Exhibit 10.20
XXXXXX X. XXXXXX
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of October ,
2004, by and between U-STORE-IT TRUST, a Maryland real estate investment trust
(the “Company”), and Xxxxxx X. Xxxxxx (the “Executive”).
WHEREAS, the Company and U-Store-It, L.P., a Delaware limited partnership,
the general partner of which is the Company (“Operating
Partnership”), are
engaging in various related transactions pursuant to which, among other things,
the Company will effect an initial public offering of its common shares and
contribute the proceeds therefrom for units of partnership interest in
Operating Partnership (the “U-Store-It IPO,” and together with all related
transactions, the “U-Store-It IPO Transactions”); and
WHEREAS, in connection with the U-Store-It IPO Transactions, the Company
wishes to offer employment to the Executive, and the Executive wishes to accept
such offer, on the terms set forth below.
Accordingly, the parties hereto agree as follows:
1. Term. The Company hereby employs the Executive, and the Executive
hereby accepts such employment for an initial term commencing as of the date
hereof and ending on December 31, 2007, unless sooner terminated in accordance
with the provisions of Section 4 or Section 5 (the period during which the
Executive is employed hereunder being hereinafter referred to as the “Term”).
The Term shall be subject to automatic one-year renewals unless either party
hereto notifies the other, in accordance with Section 7.4, of non-renewal at
least ninety (90) days prior to the end of any such Term. Notwithstanding the
employment of the Executive by the Company, the Company shall be entitled to
pay the Executive from the payroll of any subsidiary of the Company.
2. Duties. The Executive, in his capacity as President and Chief
Financial Officer, shall faithfully perform for the Company the duties of said
office and shall perform such other duties of an executive, managerial or
administrative nature as shall be specified and designated from time to time by
the Board of Trustees of the Company (the “Board”) (including the performance
of services for, and serving on the Board of Directors or a comparable
governing body of, any subsidiary or affiliate of the Company without any
additional compensation). The Executive shall devote substantially all of the
Executive’s business time and effort to the performance of the Executive’s
duties hereunder, provided that in no event shall this sentence prohibit the
Executive from performing personal and charitable activities and any other
activities approved by the Board, so long as such activities do not materially
and adversely interfere with the Executive’s duties for the Company. The Board
may delegate its authority to take any action under this Agreement to the
Compensation Committee of the Board (the “Compensation Committee”).
3. Compensation.
3.1 Salary. The Company shall pay the Executive during the Term a base
salary at the rate of $350,000 per annum (the “Annual Salary”), in accordance
with the customary payroll practices of the Company applicable to senior
executives generally. The Annual Salary may be increased annually by an amount
as may be approved by the Board or the Compensation Committee, and, upon such
increase, the increased amount shall thereafter be deemed to be the Annual
Salary for purposes of this Agreement.
3.2 Bonus. The Executive will be eligible to participate in the Company’s
annual bonus plan (the “Bonus Plan”), the terms of which will be established by
the Compensation Committee. The Executive may be awarded such restricted
shares, share options and other equity-based awards under the Company’s equity
compensation plan (“Equity Awards”) as the Compensation Committee determines to
be appropriate.
3.3 Benefits – In General. The Executive shall be permitted during the
Term to participate in any group life, hospitalization or disability insurance
plans, health programs, pension and profit sharing plans and similar benefits
that may be available to similarly situated senior executives of the Company
generally, on the same terms as may be applicable to such other executives, in
each case to the extent that the Executive is eligible under the terms of such
plans or programs. During the Term, the Company shall maintain customary
liability insurance for trustees and officers and list the Executive as a
covered officer.
With respect to each such benefit plan and program, service with The
Amsdell Companies, Amsdell Partners, Inc., U-Store-It Mini Warehouse Co. or any
of their affiliates (as applicable) shall be included for purposes of
determining eligibility to participate (including waiting periods, and without
being subject to any entry date requirement after the waiting period has been
satisfied), vesting (as applicable) and entitlement to benefits. The medical
plan or plans maintained by the Company shall waive all limitations as to
pre-existing conditions, exclusions and waiting periods with respect to
participation and coverage requirements, to the extent the Executive has
already satisfied the participation and coverage requirements under a benefit
plan or program maintained by U-Store-It Mini Warehouse Co. With respect to
vacation benefits provided by the Company, the vacation benefit of Executive
shall include all hours of accrued but unused vacation and sick time hours,
respectively, with U-Store-It Mini Warehouse Co.
3.4 Vacation. During the Term, the Executive shall be entitled to
vacation of four (4) weeks per year.
3.5 Automobile. During the Term, the Company will provide the Executive
an allowance of $6,000 per year for the use of an automobile (including the
payment of vehicle insurance). At the option of the Company, in lieu of
providing such allowance, the Company will provide the Executive with an
automobile of suitable standard to the Executive’s position.
3.6 Expenses. The Company shall pay or reimburse the Executive for all
ordinary and reasonable out-of-pocket business expenses actually incurred (and,
in the case of reimbursement, paid) by the Executive during the Term in the
performance of the Executive’s services under this Agreement, pursuant to the
Company’s standard expense reimbursement policy
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as in effect from time to time, so long as the Executive provides proper
documentation establishing the amount, date and business purpose of the
expenses.
4. Termination upon Death or Disability. If the Executive dies during the
Term, the obligations of the Company to or with respect to the Executive shall
terminate in their entirety except as otherwise provided under this Section 4.
If the Executive becomes eligible for disability benefits under the Company’s
long-term disability plans and arrangements (or, if none apply, would have been
so eligible under the most recent plan or arrangement), the Company shall have
the right, to the extent permitted by law, to terminate the employment of the
Executive upon notice in writing to the Executive and such termination in and
of itself shall not be, nor shall it be deemed to be, a breach of this
Agreement; provided, that, the Company will have no right to terminate the
Executive’s employment if, in the opinion of a qualified physician reasonably
acceptable to the Company, it is reasonably certain that the Executive will be
able to resume the Executive’s duties on a regular full-time basis within 90
days of the date the Executive receives notice of such termination.
Upon death or other termination of employment by virtue of disability (i)
the Executive (or the Executive’s estate or beneficiaries in the case of the
death of the Executive) shall have no right to receive any compensation or
benefit hereunder on and after the Effective Date of the Termination other than
Annual Salary earned and accrued under this Agreement prior to the Effective
Date of the Termination, any bonus for the prior year not yet paid, and other
benefits, including payment for accrued but unused vacation, earned and accrued
under this Agreement prior to the Effective Date of the Termination (and
reimbursement under this Agreement for expenses incurred but not paid prior to
the Effective Date of the Termination) and an amount equal to the product of
(x) the Executive’s target annual bonus for the fiscal year of the Executive’s
death or disability and (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the Effective Date of the Termination,
and the denominator of which is 365; (ii) all Equity Awards held by the
Executive shall become fully vested and exercisable; and (iii) this Agreement
shall otherwise terminate upon the Effective Date of the Termination and there
shall be no further rights with respect to the Executive hereunder (except as
provided in Section 7.13). For purposes of this Section 4, the “Effective Date
of the Termination” shall mean the date of death or the date on which a notice
of termination by virtue of disability is given or any later date (within
thirty (30) days after the giving of such notice) set forth in such notice of
termination.
For the avoidance of doubt, the Executive acknowledges and agrees that the
payments set forth in this Section 4 constitute liquidated damages for
termination of his employment during the Term upon death or by virtue of
disability.
5. Other Terminations of Employment.
5.1 Termination for Cause; Termination of Employment by the Executive
Without Good Reason.
(a) For purposes of this Agreement, “Cause” shall mean:
(i) the Executive’s conviction for (or pleading nolo
contendere to) any felony or a misdemeanor involving moral
turpitude;
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(ii) the Executive’s commission of an act of fraud, theft or
dishonesty related to the business of the Company or its affiliates
or the performance of the Executive’s duties hereunder;
(iii) the willful and continuing failure or habitual neglect
by the Executive to perform the Executive’s duties hereunder;
(iv) any material violation by the Executive of the covenants
contained in Section 6 or that certain Non-Competition Agreement
dated as of the date hereof between the Executive and the Company
(the “Non-Competition Agreement”); or
(v) the Executive’s willful and continuing material breach of
this Agreement.
For purposes of this Section 5.1, no act, or failure to act, by Executive shall
be considered “willful” unless committed in bad faith and without a reasonable
belief that the act or omission was in the best interests of the Company or its
subsidiaries. Notwithstanding the foregoing, if there exists (without regard
to this sentence) an event or condition that constitutes Cause under clause
(iii), (iv) or (v) above, the Executive shall have 30 days from the date
written notice is given by the Company of such event or condition to cure such
event or condition and, if the Executive does so, such event or condition shall
not constitute Cause hereunder.
(b) For purposes of this Agreement, “Good Reason” shall mean, unless
otherwise consented to by the Executive:
(i) the material reduction of the Executive’s authority,
duties and responsibilities, or the assignment to the Executive of
duties materially and adversely inconsistent with the Executive’s
position or positions with the Company and its subsidiaries;
(ii) a reduction in Annual Salary of the Executive;
(iii) the failure by the Company to obtain an agreement from
any successor to the business of the Company to assume and agree to
perform this Agreement;
(iv) a change in control (for purposes of this Section,
“Change in Control” shall mean:
(A) the dissolution or liquidation of the Company, (B)
the merger, consolidation, or reorganization of the
Company with one or more other entities in which the
Company is not the surviving entity or immediately
following which the persons or entities who were
beneficial owners (as determined pursuant to Rule 13d-3
under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) of voting securities of the
Company immediately prior thereto cease to beneficially
own more than 50% of the voting securities of the
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surviving entity immediately thereafter, (C) a sale of
all or substantially all of the assets of the Company
to another person or entity other than an affiliate of
the Company, (D) any transaction (including without
limitation a merger or reorganization in which the
Company is the surviving entity) that results in any
person or entity or “group” (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act)
(other than persons who are shareholders or affiliates
immediately prior to the transaction) owning thirty
percent (30%) or more of the combined voting power of
all classes of shares of the Company, or (E)
individuals who, as of the date hereof, 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 trustee
subsequent to the date hereof whose election, or
nomination for election by the Company’s shareholders,
was approved by a vote of at least a majority of the
trustees then comprising the Incumbent Board (either by
a specific vote or by approval of the proxy statement
of the Company in which such person is named as a
nominee for trustee, without written objection to such
nomination) 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 trustees or other actual or
threatened solicitation of proxies or contests by or on
behalf of a person other than the Board. For the
avoidance of doubt, the U-Store-It IPO transactions
shall not be considered a Change in Control;
(v) a requirement by the Company that the Executive’s work
location be moved more than fifty (50) miles from the Company’s
principal place of business in Cleveland, Ohio unless the
relocation results in the work location being closer to Executive’s
residence; or
(vi) the Company’s material and willful breach of this
Agreement.
Notwithstanding the foregoing, if there exists (without regard to this
sentence) an event or condition that constitutes Good Reason under clause (i),
(ii), (v) or (vi) above, the Company shall have 30 days from the date on which
the Executive gives the written notice thereof to cure such event or condition
and, if the Company does so, such event or condition shall not constitute Good
Reason hereunder. Further, an event or condition shall cease to constitute
Good Reason one (1) year after the event or condition first occurs.
(c) The Company may terminate the Executive’s employment hereunder for
Cause and such termination in and of itself shall not be, nor shall it be
deemed to be, a breach of this Agreement. If the Company terminates the
Executive for Cause, (i) the Executive shall have no right to receive any
compensation or benefit hereunder on and after the Effective
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Date of the Termination other than Annual Salary and other benefits,
including payment for accrued but unused vacation (but excluding any bonuses
except as provided in the Bonus Plan) earned and accrued under this Agreement
prior to the Effective Date of the Termination (and reimbursement under this
Agreement for expenses incurred but not paid prior to the Effective Date of the
Termination); and (ii) this Agreement shall otherwise terminate upon the
Effective Date of the Termination and the Executive shall have no further
rights hereunder (except as provided in Section 7.13). For purposes of this
Section 5.1(c), the “Effective Date of the Termination” shall mean the date on
which a notice of termination is given or any later date (within thirty (30)
days after the giving of such notice) set forth in such notice of termination.
(d) The Executive may terminate his employment without Good Reason. If
the Executive terminates the Executive’s employment with the Company without
Good Reason: (i) the Executive shall have no right to receive any compensation
or benefit hereunder on and after the Effective Date of the Termination other
than Annual Salary and other benefits, including payment for accrued but unused
vacation (but excluding any bonuses except as provided in the Bonus Plan)
earned and accrued under this Agreement prior to the Effective Date of the
Termination (and reimbursement under this Agreement for expenses incurred but
not paid prior to the Effective Date of the Termination); and (ii) this
Agreement shall otherwise terminate upon the Effective Date of the Termination
and the Executive shall have no further rights hereunder (except as provided in
Section 7.13). For purposes of this Section 5.1(d), the “Effective Date of the
Termination” shall mean the date on which a notice of termination is given or
any later date (within thirty (30) days after the giving of such notice) set
forth in such notice of termination.
(e) In the event the Company elects not to renew this Agreement as
contemplated in Section 1 above, the Executive shall receive a cash payment
equal to one (1) times the sum of: (i) the Executive’s Annual Salary in effect
on the day of expiration of the Term and (ii) the average bonus actually paid
to the Executive with respect to the prior two (2) calendar years, payable no
later than 30 days after the day of expiration of the Term.
5.2 Termination Without Cause; Termination for Good Reason. The Company
may terminate the Executive’s employment at any time without Cause, for any
reason or no reason and the Executive may terminate the Executive’s employment
with the Company for Good Reason. If the Company or the Executive terminates
the Executive’s employment and such termination is not described in Section 4
or Section 5.1, (i) the Executive shall have no right to receive any
compensation or benefit hereunder on and after the Effective Date of the
Termination other than Annual Salary earned and accrued under this Agreement
prior to the Effective Date of the Termination, any bonus for the prior year
which has been awarded but not yet paid, and other benefits, including payment
for accrued but unused vacation, earned and accrued under this Agreement prior
to the Effective Date of the Termination (and reimbursement under this
Agreement for expenses incurred but not paid prior to the Effective Date of the
Termination) and an amount equal to the product of (x) the Executive’s target
annual bonus for the fiscal year of the Executive’s termination of employment
and (y) a fraction, the numerator of which is the number of days in the current
fiscal year through the Effective Date of the Termination, and the denominator
of which is 365; (ii) the Executive shall receive a cash payment equal to the
Severance Payment payable no later than 30 days after the Effective Date of the
Termination; (iii) for eighteen (18) months after the Effective Date of the
Termination, the Company shall continue medical, prescription and dental
benefits to the Executive and/or the Executive’s family at least equal to
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those which would have been provided to them in accordance with the
welfare benefit plans, practices, policies and programs provided by the Company
to the extent applicable generally to other peer employees of the Company and
its affiliated companies, as if the Executive’s employment had not been
terminated; provided, however, that if the Executive becomes reemployed with
another employer and is eligible to receive medical, prescription and dental
benefits under another employer provided plan, the medical, prescription and
dental benefits described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility; (iv) all Equity
Awards held by the Executive shall become fully vested and exercisable
(notwithstanding anything to the contrary contained in Section 14 of the
Company’s 2004 Equity Incentive Plan or any other provision thereof); and (v)
this Agreement shall otherwise terminate upon the Effective Date of the
Termination and the Executive shall have no further rights hereunder (except as
provided in Section 7.13). The “Severance Payment” means two (2) times the sum
of: (i) the Executive’s Annual Salary in effect on the day of termination and
(ii) the Executive’s Average Annual Bonus. The Executive’s “Average Annual
Bonus” means the average bonus actually paid to the Executive with respect to
the prior two (2) calendar years but specifically excluding the
deferred shares granted to Executive concurrent with the closing of
the U-Store-It IPO. For purposes of this Section 5.2, the
“Effective Date of the Termination” shall mean the date on which a notice of
termination is given or any later date (within thirty (30) days after the
giving of such notice) set forth in such notice of termination, or in the case
of termination of employment by the Executive for Good Reason, the date of
termination specified in such Executive’s notice of termination.
5.3 Nature of Payments. For the avoidance of doubt, the Executive
acknowledges and agrees that the payments set forth in this Section 5
constitute liquidated damages for termination of his employment during the
Term.
6. Confidential and Proprietary Information.
6.1 Confidential Information. The Executive shall keep secret and retain
in strictest confidence, and shall not use for his personal benefit or the
benefit of others or directly or indirectly disclose, except as may be required
or appropriate in connection with his carrying out his duties under this
Agreement, all confidential information, knowledge or data relating to the
Company or any of its affiliates, or to the Company’s or any such affiliate’s
respective businesses and investments (including confidential information of
others that has come into the possession of the Company or any such affiliate),
learned by the Executive heretofore or hereafter directly or indirectly from
the Company or any of its affiliates and which is not generally available
lawfully and without breach of confidential or other fiduciary obligation to
the general public without restriction (the “Confidential Company
Information”), except with the Company’s express written consent or as may
otherwise be required by law or any legal process.
6.2 Return of Documents; Rights to Products. All memoranda, notes, lists,
records, property and any other tangible product and documents (and all copies
thereof) made, produced or compiled by the Executive or made available to the
Executive concerning the businesses and investments of the Company and its
affiliates shall be the Company’s property and shall be delivered to the
Company at any time on request. The Executive shall assign to the Company all
rights to trade secrets and other products relating to the Company’s business
developed by him alone or in conjunction with others at any time while employed
by the Company.
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6.3 Rights and Remedies upon Breach. The Executive acknowledges and
agrees that any breach by him of any of the provisions of this Section 6 (the
“Restrictive Covenants”) would result in irreparable injury and damage for
which money damages would not provide an adequate remedy. Therefore, if the
Executive breaches any of the Restrictive Covenants, the Company and its
affiliates shall have the right and remedy to have the Restrictive Covenants
specifically enforced (without posting bond and without the need to prove
damages) by any court having equity jurisdiction, including, without
limitation, the right to an entry against the Executive of restraining orders
and injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, of such
covenants. This right and remedy shall be in addition to, and not in lieu of,
any other rights and remedies available to the Company and its affiliates under
law or in equity (including, without limitation, the recovery of damages).
7. Other Provisions.
7.1 Severability. The Executive acknowledges and agrees that the
Executive has had an opportunity to seek advice of counsel in connection with
this Agreement. If it is determined that any of the provisions of this
Agreement, or any part thereof, is invalid or unenforceable, the remainder of
the provisions of this Agreement shall not thereby be affected and shall be
given full affect, without regard to the invalid portions.
7.2 Enforceability; Jurisdictions. The Company and the Executive intend
to and hereby confer jurisdiction to enforce the Restrictive Covenants upon the
courts of the State of Ohio. If any court holds the Restrictive Covenants
wholly unenforceable by reason of breadth of scope or otherwise it is the
intention of the Company and the Executive that such determination not bar or
in any way affect the Company’s right, or the right of any of its affiliates,
to the relief provided above in the courts of any other jurisdiction within the
geographical scope of such Restrictive Covenants, as to breaches of such
Restrictive Covenants in such other respective jurisdictions, such Restrictive
Covenants as they relate to each jurisdiction’s being, for this purpose,
severable, diverse and independent covenants, subject, where appropriate, to
the doctrine of res judicata.
7.3 Attorneys’ Fees. In the event of any legal proceeding relating to
this Agreement or any term or provision thereof, the losing party shall be
responsible to pay or reimburse the prevailing party for all reasonable
attorneys’ fees incurred by the prevailing party in connection with such
proceeding; provided, however, the Executive shall not be required to pay or
reimburse the Company unless the claim or defense asserted by the Executive was
unreasonable.
7.4 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly delivered (i) two
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, (ii) when received if it is sent by facsimile
communication during normal business hours on a business day or one business
day after it is sent by facsimile and received if sent other than during
business hours on a business day, (iii) one business day after it is sent via a
reputable overnight courier service, charges prepaid, or (iv) when received if
it is delivered by hand, in each case to the intended recipient as set forth
below:
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(i) If to the Company, to:
U-Store-It Trust
0000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
(ii) If to the Executive, to:
Xxxxxx X. Xxxxxx
Any such person may by notice given in accordance with this Section to the
other parties hereto designate another address or person for receipt by such
person of notices hereunder.
7.5 Entire Agreement. This Agreement, together with the exhibits hereto
and the Noncompetition Agreement, contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with the Company or its subsidiaries (or any
predecessor of either).
7.6 Waivers and Amendments. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege
nor any single or partial exercise of any such right, power or privilege,
preclude any other or further exercise thereof or the exercise of any other
such right, power or privilege.
7.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
7.8 Assignment. This Agreement, and the Executive’s rights and
obligations hereunder, may not be assigned by the Executive; any purported
assignment by the Executive in violation hereof shall be null and void. In the
event of any Change in Control, the Company may assign this Agreement and its
rights hereunder.
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7.9 Withholding. The Company shall be entitled to withhold from any
payments or deemed payments any amount of withholding required by law. No
other taxes, fees, impositions, duties or other charges or offsets of any kind
shall be deducted or withheld from amounts payable hereunder, unless otherwise
required by law.
7.10 No Duty to Mitigate. The Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise, nor will any payments hereunder be
subject to offset in the event the Executive does mitigate.
7.11 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors, permitted assigns,
heirs, executors and legal representatives.
7.12 Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original but all such counterparts together shall constitute one and the
same instrument. Each counterpart may consist of two copies hereof each signed
by one of the parties hereto.
7.13 Survival. Anything contained in this Agreement to the contrary
notwithstanding, the provisions of Sections 6 and 7 (to the extent necessary to
effectuate the survival of Sections 6 and 7) shall survive termination of this
Agreement and any termination of the Executive’s employment hereunder.
7.14 Existing Agreements. Executive represents to the Company that the
Executive is not subject or a party to any employment or consulting agreement,
non-competition covenant or other agreement, covenant or understanding which
might prohibit the Executive from executing this Agreement or limit the
Executive’s ability to fulfill the Executive’s responsibilities hereunder.
7.15 Headings. The headings in this Agreement are for reference only and
shall not affect the interpretation of this Agreement.
7.16 Parachute Provisions. If any amount payable to or other benefit
receivable by the Executive pursuant to this Agreement is deemed to constitute
a Parachute Payment (as defined below), alone or when added to any other amount
payable or paid to or other benefit receivable or received by the Executive
which is deemed to constitute a Parachute Payment (whether or not under an
existing plan, arrangement or other agreement), and would result in the
imposition on the Executive of an excise tax under Section 4999 of the Internal
Revenue Code of 1986, as amended, then, in addition to any other benefits to
which the Executive is entitled under this Agreement, the Executive shall be
paid by the Company an amount in cash equal to the sum of the excise taxes
payable by the Executive by reason of receiving Parachute Payments plus the
amount necessary to put the Executive in the same after-tax position (taking
into account any and all applicable federal, state and local excise, income or
other taxes at the highest applicable rates on such Parachute Payments and on
any payments under this Section 7.16) as if no excise taxes had been imposed
with respect to Parachute Payments. The amount of any payment under this
Section 7.16 shall be computed by a certified public accounting firm mutually
and reasonably
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acceptable to the Executive and the Company, the computation expenses of
which shall be paid by the Company. “Parachute Payment” shall mean any payment
deemed to constitute a “parachute payment” as defined in Section 280G of the
Internal Revenue Code of 1986, as amended.
7.17 Certain Definitions. For purposes of this Agreement:
(a) an “affiliate” of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person, and includes subsidiaries.
(b) A “business day” means the period from 9:00 am to 5:00 pm on any
weekday that is not a banking holiday in New York City, New York.
(c) A “subsidiary” means any corporation, partnership, joint venture or
other entity in which at least a majority interest in such entity is owned
directly or indirectly by the Company.
* * *
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