EXHIBIT 99.2
AGREEMENT made as of June 30, 2005, by and between LEUCADIA NATIONAL
CORPORATION, a New York corporation (the "Corporation"), and XXXXXX X. XXXXXXXXX
(the "Executive").
W I T N E S S E T H:
WHEREAS, Executive has been serving as President of the Corporation
pursuant to an Agreement, dated as of December 28, 1993, by and between the
Corporation and the Executive, amended on May 5, 1999 (the "Existing
Agreement"); and
WHEREAS, the term of employment under the Existing Agreement extends
through June 30, 2005; and
WHEREAS, the Corporation desires to continue the services of
Executive as its President upon expiration of the Existing Agreement for an
extended period and on revised terms and Executive desires to accept such
employment, for the period and upon the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. Employment. The Corporation hereby employs Executive as President,
and Executive hereby accepts such employment, upon the terms and conditions
hereinafter set forth.
2. Term. The term of employment of Executive hereunder shall be for
the period commencing July 1, 2005 and ending at the close of business on June
30, 2015, unless sooner terminated in the manner hereinafter provided.
3. Duties and Services. Executive agrees to serve the Corporation as
President, consistent with past practice, and also agrees to serve such of its
subsidiary and affiliated companies in that capacity as may be designated by the
Corporation, faithfully, diligently and to the best of his ability, under the
direction of the Board of Directors of the Corporation and of such subsidiary
and affiliated companies, devoting his time, energy and skill to such
employment, and to perform from time to time such executive services as the
Board of Directors shall request, provided that such services shall be
consistent with his position and status as President and except that Executive
may devote time to his personal investments so long as the same does not
interfere with the performance of his duties hereunder.
4. Compensation. As full compensation for the services to be rendered
hereunder by Executive, the Corporation agrees to pay the Executive, and
Executive agrees to accept:
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(a) A base salary for his services at the rate of $639,965 per
annum, payable in accordance with the Corporation's payroll practices for
executives;
(b) Such additional compensation as may from time to time be
authorized by the Board of Directors of the Corporation; and
(c) In the event that the "Consumer Price Index, New York,
Northeastern New Jersey, all items," published by the Bureau of Labor Statistics
of the United States Department of Labor, shall indicate as of June 30 of any
year commencing with 2007 that the average cost of living during the year then
ended and any succeeding year, if any, during the period of Executive's
employment hereunder shall have increased over the average cost of living during
the year ending June 30, 2006, (determined on a cumulative basis), then the
$639,965 base rate of compensation referred to above (as from time to time
increased pursuant to this Subparagraph) shall be increased prospectively
effective that July 1 to reflect a percentage increase equal to the increase in
the average cost of living.
5. Other Benefits.
(a) Nothing contained herein shall be deemed to limit or affect
the right of Executive to receive other forms of additional compensation or to
participate in any retirement, disability, profit sharing, stock option, cash or
stock bonus or other plan or arrangement, or in any other benefits now or
hereafter provided by the Corporation or any of its subsidiary and affiliated
companies for their respective employees or directors, as the case may be, in
the sole discretion of the respective Board of Directors of the Corporation and
such subsidiary and affiliated companies. Without limiting the foregoing, the
Corporation shall provide Executive with the use of suitable cars during the
term hereof. In addition, Executive shall be entitled, for so long as the
Corporation has corporate-owned aircraft for business use, and subject to
availability of such aircraft, to the personal use of such aircraft provided
that the incremental cost to the Corporation of such personal use of corporate
aircraft by the Executive does not exceed $1.5 million per year. If the
Securities and Exchange Commission modifies its reporting rules in a manner that
would cause the Corporation to report that the cost to the Corporation of such
personal use of corporate aircraft by Executive exceeded $1.5 million in any
year, the Executive agrees to negotiate in good faith with the Board of
Directors with respect to a potential modification of the benefit described in
the foregoing sentence.
(b) It is contemplated that, in connection with his employment
hereunder, Executive may be required to incur reasonable business, entertainment
and travel expenses. The Corporation agrees to reimburse Executive in full for
all reasonable and necessary business, entertainment and other related expenses,
including travel expenses, incurred or expended by him incident to the
performance of his duties hereunder, upon submission by Executive to the
Corporation of such vouchers or expense statements satisfactorily evidencing
such expenses as may be reasonably requested by the Corporation.
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(c) It is understood and agreed by the parties hereto that
during the term of Executive's employment hereunder, he shall be entitled to
annual vacations (taken consecutively or in segments) the length of which shall
be determined by the Corporation consistent with the effective discharge of
Executive's duties and the general customs and practices of the Corporation
applicable to executives of Executive's status.
6. Insurance.
(a) Executive agrees that the Corporation may at any time or
times and for the Corporation's own benefit apply for and take out life, health,
accident, and other insurance covering Executive either independently or
together with others in any amount which the Corporation may deem to be in its
best interests and the Corporation may maintain any existing insurance policies
on the life of Executive owned by the Corporation. The Corporation shall own all
rights in such insurance and in the cash value and proceeds thereof and
Executive shall not have any right, title or interest therein.
(b) The Corporation agrees to procure and maintain throughout
the term of Executive's employment hereunder, at the Corporation's sole expense,
term life insurance on Executive's life in the amount of One Million Dollars
($1,000,000). Such insurance shall be payable to such beneficiaries as Executive
shall designate from time to time by written notice to the Corporation, or,
failing such designation, to his estate.
(c) Executive agrees to assist the Corporation at the
Corporation's expense in obtaining the insurance referred to in Subparagraphs
(a) and (b) above by, among other things, submitting to the customary
examinations and correctly preparing, signing and delivering such applications
and other documents as reasonably may be required.
7. Death or Disability. The term of employment of Executive shall
terminate forthwith in the event of his death, or, at the option of the
Corporation in the event that Executive shall fail to render and perform because
of physical or mental incapacity or disability the services required of him
under this Agreement either for (a) a continuous period of more than one hundred
twenty (120) days or (b) an aggregate of more than one hundred eighty (180) days
during any period of twelve (12) successive months. In the event of the death of
Executive during the period of employment or in the event of the termination of
this Agreement by the Corporation because of physical or mental disability of
Executive, Executive or his personal representative, as the case may be, shall
be entitled to receive the compensation specified in Subparagraphs 4(a), (b) and
(c) hereof prorated through the end of the month in which death or termination
occurs. The Corporation thereafter shall be discharged and released of and from
any further obligations under this Agreement except for its obligation to pay
any accrued and/or vested employee benefits referred to in Paragraph 5 hereof.
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8. Severance Allowance.
(a) For the purposes of this Paragraph 8, the following terms
shall have the following respective meanings:
(i) Cause - The commission by Executive of any act of gross
negligence in the performance of his duties or obligations to the Corporation or
any of its subsidiary or affiliated companies, or the commission by Executive of
any material act of disloyalty, dishonesty or breach of trust against the
Corporation or any of its subsidiary or affiliated companies.
(ii) Event of Involuntary Termination - Each of the
following, if not agreed to in writing by Executive, shall be deemed an Event of
Involuntary Termination:
(A) The termination of Executive's employment by
Corporation other than (1) for Cause or (2) pursuant to
Paragraphs 2 or 7 hereof; or
(B) The termination by Executive of his employment with
the Corporation within one (1) year following:
(1) the appointment or election of a person
other than Executive to serve as President of the
Corporation, or the diminution of Executive's
duties, responsibilities or powers to duties,
responsibilities or powers less than those
customarily exercised or held by the president of a
major corporation; or
(2) the occurrence of the aggregate amount of
compensation and other benefits to be received by
Executive pursuant to Paragraphs 4 and 5 hereof for
any twelve full calendar months falling below 115%
of that received by Executive during the comparable
preceding period; or
(3) a transfer of Executive's principal place
of employment.
(iii) Initiating Event - The consolidation or merger of the
Corporation with or into another corporation or other reorganization of the
Corporation, any of which results in a change in control of the Corporation; the
sale of all or substantially all of the assets of the Corporation (other than to
a subsidiary or affiliate of the Corporation); or the acquisition, directly or
indirectly, by any Person, or by any two or more Persons acting together, of
beneficial ownership of more than fifty percent (50%) of the outstanding voting
securities of the Corporation, including, without limitation, any such
acquisition by means of a tender or exchange offer or proxy solicitation or
pursuant to a judgment, decree or final order of a judicial or administrative
body of competent jurisdiction.
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(iv) Person - An individual, partnership, joint venture,
corporation, trust, unincorporated association, other business entity or
government or department, agency or instrumentality thereof (whether domestic or
foreign).
(b) Upon the occurrence of an Event of Involuntary Termination
following an Initiating Event, Executive shall be entitled to receive, and the
Corporation agrees to pay, an amount (the "Severance Allowance") equal to the
salary Executive would have received pursuant to Subparagraphs 4(a) and (c)
hereof during the period commencing upon the Event of Involuntary Termination
and terminating at the close of business on June 30, 2015 (the "Severance
Period"). The Severance Allowance shall be paid in the manner in which
Executive's salary was paid by the Corporation immediately prior to the
occurrence of the first initiating Event.
(c) In the event Executive dies before receiving the full amount
of the Severance Allowance, his personal representative shall be entitled to
receive the Severance Allowance specified in Subparagraph (b) above prorated
through the end of the month in which death occurs.
(d) In addition to the Severance Allowance, the Corporation or
its successors shall pay or cause to be paid to Executive an amount equal to
that which Executive would have received under any pension plan of the
Corporation and/or its subsidiaries or affiliates had he continued to be an
active, full-time employee of the Corporation during the Severance Period and
had he received during such period a salary equal to, and paid in the manner of,
the Severance Allowance. Such payments shall be made at such times as Executive
would have received payments under such pension plan had he continued to be an
active full-time employee of the Corporation during the Severance Period.
(e) During the Severance Period, the Corporation or its
successors shall maintain, in full force and effect, term life insurance on
Executive's life in accordance with the provisions of Subparagraph 5(b) hereof.
9. Restrictive Covenants and Confidentiality; Injunctive Relief.
(a) Executive further agrees that during the term of this
Agreement, any renewals or extensions hereof, and for a period of six months
following termination of his employment with the Corporation, whether pursuant
to this Agreement or otherwise, Executive shall not, without the prior written
approval of the Board of Directors of the Corporation, directly or indirectly,
through any person, firm or corporation:
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(i) Solicit, raid, entice or induce any person, firm or
corporation which presently is or at any time during the term hereof shall be a
client or customer of the Corporation and/or its subsidiaries or affiliates, to
become a client or customer of any other person, firm or corporation, and
Executive shall not approach any such person, firm or corporation for such
purpose or authorize or knowingly approve the taking of such actions by any
other person; or
(ii) Solicit, raid, entice or induce any person who
presently is or at any time during the term hereof shall be an employee of the
Corporation and/or its subsidiaries or affiliates to become employed by any
other person, firm or corporation, and Executive shall not approach any such
employee for such purpose or authorize or knowingly approve the taking of such
actions by any other person.
(b) Executive acknowledges that all confidential information
acquired in his capacity as President shall be kept confidential by Executive at
all times until such information becomes publicly known, even after termination
of this Agreement.
(c) Executive consents and agrees that if he violates any of the
provisions of this Paragraph 9, the Corporation and its subsidiaries and
affiliates would sustain irreparable harm and, therefore, in addition to any
other remedies which the Corporation may have under this Agreement or otherwise,
the Corporation shall be entitled to apply to any court of competent
jurisdiction for an injunction restraining Executive or any third party from
committing, continuing or participating in any such violation of this Agreement.
10. Deductions and Withholding. Executive agrees that the Corporation
and/or its subsidiaries shall withhold from any and all payments required to be
made to Executive pursuant to this Agreement all Federal, state, local and/or
other taxes which the Corporation determines are required to be withheld in
accordance with applicable statutes and/or regulations from time to time in
effect.
11. Assignability and Binding Effect. 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 the Corporation and its successors, but the
obligations of Executive hereunder may not be assigned to another person, firm
or corporation nor may they be delegated.
12. Complete Understanding. This Agreement constitutes the complete
understanding between the parties with respect to the employment of Executive
hereunder, 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.
13. Severability. If any provision of this Agreement or any party
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.
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14. Warranty. 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.
15. Governing Law. 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. Xxxx
---------------------------------
Name: Xxxxxx X. Xxxx
Title: Executive Vice President
/s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
XXXXXX X. XXXXXXXXX
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