rounding
down to the next whole share); provided, however, that the
Company shall be entitled to withhold from any cash payments
to the Employee following the payment of such tranche of the
Stock Grant an amount equal to the remainder of such Option
Excise Tax.
For purposes of this Agreement, "Final Determination" shall
mean:
(x) a decision, judgment, decree, or other order by any court
of competent jurisdiction, which decision, judgment,
decree, or other order has become final and not subject to
further appeal; or
(y) a closing agreement entered into under section 7121 of the
Code or any other binding settlement agreement entered
into with the IRS, in either case with the consent of the
Employee, which consent shall not be unreasonably
withheld.
6. LEGAL FEES.
The Company shall pay to the Employee all legal fees and expenses
incurred by the Employee in disputing in good faith any issue hereunder
relating to the termination of the Employee's employment, in seeking in
good faith to obtain or enforce any benefit or right provided by this
Agreement or in connection with any tax audit or proceeding to the
extent attributable to the application of section 4999 of the Code to
any payment or benefit provided hereunder. Such payments shall be made
within five (5) business days after delivery
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of the Employee's written requests for payment accompanied with such
evidence of fees and expenses incurred as the Company reasonably may
require.
7. PROTECTIVE COVENANTS.
(a) COMPENSATION, BENEFITS SUSPENDED IF SECTION 7 (b) BREACHED.
Except as more specifically provided with respect to the Stock
Grant in Section 3(c), the Employee agrees that if, during the
Employment Term, he breaches his obligations under Section
7(b), any payments and benefits to which the Employee would
otherwise have been entitled shall be suspended for one (1)
year, or, if less, the remaining balance of the period with
respect to which the Employee would otherwise be so entitled
to such payments and benefits, which payments and benefits
shall be deemed immediately forfeited. Nothing herein shall
prohibit the Employee from being a stockholder in a mutual
fund or a diversified investment company or a passive owner of
not more than two percent of the outstanding stock of any
class of a corporation any equity securities of which are
publicly traded, so long as the Employee has no active
participation in the business of such corporation.
(b) NON-DISCLOSURE; NON-COMPETE; NON-SOLICITATION.
The Employee shall not, at any time during the Employment Term
or thereafter, make use of or disclose, directly or
indirectly, any trade secret, customer lists or other
confidential or secret information of the Company not
available to the public generally or to the competitors of the
Company ("Confidential Information") except to the extent that
such Confidential Information becomes a matter of public
record or is otherwise available to the general public, other
than as a result of any act or omission of the Employee, or is
required to be disclosed by any law, regulation or order of
any court or regulatory commission, department or agency.
Promptly following the Date of Termination, the Employee shall
surrender to the Company all records, memoranda, notes, plans,
reports, computer tapes and software and other documents and
data relating to any Confidential Information or the business
of the Company that he may then possess or have under his
control (together with all copies thereof); provided, however,
that the Employee may retain copies of such documents as are
necessary for the preparation of his federal or state income
tax returns. In consideration for the payments under this
Agreement and any payments received by the Employee pursuant
to the Transaction for his equity interests in the Company,
during the scheduled Employment Term (notwithstanding any
earlier termination of the Employment Term), the Employee will
not in any manner directly or indirectly, through any person,
firm or corporation, alone or as a member of a partnership or
as an officer, director, stockholder, investor or employee of
or consultant to any other corporation or enterprise or
otherwise engage or assist any other person, firm, corporation
or enterprise in engaging in any business then being conducted
by the Company (but not later than as of the Date of
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Termination) in any geographic area in which the Company is
then conducting such business. In consideration for the
payments under this Agreement and any payments received by the
Employee pursuant to the Transaction for his equity interests
in the Company, the Employee will not during the scheduled
Employment Term (notwithstanding any earlier termination of
the Employment Term) in any manner, directly or indirectly
induce or attempt to induce any employee of the Company to
terminate or abandon his or her employment for any purpose
whatsoever.
(c) FALSE, DEFAMATORY, OR DISPARAGING STATEMENTS.
The Employee agrees that after his Date of Termination, he
shall not make any false, defamatory or disparaging statements
about the Company, or the officers or directors of the
Company. Promptly after the Employee's Date of Termination,
the Company agrees that it shall instruct the officers and the
directors of the Company not to make any false, defamatory or
disparaging statements about the Employee after such Date of
Termination.
(d) INJUNCTIONS TO PREVENT BREACHES OF PROTECTIVE COVENANTS.
The parties hereto agree that the Company would be damaged
irreparably in the event any provision of paragraphs (b) or
(c), next above, were not performed by the Employee in
accordance with their respective terms or were otherwise
breached and that money damages would be an inadequate remedy
for any such nonperformance or breach. Therefore, the Company
or its successors or assigns shall be entitled, in addition to
any other rights and remedies existing in their favor, to an
injunction or injunctions to prevent any breach or threatened
breach of any such provisions and to enforce such provisions
specifically (without posting a bond or other security). The
parties hereto agree that the Employee would be damaged
irreparably in the event any provision of paragraph (c), next
above, were not performed by the Company in accordance with
its terms or were otherwise breached and that money damages
would be an inadequate remedy for any such nonperformance or
breach. Therefore, the Employee shall be entitled, in addition
to any other rights and remedies existing in his favor, to an
injunction or injunctions to prevent any breach or threatened
breach of any such provisions and to enforce such provision
specifically (without posting a bond or other security).
8. SUCCESSORS.
(a) THE EMPLOYEE.
This Agreement is personal to the Employee and, without the
prior express written consent of the Company, shall not be
assignable by the Employee, except that the Employee's rights
to receive any compensation or benefits under this Agreement
may be transferred or disposed of pursuant to testamentary
disposition, intestate succession or pursuant to a domestic
relations order of a court of competent juris-
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diction. This Agreement shall inure to the benefit of and be
enforceable by the Employee's heirs, beneficiaries and/or
legal representatives.
(b) THE COMPANY.
This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns. The Company
shall require any successor to all or substantially all of the
business and/or assets of the Company, whether direct or
indirect, by purchase, merger, consolidation, acquisition of
stock, or otherwise, by an agreement in form and substance
satisfactory to the Employee, expressly to assume and agree to
perform this Agreement in the same manner and to the same
extent as the Company would be required to perform if no such
succession had taken place.
9. MISCELLANEOUS.
(a) APPLICABLE LAW.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, applied
without reference to principles of conflict of laws.
(b) AMENDMENTS.
This Agreement may not be amended or modified otherwise than
by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(c) NOTICES.
All notices and other communications hereunder shall be in
writing and shall be given by hand-delivery to the other party
or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Company: UNITED STATES FILTER CORPORATION
00-000 Xxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
If to the Employee: XXXXXX X. XXXXXX
00-000 Xxxxxx'x Xxxxx Xxxx
Xxxx Xxxxxx, XX 00000
With a copy to: XXXXXXX XXXXXXX, ESQ.
0000 Xxxxxx xx xxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
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or to such other address as either party shall have furnished
to the other in writing in accordance herewith. Notices and
communications shall be effective when actually received by the
addressee.
(d) WITHHOLDING.
The Company may withhold from any amounts payable under this
Agreement such federal, state or local income taxes as shall be
required to be withheld pursuant to any applicable law or
regulation.
(e) SEVERABILITY.
If any provision of this Agreement as applied to any part or to
any circumstances will be adjudged by a court to be invalid or
unenforceable, the same will in no way affect any other
provision of this Agreement, the application of such provision
in any other circumstances, or the validity or enforceability
of this Agreement. The parties hereto intend this Agreement to
be enforced as written. If any provision or any part thereof is
held to be invalid or unenforceable because of the duration
thereof, the level of restrictions or the geographic scope
thereof, all parties agree that the court or arbitrator making
such determination will have the power to reduce the duration,
restrictions or geographic scope of such provision, and/or to
delete specific words or phrases in an its modified form such
provision will then be enforceable.
(f) CAPTIONS.
The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.
(g) BENEFICIARIES/REFERENCES.
The Employee shall be enabled to select (and change) a
beneficiary or beneficiaries to receive any compensation or
benefit payable hereunder following the Employee's death, and
may change such election, in either case by giving the Company
written notice thereof. In the event of the Employee's death or
a judicial determination of his incompetence, reference in this
Agreement to the Employee shall be deemed, where appropriate,
to refer to the Employee's beneficiary(ies), estate or legal
representative(s).
(h) ENTIRE AGREEMENT.
This Agreement contains the entire agreement between the
parties concerning the subject matter hereof and supersedes all
prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with
respect to the subject matter hereof, including without
limitation the Prior Agreement and the Company's Executive
Severance Pay Plan. However, nothing
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in this Agreement shall adversely affect the Employee's rights
to benefits vested and accrued prior to the Effective Date,
other than benefits which vest or accrue upon a "Change of
Control" as defined in the Prior Agreement and the Company's
Executive Severance Pay Plan, as the case may be, which are
not satisfied under Section 3(h). The Employee expressly
agrees and acknowledges that the payments for his Company
stock options set forth in Section 2.9 of the Merger Agreement
are the sole payments in connection with or with respect to
his Company stock options to which he is or will be entitled,
and that the Prior Agreement has not been amended subsequent
to September 30, 1998.
(i) ARBITRATION.
(i) Any dispute, controversy or claim arising out of or
relating to this Agreement, a breach thereof or the
coverage or enforceability of this Section 9(i) shall
be settled by arbitration in Los Angeles, California
(or such other location as the Company and the
Employee may mutually agree), conducted in accordance
with the Commercial Arbitration Rules of the American
Arbitration Association, as such rules are in effect
in Los Angeles on the date of delivery of demand for
arbitration. The arbitration of any such issue,
including the determination of the amount of damages,
shall be to the exclusion of any court of law. This
provision shall not limit, nor be limited by, any
additional right to seek injunctive relief under
Section 7(d).
(ii) There shall be three arbitrators, one to be chosen by
each party at will within ten (10) days from the date
of delivery of demand for arbitration and the third
arbitrator to be selected by the two arbitrators so
chosen. If the two arbitrators are unable to select a
third arbitrator within ten (10) days after the last
of the two arbitrators is chosen by the parties, the
third arbitrator will be designated, on application
by either party, by the American Arbitration
Association. The decision of a majority of the
arbitrators shall be final and binding on both
parties and their respective heirs, executors,
administrators, personal representatives, successors
and assigns. Judgment upon any award of the
arbitrators may be entered in any court having
jurisdiction, or application may be made to any such
court for the judicial acceptance of the award and
for an order of enforcement.
(iii) The Company shall pay the fees and expenses incurred
in connection with any arbitration arising out of
this Agreement, unless a majority of the arbitrators
concludes that such arbitration procedure was not
instituted in good faith by the Employee.
(j) REPRESENTATION.
The Company represents and warrants that it is fully
authorized and empowered to enter into this Agreement and that
the performance of its obligations under this
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Agreement will not violate any agreement between the Company
and any other person, firm or organization or any applicable
laws or regulations.
(k) SURVIVORSHIP.
The respective rights and obligations of the parties hereunder
shall survive any termination of this Agreement or the
Employee's employment hereunder to the extent necessary to the
intended preservation of such rights and obligations.
10. TERMINATION OF AGREEMENT.
This Agreement shall be void and of no further force or effect upon the
termination of the Merger Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of March 22, 1999.
PARENT:
VIVENDI
By: __________________________________
Its:___________________________________
(title)
COMPANY:
UNITED STATES FILTER CORPORATION,
a Delaware corporation
By: __________________________________
Its:___________________________________
(title)
EMPLOYEE:
By: __________________________________
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