1
EXHIBIT 10.32
EMPLOYMENT AGREEMENT dated Monday, September 28, 1998 by and between
X.X. Xxxxxxxxx Corporation, a Delaware corporation, (the "COMPANY") and Xxxxx X.
Xxxxxxxxx (the "EXECUTIVE").
WHEREAS, the transaction pursuant to which the Company has been
separated from its former parent company (the "SPINOFF") has been consummated as
of July 1, 1998, and
WHEREAS, Executive is currently serving as an executive of the Company
or of its subsidiary, X.X. Xxxxxxxxx, Inc.; and
WHEREAS, Executive is willing to continue his employment on the terms
hereinafter set forth in this agreement (the "AGREEMENT");
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Subject to the provisions of Section 8 of this
Agreement, Executive shall be employed by the Company or by X.X. Xxxxxxxxx, Inc.
for a period (the "EMPLOYMENT TERM") commencing on the date hereof (the
"COMMENCEMENT DATE") and ending on the third anniversary of the Spinoff. On the
third and each succeeding anniversary of the Spinoff, the Employment Term shall
automatically be extended for one additional year unless, not later than ninety
days prior to such anniversary, the Company or the Executive shall have given
notice of its or his intention not to extend the Employment Term.
2. Position. (a) Executive shall serve as an executive officer of the
Company or of X.X. Xxxxxxxxx, Inc. In such position, Executive shall have such
duties and authority as shall be determined from time to time by the Board of
Directors of the Company (the "BOARD") or its designee.
(b) During the Employment Term, Executive will devote substantially
all of his business time and best efforts to the performance of his duties
hereunder and will not engage in any other business, profession or occupation
for compensation or otherwise which would conflict with the rendition of such
services either directly or indirectly, without the prior written consent of the
Board; provided that nothing herein shall be deemed to preclude Executive from
serving on business, civic or charitable boards or committees, as long as such
2
activities do not materially interfere with the performance of Executive's
duties hereunder.
3. Base Salary. Company shall pay Executive an annual base salary
(the "BASE SALARY") at the initial annual rate of $175,000, payable in equal
monthly installments or otherwise in accordance with the payroll and personnel
practices of the Company from time to time. Base Salary shall be reviewed
annually by the Board or a committee thereof to which the Board may from time to
time have delegated such authority (the "COMMITTEE") for possible increase (but
not decrease) in the sole discretion of the Board or the Committee, as the case
may be.
4. Bonus. With respect to each fiscal year all or part of which is
contained in the Employment Term, Executive shall be eligible to participate in
the Company's Annual Incentive Plan or any successor plan thereto, with a target
bonus opportunity of 45% of Base Salary and a maximum bonus opportunity not less
than that for which he is eligible on the date hereof (the "BONUS").
5. Additional Compensation. As further compensation, Executive will
be eligible for participation in all bonuses, long-term incentive compensation
and stock options and other equity participation arrangements (at the same
opportunity as that applicable in the ordinary course on the Effective Date)
made available generally to senior executives of the Company.
6. Employee Benefits. During the Employment Term, Executive shall be
eligible, on the same basis as he is currently eligible, for employee benefits
(including fringe benefits, vacation, pension and profit sharing plan
participation and life, health, accident and disability insurance) no less
favorable than those benefits for which he is eligible immediately prior to the
Commencement Date.
7. Business Expenses. Reasonable travel, entertainment and other
business expenses incurred by Executive in the performance of his duties
hereunder shall be reimbursed by the Company in accordance with Company policies
from time to time.
8. Termination of Employment. Each of Executive and the Company may
terminate the employment of Executive hereunder at any time in accordance with
this Section 8. Executive's entitlements hereunder in the event of any such
termination shall be as set forth in this Section 8. The provisions of this
Section 8 shall survive any nonrenewal of this Agreement by the Company pursuant
to Section 1.
(a) For Cause by the Company. If Executive's employment is terminated
by the company for Cause, he shall be entitled to receive his Base
2
3
Salary through the Date of Termination, as hereinafter defined. All other
benefits due Executive following Executive's termination of employment pursuant
to this Section 8(a) shall be determined in accordance with the plans, policies
and practices of the Company.
(b) Death or Disability. Executive's employment hereunder shall
terminate upon his death and may be terminated by the Company upon his
Disability during the Employment Term. Upon termination of Executive's
employment hereunder upon the Executive's Disability or death, Executive or his
estate (as the case may be) shall be entitled to receive Base Salary through the
date of such termination, plus a pro-rata portion of target Bonus, based on the
number of whole or partial months from the beginning of the bonus period to the
Date of Termination. In addition, if Executive's employment is terminated as a
result of Disability, Executive shall continue to be eligible to participate in
all health, medical and dental benefit plans of the Company, until age 65 in
accordance with the terms, conditions and elections, if any, applicable to or in
effect with respect to Executive at the time of termination of employment.
(c) Without Cause by the Company Not Following a Change in Control.
If, during the Employment Term and prior to a Change in Control, as hereinafter
defined, or more than two years after a Change in Control, Executive's
employment is terminated by the Company without Cause, Executive shall be
entitled to the following benefits:
(i) Base Salary through the Date of Termination at the rate in
effect at the time of Notice of Termination, as defined in Section 8(g)
herein, is given, or if higher, at the rate in effect immediately prior
to the event or circumstance leading to the termination of employment,
plus all other amounts to which Executive is entitled under any
compensation or benefit plan of the Company.
(ii) In lieu of any further salary payments to Executive for
periods subsequent to the date of termination, the Company shall pay as
severance pay, not later than the fifth day following the Date of
Termination, a severance payment (the "SEVERANCE PAYMENT") equal to one
and one-half times the sum of (A) Base Salary at the rate in effect on
the date Notice of Termination is given, or if higher, at the rate in
effect immediately prior to the event or circumstance leading to the
termination of employment, plus (B) target Bonus, paid in lump sum
without reduction for time value of money.
(iii) Continued eligibility to participate in all health,
medical and dental benefit plans of the Company for which Executive was
eligible
3
4
immediately prior to the time of the Notice of Termination, or
comparable coverage, for 18 months, or, if sooner, until comparable
health insurance coverage is available to Executive in connection with
subsequent employment or self-employment. The coverage for which
Executive shall continue to be eligible under this Section shall be
made available at no greater cost or tax cost to Executive than that
applicable to Executive at the time of termination of employment.
(iv) Term life insurance equivalent in coverage, and at no
greater cost or tax cost to Executive, to that elected by Executive at
the time of the Notice of Termination, until the last day of the
eighteenth calendar month beginning after termination of employment,
or, if sooner, until comparable life insurance coverage is available to
Executive in connection with subsequent employment or self-employment.
(d) Termination Within Two Years Following a Change in Control. If,
during the Employment Term and within two years following a Change in Control,
Executive's employment is terminated by the Company without Cause, or by the
Executive for Good Reason, as hereinafter defined, Executive shall be entitled
to the payments and benefits set forth in Section 8(c), except that for purposes
of this Section 8(d), references in such Section to "one and one-half" times or
eighteen months shall be changed to "two" times and "two" years. In addition,
Executive shall be entitled to receive, for the two years following termination
of employment or, if sooner, until subsequently employed or self-employed, (i)
all perquisites and similar benefits he was receiving immediately prior to the
time of Notice of Termination, (ii) reimbursement of expenses relating to
financial planning services, up to a maximum amount per year equal to the
average of such amounts paid to Executive for the two calendar years preceding
the Date of Termination and (iii) reimbursement of expenses relating to
outplacement services, subject to a maximum reimbursement under this clause
(iii) of $25,000. For purposes of this Agreement, termination of employment
after the commencement of negotiations with a potential acquiror or business
combination partner shall be deemed to be a termination of employment within two
years following a Change in Control if such negotiations result in a transaction
with such acquiror or business combination partner which constitutes a Change in
Control.
(e) Retirement. If during the Employment Term, Executive retires at
normal retirement age under the Company's qualified pension plan or any
successor plan, Executive shall be entitled to the payments and benefits
specified in Section 8(b) as if his employment had terminated as a result of
Disability.
4
5
(f) Voluntary Termination of Employment. If during the Employment
Term, Executive terminates his employment under circumstances other than those
specified in this Section 8, Executive shall be entitled to the payments and
benefits specified in Section 8(a).
(g) Notice and Date of Termination. (i) Any purported termination of
employment by the Company or by Executive shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section 17(i)
hereof. For purposes of this Agreement, a "NOTICE OF TERMINATION" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of employment under the provision so
indicated. If the event or circumstance on which the proposed termination of
employment is based is susceptible of cure, the Notice of Termination shall not
be delivered until Executive or the Company, as the case may be, has had at
least 30 days to effect such cure, and unless such event or circumstance
persists at the end of such cure period.
(ii) "DATE OF TERMINATION" shall mean (A) if employment is
terminated for Disability, thirty (30) days after Notice of Termination
is given (provided that Executive shall not have returned to the
full-time performance of his duties during such thirty (30) day
period), (B) if employment is terminated by reason of death, the date
of death, and (C) if employment is terminated for any other reason, the
date specified in the Notice of Termination (which, in the case of a
termination of employment by the Company for Cause shall not be less
than ten (10) days after the date such Notice of Termination is given);
provided that if within thirty (30) days after any Notice of
Termination is given the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the
dispute is finally determined, either by mutual written agreement of
the parties, by a binding arbitration award, or by a final judgment,
order or decree of a court of competent jurisdiction (which is not
appealable or the time for appeal therefrom having expired and no
appeal having been perfected); provided further that the Date of
Termination shall be extended by a notice of dispute only if such
notice is given in good faith and the party giving such notice pursues
the resolution of such dispute with reasonable diligence.
(h) Any provision of this Agreement to the contrary notwithstanding,
Executive shall be obligated to execute a general release of claims in favor of
the Company, in the form used generally by the Company in connection with
5
6
termination of employment from time to time, as a condition to receiving
benefits and payments under this Agreement.
9. Definitions. (a) "CAUSE" shall mean (i) Executive's willful and
continued failure substantially to perform the duties of his position (other
than as a result of total or partial incapacity due to physical or mental
illness or as a result of a termination by Executive for Good Reason, as
hereinafter defined), (ii) any willful act or omission by the Executive
constituting dishonesty, fraud or other malfeasance, which in any such case is
demonstrably injurious to the financial condition or business reputation of the
Company or any of its affiliates, or (iii) the Executive's conviction of a
felony under the laws of the United States or any state thereof or any other
jurisdiction in which the Company or any of its subsidiaries conducts business
which materially impairs the value of Executive's services to the Company or any
of its subsidiaries. For purposes of this definition, no act or failure to act
shall be deemed "willful" unless effected by Executive not in good faith and
without a reasonable belief that such action or failure to act was in or not
opposed to the best interests of the Company.
(b) "CHANGE IN CONTROL" shall mean the occurrence of any of the
following events after July 14, 1998:
(i) Any "person," as such term is used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT") (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any
company owned directly or indirectly by the shareholders of the Company
in substantially the same proportions as their ownership of stock of
the Company), is or becomes the "beneficial owner" (as defined in rule
13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 20% or more of the combined voting power of
the Company's then outstanding securities;
(ii) During any period of two consecutive years commencing on
July 14, 1998, individuals who at the beginning of such period
constitute the Board, and any new director (other than a director
designated by a person (as defined above) who has entered into an
agreement with the Company to effect a transaction described in
subsections (i), (iii) or (iv) of this definition) whose election by
the Board or nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority
thereof;
6
7
(iii) The shareholders of the Company have approved a merger or
consolidation of the Company with any other company and all other
required governmental approvals of such merger or consolidation have
been obtained, other than (A) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
more than 60% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such
merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in
which no person (as defined above) becomes the beneficial owner (as
defined above) of more than 20% of the combined voting power of the
Company's then outstanding securities; or
(iv) The shareholders of the Company have approved a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets, and all other required governmental approvals of such
transaction have been obtained.
(c) "DISABILITY" shall mean the Executive's inability, as a result of
physical or mental incapacity, to perform the duties of his position for a
period of six (6) consecutive months or for an aggregate of six (6) months in
any twelve (12) consecutive month period. Any question as to the existence of
the Disability of Executive as to which Executive and the Company cannot agree
shall be determined in writing by a qualified independent physician mutually
acceptable to Executive and the Company. If Executive and the Company cannot
agree as to a qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in writing to the
Company and Executive shall be final and conclusive for all purposes of the
Agreement.
(d) "GOOD REASON" means:
(i) Removal from, or failure to be reappointed or reelected
to, Executive's position as specified in Section 2 (other than as a
result of a promotion).
(ii) Material diminution in Executive's title, position, duties
or responsibilities, or the assignment to Executive of duties that are
inconsistent, in a material respect, with the scope of duties and
7
8
responsibilities associated with Executive's position as specified in
Section 2.
(iii) Reduction in Base Salary or target or maximum Bonus
opportunity, reduction in level of participation in long term
incentive, stock option and other equity award, benefit and other plans
for senior executives or other material breach of this Agreement by the
Company.
(iv) Relocation of the executive's principal workplace without
his consent to a location outside the New York metropolitan area.
10. Certain Payments. (a) If any of the payments or benefits received
or to be received by Executive in connection with a Change in Control or
Executive's termination of employment, whether or not pursuant to this Agreement
(such payments or benefits, excluding the Gross-Up Payment, as hereinafter
defined, shall hereinafter be referred to as the "TOTAL PAYMENTS") will be
subject to an excise tax as provided for in Section 4999 of the Internal Revenue
Code (the "CODE") (the "EXCISE TAX"), the Company shall pay to Executive an
additional amount (the "GROSS-UP PAYMENT") such that the net amount retained by
the Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state and local income and employment taxes and Excise Tax upon the
Gross-Up Payment, shall be equal to the Total Payments; provided, however, that
if the Total Payments are less than 360% of the Executive's Base Amount, as
defined in section 280G(b)(3) of the Code, the Executive shall not be entitled
to the Gross-Up Payment, and the Total Payments shall be reduced as provided for
in Section 10(d) below.
(b) For purposes of determining whether any of the Total Payments will
be subject to the Excise Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments" (within the meaning of
section 280G(b)(2) of the Code) unless, in the opinion of tax counsel ("TAX
COUNSEL") reasonably acceptable to Executive and selected by the accounting firm
acting as the "Auditor", as defined below, such payments or benefits (in whole
or in part) do not constitute parachute payments, including by reason of section
280G(b)(4)(A) of the Code, (ii) all "Excess parachute payments" within the
meaning of section 280G(b)(1) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of
the Base Amount allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the Auditor in accordance
with the principles of sections 280G(d)(3) and (4) of the Code. For
8
9
purposes of determining the amount of the Gross-Up Payment, the Executive shall
be deemed to pay federal income tax at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rate of taxation in the
state and locality of Executive's residence or, if higher, in the state and
locality of Executive's principal place of employment, on the date of
termination (or if there is no date of termination, then the date on which the
Gross-Up Payment is calculated for purposes of this Section 10), net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes.
(c) In the event that the Excise Tax is finally determined to be less
than the amount taken into account hereunder in calculating the Gross-Up
Payment, Executive shall repay to the Company, at the time that the amount of
such reduction in Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (including that portion of the Gross-Up
Payment attributable to the Excise Tax and federal, state and local income and
employment taxes imposed on the Gross-Up Payment being repaid by the Executive
to the extent that such repayment results in a reduction in Excise Tax and/or a
federal, state or local income or employment tax deduction) plus interest on the
amount of such repayment at 120% of the rate provided in section 1274(b)(2)(B)
of the Code. In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder in calculating the Gross-Up Payment (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional Gross-Up
Payment in respect of such excess (plus any interest, penalties or additions
payable by the Executive with respect to such excess) at the time that the
amount of such excess is finally determined. The Executive and the Company shall
each reasonably cooperate with the other in connection with any administrative
or judicial proceedings concerning the existence or amount of liability for
Excise Tax with respect to the Total Payments.
(d) If the Total Payments would constitute an Excess parachute
payment, but are less than 360% of the Base Amount, such payments shall be
reduced to the largest amount that may be paid to the Executive without the
imposition of the Excise Tax or the disallowance as deductions to the Company
under Section 280G of the Code of any such payments.
(e) All determinations under this Section 10 shall be made by a
nationally recognized accounting firm selected by the Executive (the "AUDITOR").
The Company shall cooperate in good faith in making such determinations and in
providing the necessary information for this purpose.
9
10
11. Indemnification. The Company will indemnify Executive (and his
legal representative or other successors) to the fullest extent permitted
(including a payment of expenses in advance of final disposition of a
proceeding) by applicable law, as in effect at the time of the subject act or
omission, or by the Certificate of Incorporation and By-Laws of the Company, as
in effect at such time or on the Commencement Date, or by the terms of any
indemnification agreement between the Company and Executive, whichever affords
or afforded greatest protection to Executive, and Executive shall be entitled to
the protection of any insurance policies the Company may elect to maintain
generally for the benefit of its directors and officers (and to the extent the
Company maintains such an insurance policy or policies, Executive shall be
covered by such policy or policies, in accordance with its or their terms to the
maximum extent of the coverage available for any Company officer or director),
against all costs, charges and expenses whatsoever incurred or sustained by him
or his legal representatives (including but not limited to any judgment entered
by a court of law) at the time such costs, charges and expenses are incurred or
sustained, in connection with any action, suit or proceeding to which Executive
(or his legal representatives or other successors) may be made a party by reason
of his having accepted employment with the Company or by reason of his being or
having been a director, officer or employee of the Company, or any subsidiary of
the Company, or his serving or having served any other enterprise as a director,
officer or employee at the request of the Company. Executive's rights under this
Section 11 shall continue without time limit for so long as he may be subject to
any such liability, whether or not the Employment Term may have ended.
12. Non-Competition. (a) Executive acknowledges and recognizes the
highly competitive nature of the businesses of the Company and its affiliates
and accordingly agrees that during the Employment Term and for a period of one
year after the termination thereof;
(i) The Executive will not directly or indirectly engage in
any business which is in competition with any line of business
conducted by the Company or its affiliates (including without
limitation by performing or soliciting the performance of services for
any person who is a customer or client of the Company or any of its
affiliates) whether such engagement is as an officer, director,
proprietor, employee, partner, investor (other than as a holder of less
than 1% of the outstanding capital stock of a publicly traded
corporation), consultant, advisor, agent, sales representative or other
participant, in any location in which the Company or any of its
affiliates conducted any such competing line of business.
10
11
(ii) Executive will not directly or indirectly assist others in
engaging in any of the activities in which Executive is prohibited from
engaging in by clause (i) above.
(iii) Executive will not directly or indirectly induce any
employee of the Company or any of its affiliates to engage in any
activity in which Executive is prohibited to engage by this Section, or
to terminate his or his employment with the Company or any of its
affiliates, and will not directly or indirectly employ or offer
employment to any person who was employed by the Company or any of its
affiliates unless such person shall have ceased to be employed by the
Company or any of its affiliates for a period of at least 12 months.
(iv) Executive will not directly or indirectly solicit
subscribers or suppliers of the Company or telephone companies for
which the Company serves as sales agent or induce any such person to
terminate its relationships with the Company.
(b) It is expressly understood and agreed that although Executive and
the Company consider the restrictions contained in this Section 12 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against Executive, the provisions
of this Agreement shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such maximum extent as such
court may judicially determine or indicate to be enforceable. Alternatively, if
any court of competent jurisdiction finds that any restriction contained in this
Agreement is unenforceable, and such restriction cannot be amended so as to make
it enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.
13. Confidentiality; Nondisparagement. (a) Executive will not at any
time (whether during or after his employment with the Company) disclose or use
for his own benefit or purposes or the benefit or purposes of any other person,
firm, partnership, joint venture, association, corporation or other business
organization, entity or enterprise other than the Company and any of its
subsidiaries or affiliates, any trade secrets, information, data, or other
confidential information relating to customers, development programs, costs,
marketing, trading, investment, sales activities, promotion, credit and
financial data, manufacturing processes, financing methods, plans, employees,
organizational structure or the business and affairs of the Company generally,
or of any subsidiary or affiliate of the Company, provided that the foregoing
shall not apply to information which is not unique to the Company or which is
generally known to the industry or the public other than as a result of
Executive's breach of this
11
12
covenant. Executive agrees that upon termination of his employment with the
Company for any reason, he will return to the Company immediately all memoranda,
books, papers, plans, information, letters and other data, and all copies
thereof or therefrom, in any way relating to the business of the Company and its
affiliates, except that he may retain personal notes, notebooks and diaries.
Executive further agrees that he will not retain or use for his account at any
time any trade names, trademark or other proprietary business designation used
or owned in connection with the business of the Company or its affiliates.
(b) Executive will not at any time (whether during or after his
employment with the Company) knowingly make any statement, written or oral, or
take any other action relating to the Company or its officers or directors that
would disparage or otherwise harm the Company, its business or its reputation or
those of any of its officers and directors.
14. Material Inducement; Specific Performance. Executive acknowledges
and agrees that the covenants entered into by Executive in Section 12 and 13 are
essential elements of the parties' agreement as expressed herein, are a material
inducement for the Company to enter into this Agreement and the breach thereof
would be a material breach of this Agreement. Executive further acknowledges and
agrees that the Company's remedies at law for a breach or threatened breach of
any of the provisions of Section 12 or Section 13 would be inadequate and, in
recognition of this fact, Executive agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.
15. Litigation Support. Executive agrees that he will assist and
cooperate with the Company in connection with the defense or prosecution of any
claim that may be made against or by the Company or its affiliates, or in
connection with any ongoing or future investigation or dispute or claim of any
kind involving the Company or its affiliates, including any proceeding before
any arbitral, administrative, judicial, legislative, or other body or agency,
including testifying in any proceeding, to the extent such claims,
investigations or proceedings relate to services performed or required to be
performed by Executive, pertinent knowledge possessed by Executive, or any act
or omission by Executive. Executive further agrees to perform all acts and to
execute and deliver any documents that may be reasonably necessary to carry out
the provisions of this Section.
16. Legal Fees. The Company will pay or reimburse Executive, as
incurred, all legal fees and costs incurred by Executive in enforcing his rights
12
13
under the Agreement, if Executive's position substantially prevails. Following a
Change in Control, the Company will pay or reimburse Executive, as incurred, for
all such fees and costs unless Executive's claim was frivolous or was brought or
pursued by Executive in bad faith.
17. Miscellaneous. (a) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
(b) Entire Agreement/Amendments. This Agreement contains the entire
understanding of the parties with respect to the employment of Executive by the
Company. There are no restrictions, agreements, promises, warranties, covenants
or undertakings between the parties with respect to the subject matter herein
other than those expressly set forth herein and in the incentive compensation
and other employee benefit plans and arrangements of the Company referenced
herein. This Agreement may not be altered, modified, or amended except by
written instrument signed by the parties hereto.
(c) No Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
of such party's rights or deprive such party of the right thereafter to insist
upon strict adherence to that term or any other term of this Agreement.
(d) Severability. In the event that any one or more of the provisions
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not be affected thereby.
(e) Assignment. This Agreement shall not be assignable by Executive
and shall be assignable by the Company only with the consent of Executive except
as set forth in Section 17(h); provided that no such assignment by the Company
shall relieve the Company of any liability hereunder, whether accrued before or
after such assignment.
(f) No Mitigation. Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, and no such employment, if obtained, or compensation or benefits
payable in connection therewith, shall reduce any amounts or benefits to which
Executive is entitled hereunder except as provided for in Sections 8(c) and (d).
(g) Arbitration. Any dispute between the parties to this Agreement
arising from or relating to the terms of this Agreement or the employment of
13
14
Executive by the Company shall be submitted to arbitration in New York, New York
under the auspices of the American Arbitration Association.
(h) Successors; Binding Agreement
(i) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to
expressly assume and 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. Such assumption and agreement
shall be obtained prior to the effectiveness of any such succession. As
used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise. Prior to a Change in Control, the term
"Company" shall also mean any affiliate of the Company to which
Executive may be transferred and the Company shall cause such successor
employer to be considered the "Company" bound by the terms of this
Agreement and this Agreement shall be amended to so provide. Following
a Change in Control the term "Company" shall not mean any affiliate of
the Company to which Executive may be transferred unless Executive
shall have previously approved of such transfer in writing, in which
case the Company shall cause such successor employer to be considered
the "Company" bound by the terms of this Agreement and this Agreement
shall be amended to so provide.
(ii) This Agreement shall inure to the benefit of and be
binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributors, devisees and legatees.
If Executive should die while any amount would still be payable to
Executive hereunder if Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the devisee, legatee or other
designee of Executive or, if there is no such designee, to the estate
of Executive.
(i) Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
Executive at the address appearing from time to time in the personnel records of
the Company and to the Company at the address of its corporate headquarters,
directed to the attention of the Board with a copy to the Secretary of the
14
15
Company, or in either case to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
(j) Withholding Taxes. The Company may withhold from any amounts
payable under this Agreement such Federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(k) Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
15
16
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
Xxxxx X. Xxxxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
----------------------
X.X. XXXXXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-------------------
Title: Chairman and CEO
16
