EXHIBIT 10.2
EXECUTION VERSION
EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective as of the 1st day of October 2001, by and
between GETTY IMAGES, INC., a Delaware corporation (the "Company"), whose
principal executive offices are located at 000 X. 00xx Xxxxxx, Xxxxxxx, XX
00000, and XXXXXXXX X. XXXXX, an individual residing at 0000 Xxxx Xxxx Xxxxxx,
Xxxxxxx, XX 00000-0000 (the "Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Executive is presently serving as Chief Executive Officer
of the Company; and
WHEREAS, in connection with his performance of services in the United
States and elsewhere, the Company seeks to continue to employ the Executive and
the Executive seeks to continue to be employed by the Company; and
WHEREAS, both parties desire that the terms and conditions of the
Executive's employment with the Company be governed by the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. EMPLOYMENT AND DUTIES.
(a) General. The Company hereby employs the Executive, effective as of
the date set forth above (the "Effective Date"), and the Executive's period of
continuous employment for statutory purposes began on 14 March, 1995, and the
Executive agrees upon the terms and conditions herein set forth to serve as
President and Chief Executive Officer of the Company and shall perform all
duties customarily appurtenant to such position. In such capacity, the Executive
shall report directly and only to the Board of Directors of the Company (the
"Board"). The Executive's principal place of business shall be 000 X. 00xx
Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 or such other address as the Company may
specify from time to time.
(b) Services and Duties. For so long as the Executive is employed by the
Company hereunder, and except as otherwise expressly provided in Section 1(c)
below, the Executive shall devote his full business time to the performance of
his duties hereunder; shall faithfully serve the Company; shall in all material
respects conform to and comply with the lawful and good faith directions and
instructions given to him by the Board as the same are consistent with his
status and the term hereof; and shall use his best efforts to promote and serve
the interests of the Company. Specifically, the Executive shall be solely
responsible for
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the day-to-day operational management of the Company, its subsidiaries and
affiliates (hereinafter, collectively the "Group"), provision of operational
direction to the Executive Committee ("EC") of the Company, and oversight of
corporate, operations, sales, marketing, finance, and management of the EC. All
employees of the Group (other than the Chairman) shall report, either directly
or indirectly, to the Executive.
(c) No Other Employment. Except as provided below, for so long as the
Executive is employed by the Company, he shall not, directly or indirectly,
render services to any other person or organization for which he receives
compensation without the prior approval of the Board. No such approval will be
required if the Executive seeks to perform inconsequential services without
direct compensation therefor in connection with the management of personal
investments or in connection with the performance of charitable and civic
activities, provided that such activities do not contravene the provisions of
Section 6 hereof.
(d) Board Membership. The Executive shall be a member of the Board. In
addition, the Executive shall be entitled to attend the meetings of all other
committees of the Board, such as the Audit Committee and the Compensation
Committee, and shall be a member of any strategy committee of the Board. After
his initial term as director and during the Term (as defined in Section 2
below), the Company shall nominate the Executive for reelection to the Board and
shall use best efforts to cause the Executive to be elected to such term.
(e) Payment for Services to be Performed; Obligations. Compensation to
be paid under this Agreement shall be made with regard to all the Executive's
services to be provided to the Group globally.
2. TERM OF EMPLOYMENT. The term of the Executive's employment under this
Agreement (the "Term") shall commence on the Effective Date and continue until
the second anniversary date of the Effective Date. Thereafter, the Term shall
continue until it is terminated by either party giving the other at least twelve
months' written notice of termination of the Term, with no such notice to be
given so as to expire before the third anniversary of the Effective Date. For
the avoidance of doubt, the Term includes the twelve-month notice period.
3. COMPENSATION AND OTHER BENEFITS. Subject to the provisions of this
Agreement, the Company shall pay and provide the following compensation and
other benefits to the Executive during the Term as compensation for all services
rendered hereunder:
(a) Salary. The Company shall pay to the Executive an annual salary (the
"Salary") at the initial rate of One Million One Hundred Thousand Dollars
($1,100,000), payable to the Executive in accordance with the normal payroll
practices of the Company for its executive officers as are in effect from time
to time. The amount of the Executive's Salary shall be reviewed annually by the
Board on or about April 1 of each year
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during the Term beginning in the 2002 calendar year and may be increased, but
not decreased below such amount, on the basis of such review and then-current
market practices.
(b) Annual Bonus. The Executive shall be eligible for each calendar year
thereafter that begins with the Term to participate in an annual incentive bonus
program established by the Company in accordance with the policies of the Group
and subject to such terms, conditions and performance targets as may be approved
annually by the Compensation Committee of the Board (the "Compensation
Committee"). Under the terms of the annual incentive bonus program, the
Executive will be afforded the opportunity to earn up to thirty percent (30%) of
his Salary (the "Bonus") in effect for the applicable calendar year, any such
bonus to be paid on a pro-rata basis in the event that the Executive is employed
for less than twelve (12) months of any calendar year within the Term (for
purposes of determining the 2001 bonus, the Executive shall be deemed to have
commenced employment as of 1 January, 2001). It is open to the Compensation
Committee to pay a bonus in excess of the thirty percent (30%) referred to
above.
(c) Options.
(i) Termination for Cause or Resignation without Good Reason. In the
event that the Executive ceases to be an employee of the Company because he is
terminated for Cause or resigns without Good Reason (as each such term is
defined below), the Executive shall be entitled to retain and exercise the
then-vested portion of all options for the remainder of their respective terms
as if he had remained an employee of the Company, but the unvested portion of
all options shall lapse.
(ii) Change in Control. As per the terms of the Company's Stock
Option Plan, in the event of a Change in Control (defined as it is for purposes
of the Getty Images, Inc. 1998 Stock Incentive Plan), all unvested options then
outstanding shall become fully exercisable as of the date of the Change in
Control, whether or not then exercisable, and shall remain exercisable for a
period of twelve (12) months following the Change in Control, provided, however,
that no stock option shall be exercisable after the expiration of ten (10) years
after the date the stock option award was granted (or any earlier expiration
period as stated in the applicable award agreement).
(iii) Death or Disability. In the event of the Executive's death or
Disability (as defined below), the vesting of all unvested options shall
accelerate and all options shall become immediately exercisable and shall remain
exercisable for a period of twelve (12) months following the Executive's death
or Disability, provided, however, that no stock option shall be exercisable
after the expiration of ten (10) years after the date the stock option award was
granted (or any earlier expiration period as stated in the applicable award
agreement).
(iv) All Other Circumstances. In the event that the Executive ceases
to be an employee of the Company for any reason other than those set forth in
clauses (i) through
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(iii) of this Section 3(c), the vesting of all unvested stock options shall
accelerate and shall become immediately exercisable and the Executive shall be
entitled to retain all unexercised options, for the remainder of their
respective terms, as if he had remained an employee of the Company.
(d) Life Insurance. During the Term, the Company shall maintain a life
insurance policy on the life of the Executive for the benefit of the Executive's
estate providing a benefit equal to Three Million Two Hundred Thousand Dollars
($3,200,000). The Executive also will eligible to participate in any split
dollar life insurance plan adopted by the Company for its senior executives,
provided that Executive's benefits under any such plan will be consistent with
those granted to CEOs of companies of the size and nature of the Company.
(e) Expenses. The Company acknowledges that the successful operation of
its business may require the Executive to incur reasonable business expenses
while rendering services to the Company for such things as business travel,
lodging, meals and other business expenses. The Executive shall be reimbursed by
the Company for such expenses after presentation of appropriate receipts and
statements, according to the procedures established by the Company. The Company
expressly agrees that it will reimburse the Executive for his business class
airfare on international flights which are over five (5) hours in duration taken
in connection with Company business. The Company also agrees that, in the event
that the Executive is required to travel abroad in connection with the
performance of his duties hereunder for a period in excess of two (2) weeks, the
Company will reimburse the Executive for the airfare, hotel and other
transportation expenses of his spouse and minor children so that they may
accompany him on such trip. In the absence of fraud, it is acknowledged that
breach of this clause will not be deemed a material breach of a material term of
this Agreement.
(f) Long-Term Incentive Program. During the Term, the Executive shall
participate in all long-term incentive plans and programs of the Group that are
applicable to its senior officers in accordance with their terms and in a manner
consistent with his position with the Company.
(g) Vacation. The Company shall provide Executive no less than thirty
(30) days vacation with pay during each year of his employment under this
Agreement. Additional vacation may be earned based upon Executive's length of
service according to the Company's policies. Earned but unused vacation also may
be accumulated and carried over. In the event Executive ceases to be an employee
of the Company for any reason, he shall be paid in lieu of accumulated vacation
days.
(h) Company Automobile. During the term, the Company will provide the
Executive with an automobile of such make and model as the Board deems
appropriate and suitable for his status with the Company and will reimburse the
Executive for all costs and expenses incurred by the Executive in connection
with the use of that vehicle.
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(i) Other Specific Benefits and Perquisites. The Company shall install
and pay the rental and unit charges attributable to a dedicated business
telephone and/or DSL line at his homes. During the Term, the Company shall also
pay for the Executive's purchase, line charges, rental and unit charges for
three mobile phones. The Company shall provide the Executive with a fax machine,
computer modem and DSL line to be installed at the Executive's homes and
suitable desktop and laptop computers, as well as all ancillary equipment and
maintenance therefor. In addition, the Company will pay for the cost of the
Executive's membership and those of his family to appropriate clubs,
associations (including the American Automobile Association) and will also pay
the subscriptions to the internet service providers of his choice, and such
professional memberships, magazines and journals as are appropriate to his
duties under this Agreement. The Company also shall provide home security
systems in accordance with its policy or practice for other senior executives at
his homes. Due to the position of the Executive, the Company may be required to
provide security over and above that provided to other senior executives. In
this event, these costs will also be borne by the Company. The Executive will
also undertake an annual medical examination paid for by the Company. The
Executive and the Chairman of the Compensation Committee of the Company shall
agree to any additions to the benefits to be provided to the Executive pursuant
to this Section 3(i).
(j) Medical and Other Related Benefits. The Company shall provide the
Executive with group disability and health insurance benefits, as well as
holiday, and sick leave benefits, consistent with those granted to CEOs of
companies of the size and nature of the Company. Executive will be eligible to
participate in any deferred compensation plan adopted by the Company for its
senior executives, provided that Executive's benefits under any such plan will
be consistent with those granted to CEOs of companies of the size and nature of
the Company.
4. TERMINATION OF EMPLOYMENT. Subject to the notice and other provisions
of this Section 4, as well as in Section 5.13 of the Bylaws of the Company, the
Company shall have the right to terminate the Executive's employment hereunder,
and he shall have the right to resign, at any time for any reason or for no
stated reason.
(a) Termination for Cause; Resignation Without Good Reason.
(i) If, prior to the expiration of the Term, the Executive's
employment is terminated by the Company for Cause or if the Executive resigns
from his employment hereunder other than for Good Reason, he shall be entitled
to payment of the pro rata portion of his Salary through and including the date
of termination or resignation as well as any unreimbursed expenses. Except to
the extent required by the terms of any applicable compensation or benefit plan
or program or as otherwise required by applicable law, the Executive shall have
no rights under this Agreement or otherwise to receive any other compensation or
to participate in any other plan, program or arrangement after such
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termination or resignation of employment with respect to the year of such
termination or resignation and later years, provided, however, that Section 3(c)
shall govern the Executive's stock options. In the event of a termination under
this Section 4(a), the Company will continue to provide the benefits and
insurance provided for in Sections 3(d), 3(f), 3(g), 3(h), 3(i) and 3(j) for a
period of six months following the termination.
(ii) Termination for "Cause" shall mean termination of the
Executive's employment with the Company because of (A) willful, material or
persistently repeated non-performance of the Executive's duties to the Company
(other than by reason of the incapacity of the Executive due to physical or
mental disability) after notice by the Board of such failure and the Executive's
non-performance and continued, willful, material or persistent repeated
non-performance after such notice, (B) the indictment of the Executive for a
felony offense, (C) the commission by the Executive of fraud against the Group
or any willful misconduct that brings the reputation of the Company into serious
disrepute or causes the Executive to cease to be able to perform his duties, or
(D) any other material breach by the Executive of any material term of this
Agreement.
(iii) Termination of the Executive's employment for Cause shall be
communicated by delivery to the Executive of a written notice from the Company
stating that the Executive has been terminated for Cause, specifying the
particulars thereof and the effective date of such termination. The date of a
resignation by the Executive without Good Reason shall be the date specified in
a written notice of resignation from the Executive to the Company. The Executive
shall provide at least 30 days' advance written notice of resignation without
Good Reason.
(b) Involuntary Termination.
(i) If, prior to the expiration of the Term, the Company terminates
the Executive's employment for any reason other than Disability or Cause or
Executive resigns from his employment hereunder for Good Reason (collectively
hereinafter referred to as an "Involuntary Termination"), the Company shall pay
to the Executive his Salary and accrued Bonus (for purposes of this Agreement,
"accrued Bonus" shall be determined based on the maximum amount for which the
Executive is eligible under this Agreement using the number of days in the
applicable calendar year that the Executive was employed by the Company and the
applicable performance criteria under the bonus plan, in each case through the
date of termination or resignation), as well as any unreimbursed expenses,
including any benefits hereunder. In addition, the Company shall pay to the
Executive as severance (the "Severance Payments") within thirty (30) days after
the date of termination a lump sum payment in an amount equal to the sum of his
Salary at the rate in effect immediately prior to such Involuntary Termination,
plus his maximum Bonus as described in Section 3(b), and benefits as described
in Sections 3(d), 3(f), 3(g), 3(h), 3(i) and 3(j), in each case, for the
remainder of the Term. The treatment of the Executive's stock options shall be
governed by Section 3(c) of this Agreement.
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(ii) Resignation for "Good Reason" shall mean resignation by
Executive because of (A) an adverse and material change in the Executive's
duties, titles or reporting responsibilities, (B) a material breach by the
Company of any term of the Agreement, (C) a reduction in the Executive's Salary
or bonus opportunity or the failure of the Company to pay the Executive any
material amount of compensation when due, (D) failure by the Company to nominate
the Executive for reelection to the Board during the Term, (E) the failure of
the Executive to be reelected to the Board during the Term, (F) a change of
control, or (G) a relocation of the Executive's principal place of business
without his prior written consent. The Company shall have 30 business days from
the date of receipt of such notice to effect a cure of the material breach
described therein and, upon cure thereof by the Company to the reasonable
satisfaction of the Executive, such material breach shall no longer constitute
Good Reason for purposes of this Agreement. If Executive resigns more than two
years after the Effective Date, the resignation shall be treated as being for
"Good Reason" unless the Company establishes that it was for a reason other than
one of those set forth in subsections (A) through (H) of this Section 4(b)(ii).
(iii) The date of termination of employment without Cause shall be
the date specified in a written notice of termination to the Executive. The date
of resignation for Good Reason shall be the date specified in a written notice
of resignation from the Executive to the Company; provided, however, that no
such written notice shall be effective unless the cure period specified in
Section 4(b)(ii) above has expired without the Company having corrected, to the
reasonable satisfaction of the Executive, the event or events subject to cure.
(c) Termination following a Change in Control. In the event of a Change
in Control (defined as it is for purposes of the Getty Images, Inc. 1998 Stock
Incentive Plan), the Executive shall have the right to resign his employment
with the Company and will be entitled to receive within thirty (30) days a lump
sum payment in an amount equal to the Executive's Salary and benefits, at the
rate in effect immediately prior to such Involuntary Termination, plus his
maximum Bonus as described in Section 3(b), and benefits as described in
Sections 3(d), 3(f), 3(g), 3(h), 3(i) and 3(j), in each case, for the remainder
of the Term. The treatment of the Executive's stock options shall be governed by
Section 3(c)(2) of this Agreement.
(d) Termination Due to Disability. In the event of the Executive's
Disability (as hereinafter defined), the Company shall be entitled to terminate
his employment on providing the Executive with six months' prior written notice.
If the Company terminates the Executive's employment due to Disability, the
Executive shall be entitled to receive, for the remainder of the Term, his
Salary and benefits, at the rate in effect immediately prior to the Disability,
plus his maximum Bonus as described in Section 3(b), and benefits as described
in Sections 3(d), 3(f), 3(g), 3(h), 3(i) and 3(j), in each case for the
remainder of the Term, less any amounts paid to the Executive under any
disability plan of the Company. The treatment of the Executive's stock options
shall be governed by Section 3(c) of this Agreement. As used in Sections 4(d)
and 3(c), the term "Disability" shall mean a physical or mental incapacity that
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substantially prevents the Executive from performing his duties hereunder and
that has continued for at least six of the last twelve months and that can
reasonably be expected to continue indefinitely. Any dispute as to whether or
not the Executive is disabled within the meaning of the preceding sentence shall
be resolved by a physician reasonably satisfactory to the Executive and the
Company, and the determination of such physician shall be final and binding upon
both the Executive and the Company.
(e) Death. In the event of the Executive's death, the Executive's
Beneficiary shall be entitled to receive within thirty (30) days a lump sum
payment in an amount equal to the Executive's Salary and benefits, at the rate
in effect immediately prior to his death, plus his maximum Bonus as described in
Section 3(b), and benefits as described in Sections 3(d), 3(f), 3(g), 3(h), 3(i)
and 3(j), in each case for the remainder of the Term, less any death benefits
which are provided to the Executive's Beneficiary under the terms of any plan,
program or arrangement for the benefit of the Executive at the time of death.
The treatment of the Executive's stock options shall be governed by Section 3(c)
of this Agreement.
(f) Beneficiary. For purposes of this Agreement, "Beneficiary" shall
mean the person or persons designated in writing by the Executive to receive
benefits under a plan, program or arrangement or to receive the balance of the
Severance Payments, if any, in the event of the Executive's death, or, if no
such person or persons are designated by the Executive, the Executive's estate.
No beneficiary designation shall be effective unless it is in writing and
received by the Company prior to the date of the Executive's death.
5. LIMITATION ON PAYMENTS.
Notwithstanding anything herein to the contrary, if any of the payments
made hereunder would constitute a "parachute payment" (as defined in Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")), then
the aggregate of the amounts constituting the parachute payment shall be reduced
to an amount that will equal three times the base amount, less One Dollar
($1.00). The determinations to be made with respect to this Section 5 shall be
made by an independent accounting firm of national standing (other than the
Company's regular auditors). The accounting firm shall be paid by the Company
for its services performed hereunder.
6. PROTECTION OF THE COMPANY'S INTERESTS.
(a) No Competing Employment. For so long as the Executive is employed by
the Company and, in circumstances where the Executive receives a payment
pursuant to Section 4(b), 4(c) or 4(d) or his employment is terminated for
Cause, but in no other circumstances, and continuing for the remainder of the
Term (such period being referred to hereinafter as the "Restricted Period"), the
Executive shall not, without the prior written consent of the Board, directly or
indirectly, own an interest in, manage, operate, join, control,
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lend money or render financial or other assistance to or participate in or be
connected with, as an officer, executive, partner, stockholder, consultant or
otherwise, any individual, partnership, firm, corporation or other business
organization or entity that competes with the Group by providing any goods or
services provided or under development by the Group at the effective date of the
Executive's termination of employment under this Agreement; provided, however,
that this Section 6(a) shall not proscribe the Executive's ownership, either
directly or indirectly, of either less than five percent of any class of
securities which are listed on a national securities exchange or quoted on the
automated quotation system of the National Association of Securities Dealers,
Inc. or any limited partnership investment over which the Executive has no
control.
(b) No Interference. During the Restricted Period, in circumstances
where the Executive receives a payment pursuant to Section 4(b), 4(c) or 4(d) or
his employment is terminated for Cause, and in no other circumstances, the
Executive shall not, whether for his own account or for the account of any other
individual, partnership, firm, corporation or other business organization (other
than the Company), intentionally solicit, endeavor to entice away from the Group
or otherwise interfere with the relationship of the Group with, any key person
or team who is employed by or otherwise engaged to perform services for the
Group or any key person or team or entity who is, or was within the then most
recent twelve-month period, a customer, client or supplier of the Group.
(c) Secrecy. The Executive recognizes that the services to be performed
by him hereunder are special, unique and extraordinary in that, by reason of his
employment hereunder, he may acquire confidential information and trade secrets
concerning the operation of the Group, the use or disclosure of which could
cause the Group substantial losses and damages which could not be readily
calculated and for which no remedy at law would be adequate. Accordingly, the
Executive covenants and agrees with the Company that he will not at any time,
except in performance of the Executive's obligations to the Company hereunder or
with the prior written consent of the Board, directly or indirectly disclose to
any person any secret or confidential information that he may learn or has
learned by reason of his association with the Group. The term "confidential
information" means any information not previously disclosed to the public or to
the trade by the Group with respect to the Group's, or any of its affiliates' or
subsidiaries', products, facilities and methods, trade secrets and other
intellectual property, systems, procedures, manuals, confidential reports,
product price lists, customer lists, financial information (including the
revenues, costs or profits associated with any of the Group's products),
business plans, prospects or opportunities.
(d) Exclusive Property. The Executive confirms that all confidential
information is and shall remain the exclusive property of the Group. All
business records, papers and documents kept or made by the Executive relating to
the business of the Group shall be and remain the property of the Group. Upon
the termination of his employment with the Company or upon the request of the
Company at any time, the Executive shall promptly deliver to the Company, and
shall not without the consent of the Board retain copies of, any written
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materials not previously made available to the public, or records and documents
made by the Executive or coming into his possession concerning the business or
affairs of the Group; provided, however, that subsequent to any such
termination, the Company shall provide the Executive with copies (the cost of
which shall be borne by the Executive) of any documents which are requested by
the Executive and which the Executive has determined in good faith are (i)
required to establish a defense to a claim that the Executive has not complied
with his duties hereunder or (ii) necessary to the Executive in order to comply
with applicable law.
(e) Assignment of Developments. All "Developments" (as defined below)
that were or are at any time made, conceived or suggested by Executive, whether
acting alone or in conjunction with others, during Executive's employment with
the Group shall be the sole and absolute property of the Group, free of any
reserved or other rights of any kind on the part of Executive. During
Executive's employment and, if such Developments were made, conceived or
suggested by Executive during his employment with the Group, thereafter,
Executive shall promptly make full disclosure of any such Developments to the
Group and, at the Group's cost and expense, do all acts and things (including,
among others, the execution and delivery under oath of patent and copyright
applications and instruments of assignment) deemed by the Group to be necessary
or desirable at any time in order to effect the full assignment to the Group of
Executive's right and title, if any, to such Developments. For purposes of this
Agreement, the term "Developments" shall mean all data, discoveries, findings,
reports, designs, inventions, improvements, methods, practices, techniques,
developments, programs, concepts, and ideas, whether or not patentable, relating
to the activities of the Group of which Executive is as of the date of this
Agreement aware or of which Executive becomes aware at any time during the Term,
excluding any Development for which no equipment, supplies, facilities or
confidential information of the Group was used and which was developed entirely
on Executive's own time, unless (i) the Development relates directly to the
business of the Group, (ii) the Development relates to actual or demonstrably
anticipated research or development of the Group, or (iii) the Development
results from any work performed by Executive for the Group (the foregoing is
agreed to satisfy the written notice and other requirements of Section 49.44.140
of the Revised Code of Washington).
(f) Injunctive Relief. Without intending to limit the remedies available
to the Company, the Executive acknowledges that a breach of any of the covenants
contained in this Section 6 may result in material irreparable injury to the
Group for which there is no adequate remedy at law, that it will not be possible
to measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, the Company shall be entitled to obtain a temporary
restraining order and/or a preliminary or permanent injunction restraining the
Executive from engaging in activities prohibited by this Section 6 or such other
relief as may be required to specifically enforce any of the covenants in this
Section 6. Without intending to limit the remedies available to the Executive,
the Executive shall be entitled to seek specific performance of the Company's
obligations under this Agreement.
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(g) The Executive shall during the continuance of his employment (and
shall procure that his spouse or partner and his minor children shall comply)
with all applicable rules of law, stock exchange regulations and codes of
conduct applicable to employees, officers and directors of the Company and the
Group for the time being in force in relation to dealings in the shares,
debentures and other securities of the Company or any unpublished share price
sensitive information affecting the securities of any other company with which
the Company has dealings (provided that the Executive shall be entitled to
exercise any options granted to him under any share option scheme established by
the Company or any member of the Group, subject to the rules of such scheme).
(h) The Executive shall in relation to any dealings in securities of
overseas companies comply with all laws of any foreign state affecting dealings
in the securities of such companies and all regulations of any relevant stock
exchanges on which such dealings take place.
(i) During the continuance of his employment the Executive shall observe
the terms of any policy issued by the Company in relation to payments, rebates,
discounts, gifts, entertainment or other benefits from any third party in
respect of any business transacted or proposed to be transacted (whether or not
by him) by or on behalf of the Company or any member of the Group.
7. GENERAL PROVISIONS.
(a) Source of Payments. All payments provided under this Agreement,
other than payments made pursuant to a plan which provides otherwise, shall be
paid in cash from the general funds of the Company, and no special or separate
fund shall be established, and no other segregation of assets made, to assure
payment. The Executive shall have no right, title or interest whatever in or to
any investments which the Company may make to aid the Company in meeting its
obligations hereunder. To the extent that any person acquires a right to receive
payments from the Company hereunder, such right shall be no greater than the
right of an unsecured creditor of the Company; provided, however, that this
provision shall not be deemed to waive or abrogate any preferential or other
rights to payment accruing to the Executive under applicable bankruptcy laws by
virtue of the Executive's status as an executive of the Company.
(b) No Other Severance Benefits. Except as specifically set forth in
this Agreement, the Executive covenants and agrees that he shall not be entitled
to any other form of severance benefits from the Company, including, without
limitation, benefits otherwise payable under any of the Company's regular
severance policies, in the event his employment hereunder ends for any reason
and, except with respect to obligations of the Company expressly provided for
herein, the Executive unconditionally releases the Company and its subsidiaries
and affiliates, and their respective directors, officers, executives and
stockholders, or any of them, from any and all claims, liabilities or
obligations under this Agreement or
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under any severance or termination arrangements of the Company or any of its
subsidiaries or affiliates for compensation or benefits in connection with his
employment or the termination thereof.
(c) Tax Withholding and Gross-Up. Payments to the Executive of all
compensation contemplated under this Agreement shall be subject to all
applicable tax withholding, provided, however, that the Company shall tax
equalize certain compensation paid and benefits provided in the 2001 calendar
year prior to the Effective Date pursuant to the employment agreement dated June
1, 1999 (as amended) between Executive and the Company. The excess tax costs
related to the tax equalization of the compensation and benefits provided prior
to the Effective Date will result in adjustments to be made in a final tax
settlement in calendar year 2002. Any payment due to Executive as a result of
the final tax settlement will be made at the time Executive's US federal income
tax return for the 2001 calendar year is filed. If it is determined that any
payment made or benefit provided to Executive pursuant to Section 3(d), 3(e),
3(h), 3(i) or 3(j) is subject to any income tax payable under any United States
federal, state, local or other law, then Executive shall receive a tax gross-up
payment with respect to such taxes. The tax gross-up payment will be an amount
such that, after payment of taxes on such payment, there remains a balance
sufficient to pay the taxes being reimbursed. Any such tax gross-up payments
will be made at the time Executive's US federal income tax return for the
applicable calendar year is filed.
(d) Notices. Any notice hereunder by either party to the other shall be
given in writing by personal delivery, or certified mail, return receipt
requested, or (if to the Company) by facsimile, in any case delivered to the
applicable address set forth below:
(i) To the Company: Getty Images, Inc.
Attn: General Counsel 000 X. 00xx
Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile 0-000-000-0000
(ii) To the Executive: Xxxxxxxx X. Xxxxx
0000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000-0000
or to such other persons or other addresses as either party may specify to the
other in writing.
(e) Representation by the Executive. The Executive represents and
warrants that his entering into this Agreement does not, and that his
performance under this Agreement and consummation of the transactions
contemplated hereby will not, violate the provisions of any agreement or
instrument to which the Executive is a party, or any decree, judgment or order
to which the Executive is subject, and that this Agreement constitutes a valid
and binding
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obligation of the Executive in accordance with its terms. Breach of this
representation will render all of the Company's obligations under this Agreement
void ab initio.
(f) Limited Waiver. The waiver by the Company or the Executive of a
violation of any of the provisions of this Agreement, whether express or
implied, shall not operate or be construed as a waiver of any subsequent
violation of any such provision.
(g) Assignment; Assumption of Agreement. No right, benefit or interest
hereunder shall be subject to assignment, encumbrance, charge, pledge,
hypothecation or setoff by the Executive in respect of any claim, debt,
obligation or similar process. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to assume expressly
and to agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place.
(h) Amendment; Actions by the Company. This Agreement may not be
amended, modified or canceled except by written agreement of the Executive and
the Company. Any and all determinations, judgments, reviews, verifications,
adjustments, approvals, consents, waivers or other actions of the Company
required or permitted under this Agreement shall be effective only if undertaken
by the Company pursuant to authority granted by a resolution duly adopted by the
Board; provided, however, that by resolution duly adopted in accordance with
this Section 7(h), the Board may delegate its responsibilities hereunder to one
or more of its members other than the Executive.
(i) Severability. If any term or provision hereof is determined to be
invalid or unenforceable in a final court or arbitration proceeding, (i) the
remaining terms and provisions hereof shall be unimpaired and (ii) the invalid
or unenforceable term or provision shall be deemed replaced by a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.
(j) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington (determined without regard
to the choice of law provisions thereof).
(k) Entire Agreement. This Agreement, the Board Representation Agreement
of the same date and the resolution of the Company's Board of Directors
approving the Company's execution of this Agreement and the Board Representation
Agreement set forth the entire agreement and understanding of the parties hereto
with respect to the matters covered hereby and supersedes all prior agreements
and understandings of the parties with respect to the subject matter hereof.
Page 13 of 14
(l) Headings. The headings and captions of the sections of this
Agreement are included solely for convenience of reference and shall not control
the meaning or interpretation of any provisions of this Agreement.
(m) Counterparts. This Agreement may be executed by the parties hereto
in counterparts, each of which shall be deemed an original, but both such
counterparts shall together constitute one and the same document.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the day and year first written above.
GETTY IMAGES, INC.
By:
---------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chairman of the Compensation
Committee of the Board of Directors
EXECUTIVE
By:
---------------------------------------
Xxxxxxxx X. Xxxxx
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