EMPLOYMENT AGREEMENT
Exhibit
10.1
Cendant
Corporation and F. Xxxxxx Xxxxxxx (the "Executive") are parties to that certain
Employment Agreement effective as of August 1, 2003 (the “Prior
Agreement”).
WHEREAS,
Cendant Corporation (which has been
renamed
Avis
Budget Group, Inc. (the
“Company”) and the Executive agree to amend, restate and extend the Prior
Agreement as set forth herein (this “Agreement”); and
WHEREAS,
the Company desires to employ the Executive as a full-time employee of the
Company and the Executive desires to serve the Company in such
capacity.
NOW
THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereby agree as follows:
SECTION
I
EFFECTIVENESS
This
Agreement shall become effective as of May 31, 2006
(the
“Effective Date”). Upon the Effective Date, (i) the Prior Agreement shall
terminate and be of no further force or effect and (ii) this Agreement shall
become effective.
SECTION
II
EMPLOYMENT;
POSITION AND RESPONSIBILITIES
The
Company agrees to employ the Executive, and the Executive agrees to be employed
by the Company, for the Period of Employment as provided in Section III below
and upon the terms and conditions provided in this Agreement. During the Period
of Employment, the Executive shall serve as the President and Chief Operating
Officer of the Company. During the Period of Employment, the Executive shall
report to, and be subject to the direction of the Chief Executive Officer of
the
Company (the "Supervising Officer"). The Executive shall perform such duties
and
exercise such supervision with regard to the business of the Company as are
associated with his position, as well as such additional duties as may be
prescribed from time to time by the Supervising Officer. The Executive shall,
during the Period of Employment, devote substantially all of his time and
attention during normal business hours to the performance of services for the
Company. The Executive shall maintain a primary office and conduct his business
in Parsippany, New Jersey (the “Business Office”), except for normal and
reasonable business travel in connection with his duties hereunder.
In
addition, effective upon the Effective Date, the Executive shall serve as a
member of the Company's Board of Directors (the "Board"); provided,
however,
that
the Executive’s continued service as a member of the Board shall at all times
remain subject to any and all nomination and election procedures in accordance
with the Company’s by-laws.
SECTION
III
PERIOD
OF EMPLOYMENT
The
period of the Executive's employment under this Agreement (the "Period of
Employment") shall begin on the Effective Date and shall end on the third
anniversary of the Effective Date (the “Term”), subject to earlier termination
as provided in this Agreement. Effective upon the expiration of the Term,
Executive’s employment hereunder shall be deemed to be automatically extended
thereafter, upon the same terms and conditions, for an additional period of
one
year (the “Additional
Term”)
commencing upon the expiration of the Term unless either party shall have given
written notice to the other, at least six (6) months prior to the expiration
of
the Term (or, if applicable, the Additional Term) of its intention not to extend
the Period of Employment Period hereunder; provided
that any
such notice of non-extension delivered by the Company to Executive shall be
deemed to constitute a Constructive Discharge (as defined below) of the
Executive.
SECTION
IV
COMPENSATION
AND BENEFITS
For
all
services rendered by the Executive pursuant to this Agreement during the Period
of Employment, including services as an executive officer, director or committee
member of the Company or any subsidiary or affiliate of the Company, the
Executive shall be compensated as follows:
(a) Base
Salary
The
Company shall initially pay the Executive a fixed base salary ("Base Salary")
of
not less than seven hundred thousand dollars ($700,000), per annum, and
thereafter the Executive shall be eligible to receive annual increases as the
Board deems appropriate, in accordance with the Company’s customary procedures
regarding salaries of senior officers. Base Salary shall be payable according
to
the customary payroll practices of the Company, but in no event less frequently
than once each month.
(b) Annual
Incentive Awards
The
Executive shall be eligible to earn a target Annual Bonus for each fiscal year
of the Company ending during the Employment Period (each, an "Annual Bonus")
equal to 100% of the Executive’s Base Salary for such fiscal year, if the
Company achieves the target performance goals established by the Compensation
Committee (the "Committee") for such fiscal year The Committee may establish
such metrics whereby the Executive may earn an Annual Bonus in excess of the
target Annual Bonus or an Annual Bonus less than the target Annual Bonus.
Any
Annual Bonus that becomes payable to the Executive pursuant to this Section
shall be paid to the Executive as soon as reasonably practicable following
receipt by the Board of the audited consolidated financial statements of the
Company for the relevant fiscal year, but in no event later than two and a
half
(2 ½) months following the end of the applicable fiscal year in which such
Annual Bonus was earned. The Executive shall be entitled to receive any Annual
Bonus that becomes payable in a lump sum cash payment, or, at his election,
in
any form that the Board generally makes available to the Company’s executive
management team; provided that any such election is made by the Executive in
compliance with Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code") and the regulations promulgated thereunder.
(c) Long-Term
Incentive Awards
The
parties hereby acknowledge that (i) the Executive has been awarded a long-term
incentive equity award with a grant date value equal to three million dollars
($3,000,000) (the "Initial Grant") and (ii) the Initial Grant shall be subject
to such terms and conditions, including relating to vesting conditions, as
determined by the Committee (but subject to accelerated vesting in accordance
with Section VIII below). During the Employment Period, the Executive shall
be
eligible for long term incentive awards as determined by the Committee in its
discretion.
(d) Additional
Benefits
The
Executive shall be entitled to participate in all other compensation and
employee benefit plans or programs and receive all benefits and perquisites
for
which salaried employees of the Company generally are eligible under any plan
or
program now in effect, or later established by the Company, on a basis no less
favorable than as provided to any other similarly situated executive of the
Company. The Executive shall participate to the extent permissible under the
terms and provisions of such plans or programs, and in accordance with the
terms
of such plans and program.
SECTION
V
BUSINESS
EXPENSES
The
Company shall reimburse the Executive for all reasonable travel and other
expenses incurred by the Executive in connection with the performance of his
duties and obligations under this Agreement. The Executive shall comply with
such limitations and reporting requirements with respect to expenses as may
be
established by the Company from time to time and shall promptly provide all
appropriate and requested documentation in connection with such expenses.
Further, the Executive will receive access to Company aircraft or alternative
air transportation, subject to applicable Company policies.
SECTION
VI
DEATH
AND DISABILITY
The
Period of Employment shall end upon the Executive's death. If the Executive
becomes Disabled (as defined below) during the Period of Employment, the Period
of Employment may be terminated at the option of the Executive upon notice
of
resignation to the Company, or at the option of the Company upon notice of
termination to the Executive. For purposes of this Agreement, "Disability"
shall
have the meaning set forth in Section 409A ("Code Section 409A") of the Internal
Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder. The Company's obligation to make payments to the Executive under
this Agreement shall cease as of such date of termination, except for Base
Salary and any Annual Bonus earned but unpaid as of the date of such
termination, and, in such event (a) each of the Executive’s then outstanding
options to purchase shares of Cendant Corporation common stock (including
options to purchase shares of Realogy common stock and Wyndham Worldwide
Corporation common stock (and their successors) resulting from the adjustment
to
Cendant Corporation options in connection with the Company’s distributions of
all of the shares of common stock of Realogy Corporation and Wyndham Worldwide
Corporation (the "Adjusted Options")) shall become immediately and fully vested
and exercisable (to the extent not already vested) and, shall remain exercisable
during the extended post-termination exercise period set forth in the Prior
Agreement, (b) subject to the proviso set forth below, each option to purchase
shares of the Company common stock or stock appreciation right granted on or
after July 28th
2006,
(excluding any Adjusted Option to acquire the Company common stock) shall become
immediately and fully vested and exercisable (to the extent not already vested)
and, notwithstanding any term or provision relating to such option to the
contrary, shall remain exercisable until the first to occur of the third
(3rd
)
anniversary of the Executive’s termination of employment and the original
expiration date of such option or stock appreciation rights, and (c) subject
to
the proviso set forth below, all other long-term equity awards then outstanding
shall become immediately vested; provided that,
for
purposes of the preceding sentence, with respect to any
awards
that vest pursuant to performance criteria measured over a multi-year period,
with no interim vesting dates, such awards will instead be viewed as awards
which vest in equal pro rata installments on each respective anniversary of
the
grant date, and accordingly, upon such termination event, such award will become
vested with respect to shares which would otherwise vested prior to such
termination date and within one year following such termination date;
provided,
however,
that
the vesting of such awards shall not occur unless and until the Company
determines that all applicable performance goals have been attained (and the
Executive will receive such vesting at the same time, and on the same basis,
as
other executive officers who are subject to the same performance goals). Upon
the Executive's termination due to death or Disability, the Executive and each
person who is his covered dependent at such time under the Company sponsored
health and dental plan shall remain eligible to continue to participate in
such
plans (as they may be modified from time to time with respect to all senior
executive officers), or such other plans subsequently made available to senior
executive officers of the Company or any successor Company until the
2nd
anniversary of such termination of employment (such benefits, the "Continuation
of Health Benefits"). The executive does retain the right to participate in
the
Avis, Inc. Retiree Health Care Plan per the 1992 Avis Board of Director’s
resolution.
SECTION
VII
EFFECT
OF TERMINATION OF EMPLOYMENT
(a) Without
Cause Termination and Constructive Discharge.
If the
Executive's employment terminates during the Period of Employment due to (i)
a
Without Cause Termination, (ii) a Constructive Discharge (each as defined below)
or (iii) the Company providing the Executive notification under Section III
of
this Agreement that it is not extending the Agreement for an Additional Term:
(i) the Company shall pay the Executive (or his surviving spouse, estate or
personal representative, as applicable), in accordance with paragraph (d) below,
an amount equal to 299% multiplied by the sum of (A) the Executive’s then
current Base Salary, plus (B) the Executive’s then current target Annual Bonus;
(ii) each of the Executive’s then outstanding Adjusted Options shall become
immediately and fully vested and exercisable (to the extent not already vested)
and in accordance with the terms and conditions applicable to such options
set
forth in the Prior Agreement and shall remain exercisable for the extended
post-termination exercise period set forth in the Prior Agreement, (iii) subject
to proviso set forth in clause (iv) below, each option to purchase shares of
the
Company common stock or stock appreciation right granted on or after the July
28th
2006
(excluding any Adjusted Option to acquire the Company common stock) shall become
immediately and fully vested and exercisable (to the extent not already vested)
and, notwithstanding any term or provision thereof to the contrary, shall remain
exercisable until the first to occur of the third (3rd
)
anniversary of the Executive’s termination of employment and the original
expiration date of such option or stock appreciation right, and (iv) all other
long-term equity awards
(including,
without limitation, the restricted stock units) shall become immediately vested;
provided that,
for
purposes of the preceding sentence, with respect to any awards that vest
pursuant to performance criteria measured over a multi-year period, with no
interim vesting dates, such awards will instead be viewed as awards which vest
in equal pro rata installments on each respective anniversary of the grant
date,
and accordingly, upon such termination event, such award will become vested
with
respect to shares which would otherwise vested prior to such termination date
and within one year following such termination date; provided,
however,
that
the vesting of such awards shall not occur unless and until the Company
determines that all applicable performance goals have been attained (and the
Executive will receive such vesting at the same time, and on the same basis,
as
other executive officers who are subject to the same performance goals). Upon
such termination, the Executive shall also be entitled to the Continuation
of
Health Benefits and also be entitled to the Avis, Inc. Retiree Health Care
Plan
per the 1992 Avis Board of Director’s resolution.
(b) Termination
for Cause; Resignation.
If the
Executive's employment terminates due to a Termination for Cause or a
Resignation, Base Salary and any Annual Bonus earned but unpaid as of the date
of such termination shall be paid to the Executive in accordance with paragraph
(d) below. Outstanding stock options and other equity awards held by the
Executive as of the date of termination shall be treated in accordance with
their terms. Except as provided in this paragraph, the Company shall have no
further obligations to the Executive hereunder.
(c) For
purposes of this Agreement, the following terms have the following
meanings:
i. "Termination
for Cause" means (a) the Executive’s willful failure to substantially perform
his duties as an employee of the Company or any subsidiary (other than any
such
failure resulting from incapacity due to physical or mental illness), (b) any
act of fraud, misappropriation, dishonesty, embezzlement or similar conduct
against the Company or any subsidiary, (c) the Executive’s conviction of a
felony or any crime involving moral turpitude (which conviction, due to the
passage of time or otherwise, is not subject to further appeal), (d) the
Executive’s gross negligence in the performance of his duties or (e) the
Executive purposefully or negligently makes (or has been found to have made)
a
false certification to the Company pertaining to its financial
statements.
ii. "Constructive
Discharge" means (a) any material failure of the Company to fulfill its
obligations under this Agreement (including without limitation any reduction
of
the Base Salary, as the same may be increased during the Period of Employment,
or other element of compensation) or any material diminution to the Executive’s
duties and responsibilities relating to service as an executive officer,
including if the
Executive was immediately prior to a Corporate Transaction an
executive
officer of a public company, the Executive ceasing to be an executive officer
of
a public company, (b) the Business Office is relocated to any location which
is
more than 30 miles from the city limits of Parsippany, New Jersey, (c) after
the
occurrence of a Corporate Transaction, the Executive's failure to become the
Chief Executive Officer of the Company, or if the Company is then a subsidiary,
the Chief Executive Officer of the ultimate parent of the Company or (d) the
Executive is not nominated to be a member of the Board. The Executive shall
provide the Company a written notice of his intention to resign within 60 days
after the Executive knows or has reason to know of the occurrence of any such
event which notice describes the circumstances being relied on for the
termination with respect to this Agreement. With respect to clauses (a) and
(b)
of this paragraph, the Company shall have ten (10) days after receipt of such
notice to remedy the event prior to the termination for Constructive Discharge
and, upon the timely remedy of such event, such event shall no longer constitute
a basis for Constructive Discharge.
iii. "Without
Cause Termination" or “Terminated Without Cause” means termination of the
Executive's employment by the Company other than due to death, disability,
or
Termination for Cause.
iv. “Resignation”
means a termination of the Executive’s employment by the Executive, other than
in connection with a Constructive Discharge.
v. “Corporate
Transaction” means either:
(a)
any
"person," as such term is used in Sections 13(d) and 14(d) of the Securities
and
Exchange Act, as amended (the “Exchange Act”) (other than (A) the Company, (B)
any trustee or other fiduciary holding securities under an employee benefit
plan
of the Company, and (C) any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of Company common stock), 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 50% or more of the combined voting power
of the Company's then outstanding voting securities (excluding any person who
becomes such a beneficial owner in connection with a transaction immediately
following which the individuals who comprise the Board immediately prior thereto
constitute at least a majority of the Board of the entity surviving such
transaction or, if the Company or the entity surviving the transaction is then
a
subsidiary, the ultimate parent thereof); or
(b)
the
following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the Effective Date,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Company) whose appointment or election by the
Board
or nomination for election by the Company's stockholders was approved or
recommended by a vote of at least one-half (1/2) of the directors then still
in
office who either were directors on the Effective Date or whose appointment,
election or nomination for election was previously so approved or
recommended.
(d) Conditions
to Payment and Acceleration.
All
payments due to the Executive under this Section VII shall be made as soon
as
practicable, but in no event earlier than the date permitted under Section
409A
of the Code, to the extent such payment is subject to Section 409A of the Code;
provided,
however,
that
such payments shall be subject to, and contingent upon, the execution by the
Executive (or his beneficiary or estate) of a release of claims against the
Company and its affiliates in such reasonable form determined by the Company
in
its sole discretion. The payments due to the Executive under this Section VII
shall be in lieu of any other severance benefits otherwise payable to the
Executive under any severance plan of the Company or its
affiliates.
SECTION
VIII
OTHER
DUTIES OF THE EXECUTIVE
DURING
AND AFTER THE PERIOD OF EMPLOYMENT
(a) The
Executive shall, with reasonable notice during or after the Period of
Employment, furnish information as may be in his possession and fully cooperate
with the Company and its affiliates as may be requested in connection with
any
claims or legal action in which the Company or any of its affiliates is or
may
become a party. After the Period of Employment, the Executive shall cooperate
as
reasonably requested with the Company and its affiliates in connection with
any
claims or legal actions in which the Company or any of its affiliates is or
may
become a party. The Company agrees to reimburse the Executive for any reasonable
out-of-pocket expenses incurred by Executive by reason of such cooperation,
including any loss of salary, and the Company shall make reasonable efforts
to
minimize interruption of the Executive’s life in connection with his cooperation
in such matters as provided for in this paragraph.
(b) The
Executive recognizes and acknowledges that all information pertaining to this
Agreement or to the affairs; business; results of
operations;
accounting methods, practices and procedures; members; acquisition candidates;
financial condition; clients; customers or other relationships of the Company
or
any of its affiliates ("Information") is confidential and is a unique and
valuable asset of the Company or any of its affiliates. Access to and knowledge
of certain of the Information is essential to the performance of the Executive's
duties under this Agreement. The Executive shall not during the Period of
Employment or thereafter, except to the extent reasonably necessary in
performance of his duties under this Agreement, give to any person, firm,
association, corporation, or governmental agency any Information, except as
may
be required by law. The Executive shall not make use of the Information for
his
own purposes or for the benefit of any person or organization other than the
Company or any of its affiliates. The Executive shall also use his best efforts
to prevent the disclosure of this Information by others. All records, memoranda,
etc. relating to the business of the Company or its affiliates, whether made
by
the Executive or otherwise coming into his possession, are confidential and
shall remain the property of the Company or its affiliates.
(c) (i) During
the Period of Employment and for a two (2) year period following any termination
of employment (the "Restricted Period"), the Executive shall not use his status
with the Company or any of its affiliates to obtain loans, goods or services
from another organization on terms that would not be available to him in the
absence of his relationship to the Company or any of its
affiliates.
(ii) During
the Restricted Period, the Executive shall not make any statements or perform
any acts intended to have the effect of advancing the interest of any existing
competitors (or any entity the Executive knows to be a prospective competitor)
of the Company or any of its affiliates or in any way injuring the interests
of
the Company or any of its affiliates. During the Restricted Period, the
Executive, without prior express written approval by the Board, shall not engage
in, or directly or indirectly (whether for compensation or otherwise) own or
hold proprietary interest in, manage, operate, or control, or join or
participate in the ownership, management, operation or control of, or furnish
any capital to or be connected in any manner with, any party which competes
in
any way or manner with the business of the Company or any of its affiliates,
as
such business or businesses may be conducted from time to time, either as a
general or limited partner, proprietor, common or preferred shareholder,
officer, director, agent, employee, consultant, trustee, affiliate, or
otherwise. The Executive acknowledges that the Company's and its affiliates'
businesses are conducted nationally and internationally and agrees that the
provisions in the foregoing sentence shall operate throughout the United States
and those countries in the world where the Company then conducts business or
has
a plan to conduct business.
(iii) During
the Restricted Period, the Executive, without express prior written approval
from the Board, shall not solicit any members or the then-current clients of
the
Company or any of its affiliates for any existing business of the Company or
any
of its affiliates or discuss with any employee of the Company or any of its
affiliates information or operation of any business intended to compete with
the
Company or any of its affiliates.
(iv) During
the Restricted Period, the Executive shall not interfere with the employees
or
affairs of the Company or any of its affiliates or solicit or induce any person
who is an employee of the Company or any of its affiliates to terminate any
relationship such person may have with the Company or any of its affiliates,
nor
shall the Executive during such period directly or indirectly engage, employ
or
compensate, or cause or permit any person with which the Executive may be
affiliated, to engage, employ or compensate, any employee of the Company or
any
of its affiliates. The Executive hereby represents and warrants that the
Executive has not entered into any agreement, understanding or arrangement
with
any employee of the Company or any of its affiliates pertaining to any business
in which the Executive has participated or plans to participate, or to the
employment, engagement or compensation of any such employee.
(v) For
the
purposes of this Agreement, proprietary interest means legal or equitable
ownership, whether through stock holding or otherwise, of an equity interest
in
a business, firm or entity or ownership of more than 5% of any class of equity
interest in a publicly-held company and the term "affiliate" shall include
without limitation all subsidiaries and licensees of the Company.
(d) The
Executive hereby acknowledges that damages at law may be an insufficient remedy
to the Company if the Executive violates the terms of this Agreement and that
the Company shall be entitled, upon making the requisite showing, to preliminary
and/or permanent injunctive relief in any court of competent jurisdiction to
restrain the breach of or otherwise to specifically enforce any of the covenants
contained in this Section VIII without the necessity of showing any actual
damage or that monetary damages would not provide an adequate remedy. Such
right
to an injunction shall be in addition to, and not in limitation of, any other
rights or remedies the Company may have. Without limiting the generality of
the
foregoing, neither party shall oppose any motion the other party may make for
any expedited discovery or hearing in connection with any alleged breach of
this
Section VIII.
(e) The
period of time during which the provisions of this Section VIII shall be in
effect shall be extended by the length of time during which the Executive is
in
breach of the terms hereof as determined by any court of competent jurisdiction
on the Company's application for injunctive relief.
(f) The
Executive agrees that the restrictions contained in this Section VIII are an
essential element of the compensation the Executive is granted hereunder and
but
for the Executive's agreement to comply with such restrictions, the Company
would not have entered into this Agreement.
SECTION
IX
INDEMNIFICATION
The
Company shall indemnify the Executive to the fullest extent permitted by the
laws of the state of the Company's incorporation in effect at that time, or
the
certificate of incorporation and by-laws of the Company, whichever affords
the
greater protection to the Executive (including payment of expenses in advance
of
final disposition of a proceeding).
SECTION
X
CERTAIN
TAXES
Anything
in this Agreement or in any other plan, program or agreement to the contrary
notwithstanding and except as set forth below, in the event that (i) the
Executive becomes entitled to any benefits or payments under Section VII hereof
and (ii) 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
X) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended, 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, hereinafter 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 X, if it shall be determined that the Executive
is
entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of
the
greatest amount (the “Reduced Amount”) that could be paid to the Executive such
that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount, provided, however, that
the
payments or benefits to be eliminated in effecting such reduction shall be
agreed upon between the Company and the Executive. All determinations required
to be made under this Section X, 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 Deloitte & Touche LLP or such other
certified public accounting firm as may be designated by the
Company.
SECTION
XI
MITIGATION
The
Executive shall not be required to mitigate the amount of any payment provided
for hereunder by seeking other employment or otherwise, nor shall the amount
of
any such payment be reduced by any compensation earned by the Executive as
the
result of employment by another employer after the date the Executive's
employment hereunder terminates.
SECTION
XII
WITHHOLDING
TAXES
The
Executive acknowledges and agrees that the Company may directly or indirectly
withhold from any payments under this Agreement all federal, state, city or
other taxes that shall be required pursuant to any law or governmental
regulation.
SECTION
XIII
EFFECT
OF PRIOR AGREEMENTS
This
Agreement shall supersede any prior agreements between the Company and the
Executive (including but not limited to the Prior Agreement) hereof, and any
such prior agreement shall be deemed terminated without any remaining
obligations of either party thereunder.
SECTION
XIV
CONSOLIDATION,
MERGER OR SALE OF ASSETS
Nothing
in this Agreement shall preclude the Company from consolidating or merging
into
or with, or transferring all or substantially all of its assets to, another
corporation which assumes this Agreement and all obligations and undertakings
of
the Company hereunder. If (i)
there
is a merger, consolidation or other business combination involving the Company,
or (ii) all or substantially all of the voting stock of the Company is held
by
another public company, the term "the Company" shall mean the successor to
the
Company’s business or assets referred to in (i) above or such public company
referred to in (ii) above, and this Agreement shall continue in full force
and
effect. Notwithstanding the foregoing, the Company shall require any successor
thereto, by agreement in form and substance reasonably satisfactory to the
Executive 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. Failure of the Company to obtain
such
agreement prior to the effectiveness of any such succession shall be a breach
of
the Agreement and shall entitle the Executive to compensation from the Company
in the same amount and on the same terms as Executive would be entitled
hereunder if the Company had terminated Executive’s employment Without Cause as
described herein, except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the date
of
termination.
SECTION
XV
MODIFICATION
This
Agreement may not be modified or amended except in writing signed by the
parties. No term or condition of this Agreement shall be deemed to have been
waived except in writing by the party charged with waiver. A waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver for the future or act on anything other than that which
is
specifically waived.
SECTION
XVI
GOVERNING
LAW
This
Agreement has been executed and delivered in the State of New Jersey and its
validity, interpretation, performance and enforcement shall be governed by
the
internal laws of that state.
SECTION
XVII
ARBITRATION
(a) Any
controversy, dispute or claim arising out of or relating to this Agreement
or
the breach hereof which cannot be settled by mutual agreement (other than with
respect to the matters covered by Section VIII for which the Company may, but
shall not be required to, seek injunctive relief) shall be finally settled
by
binding arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state arbitration law) as follows: Any party who
is
aggrieved shall deliver a notice to the other party setting forth the specific
points in dispute. Any points remaining in dispute twenty (20) days after the
giving of such notice may be submitted to arbitration in New York, New York,
to
the American Arbitration Association, before a single arbitrator appointed
in
accordance with the arbitration rules of the American Arbitration Association,
modified only as herein expressly provided. After the aforesaid twenty (20)
days, either party, upon ten (10) days notice to the other, may so submit the
points in dispute to arbitration. The arbitrator may enter a default decision
against any party who fails to participate in the arbitration
proceedings.
(b) The
decision of the arbitrator on the points in dispute shall be final, unappealable
and binding, and judgment on the award may be entered in any court having
jurisdiction thereof.
(c) Except
as
otherwise provided in this Agreement, the arbitrator shall be authorized to
apportion its fees and expenses and the reasonable attorneys' fees and expenses
of any such party as the arbitrator deems appropriate. In the absence of any
such apportionment, the fees and expenses of the arbitrator shall be borne
equally by each party, and each party shall bear the fees and expenses of its
own attorney.
(d) The
parties agree that this Section XVII has been included to rapidly and
inexpensively resolve any disputes between them with respect to this Agreement,
and that this Section XVII shall be grounds for dismissal of any court action
commenced by either party with respect to this Agreement, other than
post-arbitration actions seeking to enforce an arbitration award. In the event
that any court determines that this arbitration procedure is not binding, or
otherwise allows any litigation regarding a dispute, claim, or controversy
covered by this Agreement to proceed, the parties hereto hereby waive any and
all right to a trial by jury in or with respect to such litigation.
(e) The
parties shall keep confidential, and shall not disclose to any person, except
as
may be required by law, the existence of any controversy hereunder, the referral
of any such controversy to arbitration or the status or resolution
thereof.
SECTION
XVIII
SURVIVAL
Sections
VIII, IX, X, XI, XII and XIII shall continue in full force in accordance with
their respective terms notwithstanding any termination of the Period of
Employment.
SECTION
XIX
SEPARABILITY
All
provisions of this Agreement are intended to be severable. In the event any
provision or restriction contained herein is held to be invalid or unenforceable
in any respect, in whole or in part, such finding shall in no way affect the
validity or enforceability of any other provision of this Agreement. The parties
hereto further agree that any such invalid or unenforceable provision shall
be
deemed modified so that it shall be enforced to the greatest extent permissible
under law, and to the extent that any court of competent jurisdiction determines
any restriction herein to be unreasonable in any respect, such court may limit
this Agreement to render it
reasonable
in the light of the circumstances in which it was entered into and specifically
enforce this Agreement as limited.
*****
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the
Effective Date.
/s/
Xxxx Xxxxxxxxxx
By:
Xxxx
Xxxxxxxxxx
Title:
Executive Vice President, Human Resources
F.
XXXXXX XXXXXXX
/s/
F.
Xxxxxx Xxxxxxx
