Exhibit 10.22(a)
AGREEMENT
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AGREEMENT, dated as of May 4, 1995, by and among LEUCADIA
NATIONAL CORPORATION, a New York corporation ("Employer"), and
Xxxxxxxx X. Xxxxxxxxxx ("Executive").
W I T N E S S E T H:
WHEREAS, Executive is employed as Executive Vice President of
Employer;
WHEREAS, Employer and Executive have agreed that Executive shall
relocate for a period to Moscow and shall continue to provide services
to, and shall continue to be compensated by, Employer (or its
affiliates);
WHEREAS, Employer and Executive agree that Executive will work
and reside in Russia beginning on or about February 1995;
WHEREAS, Employer and Executive have agreed that Executive will
serve as President of, and provide services to, a wholly-owned
subsidiary of Employer ("Leucadia International") to be formed by
Employer to serve as the vehicle through which investment
opportunities in Russia and the CIS will be explored and developed;
WHEREAS, Executive has determined, based on his own planning
relating to the anticipated United States and Russian tax consequences
of his provision of services and residence in Russia, that the proper
timing of his recognition of compensation income would be beneficial;
WHEREAS, to address these objectives Employer and Executive
desire, among other things, to accelerate the taxation and
deductibility, for United States tax purposes, of certain salary
otherwise expected to be paid by Employer (or its affiliates) to
Executive; and
WHEREAS, contemporaneously herewith Executive and Employer have
entered into an Escrow and Security agreement (the "Escrow and
Security Agreement") of even date herewith;
NOW, THEREFORE, in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:
SECTION ONE. -- ADDITIONAL COMPENSATION.
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Employer hereby agrees to pay to (or for the benefit of)
Executive, as additional compensation, the sum of $100,000 (the "Fund
Amount"), upon the terms and conditions hereinafter set forth.
SECTION TWO. -- VESTING IN GENERAL.
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Executive's right to receive the Fund Amount shall vest at 100%
on the first day of the calendar year in which Executive is no longer
treated as a Russian resident for Russian tax purposes; provided,
however, Executive's right to receive the Fund Amount shall never vest
if he is not employed by the Employer or any of its subsidiaries (the
"Employer Group") as of September 30, 1995. Notwithstanding the
preceding sentence, Executive's right to receive the Fund Amount shall
be 100% vested if Executive dies or becomes disabled prior to
September 30, 1995, if at the time of such death or disablement,
Executive was employed by the Employer Group.
For purposes of this Agreement, any portion of the Fund Amount
vested pursuant to this Section Two shall be referred to as the
"Vested Amount."
SECTION THREE. -- PAYMENT.
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The Vested Amount shall be paid by Employer to Executive in the
calendar year ("the Payment Year") immediately following the last
calendar year in which Executive was treated as a Russian resident for
Russian tax purposes; provided that without the prior consent of
Executive no such payment shall be made later than March 31 of the
Payment Year.
SECTION FOUR. -- ESCROW ARRANGEMENT.
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The obligations of Employer to Executive hereunder shall be
implemented and secured by way of the Escrow and Security Agreement.
Toward that end, any payment obligation of Employer hereunder shall be
satisfied, to the extent possible, by directing a release from the
Escrow Amount (as defined in the Escrow and Security Agreement) of the
appropriate amount to be paid to Executive. Such Escrow and Security
Agreement shall be irrevocable and is intended by the parties to
secure Employer's obligations to Executive hereunder, and to implement
such obligations. As provided in the Escrow and Security Agreement,
the escrow agent shall be Weil, Gotshal and Xxxxxx, the investment of
the escrow funds shall be directed by the Chief Financial Officer of
Employer, the income and earnings realized in respect of the escrow
fund shall be distributed promptly to Employer, and the tax
responsibility for such income and earnings shall be borne by Employer.
SECTION FIVE. -- TAX ELECTION.
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Executive shall timely and properly file an election under
Section 83(b) of the Internal Revenue Code of 1986, in respect of his
receipt, as compensation, of this Agreement and his interest in the
escrow established pursuant to the Escrow and Security Agreement.
Notwithstanding anything contained herein to the contrary, Executive's
failure timely and properly to file such tax election shall result in
the immediate termination of Employer's obligations hereunder and in a
termination of the Escrow and Security Agreement, and an immediate
return to Employer of the escrowed funds deposited by Employer
pursuant to such Agreement.
SECTION SIX. -- TAX WITHHOLDING.
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Executive agrees that Employer and/or its subsidiaries or
affiliates shall effect all required tax withholdings in respect of
the additional compensation paid pursuant to this Agreement. At
Executive's election, $30,975 (the "Withheld Amount") of the Fund
Amount shall be applied by the Employer in satisfaction of its
withholding obligations. If Executive makes such election, the Escrow
Agent (as defined in the Escrow and Security Agreement) shall be
directed to release the Withheld Amount to Employer. Notwithstanding
such election, the Withheld Amount shall remain unvested except as
otherwise provided in Section Two hereof.
SECTION SEVEN. -- AFFECT ON OTHER AGREEMENTS
AND ARRANGEMENTS.
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This Agreement shall have no effect on the rights and obligations
of the parties hereto under any other agreement. Notwithstanding this
Agreement, Employer (or its affiliates), in determining compensation,
if any, otherwise payable to Executive, may take the Vested Amount
into account.
SECTION EIGHT. -- ASSIGNABILITY AND BINDING EFFECT.
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This Agreement shall inure to the benefit of and shall be binding
upon the heirs, executors, administrators, successors and legal
representatives of Executive, and shall inure to the benefit of and be
binding upon Employer and its successors, but the obligations of Executive
hereunder may not be assigned to another person, firm or corporation nor
may they be delegated.
SECTION NINE. -- COMPLETE UNDERSTANDING.
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This Agreement constitutes the complete understanding between the
parties with respect to the compensation arrangement described herein,
and no statement, representation, warranty or covenant has been made
by either party with respect thereto except as expressly set forth
herein. This Agreement shall not be altered, modified, amended or
terminated except by written instrument signed by each of the parties
hereto.
SECTION TEN. -- SEVERABILITY.
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If any provision of this Agreement or any part hereof is invalid,
unlawful or incapable of being enforced, by reason of any rule of law
or public policy, all other conditions and provisions of this
Agreement which can be given effect without such invalid, unlawful or
unenforceable provision shall, nevertheless, remain in full force and
effect.
SECTION ELEVEN. -- WARRANTY.
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Executive warrants and represents that he is not a party to any
agreement, contract or understanding, whether of employment or
otherwise, which would in any way restrict or prohibit him from
undertaking or performing employment in accordance with the terms and
conditions of this Agreement.
SECTION TWELVE. -- GOVERNING LAW.
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This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective as of the day and year first above written.
LEUCADIA NATIONAL CORPORATION
By /s/ XXXXXX X. ORLANDO /s/ XXXXXXXX X. XXXXXXXXXX
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Name: XXXXXX X. ORLANDO XXXXXXXX X. XXXXXXXXXX
Title: VICE PRESIDENT AND
COMPTROLLER
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