Exhibit 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), effective as of the 1st day of
October, 1997, between May & Xxxx, Inc., a Delaware corporation (the "Company")
and Xxxxxx X. Early ("Executive");
WITNESSETH:
A. Executive is currently employed by the Company as an executive officer;
B. The Company desires to continue to obtain the benefits of Executive's
knowledge, skill, and experience by employing Executive upon the terms and
subject to the conditions of this Agreement; and
C. Executive desires to continue to be employed by the Company upon the
terms and subject to the conditions of this Agreement.
AGREEMENTS:
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth below, and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and Executive hereby
covenant and agree as follows:
1. Definitions. For purposes of this Agreement, the following capitalized
terms shall have the following meanings, and all other capitalized terms used in
this Agreement but not defined in this paragraph 1 shall have the meanings
assigned elsewhere in this Agreement:
"Base Amount" means $300,000 subject to increase as provided in Section
4(a) herein.
"Cause" has the meaning assigned in paragraph 5(a).
"Change in Control" has the meaning assigned in paragraph 6(f).
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.
"Compensation Committee" means the applicable compensation committee of the
Board of Directors of the Company, or in the absence thereof, the Board of
Directors.
"Disabled" or "Disability" has the meaning assigned in paragraph 5(c).
"Employment Period" has the meaning assigned in paragraph 2.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
any successor thereto.
"Good Reason" has the meaning assigned in paragraph 6(e).
"Notice of Termination" means a written notice of either the Company or
Executive, as applicable, setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination.
"Termination Date" has the meaning assigned in the initial paragraph of
paragraph 5.
2. Employment Period. The Company shall employ Executive, and Executive
shall be employed by the Company and shall provide services to the Company for
the period beginning on the date hereof, and continuing for a period of five
years (whereby each year is comprised of 12 complete, consecutive months) (the
"Employment Period") or such earlier date on which Executive's employment is
terminated in accordance with paragraph 5 below; provided, however, that after
expiration of the initial Employment Period, the Employment Period shall
automatically be extended or re-extended for successive one year periods unless
the Company or Executive delivers a notice specifying such party's intent not to
extend or re-extend the Employment Period at least ninety (90) days prior to an
extension or re-extension date.
3. Performance of Duties.
(a) Executive's title shall be Executive Vice President, Corporate
Development. Executive shall possess such powers and perform such duties
as are determined by the Chief Executive Officer of the Company, as well as
such other powers and duties as are normally incident to such position, as
provided in the By-laws of the Company and in accordance with the General
Corporation Law of the State of Delaware. Executive shall perform his
duties fully and faithfully and shall report to the Chief Executive Officer
of the Company.
(b) Executive agrees that during the Employment Period he shall devote
substantially his full business time to the business affairs of the
Company, provided, however, that notwithstanding any other provision
hereof, the parties acknowledge that Executive may engage in other business
activities, including but not limited to attending to his personal
investment activities and serving as a member of the board of directors of
public, private, and not-for-profit companies, to the extent that such
activities do not interfere with the performance of his duties hereunder,
and that Executive shall be entitled to retain all compensation (whether in
the form of cash, equity securities or perquisites) paid or delivered to
Executive in connection with such activities. Executive agrees that
Executive shall not, without the prior consent of the Board of Directors or
Chief Executive Officer of the Company (which consent shall not be
unreasonably
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withheld), agree to serve on any boards of directors other than the boards
of directors upon which Executive presently serves.
4. Compensation. For services rendered by Executive under this Agreement
and upon the condition that Executive fully and faithfully perform all of his
duties and obligations set forth herein, Executive shall be compensated for his
services as follows:
(a) Subject to the following sentence, Executive shall receive an
annual salary, payable in monthly or more frequent installments, in an
amount equal to the Base Amount, less income tax withholdings and other
normal employee deductions. The Base Amount shall be reviewed annually by
the Compensation Committee as of the end of each fiscal year commencing
September 30, 1998, and may, at the sole discretion of the Compensation
Committee, be increased by an amount that it deems appropriate. If the
Base Amount is increased by the Compensation Committee, it shall not be
decreased thereafter during the Employment Period.
(b) Executive shall receive bonus payments in accordance with any
arrangements or bonus plans established by the Company for its senior
executive officers, in such amounts and upon such terms as are determined
by the Compensation Committee pursuant to such plans. The Company agrees
that Executive will be eligible for a potential bonus for the fiscal year
ending September 30, 1998, to be determined by the Compensation Committee
in its discretion.
(c) Executive shall be a participant, to the extent he meets all
eligibility requirements of general application, in any and all plans,
programs and arrangements maintained by the Company to provide benefits for
its employees, including, but not limited to, medical and hospitalization,
group term life insurance, disability, profit sharing, employee stock
ownership and retirement plans. The Company shall not make any changes in
such plans, programs and arrangements which would adversely affect
Executive's rights or benefits thereunder, unless such change occurs
pursuant to a plan, program or arrangement applicable to all senior
executive employees of the Company and does not result in a proportionately
greater reduction in the rights of or benefits to Executive as compared
with any other senior executive employee of the Company.
(d) Without limiting the generality of paragraph 4(c), the Company
shall pay for the premiums of the $1,000,000 split dollar life insurance
policy currently in place on Executive's life, and Executive shall
reimburse the Company annually in an amount equal to the policy's "economic
benefit" as defined in such policy. Executive shall be the owner of such
policy or policies and shall have the sole right to designate the
beneficiaries of such policy or policies. Executive agrees to comply with
reasonable requests of the Company in connection with the Company's
attempts to obtain, maintain, replace or renew one or more insurance
policies on the life of Executive, of which the
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Company would be the owner and have the right to designate the
beneficiaries of such policies; provided that the Company's attempts to
obtain, maintain, replace or renew such policies do not interfere with
Executive's attempts to obtain, maintain, replace or renew the policies
referred to above.
(e) Executive shall be entitled to take such reasonable vacations as
are consistent with the full and faithful performance of his duties under
this Agreement, but not less than such vacation time as is permitted by
Company policy.
(f) Executive shall be entitled to be reimbursed for regular dues and
business-related expenses attendant to his membership in the University
Club of Chicago.
(g) Executive shall be entitled to such perquisites as may be
customarily granted by the Company to its senior executives.
(h) The Company shall reimburse Executive for the reasonable and
necessary business expenses incurred by him in connection with the
performance of his duties and obligations as set forth herein.
Reimbursement shall be made upon the presentation by Executive to the
Company of reasonably detailed statements of such expenses.
Payment of the Base Amount shall not in any way limit or reduce any other
obligation of the Company pursuant to this Agreement, and no other compensation,
benefit, or payment hereunder shall in any way limit or reduce the obligation of
the Company to pay Executive's Base Amount, except that, for the period
commencing on the date Executive becomes Disabled and ending on the Termination
Date, the Base Amount shall be reduced by any amounts that are payable to
Executive prior to or during such period under any disability benefit plan of
the Company in which Executive participates.
5. Termination. Executive's employment hereunder shall terminate at the
end of the Employment Period. In addition, the Employment Period may be
terminated at any time as provided in this paragraph 5, and, subject to the last
paragraph of this paragraph 5, the applicable effective date of termination as
expressed herein shall be referred to as the "Termination Date".
(a) Cause. The Employment Period may be terminated at the option of
the company for "Cause" (as such term is hereinafter defined), effective
upon the date stated in the Notice of Termination to Executive. As used
herein, the term "Cause" shall mean and be limited to:
(i) Executive's conviction of (or plea of no contest or similar
plea to) a felony; or
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(ii) Executive's intentional continuing refusal to substantially
perform his obligations under this Agreement (except by reason of
incapacity due to illness or accident) if he (a) shall have failed to
remedy the alleged breach caused by such conduct within 30 days from
the date written notice is given by the Secretary of the Company
demanding that he remedy the alleged breach caused by such conduct, or
(b) shall have failed to take reasonable steps in good faith to that
end during such 30-day period, provided that, with respect to this
paragraph 5(a)(ii), after the end of such 30-day period there shall
have been delivered to Executive a certified copy of a resolution of
the Board of Directors of the Company, adopted by the affirmative vote
of not less than two-thirds of the members of the Board of Directors,
taken at a meeting of the Board of Directors at which Executive,
together with his counsel, is given the opportunity to be heard
(hereafter, a "Supermajority Vote"), finding that Executive was guilty
of conduct set forth in this paragraph 5(a)(ii) and specifying the
details thereof, and that Executive has failed to take reasonable
steps in good faith to remedy the alleged breach caused by such
conduct, or
(iii) upon a finding by a Supermajority Vote that Executive
engaged in willful fraud or defalcation, either of which involved
funds or other assets of the Company.
(b) Death. The Employment Period shall terminate automatically
effective upon the death of Executive.
(c) Disability. In the event Executive becomes Disabled (as such term
is hereinafter defined) during the Employment Period, and the Company is
unable to make a reasonable accommodation which would enable Executive to
continue to perform the essential functions of his employment position with
the Company, the Employment Period may be terminated at the option of
Executive or the Company effective 30 days after a Notice of Termination is
given (provided that Executive shall not have returned to the performance
of his duties on a full-time basis during such 30-day period). "Disabled"
or "Disability" means a determination, made at the request of Executive or
upon the reasonable request of the Company set forth in a notice to
Executive, by an independent competent medical authority that Executive is
unable to perform his duties as specified in this Agreement and in all
reasonable medical likelihood such inability will continue for a period in
excess of 180 days. Unless otherwise agreed by Executive and the Board of
Directors, the independent medical authority shall be selected by Executive
and the Company each selecting a board certified licensed physician and the
two physicians selected shall designate an independent medical authority,
whose determination that Executive is Disabled shall be binding upon the
Company and Executive.
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(d) Voluntary Resignation. Executive may resign his employment at any
time, effective upon Notice of Termination (which shall state whether such
resignation is with Good Reason) given by Executive to the Company.
(e) Termination Without Cause by the Company. The Company may
terminate Executive's employment at any time, effective upon Notice of
Termination (which shall state that such termination is without Cause)
given by the Company to Executive.
If, within 30 days after any Notice of Termination for Cause is given by the
Company, Executive notifies the Company that a dispute exists concerning the
termination, then the Termination Date shall be the date (the "Final
Determination") as determined either by mutual written agreement of the parties,
by a binding and final arbitration award or by a final judgment, order or decree
of a court of competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected). Notwithstanding the foregoing,
the Company shall not be prohibited from removing Executive from his position
with the Company pending the Final Determination provided that such removal is
without prejudice to Executive's rights to receive all benefits from the Company
to which he may be entitled upon the Final Determination.
6. Separation Benefits. Executive shall be entitled to receive separation
benefits upon such events and in such amounts as are set forth in this paragraph
6. All payments made to Executive under this paragraph 6 shall be subject to
income tax and other required withholdings.
(a) Termination Without Cause or for Good Reason.
(i) Subject to subparagraph (ii) of this paragraph 6(a), in the
event that Executive's employment with the Company is terminated at
any time during the Employment Period by the Company without Cause, or
by Executive for "Good Reason" (as such term is hereafter defined in
paragraph 6(e) below), then Executive (or if he shall have died after
termination but prior to payment, his surviving spouse, or if he
leaves no spouse, his personal representative, as successor in
interest) shall be paid by the Company an amount equal to the product
of Executive's Base Amount in effect as of the Date of Termination,
multiplied by one and one-half (1.5) (the "Termination Amount"). The
Termination Amount shall be payable in cash in a lump sum on or before
the fifteenth day following the Date of Termination, provided,
however, that in the event that Executive is required to perform
consulting services pursuant to paragraph 11 below, ten percent (10%)
of the Termination Amount shall be deducted from the lump sum payment
referred to above and shall be payable in monthly or more frequent
installments during the Consulting Period (as defined in paragraph 11
below) in consideration for Executive holding himself available to
perform the consulting services as described in paragraph 11.
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(ii) Notwithstanding the foregoing, in the event that Executive's
employment is terminated by the Company (or its successor) without
Cause at any time during the Employment Period within the one year
period immediately following a Change in Control (as such term is
hereafter defined in paragraph 6(f) below), then, in lieu of the
amounts payable under paragraph 6(a)(i) above, Executive (or if he
shall have died after termination but prior to payment, his surviving
spouse, or if he leaves no spouse, his personal representative, as
successor in interest) shall be paid by the Company an amount equal to
the product of Executive's Base Amount in effect as of the Date of
Termination, multiplied by three (3), payable in cash in a lump sum on
or before the fifteenth day following the Date of Termination.
(b) Termination Upon Death. If the Employment Period is terminated by
Executive's death, the Company shall pay Executive's surviving spouse, or
if he leaves no spouse, his personal representative, as successor in
interest, (i) an amount equal to the then current Base Amount (paid in one
lump sum payment on or before the fifteenth day following the date of
Executive's death), and (ii) any death benefit payable under any employee
benefit plans, programs and arrangements of the Company in which Executive
is a participant on the date of his death.
(c) Termination Upon Disability. If the Employment Period is
terminated in accordance with the terms of paragraph 5(c) because of
Executive's Disability, the Company shall pay to Executive (or in the event
of Executive's death after finding of Disability, his surviving spouse, or
if he leaves no spouse, his personal representative, as successor in
interest) all compensation and benefits specified under paragraph 4 herein,
for a period of one year from the Date of Termination, payable in the same
manner as if the Employment Period had not been terminated.
(d) Additional Separation Benefit. For a period of three years
following (i) the full completion of the Employment Period, or (ii) the
Date of Termination of the Employment Period for any reason (except for (x)
termination by the Company for Cause, or (y) termination by Executive for
any reason other than Good Reason), the Company shall permit, at the
Company's expense, Executive, his spouse and dependents, as applicable (the
"Benefit Participants"), to participate in all group medical and health
insurance plans and employee benefit plans, programs and arrangements which
are now or prior to the Date of Termination of the Employment Period made
available to the senior executive employees of the Company (the "Plans")
(including but not limited to such Plans in which Executive was entitled to
participate immediately prior to the Date of Termination), in the same
manner provided to its other senior executive employees; provided, however,
that this paragraph 6(d) shall not apply in the event that (i) the Company
shall hereafter terminate the applicable Plan, or (ii) the participation of
the Benefit Participants in such Plan is prohibited by law or, if
applicable, would disqualify
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such Plan as a tax qualified plan pursuant to the Code, or (iii) the
participation of the Benefit Participants violates the general terms and
provisions of such applicable Plan. In the event that any of the Benefit
Participants' participation in such Plans is prohibited by law or, if
applicable, would disqualify the Plan as a tax qualified plan, or the
participation of the Benefit Participants violates the general terms and
provisions of such applicable Plan, the Company shall permit the Benefit
Participants to acquire substantially comparable coverage or benefits, at
the Company's expense, from a source of Executive's or his spouse's
choosing, provided, however, that if provision of such coverage or benefit
would result in a cost of excess of 130% of the cost to the Company if
provided under a Company Plan, the Company may satisfy its obligations
under this paragraph 6(d) by contributing to the Benefit Participants 130%
of the cost to the Company under the Company Plans. Notwithstanding the
foregoing, in no event will the Benefit Participants receive from the
Company the coverage and benefits contemplated by this paragraph 6(d) if
the Benefit Participants receive such coverage and benefits from any other
source.
(e) Good Reason Defined. For purpose of this Agreement, "Good Reason"
means:
(i) a Change in Control of the Company (as defined in paragraph
6(f) below);
(ii) a decrease in the total amount of Executive's Base Amount;
(iii) a reduction in Executive's title, a material permanent
reduction in his duties or job responsibilities, a material adverse
change in his working conditions, or the relocation of Executive's
office more than 40 miles from the Company's present executive
offices, in each case without Executive's consent;
(iv) a failure by the Company to comply with any material
provision of this Agreement or any Nonqualified Stock Option Agreement
between the Company and the Executive if the Company shall have failed
to remedy the alleged breach within 30 days from the date written
notice is given by Executive demanding that the Company remedy the
alleged breach;
(v) any purported termination of Executive's employment which is
not effected pursuant to a proper Notice of Termination (and for
purposes of this Agreement no such purported termination shall be
effective);
(vi) Executive ceases to be a director of the Company for any
reason other than Executive's resignation from the Board of Directors
or Executive's refusal to stand for election as a director; or
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(vii) modification, without Executive's consent, of the vesting
schedule, exercise period, or number of shares which are subject to
stock options issued to Executive pursuant to one or more Nonqualified
Stock Option Agreements between the Company and the Executive.
(f) Change in Control Defined. For purposes of this Agreement, a
"Change in Control" shall be deemed to occur in the following situations:
(i) in the event any "person" (as such term is used in paragraphs
13(d) and 14(d) of the Exchange Act) or more than one such person
acting as a group, other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of the securities of the
Company, in a transaction or a series of transactions, representing
thirty percent (30%) or more of the combined voting power of the
Company's then outstanding securities ordinarily having the right to
vote for the election of directors of the Company;
(ii) during any period of two consecutive years during the
Employment Period, individuals who at the beginning of the Employment
Period constitute the Board of Directors of the Company cease for any
reason to constitute at least a majority thereof, unless the election,
or the nomination for election by the Company's stockholders, of each
director who was not a director at the beginning of the Employment
Period has been approved in advance by directors representing at least
two-thirds of the directors then in office who were (A) directors at
the beginning of the Employment Period, or (B) previously approved in
accordance with this subparagraph (ii);
(iii) the Company sells or otherwise disposes of all or
substantially all of its assets; or
(iv) the Company participates in a merger or consolidation and,
immediately following the consummation of such merger or
consolidation, the Company's stockholders prior to such merger or
consolidation do not own 50% or more of the voting shares of stock of
the surviving or successor corporation.
(g) Excise Tax Gross-Up. If Executive becomes entitled to one or more
payments (with a "payment" including, but not limited to, the vesting of an
option or other non-cash benefit or property), whether pursuant to the
terms of this Agreement or any other plan, arrangement, or agreement with
the Company or any affiliated company (the "Total Payments"), which are or
become subject to the tax imposed by Section 4999 of the Code (or any
similar tax that may hereafter be imposed) (the "Excise Tax"), the
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Company shall pay to Executive at the time specified below an additional
amount (the "Gross-Up Payment") (which shall include, but not be limited
to, reimbursement for any penalties and interest that may accrue in respect
of such Excise Tax) such that the net amount retained by Executive, after
reduction for any Excise Tax (including any penalties or interest thereon)
on the Total Payments and any federal, state and local income or employment
tax and Excise Tax on the Gross-Up Payment provided for by this
subparagraph (g), but before reduction for any federal, state, or local
income or employment tax on the Total Payments, shall be equal to the sum
of (a) the Total Payments, and (b) an amount equal to the product of any
deductions disallowed to Executive for federal, state, or local income tax
purposes because of the inclusion of the Gross-Up Payment in Executive's
adjusted gross income multiplied by the highest applicable marginal rate of
federal, state, or local income taxation, respectively, for the calendar
year in which the Gross-Up Payment is to be made.
For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax:
(i) The Total Payments shall be treated as "parachute payments"
within the meaning of Section 280G(b)(2) of the Code, and all "excess
parachute payments" within the meaning of Section 280G(b)(1) of the
Code shall be treated as subject to the Excise Tax, unless, and except
to the extent that, in the written opinion of independent compensation
consultants or auditors of nationally recognized standing
("Independent Advisors") selected by the Company and reasonably
acceptable to Executive, the Total Payments (in whole or in part) do
not constitute parachute payments, or such excess parachute payments
(in whole or in part) represent reasonable compensation for services
actually rendered within the meaning of Section 280G(b)(4) of the Code
in excess of the base amount within the meaning of Section 280G(b)(3)
of the Code or are otherwise not subject to the Excise Tax;
(ii) The amount of the Total Payments which shall be treated as
subject to the Excise Tax shall be equal to the lesser of (A) the
total amount of the Total Payments or (B) the total amount of excess
parachute payments within the meaning of Section 280G(b)(1) of the
Code (after applying clause (i) above); and
(iii) The value of any non-cash benefits or any deferred payment
or benefit shall be determined by the Independent Advisors in
accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.
For purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed (A) to pay federal income taxes at the
highest marginal rate of federal income taxation for the calendar year
in which the Gross-Up
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Payment is to be made; (B) to pay any applicable state and local
income taxes at the highest marginal rate of taxation for the calendar
year in which the Gross-Up Payment is to be made, net of the maximum
reduction in federal income taxes which could be obtained from
deduction of such state and local taxes if paid in such year
(determined without regard to limitations on deductions based upon the
amount of Executive's adjusted gross income); and (C) to have
otherwise allowable deductions for federal, state, and local income
tax purposes at least equal to those disallowed because of the
inclusion of the Gross-Up Payment in Executive's adjusted gross
income. 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 made, Executive shall repay to the Company at the
time that the amount of such reduction in Excise Tax is finally
determined (but, if previously paid to the taxing authorities, not
prior to the time the amount of such reduction is refunded to
Executive or otherwise realized as a benefit of Executive) the portion
of the Gross-Up Payment that would not have been paid if such Excise
Tax had been applied in initially calculating the Gross-Up Payment,
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 made (including 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 and penalties
payable with respect to such excess) at the time that the amount of
such excess is finally determined.
The Gross-Up Payment provided for above shall be paid on the 30th
day (or such earlier date as the Excise Tax becomes due and payable to
the taxing authorities) after it has been determined that the Total
Payments (or any portion thereof) are subject to the Excise Tax;
provided, however, that if the amount of such Gross-Up Payment or
portion thereof cannot be finally determined on or before such day,
the Company shall pay to Executive on such day an estimate, as
determined by the Independent Advisors, of the minimum amount of such
payments 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 Executive, 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). If more than one Gross-Up Payment is
made, the amount of each Gross-Up Payment shall be computed so as not
to duplicate any prior Gross-Up Payment. The Company shall have the
right to control all proceedings with the Internal Revenue Service
that may arise in connection with
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the determination and assessment of any Excise Tax and, at its sole
option, the Company may pursue or forego any and all administrative
appeals, proceedings, hearings, and conferences with any taxing
authority in respect of such Excise Tax (including any interest or
penalties thereon); provided, however, that the Company's control over
any such proceedings shall be limited to issues with respect to which
a Gross-Up Payment would be payable hereunder, and Executive shall be
entitled to settle or contest any other issue raised by the Internal
Revenue Service or any other taxing authority. Executive shall
cooperate with the Company in any proceedings relating to the
determination and assessment of any Excise Tax and shall not take any
position or action that would materially increase the amount of any
Gross-Up Payment hereunder.
7. Restrictive Covenants.
(a) Restrictions. During the Employment Period and continuing until
the date that is 19 months after the later to occur of (x) the Termination
Date, or (y) the date that Executive ceases to be a director of the Company
(the "Non-Compete Period"), Executive shall not, without the prior written
authorization of the Board of Directors of the Company, (i) directly or
indirectly render services of a business, professional or commercial nature
(whether for compensation or otherwise) to any person or entity that
directly competes with any of the businesses of the Company, (ii) attempt
in any manner to solicit from any customer or prospect business of the type
performed by the Company or to persuade any customer or prospect of the
Company to cease doing business or to reduce the amount of business which
any such customer or prospect has customarily done or contemplates doing
with the Company, whether or not the relationship between the Company and
such customer or prospect was originally established in whole or in part
through Executive's efforts, (iii) render to or for any customer of the
Company any services of the type rendered by the Company, or (iv) employ or
attempt to employ or assist anyone else to employ any person who is at such
time, or at any time during the preceding year was, an employee of or
consultant to the Company, provided that this clause shall not restrict
Executive from employing a third party vendor who supplies generic services
to the industry. This paragraph 7 shall not, however, prevent Executive
from investing in securities issued by any corporation provided the
holdings thereof by Executive do not constitute more than three percent of
any one class of such securities.
(b) Usage. As used in this paragraph 7, the verb "employ" shall
include its variations, for example, retain, engage or conduct business
with; the term "the Company" shall include subsidiaries of the Company; the
term "customer" shall mean anyone who is a customer of the Company
immediately prior to or at any time during the Non-Compete Period; and the
term "prospect" shall mean any prospective customer of the Company which is
being actively pursued by the Company during the year immediately prior to
the Non-Compete Period. "Actively pursued" means that the Company has been
"short-
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listed" to receive a request for proposal ("RFP"), has received an RFP, is
in the process of developing a proposal in response to an RFP, or has a
proposal outstanding.
(c) Acknowledgment. The parties acknowledge that the time, scope, and
other provisions of this paragraph 7 and the following paragraph 8 have
been specifically negotiated by the parties and agree that all such
provisions are reasonable under the circumstances and are given as an
integral and essential part of Executive's employment hereunder. In the
event that any covenant contained in this paragraph 7 or in paragraph 8 is
determined by any court of competent jurisdiction to be unenforceable by
reason of its extending for too great a period of time or by reason of its
being too extensive in any other respect, it shall be interpreted to extend
only over the maximum period of time for which it may be enforceable and to
the maximum intent in all other respects as to which it may be enforceable,
all as determined by such court in such action.
8. Confidentiality.
(a) Disclosure and Use. Executive shall not disclose or use at any
time, either during or after the Employment Period, any trade secrets or
other confidential information of the Company of which Executive is or
becomes informed or aware of prior to or during the Employment Period,
except (i) as may be required for Executive to perform his duties and
obligations under this Agreement, (ii) to the extent such information has
been disclosed to Executive by a third party who is not affiliated with the
Company or which otherwise becomes generally available to the public, (iii)
information which must be disclosed as a result of a subpoena or other
legal process, or (iv) unless Executive shall first secure the Company's
prior written authorization. This paragraph shall survive the termination
of this Employment Period, whether by lapse of time or otherwise, and shall
remain in effect and be enforceable against Executive for as long as any
such Company trade secrets or confidential information retains commercial
value. Executive shall execute additional agreements and confirmations of
his obligations to the Company concerning such non-disclosure of Company
trade secrets and other confidential information as the Company may require
from time to time, provided that the execution of such additional
agreements and confirmations are (i) reasonable and (ii) are required of
all other senior executive employees of the Company under similar
circumstances.
(b) Return of Materials. Upon termination of his employment for any
reason, Executive (or in the event of termination due to Executive's death,
his surviving spouse or personal representative, as applicable) shall
promptly deliver to the Company all materials of a secret or confidential
nature relating to the Company's business, which are in the possession or
under the control of Executive.
9. Ideas and Improvements. Executive hereby assigns to the Company all of
his rights, title, and interest in and to all inventions, discoveries,
processes, designs, and other
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intellectual property (hereinafter referred to collectively as the
"Inventions"), and all improvements on existing Inventions made or discovered by
Executive during the term of his employment by the Company. Promptly upon the
development or making of any such Invention or improvement thereon, Executive
shall disclose the same to the Company and shall execute and deliver to it such
reasonable documents as it may request to confirm the assignment of Executive's
rights therein and, if requested, shall assist the Company in applying for and
prosecuting any patents which may be available in respect thereof. The Company
acknowledges and hereby notifies Executive that this paragraph 9 does not apply
to an Invention for which no equipment, supplies, facility or trade secret
information of the Company was used and which was developed entirely on
Executive's own time, unless (a) the Invention relates to (i) the business of
the Company, or (ii) the Company's actual or demonstrably anticipated research
or development, or (b) the Invention results from any work performed by
Executive for the Company.
10. Remedies. If, at any time, Executive violates to any material extent
any of the covenants or agreements set forth in paragraphs 7, 8 and 9, the
Company shall have the right to terminate all of its obligations to make further
payments under this Agreement. Executive acknowledges that the Company would be
irreparably injured by a violation of paragraph 7, 8 or 9 and agrees that the
Company shall be entitled to an injunction restraining Executive from any actual
or threatened breach of paragraph 7, 8 or 9 or to any other appropriate
equitable remedy without any bond or other security being required.
11. Consulting Arrangement. For a period of 19 months after the later to
occur of (i) the date that Executive's employment with the Company is terminated
by the Company without Cause at any time during the Employment Period before a
Change in Control, or by Executive for "Good Reason" pursuant to paragraphs
6(e)(ii) through (vii) of this Agreement, or (ii) the date that Executive ceases
to be a director of the Company (the "Consulting Period"), Executive shall serve
as a consultant to the Company. As a consultant, Executive shall perform such
services, at such locations and during reasonable business hours, as are
mutually agreed upon by the Executive and the Company, commensurate with
Executive's expertise and experience as an employee of the Company. Executive
shall be available to perform approximately 400 hours of consulting services
during the Consulting Period. In consideration for making himself available to
perform consulting services, Executive shall be paid as provided in paragraph
6(a)(i) of this Agreement. In addition, Executive shall be compensated by the
Company at the rate of $150 per hour, less income tax and other required
withholdings, in consideration for the actual performance of consulting
services. Payments to Executive pursuant to this paragraph 11 shall be made in
monthly or more frequent installments. Executive shall be reimbursed for the
reasonable and necessary business expenses incurred by him in connection with
the performance of his consulting services. In addition, as provided in the
Amended and Restated 1994 Executive Stock Option Plan of May & Xxxx, Inc., for
as long as Executive remains an employee or director of, or a consultant to, the
Company, Executive shall continue to be entitled to, and vest in, the stock
options issued to Executive pursuant to any stock option agreements between the
Company and the Executive. At all times during the Consulting Period, Executive
shall be considered an
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independent contractor and not an agent or employee of the Company, and he shall
not hold himself out as such or as having the power to bind the Company.
12. Resolution of Disputes.
(a) In the event of any controversy among the parties hereto arising
out of, or relating to, this Agreement which cannot be settled amicably by
the parties (other than a controversy contemplated by paragraphs 6
(separation benefits) and 13 (legal fees and expenses) herein), within 60
days of the date the dispute arose, such controversy shall be finally
settled by arbitration conducted expeditiously in accordance with the
American Arbitration Association Commercial Arbitration Rules by a board of
three independent arbitrators. Either the Company or Executive may
institute such arbitration proceeding by giving written notice to the other
party and by designating one independent arbitrator. Within 10 days
thereafter, the other party shall designate a second independent
arbitrator, and such two arbitrators shall thereafter select the third
independent arbitrator. A hearing shall be held by the three arbitrators
in the City of Chicago, Illinois, and a decision of the matter submitted to
them shall be rendered promptly in accordance with the rules of the
American Arbitration Association. The decision of a majority of the
arbitrators shall be final and binding upon all parties hereto. Judgment
upon the award rendered may be entered in any court having jurisdiction
thereof. If the responding party shall fail to appoint an independent
arbitrator within the 10-day period above, the American Arbitration
Association may be called upon by the other party to appoint such
independent arbitrator and such two arbitrators shall thereupon select a
third independent arbitrator and the three arbitrators thus chosen shall
constitute the board of arbitration. The cost of arbitration (other than
as provided in paragraph 13) shall be borne by the Company. The
arbitrators are not empowered to award damages in excess of compensatory
damages and each party hereby irrevocably waives any damages in excess of
compensatory damages.
(b) Notwithstanding the foregoing, Executive acknowledges and agrees
that the Company may seek in a court of competent jurisdiction an
injunction prohibiting Executive's breach or alleged breach of paragraphs
7, 8 and 9.
13. Legal Fees. Subject to any arbitration award of fees and expenses,
each party shall bear its own costs and expenses, including attorneys fees,
incurred in connection with the enforcement of this Agreement.
14. Amendment and Termination. This Agreement may be amended or canceled
by mutual agreement of the parties without the consent of any other person and,
as long as Executive lives, no person, other than the parties hereto, shall have
any rights under or interest in this Agreement or the subject matter hereof.
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15. Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if given in writing and personally delivered or
sent by registered or certified mail, return receipt requested, or by facsimile,
telegram or telex followed by a confirmation letter sent by registered or
certified mail, return receipt requested, addressed as follows:
If to the Company: May & Xxxx, Inc.
0000 Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
If to Executive: Xxxxxx X. Early
000 X. Xxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
16. Non-assignment. The interests of Executive under this Agreement are
not subject to the claims of his creditors and may not be voluntarily or
involuntarily assigned, alienated or encumbered.
17. Severability. If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or application
to given circumstances, such provision shall thereupon be deemed modified only
to the extent necessary to render such provision valid, or not applicable to
given circumstances, or excised from this Agreement, as the situation may
require, and this Agreement shall be construed and enforced as if such provision
had been included herein as so modified in scope or application, or had not been
included herein, as the case may be. Should this Agreement, or any one of more
of the provisions hereof, be held to be invalid, illegal or unenforceable within
any governmental jurisdiction or subdivision thereof, the Agreement or any such
provision or provisions shall not as a consequence thereof be deemed to be
invalid, illegal or unenforceable in any other governmental jurisdiction or
subdivision thereof.
18. Successors. This Agreement shall be binding upon, and inure to the
benefit of, the Company and Executive, and, in the case of the Company, its
successors and assigns and any Person acquiring, whether by merger,
consolidation, purchase of assets or otherwise, all or substantially all of the
Company's assets and business, and in the case of Executive, his heirs,
executors, administrators, legal representatives, successors and assigns.
19. Prior Agreements. This Agreement cancels any employment agreement,
whether written or oral, entered into between the Company and Executive prior to
the day and year first above written.
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20. Counterparts. The Agreement may be executed in two or more
counterparts, any one of which shall be deemed an original and all of which
taken together shall constitute a single instrument.
21. Governing Law. This Agreement, and all matters or disputes relating
to the validity, construction, performance or enforcement hereof, shall be
governed, construed and controlled by and under the laws of the State of
Illinois without regard to principles of conflicts of law.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the day and year first above written.
______________________________________
Xxxxxx X. Early
MAY & XXXX, INC.
By: __________________________________
Xxxxx X. Xxxxx
President and Chief Executive
Officer
MAY & XXXX, INC.
By: __________________________________
Xxxx Xxxxxxxxxxx
Executive Vice President and Chief
Financial Officer
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