EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into
by and between Veritas DGC Inc., a Delaware corporation (hereinafter referred to
as "Employer"), and Xxxxxxx Xxxxxxx, an individual currently resident in Paris,
France (hereinafter referred to as "Employee"), effective as of January 26, 2004
(the "Effective Date").
WITNESSETH:
WHEREAS, attendant to Employee's employment by Employer, Employer and
Employee wish for there to be a complete understanding and agreement between
Employer and Employee with respect to, among other terms, Employee's duties and
responsibilities to Employer; the compensation and benefits owed to Employee;
the fiduciary duties owed by Employee to Employer; Employee's obligation to
avoid conflicts of interest, disclose pertinent information to Employer, and
refrain from using or disclosing Employer's information; and the term of
Employee's employment;
WHEREAS, Employer considers the establishment and maintenance of a
sound and vital management to be essential to protecting and enhancing its best
interests and the best interests of its stockholders;
WHEREAS, Employer recognizes that, because Employer is a publicly held
company and as is the case with many such companies, the possibility of a change
in control may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or
distraction of management personnel to the detriment of Employer and its
stockholders;
WHEREAS, the Board of Directors of Employer (the "Board") has
determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of Employer's management,
including Employee, to their assigned duties without distraction in the face of
the potentially disturbing circumstances arising from the possibility of a
change in control of Employer;
WHEREAS, Employer recognizes that Employee could suffer adverse
financial and professional consequences if a change in control of Employer were
to occur;
WHEREAS, Employer and Employee wish to enter into this Agreement to,
among other things, protect Employee if a change in control of Employer occurs,
thereby encouraging Employee to remain in the employ of Employer and not to be
distracted from the performance of his duties to Employer by the possibility of
a change in control of Employer;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Employer and Employee agree as
follows:
Section 1. General Duties of Employer and Employee.
(a) Commencing on the Commencement Date (as defined in
Section 4) Employer agrees to employ Employee and Employee agrees to accept
employment by Employer and to serve Employer in an executive capacity as its
Chairman & Chief Executive Officer on the terms and conditions stated in this
Agreement. At the Commencement Date, Employee will report to the Board. The
powers, duties and responsibilities of Employee as Chairman & Chief Executive
Officer include those duties that are the usual and customary powers, duties and
responsibilities of such office, including those powers, duties and
responsibilities specified in Employer's Bylaws, and such other and further
duties appropriate to such position as may from time to time be assigned to
Employee by the Board or by any committee of the Board authorized to make such
assignments.
(b) While employed hereunder, Employee will devote
substantially all reasonable and necessary time, efforts, skills and attention
for the benefit of and with his primary attention to the affairs of Employer in
order that he may faithfully perform his duties and obligations. The preceding
sentence will not, however, be deemed to restrict Employee from attending to
matters or engaging in activities not directly related to the business of
Employer, provided that (i) such activities or matters are reasonable in scope
and time commitment and not otherwise in violation of this Agreement, and (ii)
Employee will not become a director of any corporation or other entity
(excluding charitable or other non-profit organizations) without prior written
disclosure to, and consent of, Employer.
(c) Employer's headquarters is currently located at 00000
Xxxx Xxxx, Xxxxxxx, Xxxxx (the "Employer's Headquarters").
(d) Employee agrees and acknowledges that during the term
of this Agreement, he owes a fiduciary duty of loyalty, fidelity and allegiance
to act at all times in the performance of his duties in the best interests of
Employer and to do no act knowingly and intentionally in the performance of his
duties which would injure Employer's business, its interests or its reputation.
Section 2. Compensation and Benefits.
(a) Employer will pay to Employee for the period
beginning on the Commencement Date and throughout the term of this Agreement, a
base salary at the rate of $450,000 per annum (such base salary as increased by
the Compensation Committee of the Board as hereinafter provided is referred to
herein as the "Base Salary"). The Compensation Committee of the Board will
review the Base Salary from time to time and, during the term of this Agreement,
may increase, but may not decrease, the Base Salary. The Base Salary will be
paid to Employee in equal installments every two weeks or on such other schedule
as Employer may establish from time to time for its management personnel.
(b) Employer will pay to Employee a one-time Sign-On
Bonus in the amount of $75,000 as soon as practicable following the Commencement
Date.
(c) During each fiscal year during the term of this
Agreement, Employee will be eligible to participate in that year's Veritas DGC
Inc. Key Contributor Incentive Plan (the
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"Key Contributor Plan") or other replacement incentive or bonus plan Employer
establishes for its key executives. Employee's "Target Payout" for incentive
bonus compensation under the Key Contributor Plan will be 75% of Base Salary
and, provided that the individual Employee objectives and company objectives are
met as required by the plan, Employee will be eligible to earn up to 150% of his
Base Salary as incentive bonus compensation under the Key Contributor Plan.
(d) On the Commencement Date, Employee will be granted
options to purchase 120,000 shares of Employer's common stock, $.01 par value
("Common Stock") pursuant to the Veritas DGC Inc. Share Incentive Plan (or other
replacement equity compensation plan Employer establishes for its key
executives) ("Share Incentive Plan"). This initial grant (the "Initial Grant")
will vest in one-third increments on each of the first, second and third
anniversaries of the Commencement Date (as defined in Section 4). The options
granted pursuant to the Initial Grant shall be exercisable for five years from
the Commencement Date, provided they have vested prior to their exercise and
provided further that the five-year period may be shorter in the event
Employee's employment is terminated prior to exercise. The exercise price for
each share of Common Stock to be purchased pursuant to the Initial Grant shall
be the closing price for a share of Common Stock on the New York Stock Exchange
on the last trading day prior to the Commencement Date. All other terms of the
Initial Grant shall be as provided in the Share Incentive Plan and any grant
agreement entered into by Employee and Employer pursuant thereto. Employee will
be eligible for such additional option grants to purchase shares of Common Stock
pursuant to the terms of the Share Incentive Plan as the Compensation Committee
may, in its discretion, award from time to time.
(e) From and after the Commencement Date and during the
term of this Agreement, Employee will be entitled to paid vacation of not less
than four (4) weeks each year. Vacation may be taken by Employee at the time and
for such periods as may be mutually agreed upon between Employer and Employee.
(f) From and after the Commencement Date and during the
term of this Agreement, Employee will be reimbursed in accordance with
Employer's normal expense reimbursement policy for all of the actual and
reasonable costs and expenses incurred by him in the performance of his services
and duties hereunder, including, but not limited to, travel and entertainment
expenses. Employee will furnish Employer with all invoices and vouchers
reflecting amounts for which Employee seeks Employer's reimbursement under this
or any other paragraph of this Agreement.
(g) From and after the Commencement Date and during the
term of this Agreement, Employee will be entitled to participate in all
insurance and retirement plans, incentive compensation plans (at a level
appropriate to his position) and such other benefit plans or programs as may be
in effect from time to time for the key management employees of Employer
including, without limitation, those related to savings and thrift, retirement,
employee stock purchase, nonqualified deferred compensation, welfare, medical,
dental, disability, salary continuance, accidental death, travel accident, life
insurance, incentive bonus, membership in business and professional
organizations, and reimbursement of business and entertainment expenses.
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(h) From and after the Commencement Date and during the
term of this Agreement, Employee will be reimbursed for the cost of his
membership in a recreational/?social/?sports club in an amount not to exceed
$6,000 each year. Employee will also be reimbursed for the cost of his
initiation fee and monthly membership dues for a business luncheon club approved
by the Compensation Committee of the Board.
(i) Employee will be reimbursed for the expense of
leasing a vehicle in an amount not to exceed $1,000 per month and for up to 24
months' duration.
(j) Employer will, at its expense, provide counsel to
Employee in applying for an H-1B visa and a green card and shall bear all costs
in connection with applying for and obtaining an H-1B visa on Employee's behalf
and applying for and obtaining green card status for Employee and his family.
(k) Employee will be provided additional compensation
equal to one month's Base Salary in order to defray Employee's start up living
expenses in the United States. Employer will reimburse Executive for the cost of
moving all reasonable household goods, using the most cost efficient method.
Employee will also be reimbursed the reasonable cost of temporary corporate
housing (up to two bedroom, fully furnished) that may be required in connection
with his relocation to the United States for a period of no more than six
months. Employee will also be reimbursed for the cost of economy class roundtrip
airfare from Paris, France to Houston, Texas for himself, his wife and children,
for the purpose of traveling to Houston to locate a house and schools. Employee
will also be reimbursed the normal closing costs associated with the purchase of
a home in the metropolitan Houston, Texas area.
(l) All Base Salary, bonus and other payments made or
benefits provided by Employer to Employee pursuant to this Agreement will be
subject to such payroll and withholding deductions as may be required by law and
other deductions applied generally to employees of Employer for insurance and
other employee benefit plans in which Employee participates. Employee will be
reimbursed for the reasonable costs of preparation of his United States federal
income tax return and his French income tax return for the first two years
following the Effective Date.
(m) Notwithstanding anything to the contrary herein, this
Agreement shall terminate if, within 120 days after the Effective Date, Employee
does not obtain an H-1B visa or otherwise obtain permission to work legally in
the United States for the Employer. In the event of such termination, (i)
Employer shall pay Employee within 120 days after the Effective Date a lump sum
payment of 145,000 Euros to compensate him for his attempted performance of this
Agreement; (ii) Employer shall reimburse Employee for his reasonable out of
pocket expenses incurred in connection with his attempted performance of this
Agreement (including but not limited to any travel and/or moving expenses); and
(iii) Employee shall continue to be bound by Sections 3(b) and 3(c) hereof and
the Employee Confidentiality and Intellectual Property Agreement executed
pursuant to Section 3(d). The payments thus made by Employer to Employee shall
be in complete satisfaction of any obligation whatsoever Employer may then have
to Employee. Without limiting the generality of the foregoing, and for the
avoidance of doubt, in the event of the termination of this Agreement prior to
the Commencement Date for failure to obtain the required permission to work in
the United States, Employee will not be
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entitled to any compensation or benefits under Sections 2(a)-(l) of this
Agreement nor will he be entitled to any severance or other benefits under
Section 6 of this Agreement.
Section 3. Fiduciary Duty; Confidentiality.
(a) In keeping with Employee's fiduciary duties to
Employer, Employee agrees that he will not knowingly take any action that would
create a conflict of interest with Employer, or upon discovery thereof, allow
such a conflict to continue. In the event that Employee discovers that such a
conflict exists, Employee agrees that he will disclose to the Board any facts
which might involve a conflict of interest that has not been approved by the
Board.
(b) As part of Employee's fiduciary duties to Employer,
Employee agrees to protect and safeguard Employer's information, ideas,
concepts, improvements, discoveries, and inventions and any proprietary,
confidential and other information relating to Employer or its business to the
extent such information is in his possession or under his control (collectively,
"Confidential Information") and, except as may be required by Employer, Employee
will not knowingly, either during his employment by Employer or thereafter,
directly or indirectly, use for his own benefit or for the benefit of another,
or disclose to another, any Confidential Information, except (i) with the prior
written consent of Employer; (ii) in the course of the proper performance of
Employee's duties under this Agreement; (iii) for information that becomes
generally available to the public other than as a result of the unauthorized
disclosure by Employee; (iv) for information that becomes available to Employee
on a nonconfidential basis from a source other than Employer or its affiliated
companies who is not bound by a duty of confidentiality to Employer; or (v) as
may be required by any applicable law, rule, regulation, order, or legal
process.
(c) Upon termination of his employment with Employer (or,
if applicable, upon the expiration of 120 days from the Effective Date without
Employee's having obtained an H-1B visa), Employee will immediately deliver to
Employer all documents in Employee's possession or under his control which
embody any of Employer's Confidential Information.
(d) In addition to the foregoing provisions of this
Section 3, and effective as of the Commencement Date, Employee agrees to enter
into an Employee Confidentiality and Intellectual Property Agreement with
Employer, a copy of which is attached hereto as Exhibit A.
Section 4. Term.
Provided that Employee has then obtained an H-1B visa or otherwise
obtained permission to work legally in the United States for the Employer,
Employee's employment with Employer will commence on March 15, 2004 or such
other date as Employer and Employee may mutually agree. In the event Employee
has not obtained permission to work legally in the United States for the
Employer by March 15, 2004, the commencement of Employee's employment with
Employer shall automatically be postponed from day to day for a period of up to
120 days after the Effective Date. (The date Employee's employment commences in
accordance with this Section 4 is referred to herein as the "Commencement
Date"). Employee's employment will continue from the Commencement Date until
terminated in accordance with Section 5.
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Section 5. Termination of Employment.
(a) Employee's employment with Employer hereunder will
terminate upon the first to occur of the following:
(1) The death or "Disability" (as defined in
Section 5(b) hereof) of Employee;
(2) Employer terminates such employment for
"Cause" (as defined in Section 5(c) hereof);
(3) Employee terminates such employment for
"Good Reason" (as defined in Section 5(d) hereof);
(4) Employer terminates such employment for any
reason other than Cause or for no reason at all; or
(5) Employee terminates such employment for any
reason other than Good Reason or for no reason at all.
(b) As used in this Agreement, "Disability" means
permanent and total disability (within the meaning of Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended (the "Code"), or any successor
provision) which has existed for at least 180 consecutive days.
(c) As used in this Agreement, "Cause" means:
(1) the willful and continued failure by
Employee to make good faith efforts to substantially perform
his material obligations under this Agreement (other than any
such failure resulting from his Disability) after a demand for
substantial performance has been delivered to him by the Board
which specifically identifies the manner in which the Board
believes Employee has not substantially performed such
provisions and Employee has failed to remedy the situation
within ten (10) days after such demand;
(2) Employee's (i) willfully engaging in
misconduct involving the business or property of Employer or
Employee's duties hereunder, which misconduct is materially
and demonstrably injurious to the property or business of
Employer, including without limitation, fraud,
misappropriation of funds or other property of Employer; (ii)
gross negligence with regard to a material matter involving
the business or property of Employer or Employee's duties
hereunder; or (iii) conviction of a felony or any crime of
moral turpitude; or
(3) Employee's material breach of this Agreement
which breach has not been remedied by Employee within ten (10)
days after receipt by Employee of written notice from Employer
that he is in material breach of the Agreement, specifying the
particulars of such breach.
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For purposes of this Agreement, no act, or failure to act, on the part of
Employee shall be deemed "willful" or engaged in "willfully" if it was due
primarily to an error in judgment or negligence, but shall be deemed "willful"
or engaged in "willfully" only if done, or omitted to be done, by Employee not
in good faith and without reasonable belief that his action or omission was in
the best interest of Employer. Notwithstanding the foregoing, Employee shall not
be deemed to have been terminated as a result of "Cause" hereunder unless and
until there shall have been delivered to Employee a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the Board
then in office at a meeting of the Board called and held for such purpose (after
reasonable notice to Employee and an opportunity for Employee, together with his
counsel, to be heard before the Board), finding that, in the good faith opinion
of the Board of Directors, Employee has committed an act set forth above in this
Section 5(c) and specifying the particulars thereof in detail. Nothing herein
shall limit the right of Employee or his legal representatives to contest the
validity or propriety of any such determination.
(d) As used in this Agreement, "Good Reason" means:
(1) Employer's failure to comply with any of the
provisions of Section 2 of this Agreement (including, but not
limited to, such a failure resulting from any reduction in the
Base Salary) which failure is not remedied within ten (10)
days after receipt of written notice from Employee specifying
the particulars of such breach;
(2) Employer's breach of any other material
provision of this Agreement which is not remedied within ten
(10) days after receipt by Employer of written notice from
Employee specifying the particulars of such breach;
(3) the assignment to Employee of any duties
materially inconsistent with Employee's position (including
status, offices, titles, and reporting requirements), duties,
functions, responsibilities, or authority as contemplated by
Section 1 of this Agreement or other action by Employer that
results in a diminution (other than an isolated,
inconsequential or insubstantial diminution which is remedied
by Employer promptly after receipt of written notice thereof
given by Employee) in such title, position, duties, functions,
responsibilities or authority; or
(4) the relocation of Employee's principal place
of performance of his duties and responsibilities under this
Agreement to a location more than one hundred miles (100)
miles from Employer's Headquarters;
(5) After a "Change in Control" (as defined in
Section 6(f) hereof), (i) Employer's failure to continue in
effect any benefit or compensation plan (including, but not
limited to, any bonus, incentive, retirement, supplemental
executive retirement, savings, profit sharing, pension,
performance, stock option, stock purchase, deferred
compensation, life insurance, medical, dental, health,
hospital, accident or disability plans) in which Employee is
participating at the time of such Change in Control (or plans
providing to Employee, in the aggregate, substantially similar
benefits as the benefits enjoyed by Employee under the
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benefit and compensation plans in which Employee is
participating at the time of such Change in Control), or (ii)
the taking of any action by Employer that would adversely
affect Employee's participation in or materially reduce
Employee's benefits under any of such plans or deprive
Employee of any material fringe benefit enjoyed by Employee at
the time of such Change in Control;
(6) Any failure by Employer to comply with
Section 11(c); or
(7) Any purported termination of Employee's
employment by Employer which is not effected pursuant to a
Notice of Termination satisfying the requirements of Section
5(e) hereof (and for purposes of this Agreement, no such
purported termination shall be effective).
(e) Any termination by Employer or Employee of Employee's
employment with Employer shall be communicated by written notice (a "Notice of
Termination") to the other party that shall:
(1) indicate the specific provision of this
Agreement relied upon for such termination;
(2) indicate the specific provision of this
Agreement pursuant to which Employee is to receive
compensation and other benefits as a result of such
termination; and
(3) otherwise comply with the provisions of this
Section 5(e) and Section 13(a).
If a Notice of Termination states that Employee's employment with Employer has
been terminated as a result of Employee's Disability, the notice shall (i)
specifically describe the basis for the determination of Employee's Disability,
and (ii) state the date of the determination of Employee's Disability, which
date shall be not more than ten (10) days before the date such notice is given.
If the notice is from Employer and states that Employee's employment with
Employer is terminated by Employer as a result of the occurrence of Cause, the
Notice of Termination shall specifically describe the action or inaction of
Employee that Employer believes constitutes Cause and shall be accompanied by a
copy of the resolution satisfying Section 5(c). If the Notice of Termination is
from Employee and states that Employee's employment with Employer is terminated
by Employee as a result of the occurrence of Good Reason, the Notice of
Termination shall specifically describe the action or inaction of Employer that
Employee believes constitutes Good Reason. Any purported termination by Employer
of Employee's employment with Employer shall be ineffective unless such
termination shall have been communicated by Employer to Employee by a Notice of
Termination that meets the requirements of this Section 5(e) and the provisions
of Section 13(a).
(f) As used in this Agreement, "Date of Termination"
means:
(1) if Employee's employment with Employer is
terminated for Disability, sixty (60) days after Notice of
Termination is received by Employee or any later date
specified therein, provided that within such sixty (60) day
period
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Employee shall not have returned to full-time performance of
Employee's duties;
(2) if Employee's employment with Employer is
terminated as a result of Employee's death, the date of death
of Employee;
(3) if Employee's employment with Employer is
terminated for Cause, the date Notice of Termination,
accompanied by a copy of the resolution satisfying Section
5(c), is received by Employee or any later date specified
therein, provided that Employer may, in its discretion,
condition Employee's continued employment upon such
considerations or requirements as may be reasonable under the
circumstances and place a reasonable limitation upon the time
within which Employee will comply with such considerations or
requirements; or
(4) if Employee's employment with Employer is
terminated for any reason other than Employee's Disability,
Employee's death, or Cause, or for no reason, the date that is
fourteen (14) days after the date of receipt of the Notice of
Termination.
Section 6. Effect of Termination.
(a) Upon termination of Employee's employment by Employer
for Cause, or by Employee for no reason or any reason other than Good Reason,
all compensation and benefits will cease upon the Date of Termination other
than: (i) those benefits that are provided by retirement and benefit plans and
programs specifically adopted and approved by Employer for Employee that are
earned and vested by the Date of Termination, (ii) as provided in Section 10,
(iii) Employee's Base Salary through the Date of Termination; (iv) any incentive
compensation due Employee if, under the terms of the relevant incentive
compensation arrangement, such incentive compensation was due and payable to
Employee on or before the Date of Termination; and (v) medical and similar
employee welfare benefits the continuation of which is required by applicable
law or provided by the applicable benefit plan.
(b) Upon termination of Employee's employment due to the
death of Employee or upon termination by Employer due to the Disability of
Employee, all compensation and benefits will cease upon the Date of Termination
other than: (i) those benefits that are provided by retirement and benefit plans
and programs specifically adopted and approved by Employer for Employee that are
earned and vested by the Date of Termination, (ii) as provided in Section 10,
(iii) Employee's Base Salary through the Date of Termination; (iv) any incentive
compensation due Employee if, under the terms of the relevant incentive
compensation arrangement, such incentive compensation was due and payable to
Employee on or before the Date of Termination; and (v) medical and similar
employee welfare benefits the continuation of which is required by applicable
law or provided by the applicable benefit plan.
(c) Except as otherwise provided in Section 6(d), if
Employee's employment with Employer is terminated (i) by Employer for no reason
or for any reason other than Cause, or the death or Disability of Employee, or
(ii) by Employee for Good Reason, the obligations of Employer and Employee under
Sections 1 and 2 will terminate as of the Date of Termination,
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and Employer will pay or provide to Employee the following:
(1) Employee's Base Salary through the Date of
Termination;
(2) (i) should the Date of Termination be on a day
which is prior to the first anniversary of
the Commencement Date, Employer shall pay
Employee an amount equal to the incentive
bonus compensation he would have received
under the Key Contributor Plan or other
replacement plan but for the termination of
his employment, which incentive bonus
compensation shall be pro rated through the
Date of Termination and paid at the time
other participants in the Key Contributor
Plan or the relevant incentive plan receive
their payments; or,
(ii) should the Date of Termination be on a day
which is on or after the first anniversary
of the Commencement Date, Employer shall pay
Employee the incentive bonus compensation
due Employee, if any, in accordance with the
terms of the relevant incentive compensation
arrangement;
(3) during the three-year period ending on the third
anniversary of the Date of Termination, Employer shall pay to Employee
an aggregate amount (the "Severance Payment") equal to one and one-half
(1.5) times Employee's Base Salary at the highest annual rate in effect
on or before the Date of Termination (but prior to giving effect to any
reduction therein which precipitated such termination), which Severance
Payment will be paid to Employee in equal installments every two weeks
during such three-year period; provided, however, that at any time
during such three-year period Employer may, in its discretion, elect to
pay to Employee the then remaining balance of the Severance Payment in
the form of a lump sum cash payment;
(4) should the Date of Termination be on a day which is
prior to the first anniversary of the Commencement Date, 40,000 of the
options granted in the Initial Grant shall become fully exercisable,
regardless of whether or not the vesting conditions set forth in the
relevant stock option agreement have been satisfied in full, and shall
be fully exercisable for the period commencing on the Date of
Termination and ending one day less than three months after the Date of
Termination; and
(5) if immediately prior to the Date of Termination
Employee (and, if applicable, his spouse and/or dependents) was covered
under Employer's group medical, dental, health and hospital plan in
effect at such time, then Employer shall, at its election, pay or
provide to Employee one (but not both) of the following:
(i) for one (1) year after the Date of
Termination, and provided
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that Employee has timely elected under the
Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), to
continue coverage under such plan, Employer
will, at no greater cost or expense to
Employee than was the case immediately prior
to the Date of Termination, maintain such
continued coverage in full force and effect;
or
(ii) pay to Employee a lump sum cash payment (the
"Section 6(c)(4)(ii) Payment") equal to the
sum of:
(A) an amount equal to (I) twelve (12),
multiplied by (II) the amount of
the applicable monthly COBRA
premium (determined based upon the
applicable COBRA premium rate in
effect immediately after the Date
of Termination) Employee would pay
if Employee elected under COBRA to
maintain coverage identical to the
coverage Employee (and, if
applicable, his spouse and/or
dependents) had under such plan
immediately prior to the Date of
Termination; plus
(B) an amount equal to the excess of
(I) an amount determined by
dividing (x) the amount determined
under Section 6(c)(4)(ii)(A) above,
by (y) one (1) minus the sum of the
following which shall be determined
for the calendar year that includes
the date of payment of the Section
6(c)(4)(ii) Payment and shall be
expressed as a decimal: (i) the
highest marginal U.S. federal
income tax rate applicable to
individuals for such calendar year,
plus (ii) the highest foreign,
state, provincial and/or local
individual income tax rate or
rates, if any, to which the Section
6(c)(4)(ii) Payment is subject for
such calendar year (which shall be
determined based on the assumption
that Employee pays income tax to
any such foreign, state, provincial
or local jurisdiction at the
highest marginal rate of income tax
imposed by such jurisdiction on
individuals), plus, (iii) the
Hospital (Medicare) Insurance tax
rate under Section 3101(b) of the
Code (or any corresponding
successor statute) for such
calendar year, over (II) the amount
determined under Section
6(c)(4)(ii)(A) above.
Except as otherwise provided above and in Section 10, all other compensation and
benefits will
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cease upon the Date of Termination other than the following: (i) those benefits
that are provided by retirement and benefit plans and programs specifically
adopted and approved by Employer for Employee that are earned and vested by the
Date of Termination, (ii) any rights Employee or his survivors may have under
any grants of options to purchase Employer's Common Stock or under any grants of
restricted stock of Parent; and (iii) medical and similar employee welfare
benefits the continuation of which is required by applicable law or as provided
by the applicable benefit plan. As a condition to making the payments and
providing the benefits specified in this Section 6(c), Employer will require
that Employee execute a release of all claims Employee may have against Employer
at the time of Employee's termination. Such release will be in substantially the
same form as Exhibit B attached hereto.
(d) If (i) a "Change in Control" (as defined in Section
6(f) hereof) shall have occurred, and (ii) within three (3) years after such
Change in Control Employee's employment with Employer is terminated (x) by
Employer for no reason or for any reason other than Cause, or the death or
Disability of Employee, or (y) by Employee for Good Reason, the obligations of
Employer and Employee under Sections 1 and 2 will terminate as of the Date of
Termination, Section 6(c) above shall not apply, and Employer will pay or
provide to Employee:
(1) Employee's Base Salary through the Date of
Termination;
(2) incentive compensation due Employee, if any,
under the terms of the relevant incentive compensation
arrangement;
(3) within thirty (30) days after the Date of
Termination, a lump sum cash payment equal to one and one-half
(1.5) times the sum of:
(i) Employee's Base Salary at the
highest annual rate in effect on or
before the Date of Termination (but
prior to giving effect to any
reduction therein which
precipitated such termination),
plus
(ii) An amount equal to the greatest of:
(A) the average of the
incentive bonuses paid to
Employee for the last
three (3) full fiscal
years of Employer ending
before the Date of
Termination (or, if
Employee was not employed
by Employer hereunder for
such last three (3) full
fiscal years, the average
of the incentive bonuses
paid to Employee for the
number of full fiscal
years of Employer ending
before the Date of
Termination during which
Employee was employed by
Employer hereunder);
(B) the incentive bonus paid
to Employee for the last
full fiscal year of
Employer ending before
the Date of Termination;
or
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(C) an amount equal to
Employee's Base Salary
described in Section 6(d)
(3)(i) multiplied by
Employee's target
percentage under the Key
Contributor Plan or other
replacement incentive or
bonus plan of Employer
for the fiscal year which
includes the Date of
Termination;
(4) if immediately prior to the Date of
Termination Employee (and, if applicable, his spouse and/or
dependents) was covered under Employer's group medical,
dental, health and hospital plan in effect at such time, then
Employer shall, at its election, pay or provide to Employee
one (but not both) of the following:
(i) for eighteen (18) months after the
Date of Termination, and provided
that Employee has timely elected
under COBRA to continue coverage
under such plan, Employer will, at
no greater cost or expense to
Employee than was the case
immediately prior to the Date of
Termination, maintain such
continued coverage in full force
and effect; or
(ii) pay to Employee a lump sum cash
payment (the "Section 6(d)(4)(ii)
Payment") equal to the sum of:
(A) an amount equal to (I)
eighteen (18), multiplied
by (II) the amount of the
applicable monthly COBRA
premium (determined based
upon the applicable COBRA
premium rate in effect
immediately after the
Date of Termination)
Employee would pay if
Employee elected under
COBRA to maintain
coverage identical to the
coverage Employee (and,
if applicable, his spouse
and/or dependents) had
under such plan
immediately prior to the
Date of Termination; plus
(B) an amount equal to the
excess of (I) an amount
determined by dividing
(x) the amount determined
under Section 6(d)(4)(ii)
(A) above, by (y) one (1)
minus the sum of the
following which shall be
determined for the
calendar year that
includes the date of
payment of the Section
6(d)(4)(ii) Payment and
shall be expressed as a
decimal: (i) the highest
marginal U.S. federal
income tax rate
applicable to individuals
for such calendar year,
plus (ii) the highest
foreign, state,
provincial and/or local
individual income tax
rate or rates, if any, to
which the Section 6(d)(4)
(ii) Payment is subject
for such calendar year
(which shall be
determined based on
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the assumption that
Employee pays income tax
to any such foreign,
state, provincial or local
jurisdiction at the
highest marginal rate of
income tax imposed by
such jurisdiction on
individuals), plus, (iii)
the Hospital (Medicare)
Insurance tax rate under
Section 3101(b) of the
Code (or any corresponding
successor statute) for
such calendar year, over
(II) the amount
determined under Section
6(d)(4)(ii)(A) above; and
(5) the following shall occur immediately upon
the occurrence of such Change in Control:
(i) each option to acquire Common Stock
or other equity securities of
Employer held by Employee
immediately prior to such Change in
Control shall become fully
exercisable, regardless of whether
or not the vesting conditions set
forth in the relevant stock option
agreement have been satisfied in
full, and shall remain fully
exercisable for the remainder of
the five-year term of such option;
and
(ii) all restrictions on any restricted
Common Stock or other equity
securities of Employer granted to
Employee prior to such Change in
Control shall be removed and such
Common Stock or other equity
securities shall be freely
transferable (subject to applicable
securities laws), regardless of
whether the conditions set forth in
the relevant restricted stock
agreements have been satisfied in
full.
As a condition to making the payments and providing the benefits specified in
this Section 6(d), Employer will require that Employee execute a release of all
claims Employee may have against Employer at the time of Employee's termination.
Such release will be in substantially the same form as Exhibit B attached
hereto.
(e) Notwithstanding anything contained in this Agreement
to the contrary, if following the commencement of any discussion with a third
person or the initiation of any tender offer that ultimately results in a Change
in Control, (i) Employee's employment with Employer is terminated by Employer
for no reason or for any reason other than Cause, (ii) Employee is removed from
any material duties or position with Employer, or (iii) Employer fails to comply
with any of the provisions of Section 2 of this Agreement, then for all purposes
of this Agreement, such Change in Control shall be deemed to have occurred on
the date immediately prior to the date of such termination, removal, or failure.
(f) For purposes of this Agreement, a "Change in Control"
shall mean the occurrence of any of the following after the Effective Date:
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(1) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended from time to
time (the "Exchange Act"), or any successor statute) (a
"Covered Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 25% or
more of either (i) the then outstanding shares of Common Stock
(the "Outstanding Company Common Stock"), or (ii) the combined
voting power of the then outstanding voting securities of
Employer entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this Section 6(f)(1),
the following acquisitions shall not constitute a Change in
Control: (i) any acquisition directly from Employer, (ii) any
acquisition by Employer, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by
Employer or any entity controlled by Employer, or (iv) any
acquisition by any corporation pursuant to a transaction which
complies with Section 6(f)(3)(i), (ii) or (iii); or
(2) individuals who, as of the Effective Date,
constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the Effective Date whose election, or nomination
for election by Employer's stockholders, was approved by a
vote of at least two-thirds of the directors then comprising
the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Covered Person other than the Board; or
(3) consummation of (xx) a reorganization,
merger, amalgamation, consolidation, sale or other form of
business combination of Employer or any subsidiary of
Employer, or (yy) a sale, lease, exchange, disposition or
other transfer of all or substantially all of the assets of
Employer (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or
indirectly, more than 75% of, respectively, the then
outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation
which as a result of such transaction owns Employer or all or
substantially all of Employer's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such
Business Combination of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be,
(ii) no Covered Person (excluding any employee benefit plan
(or related trust) of Employer or such corporation resulting
from such Business
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Combination) beneficially owns, directly or indirectly, 25% or
more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business
Combination or the combined voting power of the then
outstanding voting securities of such corporation, except to
the extent that such ownership existed prior to the Business
Combination, and (iii) at least a majority of the members of
the board of directors of the corporation resulting from such
Business Combination, were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the
action of the Board of Directors, providing for such Business
Combination; or
(4) approval by the stockholders of Employer of
a complete liquidation or dissolution of Employer.
Section 7. Excise Tax
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by, or benefit from, Employer or any of its affiliates to or for
the benefit of Employee, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (any such payments,
distributions or benefits being individually referred to herein as a "Payment,"
and any two or more of such payments, distributions or benefits being referred
to herein as "Payments"), would be subject to the excise tax imposed by Section
4999 of the Code (such excise tax, together with any interest thereon, any
penalties, additions to tax, or additional amounts with respect to such excise
tax, and any interest in respect of such penalties, additions to tax or
additional amounts, being collectively referred herein to as the "Excise Tax"),
then Employee shall be entitled to receive an additional payment or payments
(individually referred to herein as a "Gross-Up Payment" and any two or more of
such additional payments being referred to herein as "Gross-Up Payments") in an
amount such that after payment by Employee of all taxes (as defined in Section
7(k)) imposed upon the Gross-Up Payment, Employee retains an amount of such
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 7(c) through
(i), any determination (individually, a "Determination") required to be made
under this Section 7(b), including whether a Gross-Up Payment is required and
the amount of such Gross-Up Payment, shall initially be made, at Employer's
expense, by nationally recognized tax counsel selected by Employer ("Tax
Counsel"). Tax Counsel shall provide detailed supporting legal authorities,
calculations, and documentation both to Employer and Employee within 15 business
days of the termination of Employee's employment, if applicable, or such other
time or times as is reasonably requested by Employer or Employee. If Tax Counsel
makes the initial Determination that no Excise Tax is payable by Employee with
respect to a Payment or Payments, it shall furnish Employee with an opinion
reasonably acceptable to Employee that no Excise Tax will be imposed with
respect to any such Payment or Payments. Employee shall have the right to
dispute any Determination (a "Dispute") within 15 business days after delivery
of Tax Counsel's opinion with respect to such Determination. The Gross-Up
Payment, if any, as determined pursuant to such Determination shall, at
Employer's expense, be paid by Employer to or for the benefit of Employee within
five business days of Employee's receipt of such Determination. The existence of
a Dispute shall not in any way affect Employee's right to receive the Gross-Up
Payment in accordance with such
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Determination. If there is no Dispute, such Determination shall be binding,
final and conclusive upon Employer and Employee, subject in all respects,
however, to the provisions of Section 7(c) through (i) below. As a result of the
uncertainty in the application of Sections 4999 and 280G of the Code, it is
possible that Gross-Up Payments (or portions thereof) which will not have been
made by Employer should have been made ("Underpayment"), and if upon any
reasonable written request from Employee or Employer to Tax Counsel, or upon Tax
Counsel's own initiative, Tax Counsel, at Employer's expense, thereafter
determines that Employee is required to make a payment of any Excise Tax or any
additional Excise Tax, as the case may be, Tax Counsel shall, at Employer's
expense, determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by Employer to or for the benefit of
Employee.
(c) Employer shall defend, hold harmless, and indemnify
Employee on a fully grossed-up after tax basis from and against any and all
claims, losses, liabilities, obligations, damages, impositions, assessments,
demands, judgments, settlements, costs and expenses (including reasonable
attorneys', accountants', and experts' fees and expenses) with respect to any
tax liability of Employee resulting from any Final Determination (as defined in
Section 7(j)) that any Payment is subject to the Excise Tax.
(d) If a party hereto receives any written or oral
communication with respect to any question, adjustment, assessment or pending or
threatened audit, examination, investigation or administrative, court or other
proceeding which, if pursued successfully, could result in or give rise to a
claim by Employee against Employer under this Section 7 ("Claim"), including,
but not limited to, a claim for indemnification of Employee by Employer under
Section 7(c), then such party shall promptly notify the other party hereto in
writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Employee ("Employee
Claim"), Employee shall take or cause to be taken such action in connection with
contesting such Employee Claim as Employer shall reasonably request in writing
from time to time, including the retention of counsel and experts as are
reasonably designated by Employer (it being understood and agreed by the parties
hereto that the terms of any such retention shall expressly provide that
Employer shall be solely responsible for the payment of any and all fees and
disbursements of such counsel and any experts) and the execution of powers of
attorney, provided that:
(1) within 30 calendar days after Employer
receives or delivers, as the case may be, the Tax Claim Notice
relating to such Employee Claim (or such earlier date that any
payment of the taxes claimed is due from Employee, but in no
event sooner than five calendar days after Employer receives
or delivers such Tax Claim Notice), Employer shall have
notified Employee in writing ("Election Notice") that Employer
does not dispute its obligations (including, but not limited
to, its indemnity obligations) under this Agreement and that
Employer elects to contest, and to control the defense or
prosecution of, such Employee Claim at Employer's sole risk
and sole cost and expense; and
(2) Employer shall have advanced to Employee on
an interest-free basis, the total amount of the tax claimed in
order for Employee, at Employer's
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request, to pay or cause to be paid the tax claimed, file a
claim for refund of such tax and, subject to the provisions of
the last sentence of Section 7(g), xxx for a refund of such
tax if such claim for refund is disallowed by the appropriate
taxing authority (it being understood and agreed by the
parties hereto that Employer shall only be entitled to xxx for
a refund and Employer shall not be entitled to initiate any
proceeding in, for example, United States Tax Court) and shall
indemnify and hold Employee harmless, on a fully grossed-up
after tax basis, from any tax imposed with respect to such
advance or with respect to any imputed income with respect to
such advance; and
(3) Employer shall reimburse Employee for any
and all costs and expenses resulting from any such request by
Employer and shall indemnify and hold Employee harmless, on
fully grossed-up after-tax basis, from any tax imposed as a
result of such reimbursement.
(f) Subject to the provisions of Section 7(e) hereof,
Employer shall have the right to defend or prosecute, at the sole cost, expense
and risk of Employer, such Employee Claim by all appropriate proceedings, which
proceedings shall be defended or prosecuted diligently by Employer to a Final
Determination; provided, however, that (i) Employer shall not, without
Employee's prior written consent, enter into any compromise or settlement of
such Employee Claim that would adversely affect Employee, (ii) any request from
Employer to Employee regarding any extension of the statute of limitations
relating to assessment, payment, or collection of taxes for the taxable year of
Employee with respect to which the contested issues involved in, and amount of,
Employee Claim relate is limited solely to such contested issues and amount, and
(iii) Employer's control of any contest or proceeding shall be limited to issues
with respect to Employee Claim and Employee shall be entitled to settle or
contest, in his sole and absolute discretion, any other issue raised by the
Internal Revenue Service or any other taxing authority. So long as Employer is
diligently defending or prosecuting such Employee Claim, Employee shall provide
or cause to be provided to Employer any information reasonably requested by
Employer that relates to such Employee Claim, and shall otherwise cooperate with
Employer and its representatives in good faith in order to contest effectively
such Employee Claim. Employer shall keep Employee informed of all developments
and events relating to any such Employee Claim (including, without limitation,
providing to Employee copies of all written materials pertaining to any such
Employee Claim), and Employee or his authorized representatives shall be
entitled, at Employee's expense, to participate in all conferences, meetings and
proceedings relating to any such Employee Claim.
(g) If, after actual receipt by Employee of an amount of
a tax claimed (pursuant to an Employee Claim) that has been advanced by Employer
pursuant to Section 7(e)(2) hereof, the extent of the liability of Employer
hereunder with respect to such tax claimed has been established by a Final
Determination, Employee shall promptly pay or cause to be paid to Employer any
refund actually received by, or actually credited to, Employee with respect to
such tax (together with any interest paid or credited thereon by the taxing
authority and any recovery of legal fees from such taxing authority related
thereto), except to the extent that any amounts are then due and payable by
Employer to Employee, whether under the provisions of this Agreement or
otherwise. If, after the receipt by Employee of an amount advanced by Employer
pursuant to Section 7(e)(2), a determination is made by the Internal Revenue
Service
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or other appropriate taxing authority that Employee shall not be entitled to any
refund with respect to such tax claimed and Employer does not notify Employee in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of any Gross-Up Payments and other payments
required to be paid hereunder.
(h) With respect to any Employee Claim, if Employer fails
to deliver an Election Notice to Employee within the period provided in Section
7(e)(1) hereof or, after delivery of such Election Notice, Employer fails to
comply with the provisions of Section 7(e)(2) and (3) and (f) hereof, then
Employee shall at any time thereafter have the right (but not the obligation),
at his election and in his sole and absolute discretion, to defend or prosecute,
at the sole cost, expense and risk of Employer, such Employee Claim. Employee
shall have full control of such defense or prosecution and such proceedings,
including any settlement or compromise thereof. If requested by Employee,
Employer shall cooperate, and shall cause its Affiliates to cooperate, in good
faith with Employee and his authorized representatives in order to contest
effectively such Employee Claim. Employer may attend, but not participate in or
control, any defense, prosecution, settlement or compromise of any Employee
Claim controlled by Employee pursuant to this Section 7(h) and shall bear its
own costs and expenses with respect thereto. In the case of any Employee Claim
that is defended or prosecuted by Employee, Employee shall, from time to time,
be entitled to current payment, on a fully grossed-up after tax basis, from
Employer with respect to costs and expenses incurred by Employee in connection
with such defense or prosecution.
(i) In the case of any Employee Claim that is defended or
prosecuted to a Final Determination pursuant to the terms of this Section 7(i),
Employer shall pay, on a fully grossed-up after tax basis, to Employee in
immediately available funds the full amount of any taxes arising or resulting
from or incurred in connection with such Employee Claim that have not
theretofore been paid by Employer to Employee, together with the costs and
expenses, on a fully grossed-up after tax basis, incurred in connection
therewith that have not theretofore been paid by Employer to Employee, within
ten calendar days after such Final Determination. In the case of any Employee
Claim not covered by the preceding sentence, Employer shall pay, on a fully
grossed-up after tax basis, to Employee in immediately available funds the full
amount of any taxes arising or resulting from or incurred in connection with
such Employee Claim at least ten calendar days before the date payment of such
taxes is due from Employee, except where payment of such taxes is sooner
required under the provisions of this Section 7(i), in which case payment of
such taxes (and payment, on a fully grossed-up after tax basis, of any costs and
expenses required to be paid under this Section 7(i)) shall be made within the
time and in the manner otherwise provided in this Section 7(i).
(j) For purposes of this Agreement, the term "Final
Determination" shall mean (A) a decision, judgment, decree or other order by a
court or other tribunal with appropriate jurisdiction, which has become final
and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of
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limitations.
For purposes of this Agreement, the terms "tax" and "taxes" mean any and all
taxes of any kind whatsoever (including, but not limited to, any and all Excise
Taxes, income taxes, and employment taxes), together with any interest thereon,
any penalties, additions to tax, or additional amounts with respect to such
taxes and any interest in respect of such penalties, additions to tax, or
additional amounts.
(l) Nothing in this Section is intended to violate the
Xxxxxxxx-Xxxxx Act and to the extent that any advance or repayment obligation
hereunder would do so, such obligation shall be deemed modified so as to make
the advance a nonrefundable payment to Employee and the repayment obligation
null and void.
Section 8. Expenses of Enforcement.
Upon demand by Employee made to Employer, Employer shall reimburse
Employee for the reasonable expenses (including attorneys' fees and expenses)
incurred by Employee after a Change in Control in enforcing or seeking to
enforce the payment of any amount or other benefit to which Employee shall have
become entitled under this Agreement as a result of the termination of
Employee's employment with Employer within three (3) years after such Change in
Control, including, but not limited to, those incurred in connection with any
arbitration concerning same initiated pursuant to Section 14 (regardless of the
outcome of such arbitration). To the extent that any such reimbursement would be
subject to the Excise Tax, then Employee shall be entitled to receive Gross-Up
Payments in an amount such that after payment by Employee of all taxes imposed
on such Gross-Up Payments, Employee retains an amount equal to the Excise Tax
imposed upon the reimbursement, and the other provisions of Section 7 hereof
shall also apply to such circumstance unless the context thereof otherwise
indicates.
Section 9. No Obligation to Mitigate; No Rights of Offset.
(a) Employee shall not be required to mitigate the amount
of any payment or other benefit required to be paid to Employee pursuant to this
Agreement, whether by seeking other employment or otherwise, nor shall the
amount of any such payment or other benefit be reduced on account of any
compensation earned by Employee as a result of employment by another person.
(b) Employer's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which Employer may have against Employee or others.
Section 10. No Effect on Other Rights.
Nothing in this Agreement shall prevent or limit Employee's future
participation in any plan, program, policy or practice of or provided by
Employer or any of its affiliates and for which Employee may qualify, nor shall
anything herein limit or otherwise affect such rights as Employee may attain
under any stock option or other agreements that he may hereafter enter into with
Employer or any of its affiliates. Amounts which are vested benefits or which
Employee is
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otherwise entitled to receive under any plan, program, policy or practice of or
provided by, or any other contract or agreement with, Employer or any of its
affiliates at or subsequent to the Date of Termination shall be payable or
otherwise provided in accordance with such plan, program, policy or practice or
contract or agreement except as explicitly modified by this Agreement.
Section 11. Successors; Binding Agreement.
(a) This Agreement is personal to Employee and without
the prior written consent of Employer shall not be assignable by Employee. This
Agreement shall inure to the benefit of and be enforceable by Employee's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
(b) This Agreement shall inure to the benefit of and be
binding upon Employer and those successors and assigns permitted in accordance
with Section 11(c).
(c) Employer will require any successor (whether direct
or indirect, by purchase, merger, amalgamation, consolidation or otherwise) to
all or substantially all of the business and/or assets of Employer, by agreement
in form and substance reasonably satisfactory to Employee, to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken
place. As used in this Agreement, "Employer" shall mean Employer as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by execution and delivery of the
agreement provided for in this Section 11(c) or which otherwise becomes bound by
the terms and provisions of this Agreement by operation of law or otherwise.
Section 12. Non-Competition; Non-Solicitation; No Hire.
(a) Employee agrees that, effective as of the
Commencement Date and for a period that includes the term of this Agreement and
(i) eighteen (18) months thereafter in the event of a termination of Employee's
employment with Employer described in Section 6(c) or Section 6(d) (such
applicable period being referred to herein as the "Non-Compete Period"),
Employee shall not, without the prior written consent of Employer, directly or
indirectly, anywhere in the world, engage, invest, own any interest, or
participate in, consult with, render services to, or be employed by any
business, person, firm or entity that is in competition with the "Business" (as
defined in Section 12(e)) of Employer or any of its subsidiaries or affiliates,
except for the account of Employer and its subsidiaries and affiliates;
provided, however, that (i) during the Non-Compete Period Employee may acquire,
solely as a passive investment, not more than five percent (5%) of the
outstanding shares or other units of any security of any entity subject to the
requirements of Section 13 or 15(d) of the Exchange Act' and (ii) Employee may
consult with, render services to, or be employed by any business, person, firm
or entity that, solely through a subsidiary or a division, is in competition
with the Business, as long as Employee does not divulge any Confidential
Information to such competing subsidiary or division or use it for the benefit
of such competing subsidiary or division. Employee acknowledges that a remedy at
law for any breach or attempted breach of this covenant not to compete will be
inadequate and further agrees that any breach of this covenant not to compete
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will result in irreparable harm to Employer, and, accordingly, Employer shall,
in addition to any other remedy that may be available to it, be entitled to
specific performance and temporary and permanent injunctive and other equitable
relief (without proof of actual damage or inadequacy of legal remedy) in case of
any such breach or attempted breach. Employee acknowledges that this covenant
not to compete is being provided as an inducement to Employer to enter into this
Agreement and that this covenant not to compete contains reasonable limitations
as to time, geographical area and scope of activity to be restrained that do not
impose a greater restraint than is necessary to protect the goodwill or other
business interest of Employer. Whenever possible, each provision of this
covenant not to compete shall be interpreted in such a manner as to be effective
and valid under applicable law, but if any provision of this covenant not to
compete shall be prohibited by or invalid under applicable law, such provision
of this covenant not to compete shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remaining provisions of this
covenant not to compete. If any provision of this covenant not to compete shall,
for any reason, be judged by any court of competent jurisdiction to be invalid
or unenforceable, such judgment shall not affect, impair or invalidate the
remainder of this covenant not to compete but shall be confined in its operation
to the provision of this covenant not to compete directly involved in the
controversy in which such judgment shall have been rendered. In the event that
the provisions of this covenant not to compete should ever be deemed to exceed
the time or geographic limitations permitted by applicable laws, then such
provision shall be reformed to the maximum time or geographic limitations
permitted by applicable law.
(b) If Employee's employment is terminated under
circumstances described in Section 6(c), then within ten days after Employee
signs the release required pursuant to Section 6(c), the Employer will pay to
Employee an aggregate amount (the "Non-Compete Payment") equal to one and
one-half (1.5) times Employee's Base Salary at the highest annual rate in effect
on or before the Date of Termination (but prior to giving effect to any
reduction therein which precipitated such termination), which Non-Compete
Payment will be paid to Employee in equal installments every two weeks during
such three-year period; provided, however, that at any time during such
three-year period Employer may, in its discretion, elect to pay to Employee the
then remaining balance of the Non-Compete Payment in the form of a lump sum cash
payment. If Employee's employment is terminated under circumstances described in
Section 6(d), then within ten days after Employee signs the release required
pursuant to Section 6(d), Employer will pay Employee a lump sum cash payment
equal to one and one-half (1.5) times the sum of:
(i) Employee's Base Salary at the highest annual
rate in effect on or before the Date of
Termination (but prior to giving effect to
any reduction therein which precipitated
such termination), plus
(ii) An amount equal to the greatest of:
(A) the average of the incentive
bonuses paid to Employee for the
last three (3) full fiscal years of
Employer ending before the Date of
Termination (or, if Employee was
not employed by Employer hereunder
for such last three (3) full fiscal
years, the average of the incentive
bonuses paid to Employee for the
number of full fiscal years of
Employer
-22-
ending before the Date of
Termination during which Employee
was employed by Employer
hereunder);
(B) the incentive bonus paid to
Employee for the last full fiscal
year of Employer ending before the
Date of Termination; or
(C) an amount equal to Employee's Base
Salary described in Section
6(d)(3)(i) multiplied by Employee's
target percentage under the Key
Contributor Plan or other
replacement incentive or bonus plan
of Employer for the fiscal year
which includes the Date of
Termination.
Employee must execute the release described in Section 6(c) or 6(d), as
applicable, in order to receive the payments described in this Section 12(b).
(c) In addition to the restrictions set forth in Section
12(a), Employee agrees that, during the Non-Compete Period, Employee will not,
either directly or indirectly, (i) make known to any person, firm or entity that
is in competition with the Business of Employer or any of its subsidiaries or
affiliates the names and addresses of any of the suppliers or customers of
Employer or any of its subsidiaries or affiliates, potential customers of
Employer or any of its subsidiaries or affiliates upon whom Employer or any of
its subsidiaries or affiliates has called upon in the last twelve (12) months or
contacts of Employer or any of its subsidiaries or affiliates or any other
information pertaining to such persons, or (ii) call on, solicit, or take away,
or attempt to call on, solicit or take away any of the suppliers or customers of
Employer or any of its subsidiaries or affiliates, whether for Employee or for
any other person, firm or entity.
(d) Regardless of the reason for any termination of
Employee's employment, effective as of the Commencement Date and for a period
that includes the term of this Agreement and twelve (12) months thereafter,
Employee will not, either on his own account or for any other person, firm,
partnership, corporation, or other entity (i) solicit any employee of Employer
or any of its subsidiaries or affiliates to leave such employment; or (ii)
induce or attempt to induce any such employee to breach her or his employment
agreement with Employer or any of its subsidiaries or affiliates.
(e) As used in this Agreement, "Business" means the
business of acquiring, processing and/or interpreting geophysical data and/or
producing and/or conducting geophysical surveys for third parties, including,
but not limited to, (x) engaging in the business of conducting surface seismic
acquisition and/or surface seismic data processing and/or interpretation for the
purpose of providing and/or interpreting seismic images of the subsurface of the
earth for third parties, and (y) providing the following services to third
parties: (i) all forms of surface land, marine, ocean bottom cable and
transition zone seismic data acquisition; (ii) all forms of surface seismic data
processing, including the processing of two, three and/or four dimensional
vertical seismic profiling; (iii) recording of data from wellbore seismic arrays
performed during simultaneous acquisition of surface two, three and/or four
dimensional data; (iv) trenched in, buried near surface or seabed permanent
array installation and acquisition; (v) surface seismic acquisition, processing,
interpretation and/or sales, in each case, of multiclient surveys; (vi)
-23-
maintenance of surface seismic data processing centers, including licensing and
support of surface seismic processing software; (viii) research and development
programs for any of the items described in this Section 12(e) and
seismically-assisted reservoir solutions, including software relating thereto;
(ix) surface seismic data management services; (x) interpretation activities
related to or in support of acquisition and processing activities described in
this Section 12(e); (xi) borehole seismic acquisition and installation and
acquisition of data from wellbore seismic arrays; and (xii) commercial
seismically-assisted reservoir solutions.
Section 13. Miscellaneous.
(a) All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith will be in
writing and will be delivered by hand or by registered or certified mail, return
receipt requested to the addresses set forth below in this Section 13(a):
If to Employer, to:
Veritas DGC Inc.
00000 Xxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Secretary
If to Employee, to:
Xxxxxxx Xxxxxxx
00, xxx xx Xxxxxxx Xxxx
00000 Xxxxx, Xxxxxx
or to such other names or addresses as Employer or Employee, as the case may be,
designate by notice to the other party hereto in the manner specified in this
Section.
(b) This Agreement (including the Exhibits attached
hereto) supersedes, replaces and merges all previous agreements, term sheets,
and discussions relating to the same or similar subject matters between Employee
and Employer (including any such agreements or discussions between Employee and
any past or present subsidiary or affiliate of Employer) and constitutes the
entire agreement between Employee and Employer with respect to the subject
matter of this Agreement. This Agreement may not be modified in any respect by
any verbal statement, representation or agreement made by any employee, officer,
or representative of Employer or by any written agreement unless signed by an
officer of Employer who is expressly authorized by the Board to execute such
document.
(c) If any provision of this Agreement or application
thereof to anyone or under any circumstances should be determined to be invalid
or unenforceable, such invalidity or unenforceability will not affect any other
provisions or applications of this Agreement which can be given effect without
the invalid or unenforceable provision or application. In addition, if any
provision of this Agreement is held by an arbitration panel or a court of
competent jurisdiction to be invalid, unenforceable, unreasonable, unduly
restrictive or overly broad, the parties intend that
-24-
such arbitration panel or court modify said provision so as to render it valid,
enforceable, reasonable and not unduly restrictive or overly broad.
(d) The internal laws of the State of Texas will govern
the interpretation, validity, enforcement and effect of this Agreement without
regard to the place of execution or the place for performance thereof.
Section 14. Arbitration.
(a) Employer and Employee agree to submit to final and
binding arbitration any and all disputes or disagreements concerning the
interpretation or application of this Agreement. Any such dispute or
disagreement will be resolved by arbitration in accordance with the National
Rules for the Resolution of Employment Disputes of the American Arbitration
Association (the "AAA Rules"). Arbitration will take place in Houston, Texas,
unless the parties mutually agree to a different location. Within 30 calendar
days of the initiation of arbitration hereunder, each party will designate an
arbitrator. The appointed arbitrators will then appoint a third arbitrator.
Employee and Employer agree that the decision of the arbitrators will be final
and binding on both parties. Any court having jurisdiction may enter a judgment
upon the award rendered by the arbitrators. In the event the arbitration is
decided in whole or in part in favor of Employee, Employer will reimburse
Employee for his reasonable costs and expenses of the arbitration (including
reasonable attorneys' fees); provided, however, that Employer shall reimburse
Employee in accordance with Section 8 for the reasonable expenses (including
attorneys' fees and expenses) incurred by Employee in enforcing or seeking to
enforce in any arbitration the payment of any amount or other benefit described
in Section 8 regardless of the outcome of such arbitration. Regardless of the
outcome of any arbitration, Employer will pay all fees and expenses of the
arbitrators and all of Employer's costs of such arbitration.
(b) Notwithstanding the provisions of Section 14(a),
Employer may, if it so chooses, bring an action in any court of competent
jurisdiction for injunctive relief to enforce Employee's obligations under
Sections 3 or 12 hereof and/or the Employee Confidentiality and Intellectual
Property Agreement between Employee and Employer (entered into pursuant to
Section 3(d) hereof).
[SIGNATURES ON FOLLOWING PAGE]
-25-
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as to be effective as of the Effective Date.
EMPLOYER:
VERITAS DGC INC.
By: ________________________________________
Xxxxx X. Xxxxx
Director
EMPLOYEE:
____________________________________________
Xxxxxxx Xxxxxxx
-26-
[VERITAS LOGO]
VERITAS
GEOPHYSICAL INTEGRITY
EMPLOYEE CONFIDENTIALITY
AND
INTELLECTUAL PROPERTY AGREEMENT
As part of the consideration for my employment or continued employment with
Veritas DGC Inc. or any company affiliated with Veritas (collectively referred
to as "Veritas"), I agree to the following:
1. CONFIDENTIAL INFORMATION. I understand that during my employment with
Veritas, I will have access to Confidential Information that belongs to
Veritas. Some examples of the types of Confidential Information I may
receive include:
(a). Customer lists, customer requirements, customer contracts and
service agreements, customer profitability and other financial
information;
(b). Business plans, pricing and marketing techniques and
strategies, product information, business software and
computer programs, costing methodologies and allocation
modeling, and methods of business operation or procedure;
(c). Suppliers, business associates, business connections and
opportunities and information concerning the financial status
and private affairs of Veritas; and
(d). Trade secrets, inventions, improvements, developments,
technical data, test results, designs, and materials for which
Veritas may or may not have obtained patent, copyright or
trademark protection.
I may receive Confidential Information in writing, orally, or
electronically.
2. CONFIDENTIALITY AGREEMENT. I agree to hold all Confidential Information
in confidence during and following my employment. I will not divulge it
to anyone without the express written authorization of the Company. I
further agree that if my employment ceases, I will not take any
Confidential Information with me or disclose it to anyone not
authorized by the Company. To the extent that any provision of this
Section 2 conflicts with my Employment Agreement dated effective
January 26, 2004, the terms of my Employment
EXHIBIT A
CONFIDENTIALITY AND INTELLECTUAL PROPERTY AGREEMENT
PAGE 1
Agreement shall control.
3. ASSIGNMENT OF INTELLECTUAL PROPERTY. I assign to Veritas all
inventions, novel ideas (including ideas relating to new products, new
services, or new methods of doing business), improvements or
discoveries which I conceive or make, either alone or with others: (a)
with the use of Veritas' time, materials, or facilities; or (b)
resulting from or suggested by my work for Veritas; or (c) in any way
related to any business Veritas is engaged in or plans to engage in.
All such inventions, improvements, and developments will automatically
become the property of Veritas immediately as I make them or conceive
them. I agree to assign to Veritas the rights to such inventions,
improvements and developments at any time Veritas requests, even after
my employment terminates.
4. EXECUTION OF DOCUMENTS. At any time Veritas requests, either during my
employment or after termination, and without charge to Veritas, but at
its expense, I agree to execute, acknowledge, and deliver all
additional papers (including applications for patents and assignments
of patents) and to perform such other lawful acts as Veritas may deem
reasonably necessary to obtain or maintain patents for such inventions
in any country and to vest title to such inventions in Veritas.
5. This Agreement may not be modified, released, discharged, abandoned or
terminated, except as agreed in writing between Veritas and the
undersigned employee.
IN WITNESS WHEREOF this Agreement has been signed and delivered this ________
day of ____________________, 20___.
______________________________________ ___________________________________
WITNESS EMPLOYEE SIGNATURE
______________________________________ ___________________________________
PRINTED NAME PRINTED NAME
CONFIDENTIALITY AND INTELLECTUAL PROPERTY AGREEMENT
PAGE 2
AGREEMENT AND RELEASE OF ALL CLAIMS
This Agreement, entered into as of the date written by Employee's
signature below, is by and between Veritas DGC Inc. ("Veritas"), a Delaware
corporation, and _______________ ("Employee"). (As used in this Agreement, the
term "Veritas" includes Veritas DGC Inc., and all of its subsidiary and
affiliated companies).
Veritas and Employee agree as follows:
Section 1. Within 5 business days after the Separation Date, as defined
in Section 3 below, and whether or not Employee executes and returns this
Agreement, Veritas will pay Employee the following amounts:
- Employee's regular base salary prorated through the Separation
Date;
- Employee's incentive bonus, if any is due;
- Employee's vacation pay accrued as of the Separation Date; and
- any expense reimbursement owed to Employee under Veritas
policy.
All of the above amounts will be REDUCED by applicable taxes and withholding.
Section 2. [Insert, if applicable in accordance with Section 6(c)(2)(i)
of the Employment Agreement: Veritas shall pay Employee an amount equal to the
incentive bonus compensation which would have been due him but for the
termination of his employment, which incentive compensation shall be pro rated
through the Date of Termination. Such payment or payments shall be made to
Employee at the time other participants in the Key Contributor Plan or the
relevant incentive plan receive their payments.]
[Insert Option A or Option B, whichever is applicable:
[Option A: In accordance with Section 6(c) of the Employment Agreement
between Employer and Employee dated January 26, 2004 (the "Employment
Agreement"), during the
EXHIBIT B
three-year period ending on the third anniversary of the Separation Date,
Employer shall pay to Employee an aggregate amount (the "Severance Payment")
equal to one and one-half (1.5) times Employee's Base Salary (as defined in the
Employment Agreement) at the highest annual rate in effect on or before the
Separation Date (but prior to giving effect to any reduction therein which
precipitated such termination), which Severance Payment will be paid to Employee
in equal installments every two weeks during such three-year period; provided,
however, that at any time during such three-year period Employer may, in its
discretion, elect to pay to Employee the then remaining balance of the Severance
Payment in the form of a lump sum cash payment. Further, in accordance with
Section 12(b) of the Employment Agreement, Employer will also pay employee an
amount equal to the Severance Payment, payable in the same method described
above, in respect of his agreements pursuant to Section 12 of the Employment
Agreement. All amounts so paid will be REDUCED by applicable taxes and
withholding.
In addition, Employer will pay or provide for Employee's medical,
dental, health, and hospital coverage for one year or pay Employee a lump cash
payment in lieu of such coverage, in accordance with Section 6(c)(4) of the
Employment Agreement].
[Option B: In accordance with Section 6(d) of the Employment Agreement
between Employer and Employee dated January 26, 2004 (the "Employment
Agreement"), within 30 calendar days after the Effective Date, as defined in
Section 15 below, Veritas will pay to Employee a lump sum (the "Severance
Payment") equal to one and one-half (1.5) times Employee's Base Salary (as
defined in the Employment Agreement) at the highest annual rate in effect on or
before the Separation Date (but prior to giving effect to any reduction therein
which precipitated such termination) plus (y) the payment relating to Employee's
incentive bonus provided for in Section 6(d)(3) of the Employment Agreement.
Further, in accordance with
-2-
Section 12(b) of the Employment Agreement, Employer will also pay employee an
amount equal to the Severance Payment, payable in the same method described
above, in respect of his agreements pursuant to Section 12 of the Employment
Agreement. All amounts so paid will be REDUCED by applicable taxes and
withholding.
In addition, Employer will pay or provide for Employee's medical,
dental, health, and hospital coverage for eighteen months or pay Employee a lump
cash payment in lieu of such coverage, in accordance with Section 6(d)(4) of the
Employment Agreement].
Section 3. Employee's termination from employment will be effective at
the close of business on the Separation Date. The SEPARATION DATE as used in
this Agreement means _________.
Section 4. Employee agrees to release Veritas DGC Inc., all of its
subsidiary and affiliated companies and parent companies, partnerships, and each
of their respective present and former directors, officers, employees, agents,
managers, advisors, representatives, partners, predecessors and successors in
such capacity, and all employee benefit plans sponsored by any of them (the
"Released Parties") from any and all claims he has or may have against the
Release Parties, individually and collectively, as of the date he signs this
Agreement. The claims he is releasing include (but are not limited to) all of
the following:
- any claims under any equity compensation, bonus or incentive
plans;
- any claims for tortious action or inaction of any sort
("tortious action or inaction" means, among other things,
claims for such things as negligence, fraud, libel, or
slander);
- any claims arising under the Age Discrimination in Employment
Act of 1967 as amended (29 U.S.C. Section 621, et seq.) (the
Age Discrimination in Employment Act
-3-
of 1967 prohibits, in general, discrimination against
employees on the basis of age);
- any claims arising under Title VII of the Civil Rights Act of
1964 as amended (42 U.S.C. Section 2000e, et seq.), or the
Texas Commission on Human Rights Act (Texas Labor Code Section
21.001, et seq.) (both of these statutes, in general, prohibit
discrimination in employment on the basis of race, religion,
national origin or gender);
- any claims arising under the Americans with Disabilities Act
of 1990, as amended (42 U.S.C. Section 12101, et seq.) (the
Americans with Disabilities Act of 1990 prohibits, in general,
discrimination in employment on the basis of an employee's or
applicant's disability);
- any claims arising under Texas Labor Code Sections 451.001, et
seq. for retaliation or discrimination in connection with a
claim for workers' compensation benefits; and,
- any claims for breach of contract, wrongful discharge,
promissory estoppel, violation of public policy, constructive
discharge, retaliation, or conspiracy;
- any claims relating to Employee's employment or termination of
his employment including any and all claims for damages,
costs, salary, wages, termination pay, severance pay, vacation
pay, bonuses, commissions, expenses, allowances, insurance, or
any other benefit arising out of Employee's employment with
Veritas, with the exception of those benefits specifically
excluded below in this Section 4;
- any claims arising under any other local, state, federal or
foreign law, regulation
-4-
or ordinance;
- any and all rights, benefits or claims Employee may have under
any employment, severance or retention agreement with or
incentive compensation plan, bonus plan, stock option plan,
retention plan, or severance plan or policy of Veritas or to
any ownership interest in Veritas;
- any other claim of any kind whatsoever, whether or not
expressly set forth in this Agreement;
- any claims for costs, fees or other expenses (including
attorneys' fees) in connection with the claims described
above.
The release contained in this Section 4 WILL NOT affect any of the
following:
- Any rights or claims that may arise after the date of
Employee's signature below;
- Employee's rights or benefits under Veritas' 401(k) retirement
savings plan, Veritas' Employee Stock Purchase Plan, or any
pension or retirement plan in which Employee is a participant
on the Separation Date (Employee's rights and benefits will be
determined by the applicable plan documents);
- Employee's right to elect continued health and/or dental
benefits under the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA");
- Employee's right to exercise any options to purchase Veritas
DGC Inc. common stock in accordance with the terms of the
applicable stock option grant, including any terms of the
grant modified by Section 6(c)(4) or Section 6(d)(5) of the
Employment Agreement;
- Employee's rights under any restricted stock agreement between
Employee and Veritas DGC Inc. under the terms of which
Employee has been granted Veritas
-5-
DGC Inc. restricted stock, including any terms of the grant
modified by Section 6(d)(5) of the Employment Agreement;
- Employee's rights under any other plan or agreement between
Employee and Veritas DGC Inc. under the terms of which
Employee has been granted any other equity interest in Veritas
DGC Inc. or equity-based interest such as stock appreciation
rights;
- Employee's rights under that one certain Indemnity Agreement
between Veritas and Employee dated __________, 2004, or any
other indemnity arrangement between Veritas and Employee;
- Employee's rights under any director's and officer's policies
of insurance issued to Veritas, including any replacement
policies or renewals;
- Employee's right to claim and receive reimbursement for or
indemnity from excise taxes in accordance with Section 7 of
the Employment Agreement;
- Any other benefit to which Employee may be entitled under any
other health or benefit plan in accordance with the applicable
plan documents; or
- Employee's rights under any workers' compensation statute; the
Xxxxx Act, 46 U.S.C. Appx. Section 688, as amended; general
maritime law or similar laws; and any other right Employee may
have with respect to bodily injury incurred in the course and
scope of employment.
Section 5. Veritas and Employee agree that this Agreement is a binding
contract. The purpose of the Agreement is to compromise doubtful or disputed
claims, avoid litigation, and buy peace. Employee agrees that although Veritas
is making payment to Employee in exchange for a release of claims, Veritas does
not admit any wrongdoing of any kind.
-6-
Section 6. Employee agrees to assist Veritas in defending any legal
proceedings against Veritas arising out of matters which occurred on or prior to
the Separation Date. Veritas agrees to reimburse Employee for his time and
expense or costs he may incur in that regard.
Section 7. Employee confirms that after the Effective Date he remains
subject to and agrees to comply with:
- those obligations of confidentiality contained in Section 3(b)
and 3(c) of the Employment Agreement;
- the provisions relating to non-competition with Employer and
non-solicitation of Employer's employees contained in Section
12 of the Employment Agreement;
- the provisions relating to solicitation or hiring of
Employer's employees contained in Section 12 of the Employment
Agreement; and
- the terms of the Employee Confidentiality and Intellectual
Property Agreement with Employer which Employee signed
effective ____________, 2004.
Section 8. This Agreement has been delivered to Employee on
_____________.
- Employee will have 21 calendar days from ___________ or until
the close of business on ___________ to decide whether to sign
and return this Agreement and be bound by its terms. In the
event Employee has not signed and returned this Agreement to
Veritas on or before __________, this Agreement will become
null and void.
- Veritas and Employee agree that if they agree to change the
terms of this Agreement in any manner after it is delivered to
Employee, even if the changes are material, the 21-day period
specified in the previous paragraph will not restart or be
extended.
-7-
- After signing this Agreement, Employee will have the right to
revoke the Agreement for a period of 7 calendar days after
signing it by notifying Veritas in writing that Employee
revokes the Agreement. In the event Employee revokes the
Agreement, it will become null and void.
- Employer will provide the benefits described in Section 2
above only beginning after the expiration of the revocation
period described above (assuming Employee has not timely
revoked this Agreement).
Section 9. Employee acknowledges that he has read this Agreement and
has had reasonable opportunity consider it and consult with an attorney about
it. Employee acknowledges that the only promises made to him to sign this
Agreement are those stated in this Agreement. He understands that, except for
the exceptions set out in Section 4 above, this Agreement will have the effect
of waiving any claim he may pursue against the Released Parties.
Section 10. Employee acknowledges that he makes this Agreement
knowingly and voluntarily and that he agrees to each of its terms. Employee
understands that by signing this Agreement, he will become entitled to receive
payments and other benefits to which he is not otherwise entitled.
Section 11. This Agreement constitutes the entire understanding between
Veritas and Employee with respect to the subject matter hereof.
Section 12. This Agreement will benefit and be binding upon Veritas and
its successors and assigns and Employee and his successors and legal
representatives. Employee will not assign or attempt to assign any of his rights
under this Agreement.
Section 13. If a court determines that any provision of this Agreement
is invalid, the other provisions will remain in effect.
-8-
Section 14. This Agreement will be governed by, construed under, and
enforced in accordance with the laws of the State of Texas, not including,
however, its conflicts of law rules that might otherwise refer to the law of
another forum or jurisdiction.
Section 15. This Agreement will become effective and enforceable only
after a period of 7 days has expired following Employee's execution and delivery
of this Agreement to Veritas (this date is referred to in this Agreement as the
"EFFECTIVE DATE"), assuming Employee has not timely revoked this Agreement.
THIS AGREEMENT IS SUBJECT TO ARBITRATION IN
ACCORDANCE WITH THE FOLLOWING SECTION
Section 16. Employer and Employee agree to submit to final and binding
arbitration any and all disputes or disagreements concerning the interpretation
or application of this Agreement. Any such dispute or disagreement will be
resolved by arbitration in accordance with the National Rules for the Resolution
of Employment Disputes of the American Arbitration Association (the "AAA
Rules"). Arbitration will take place in Houston, Texas, unless the parties
mutually agree to a different location. Within 30 calendar days of the
initiation of arbitration hereunder, each party will designate an arbitrator.
The appointed arbitrators will then appoint a third arbitrator. Employee and
Employer agree that the decision of the arbitrators will be final and binding on
both parties. Any court having jurisdiction may enter a judgment upon the award
rendered by the arbitrators. In the event the arbitration is decided in whole or
in part in favor of Employee, Employer will reimburse Employee for his
reasonable costs and expenses of the arbitration (including reasonable
attorneys' fees). Regardless of the outcome of any arbitration, Employer will
pay all fees and expenses of the arbitrators and all of Employer's costs of such
arbitration.
-9-
Notwithstanding the provisions of the previous paragraph, Employer may,
if it so chooses, bring an action in any court of competent jurisdiction for
injunctive relief to enforce Employee's obligations under Section 7 of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the Effective Date.
VERITAS:
VERITAS DGC INC.
and subsidiary and affiliated companies
By: ________________________________
NOTICE TO EMPLOYEE
BY SIGNING THIS DOCUMENT, YOU MAY BE GIVING UP IMPORTANT LEGAL RIGHTS. YOU ARE
ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING AND RETURNING THIS DOCUMENT
TO VERITAS.
EMPLOYEE:
XXXXXXX XXXXXXX
___________________________
Date:______________________
STATE OF _________________ Section
COUNTY OF _______________ Section
Subscribed and sworn to before me, this _____ day of ____________, 20__.
NOTARY PUBLIC in and for
The State of_______________________
My Commission Expires:_____________
-10-
