Exhibit 10(a)
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of the 30th day of April, 1999, between
Republic New York Corporation, a Maryland corporation having its principal
executive offices in New York, New York (including as successor thereto, the
"Company"), and Xxx X. Xxxxxxx (the "Executive").
WHEREAS, Executive currently serves as a senior executive
officer of the Company;
WHEREAS, the Company recognizes the Executive's substantial
contribution to the growth and success of the Company, desires to provide for
the continued employment of the Executive and to make certain changes in the
Executive's employment arrangements with the Company, which the Board has
determined will reinforce and encourage the continued attention and dedication
to the Company of the Executive as a member of the Company's senior management
in the best interests of the Company and its shareholders;
WHEREAS, the Executive is willing to continue to serve the
Company on the terms and conditions set forth below;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. The Company hereby agrees to continue to
employ the Executive, and the Executive hereby agrees to continue in the employ
of the Company, subject to the terms and conditions of this Agreement, for the
period commencing on the date hereof (the "Effective Date") and ending on April
30, 2004 (the "Employment Period").
2. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, the
Executive shall serve as Chairman of the Board and Chief Executive
Officer of Republic New York Corporation and Chairman of the Board
and Chief Executive Officer of Republic National Bank of New York
with the appropriate authority, duties and responsibilities attendant
to such position. Prior to a change in control (as defined in the
Company Supplemental Executive Retirement Plan) ("Change in Control"),
the Company shall use its best efforts to cause the Executive to be
nominated for
election to the Company's Board of Directors (the
"Board") during the Employment Period.
(ii) During the Employment Period, and
excluding any periods of vacation and sick leave to which the Executive
is entitled, the Executive agrees to devote substantially all of his
attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the
Executive's reasonabl best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period it
shall not be a violation of this Agreement for the Executive, in
accordance with the Company's Standards of Conduct, to (A) serve, with
prior approval of the Board, on corporate, civic or charitable boards
or committees, (B) deliver lectures, fulfill speaking engagements or
teach on a limited basis at educational institutions and (C) manage
Executive's personal investments, so long as such activities described
in clauses (A), (B) and (C) do not significantly interfere with the
performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities have
been conducted by the Executive prior to the Effective Date in
accordance with the Company's Standards of Conduct, the continued
conduct of such activities (or the conduct of activities similar in
nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Company.
(b) Compensation.
(i) Annual Base Salary. Effective
January 1, 1999, and during the Employment Period, the Executive shall
receive an annual base salary ("Annual Base Salary") of at least
$450,000 which shall increase effective May 1, 2000 to $575,000.
Any increase in Annual Base Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced fter any such increase and the term Annual
Base Salary as utilized in this Agreement shall refer to Annual Base
Salary as so increased.
(ii) Annual Bonus. During the Employment
Period, the Executive shall be paid an annual cash bonus ("Annual
Bonus") with a target level of not less than 3.75 times Annual Base
Salary ("Target Bonus"), or such greater amount as determined by the
Human Resources Committee of the Board (the "HR Committee"); provided,
however, that a minimum annual bonus shall be paid in any event to
the Executive equal to the difference between one million dollars
and the Annual Base Salary; and further provided, that (A) the formula
for
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determining Executive's 1999 Award under the Company's 1994
Performance Based Incentive Compensation Plan (the "Performance
Plan") that was adopted by the HR Committee at its meeting of March 30,
1999 and attached hereto as Annex I will not be modified without
Executive's written consent and (B) the formula for determining
Executive's Award under the Performance Plan and any successor
plan for each subsequent year during the Employment Period shall use
a "Base Year" and "Award Multiple" (as such terms are defined in the
Performance Plan as in effect on the Effective Date) which shall result
in an award that is no less than the amount that would have been paid
had the Base Year and Award Multiple used for 1999 been applied. The
Annual Bonu shall be paid within two month of the end of the
fiscal year of the Company to which it relates. If any extraordinary
event, such as a reorganization, recapitalization, spinoff, stock
split, stock dividend, merger of the Company, or sale of substantially
all of the assets of the Company, occurs in any fiscal year, the
Company shall equitably adjust the terms of the award under the
Performance Plan. If a Change in Control occurs and the Company has
"net income" (as defined in the Performance Plan as in effect on the
Effective Date and determined consistently with past practice) from its
continuing operations, the Executive shall be paid at least the Target
Bonus for the year in which such Change in Control occurs and in each
subsequent year until the end of the Employment Period. If because of a
merger or other corporate reorganization, it is not possible to
determine whether the Company has net income from its continuing
operations, such net income shall be presumed unless there is
conclusive proof to the contrary.
(iii) Incentive Awards. If the Board
approves any transaction which, if consummated, would constitute a
Change in Control (a "Change in Control Transaction"), then on such
approval date the Executive shall be awarded a special bonus, in
recognition of extraordinary services, of $1,000,000 payable January
1, 2000, provided the Executive is an employee of the Company on
such date or the earlier date on which the Change in Control
Transaction is consummated.
(iv) Other Employee Benefit Plans.
During the Employment Period, except as otherwise expressly provided
herein, the Executive shall be entitled to participate in all employee
benefit, welfare and other plans, practices, policies and programs
and fringe benefits (including the use of an automobile of his
selection with an approximate retail price not in excess of $50,000,
which automobile shall be replaced every three years at which time
it may be purchased by the Executive at its holesale value as reflected
in the Xxxxx Blue Book Auto Market Report, if the Company owns the car,
or, if the car is leased, the purchase price specified in the
Company's lease agreement)
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(collectively, Employee Benefit Plans")
on a basis no less favorable han that provided to the Chief Executive
Officer prior to any Change in Control.
3. Termination of Employment.
(a) Death or Disability. The Executive's
employment shall terminate automatically upon the Executive's death during
the Employment Period. If the Company determines in good faith that the
Disabiliy of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), it may give to the
Executive written notice in accordance with Section 10(b) of this Agreement
of its intention to terminate the Executive's employment. In such event,
the Executive's employment with the Company shall terminate effective on the
30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability" shall mean
the absence of the Executive from the Executive's duties with the Company on
a full-time basis for 180 business days during any consecutive twelve month
period as a result of incapacity due to mental or physical illness which is
determined to be total and permanent by a physician selected by the Company or
its insurers and acceptable to the Executive or the Executive's legal
representative.
(b) With or Without Cause. The Company may
terminate the Executive's employment during the Employment Period with or
without Cause. For purposes of this Agreement, "Cause" shall mean:
(i) the willful engaging by the
Executive in illegal conduct or gross misconduct which is materially
and demonstrably injurious to the Company or the willful engaging in
conduct which materially interferes with any Change in Control
Transaction approved by the Board, or
(ii) conviction of a felony or guilty or
nolo contendere plea by the Executive with respect thereto or any event
requiring the consent of the Federal Deposit Insurance Corporation
Act under 12 U.S.C. ss.1829(a).
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer
(while the Executive does not serve as such) or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the Company.
The cessation of
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employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than 75% of the
entire membership of the Board (excluding the Executive) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph (i) or
(ii) above, and specifying the particulars thereof in detail.
(c) Good Reason. The Executive's employment may
be terminated by the Executive for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean in the absence of a written consent of the Executive:
(i) the assignment to the Executive of
any duties inconsistent with the Executive's title and position
(including status, offices and reporting requirements), authority,
duties or responsibilities as contemplated by Section 2(a)(i) of this
Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;
(ii) any failure by the Company to comply
with any of the provisions of Section 2 (b) of this Agreement, other
than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(iii) any purported termination by the
Company of the Executive's employment otherwise than as expressly
permitted by this Agreement for Cause, death or Disability, or any
failure by the Company to renew this Agreement;
(iv) any failure by the Company to comply
with and satisfy Section 9(c) of this Agreement;
(v) failure of the Company to appoint
the Executive to, and retain the Executive in, any of the positions as
specified in Section 2(a)(i) or equivalent positions (it being
understood that equivalent positions may have different titles);
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(vi) any requirement that the Executive (A)
be based anywhere more than fifty (50) miles from the office where the
Executive is currently located or (B) travel on Company business to
an extent substantially greater than the Executive's current travel
obligations;
(vii) any failure of the Company to use its
best efforts to assist the Executive in obtaining or retaining a visa
to work in the United States;
(viii) any failure of the Company to retain
the Executive in a position with respect to the Company's operations in
the United States that is comparable to the Executive's position with
the Company as of the Effective Date; and
(ix) any failure of the Executive to be
elected to, or to remain a member of, the Company's Board of Directors;
provided, however, that after a Change in Control, failure of the
Executive to be nominated to the Board of Directors of a successor
that is a publicly traded company shall not constitute Good Reason.
For purposes of this Section 3(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive. Without limiting the generality of
the foregoing, the Executive shall for all purposes of this Agreement be deemed
to have terminated his employment for Good Reason if he voluntarily terminates
his employment within sixty (60) days following the first anniversary of the
occurrence of a Change in Control due to an event described in Section 3(c)(i),
(v), (viii) or (ix) which occurs prior to the first anniversary of such Change
in Control.
(d) Notice of Termination. Any termination by
the Company or by the Executive shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 10(b) of this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt
of such notice, specifies the termination date (which date shall be not more
than thirty days after the giving of such notice). The failure by the Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
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(e) Date of Termination. "Date of Termination"
means if the Executive's employment is terminated by the Company other than for
Disability, or by the Executive, the date of receipt of the Notice of
Termination or any later date specified therein within 30 days of such
notice, and if the Executive's employment is terminated by reason of death
or Disability, the Date of Termination shall be the date of death of the
Executive or the Disability Effective Date, as the case may be.
4. Obligations of the Company upon Termination.
(a) Good Reason; Death; Disability; Other Than for Cause. If,
during the Employment Period, the Company shall terminate the Executive's
employment other than for Cause, or the Executive shall terminate employment for
Good Reason or the Executive's employment shall terminate on account of death or
Disability:
(i) the Company shall pay to the
Executive or his estate in a lump sum in cash within 30 days after
the Date of Termination:
(A) the amount equal to the
product of (x) three 3) and (y) the sum of the Executive's
current Annual Base Salary and Target Bonus; and
(B) the sum of (x) the Executive's
Annual Base Salary through the Date of Termination to the
extent not theretofore paid, and (y) the product of (1)
the Target Bonus and (2) a fraction, the numerator of which
is the number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination and the
denominator of which is 365, to the extent not theretofore
paid (the sum of the amounts described in clauses (x) and (y)
shall be hereinafter referred to as the "Accrued Obligations")
(ii) for the remainder of the Executive's
life and that of his spouse, the Company shall continue to provide
medical and dental benefits to the Executive, his spouse and children
under age 25 on the same basis, including without limitation employee
contributions, as such benefits are then currently provided to the
Executive ("Medical Benefits"); provided that such Medical Benefits
shall be secondary to any other coverage obtained by the Executive
and further provided that the aggregate cost to the Company for
such coverage shall not exceed $1,000,000.
(iii) all stock options shall vest and
remain exercisable for at least ninety days from the Date of
Termination or the earlier expiration of
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their term and all restricted
stock awards and other awards shall vest and become immediately
payable;
(iv) to the extent not theretofore paid or
provided, the Company shall timely pay or provide to the Executive any
other amounts or benefits required to be paid or provided or which the
Executive is eligible to receive under any plan, program, policy or
practice or contract or agreement of the Company and its affiliated
companies through the Date of Termination, and the Executive shall be
permitted to retain the ompany automobile as provided in Section 2(b)
(iv) (such other amounts and benefits shall be hereinafter referred to
as the "Other Benefits"); and
(v) the xecutive's supplemental benefit
under the Company's Supplemental Executive Retirement Plan shall be
determined assuming the Executive had attained the age that he would
have attained at the end of the Employment Period.
Notwithstanding the foregoing provisions of this Section 4(a), if the Executive
terminates employment for Good Reason within one year of a Change in Control,
only the payment specified in paragraph (i)(B) shall be made unless (i) the
basis for such termination is the occurrence of one or more of the circumstances
set forth in each of Section 3(c)(ii), (iii), (iv), (vi) or (vii), or (ii) the
Executive's title with the Company during such period is not that of Executive
Vice President (or such other title as shall be mutually agreed upon) or the
Executive is assigned duties inconsistent with the duties normally assigned to
an executive with such title in a financial organization of comparable size (it
being understood that no duties need be assigned to the Executive).
(b) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause or the Executive terminates his
employment without Good Reason during the Employment Period, this Agreement
shall terminate without further obligations to the Executive other than the
obligation to pay to the Executive (i) his Annual Base Salary through the Date
of Termination to the extent theretofore unpaid and (ii) the Other Benefits,
provided, however that the Medical Benefits shall be paid if the Executive's
employment is terminated other than for Cause.
5. Non-exclusivity of Rights. Except as specifically provided
and subject to Section 10, nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any plan, program, policy or
practice provided by the Company or any of its affiliated companies and for
which the Executive may qualify, nor, subject to Section 10(f), shall anything
herein limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is
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otherwise entitled
to receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement; provided that the Executive shall not be eligible
for severance benefits under any other program or policy of the Company.
6. Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) pursued or defended against in
good faith by the Executive regarding the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
7. Certain Additional Payments by the Company.
(a) Anything in this Agreement (other than in
Section 10) to the contrary notwithstanding and except as set forth below,
in the event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 7) (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Code or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are tereinafter collectively referred to
as the "Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that after payment
by the Executive of all taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section 7(a), no Gross-Up
Payment shall be made to the Executive if the Executive
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terminates
employment within one year of a Change in Control, unless (i) such termination
is by the Company without Cause, (ii) the basis for such termination is the
occurrence of one or more of the circumstances set forth in each of Section
3(c)(ii), (iii), (iv), (vi) or (vii), or (iii) the Executive's title with the
Company during such period is not Executive Vice President (or such other title
as shall be mutually agreed upon) or the Executive is assigned duties
inconsistent with the duties normally assigned to an executive with such title
in a financial organization of comparable size (it being understood that no
duties need be assigned to the Executive).
(b) Subject to the provisions of Section 7(c),
all determinations required to be made under this Section 7, including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall
be made by the Company's independent auditors or such other certified public
accounting firm reasonably acceptable to the Executive as may be designated by
the Company (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days
of the receipt of notice from the Executive that there has been a Payment, or
such earlier time as is requested by the Company. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 7, shall be paid by the Company to the
Executive not later than the d ue date for the payment of any Excise Tax. Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 7(c) and the Executive thereafter
is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of
the Executive.
(c) The Executive shall notify the Company in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten business days after
the Executive is informed in writing of such claim and shall apprise the Company
of the nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which it gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:
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(i) give the Company any information
reasonably requested by the Company relating to such claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably request in
writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii) cooperate with the Company in good
faith in order effectively to contest such claim, and
(iv) permit the Company to participate in
any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 7(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and xxx for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 7(c), the Executive becomes
entitled to receive any
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refund with respect to such claim, the Executive shall
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Section 7(c), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior
to the expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
8. Covenants Not to Compete or Solicit Company Clients and
Employees; Confidential Information.
(a) During the term of this Agreement, and for a
one year period after the Date of Termination by the Company or by the
Executive for any reason, the Executive shall not directly or indirectly, own,
manage, operate, join, control, or participate in the ownership, management,
operation or control of, or be employed by or connected in any manner with,
any competing business, whether for compensation or otherwise, without the prior
written consent of the Company. For the purposes of this Agreement, a
"competing business" shall be any business which is a significant competitor
of the Company in the New York area and has at least five (5) billion dollars
in deposits or at least five (5) billion dollars in assets under management,
unless the Executive's primary duties and responsibilities with respect
to such business are not related to the Executive's activities engaged
in for the Company within the one year period prior to the Date of Termination.
Should the Executive, directly or indirectly, own, manage, operate, join,
control or participate in the ownership, management, operation or control of, or
be employed by or connected in any manner with, any competing business, all
payments under this Agreement shall cease.
(b) During the term of this Agreement, and for a
one year period after the Date of Termination by the Company or the Executive
for any reason, the Executive shall not, in any manner, directly or
indirectly, (i) solicit any client or prospective client of the Company to
whom the Executive provided services, or for whom the Executive transacted
business, or whose identity became known to the Executive in connection with the
Executive's employment with the Company to transact business with a competing
business or reduce or refrain from doing any business with the Company or (ii)
interfere with or damage (or attempt to interfere with or damage) any
relationship between the Company and any such client or prospective client.
During the term of this Agreement and for a period of one year after the Date of
Termination by the Company or the Executive for any reason, the Executive
further agrees that the Executive shall not, in any manner, directly or
indirectly, solicit any person who is an employee of the Company to apply for or
accept employment with any competing business. The term "solicit" as
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used in
this Agreement means any communication of any kind whatsoever, regardless
of by whom initiated, inviting, encouraging or requesting any person or entity
to take or refrain from taking any action.
(c) The Executive hereby acknowledges that, as
an employee of the Company, he will be making use of, acquiring and adding to
confidential information of a special and unique nature and value relating to
the Company and its strategic plan and financial operations. The Executive
further recognizes and acknowledges that all confidential information is the
exclusive property of the Company, is material and confidential, and is critical
to the successful conduct of the business of the Company. Accordingly, the
Executive hereby covenants and agrees that he will use confidential information
for the benefit of the Company only and shall not at any time, directly or
indirectly, during the term of this Agreement and thereafter divulge, reveal
or communicate any confidential information to any person, firm, corporation
or entity whatsoever, or use any confidential information for his own benefit
or for the benefit of others. In no event shall an asserted violation of the
provisions of this Section 8(c) constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement.
(d) Any termination of the Executive's
employment or of this Agreement shall have no effect on the continuing operation
of this Section 8.
(e) The Executive acknowledges and agrees that the
Company will have no adequate remedy at law, and could be irreparably harmed,
if the Executive breaches or threatens to breach any of the provisions of this
Section 8. The Executive agrees that the Company shall be entitled to equitable
and/or injunctive relief to prevent any breach or threatened breach of this
Section 8, and to specific performance of each of the terms hereof in addition
to any other legal or equitable remedies that the Company may have. The
Executive further agrees that he shall not, in any equity proceeding relating to
the enforcement of the term of this Section 8, raise the defense that the
Company has an adequate remedy at
law.
(f) The terms and provisions of this Section 8
are intended to be separate and divisible provisions and if, for any reason,
any one or more of them is held to be invalid or unenforceable, neither the
validity nor the enforceability of any other provision of this Agreement shall
thereby be affected. The parties hereto acknowledge that the potential
restrictions on the Executive's future employment imposed by this Section 8 are
reasonable in both duration and geographic scope and in all other respects. If
for any reason any court of competent jurisdiction shall find any provisions
of this Section 8 unreasonable in duration or geographic scope or otherwise,
the Executive and the Company agree that the restrictions and prohibitions
contained herein shall be effective to the fullest extent allowed under
applicable law in such jurisdiction.
13
(g) The parties acknowledge that this Agreement would
not have been entered into and the benefits described in Sections 2 or 4 would
not have been promised in the absence of the Executive's promises under this
Section 8.
9. Successors.
(a) This Agreement is personal to the Executive
and without the prior written consent of the Company shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns.
(c) 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 assume
expressly 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. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid.
10. No "Golden Parachute Payments" Required. Anything in this
Agreement to the contrary notwithstanding, the Company shall not be obligated to
make any payment hereunder that would be prohibited as a "golden parachute
payment" or "indemnification payment" under 12 U.S.C. ss.1828(k).
11. Miscellaneous.
(a) This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
14
Xxx X. Xxxxxxx
0000 Xxxx Xxxx
Xxxxxxxxxx, X.X. 00000
If to the Company:
Republic New York Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxx Xxxx and Xxxxxxx Saali
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(d) The Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to
insist upon strict compliance with any provision of this Agreement or the
failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 3(c)(i)-(iv) of this Agreement,
shall no be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
(f) From and after the Effective Date this Agreement
shall supersede any other employment agreement between the parties with respect
to the subject matter hereof.
(g) Subject to the provisions of Section 4(a),
there shall be no limitation on the ability of the Company to terminate the
Executive at any time with or without Cause.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Board of Directors,
the Company has
15
caused these presents to be executed in its name on its behalf,
all as of the day and year first above written.
/s/ Xxx X. Xxxxxxx
------------------
REPUBLIC NEW YORK CORPORATION
By: /s/ Xxxxx Xxxx
------------------
Title: Vice Chairman &
Chairman of the
Executive Committee
16
REPUBLIC NEW YORK CORPORATION
000 XXXXX XXXXXX
XXX XXXX, X.X. 00000
TELEPHONE (000) 000-0000
Bonuses Payable Under Employment Agreement
Dear Xxx X. Xxxxxxx:
This is to confirm the understanding of the parties regarding the
proper interpretation of Section 2(b)(ii) of the Employment Agreement (the
"Agreement") by and between Republic New York Corporation (the "Company") and
you, dated as of April 30, 1999, in the event that there is a Change in Control
(as defined in such Agreement).
We have agreed that, the consummation of the transaction contemplated
under the Transaction Agreement and Plan of Merger by and among HSBC Holdings
plc, Republic New York Corporation and Safra Republic Holdings S.A., dated as of
May 10, 1999, (the "Merger") would result in a Change in Control of the Company.
Further, we have agreed that under such Section 2(b)(ii), in the event such
Change in Control pursuant to the Merger occurs and the Company has "net income"
(as defined in the Performance Plan as in effect on April 30, 1999 and
determined consistently with past practice) from it continuing operations, you
will be paid a bonus for the year in which such Change in Control occurs and in
each subsequent year until the end or the Employment Period (as defined in the
Agreement) equal to the target level of bonus specified in such Section 2(b)(ii)
and that no additional bonus would be due under the Performance Plan. This
interpretation shall not preclude the Company from paying you a bonus in excess
of such targeted amount if, in its discretion and in accordance with the
applicable governing procedures then in effect, the Company determines that an
additional amount is warranted.
To indicate your agreement with this interpretation of Section 2(b)(ii)
of the Agreement in connection with the Merger, please sign your name where
indicated below and return one copy of this letter to the undersigned. Keep the
other copy for your records.
REPUBLIC NEW YORK CORPORATION
/s/ Xxxx X. Xxxxxxx
-------------------
By: Xxxx Xxxxxxx
AGREED AND ACCEPTED:
/s/ Xxx X. Xxxxxxx
------------------
Dated: Sept. 28, 1999
