EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of this 9th day of February, 1998, by and
between PHOTODISC, INC., a Washington corporation (the "COMPANY"), and XXXXXX X.
XXXXXXXXXXX, an individual residing at 0000-00xx Xxxxxx Xxxxxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000 (the "EMPLOYEE").
W I T N E S S E T H:
WHEREAS, the Employee is presently serving as Chief Financial
Officer and Senior Vice President, Finance of the Company; and
WHEREAS, the Company is a wholly-owned subsidiary of Getty Images,
Inc., a Delaware corporation (the "PARENT"); and
WHEREAS, the Company seeks to employ the Employee and the Employee
seeks to continue to be employed by the Company; and
WHEREAS, both parties desire that the terms and conditions of the
Employee's employment with the Company be governed by the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. EMPLOYMENT AND DUTIES.
(a) GENERAL. The Company hereby employs the Employee, effective
as of the date hereof (the "EFFECTIVE DATE"), and the Employee agrees upon the
terms and conditions herein set forth to serve, effective as of the Effective
Date, as Co-President of the Company and shall perform all duties customarily
appurtenant to such position. In such capacity, the Employee shall report
directly and only to Xxxxxxxx Xxxxx, or his successor. The Employee's principal
place of business shall be Seattle, Washington.
(b) SERVICES AND DUTIES. For so long as the Employee is employed
by the Company, the Employee shall devote his full business time to the
performance of his duties hereunder; shall faithfully serve the Company; shall
in all respects conform to and comply with the lawful and good faith directions
and instructions given to him by Xxxxxxxx Xxxxx, or his successor; and shall use
his best efforts to promote and serve the interests of the Company.
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(c) NO OTHER EMPLOYMENT. For so long as the Employee is employed
by the Company, he shall not, directly or indirectly, render services to any
other person or organization for which he receives compensation without the
prior approval of Xxxxxxxx Xxxxx, or his successor. No such approval will be
required if the Employee seeks to perform inconsequential services without
direct compensation therefor in connection with the management of personal
investments or in connection with the performance of charitable and civic
activities, provided that such activities do not contravene the provisions of
Section 6 hereof.
2. TERM OF EMPLOYMENT. The term of the Employee's employment
under this Agreement (the "TERM") shall commence on the Effective Date and
continue until it is terminated by either party giving the other at least six
months' written notice of termination of the Term; PROVIDED, HOWEVER, that in no
event may a non-renewal notice be given prior to August 10, 1999; and PROVIDED
FURTHER, HOWEVER, that, in any event, the Term shall not extend beyond the last
day of the month in which the Employee attains age 65.
3. COMPENSATION AND OTHER BENEFITS. Subject to the provisions
of this Agreement, the Company shall pay and provide the following compensation
and other benefits to the Employee during the Term as compensation for all
services rendered hereunder and the covenants contained in Section 6 hereof:
(a) SALARY. The Company shall pay to the Employee an annual
salary (the "SALARY") at the initial rate of $190,000 (retroactive to February
1, 1998), payable to the Employee in accordance with the normal payroll
practices of the Company for its employees as are in effect from time to time.
The amount of the Employee's Salary shall be reviewed annually by the Company on
or about April 1 of each year during the Term beginning in the 1999 calendar
year and may be increased, but not decreased below such amount, on the basis of
such review and then-current market practices.
(b) ANNUAL BONUS. During the Term, the Employee shall be eligible
for 1998 and each calendar year thereafter that begins within the Term to
participate in an annual incentive bonus program established by the Company by
March 31, 1998, in accordance with the policies of the Company, its Parent, its
subsidiaries and affiliates (hereinafter, collectively the "GROUP") and subject
to such terms and conditions as may be approved annually by the Company. Under
the terms of the annual incentive bonus program, the Employee will be afforded
the opportunity to earn up to 30% of his Salary (the "BONUS") in effect for the
applicable calendar year, subject to the achievement of the performance targets
established by the Company for that year, to be paid on a pro-rata basis in the
event that the Employee is employed for less than a full calendar year within
the Term (for purposes of determining the 1998 bonus, the Employee shall be
deemed to have commenced employment as of January 1, 1998).
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(c) STOCK OPTIONS. Effective as of the Effective Date, the
Parent shall grant the Employee an option (the "DEAL OPTION") to purchase 50,000
shares of the common stock of the Parent pursuant to the terms of the Parent's
1998 Stock Incentive Plan (the "OPTION PLAN"). The per share exercise price of
the Deal Option shall equal the fair market value of a share of Common Stock on
the Effective Date, as determined in accordance with the terms of the Option
Plan. The Deal Option shall vest and become exercisable in full on February 1,
1999. Also effective as of the Effective Date, the Parent shall grant the
Employee an option (the "OPTION") to purchase 65,000 shares of the common stock
of the Parent pursuant to the terms of the Option Plan. The per share exercise
price of the Option shall equal the fair market value of a share of Common Stock
on the Effective Date, as determined in accordance with the terms of the Option
Plan. The Option shall vest and become exercisable as to 25% on February 1,
1999; the remainder of the Option shall vest ratably on the first day of each
month over the following three years. Except as otherwise specified herein,
both the Deal Option and the Option shall be subject to the terms of the Option
Plan and to such other terms and conditions as may be specified by the
Compensation Committee of the Parent in the form of a standard option agreement
between the Parent and the Employee.
(d) EXPENSES. The Company shall pay or reimburse the Employee
for all reasonable out-of-pocket expenses incurred by the Employee in connection
with his employment hereunder in accordance with Group policy and expressly
agrees that it will reimburse the Employee for his business class airfare on
international flights that are over eight hours in duration taken in connection
with Company business. Such expenses shall be paid upon the periodic submission
of invoices and shall be paid reasonably promptly after the date of such
invoice. The reimbursement of expenses under this Section 3(d) shall be subject
to the Employee's providing the Company with such documentation of the expenses
as the Company may from time to time reasonably request in accordance with the
policies of the Group.
(e) PENSION, WELFARE AND FRINGE BENEFITS. During the Term, the
Employee shall be eligible to participate in the Company's pension, medical,
disability and life insurance plans applicable to executives of the Company in
accordance with the terms of such plans as in effect from time to time;
PROVIDED, HOWEVER, that in no event shall the Employee's medical, disability and
life insurance benefits be less favorable than those in effect for the Employee
at the Company at the date of this Agreement.
(f) LONG-TERM INCENTIVE PROGRAM. During the Term, the Employee
shall participate in all long-term incentive plans and programs of the Group
that are applicable to its senior executives in accordance with their terms and
in a manner consistent with his position with the Company.
(g) OTHER SPECIFIC BENEFITS. The Company shall install and pay
the rental and unit charges attributable to a dedicated business telephone or
ISDN line at his home.
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During the Term, the Company shall also pay for the Employee's purchase, line
charge, rental and unit charges for his mobile phone. The Company shall provide
the Employee with a computer modem to be installed at the Employee's home and a
suitable desktop or laptop computer, as well as all ancillary equipment and
maintenance therefor. In addition, the Company will pay for the cost of the
Employee's membership in or subscriptions to the internet service provider of
his choice. It is acknowledged that in no event is any of the foregoing
intended to duplicate the equipment that the Company has previously provided to
Employee and these items shall only be provided to the extent that they are
required for legitimate business reasons. In addition, the Company shall
continue to provide parking benefits to Employee.
(h) HOLIDAYS. In addition to the usual public and bank holidays,
the Employee shall be entitled to twenty days' paid vacation annually, which
shall be taken at such times as are approved by the Company. The Employee shall
be permitted to carry forward any portion of his vacation time for up to one
year and, upon the expiration of such one year period, the Employee shall be
paid in lieu of such vacation days.
4. TERMINATION OF EMPLOYMENT. Subject to the notice and other
provisions of this Section 4, the Company shall have the right to terminate the
Employee's employment hereunder, and he shall have the right to resign, at any
time for any reason or for no stated reason.
(a) TERMINATION FOR CAUSE; RESIGNATION WITHOUT GOOD REASON. (i)
If, prior to the expiration of the Term, the Employee's employment is terminated
by the Company for Cause or if the Employee resigns from his employment
hereunder other than for Good Reason, he shall be entitled to payment of the pro
rata portion of his Salary and accrued Bonus (for purposes of this Agreement,
"ACCRUED BONUS" shall be determined using the number of days in the applicable
calendar year that the Employee was employed by the Company and the applicable
performance criteria under the bonus plan, in each case through the date of
termination or resignation) through and including the date of termination or
resignation, as well as any unreimbursed expenses. Except to the extent
required by the terms of any applicable compensation or benefit plan or program
or as otherwise required by applicable law, the Employee shall have no rights
under this Agreement or otherwise to receive any other compensation or to
participate in any other plan, program or arrangement after such termination or
resignation of employment with respect to the year of such termination or
resignation and later years.
(ii) In addition, the Employee shall be entitled to retain the
then-vested portion of his options to purchase shares of the Parent's common
stock as if he had remained an Employee until such options otherwise expire in
accordance with their terms.
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(iii) Termination for "CAUSE" shall mean termination of the
Employee's employment with the Company because of (A) willful, material or
persistently repeated non-performance of the Employee's duties to the Company or
the Parent (other than by reason of the incapacity of the Employee due to
physical or mental illness) after notice by the Board of such failure and the
Employee's non-performance and continued, willful, material or persistent
repeated non-performance after such notice, (B) the indictment of the Employee
for a felony offense, (C) fraud against the Group or any willful misconduct that
brings the reputation of the Group into serious disrepute or causes the Employee
to cease to be able to perform his duties, (D) any other material breach by the
Employee of any material term of this Agreement, or (E) the Employee files for
personal bankruptcy under the United States Bankruptcy Code.
(iv) Termination of the Employee's employment for Cause shall be
communicated by delivery to the Employee of a written notice from the Company
stating that the Employee has been terminated for Cause, specifying the
particulars thereof and the effective date of such termination. The date of a
resignation by the Employee without Good Reason shall be the date specified in a
written notice of resignation from the Employee to the Company. The Employee
shall provide at least 45 days' advance written notice of resignation without
Good Reason.
(b) INVOLUNTARY TERMINATION. (i) If, prior to the expiration of
the Term, the Company terminates the Employee's employment for any reason other
than Disability or Cause or Employee resigns from his employment hereunder for
Good Reason (collectively hereinafter referred to as an "INVOLUNTARY
TERMINATION"), the Company shall pay to the Employee his Salary and accrued
Bonus up to and including the date of such Involuntary Termination, as well as
any unreimbursed expenses. In addition, the Company shall continue to pay to
the Employee as severance (the "SEVERANCE PAYMENTS") in accordance with the
Company's normal payroll practices, his Salary, at the rate in effect
immediately prior to such Involuntary Termination, plus his maximum Bonus as
described in Section 3(b), in each case for the greater of one year or the
remainder of the Term.
(ii) In the event of the Employee's Involuntary Termination, the
Employee shall continue to participate on the same terms and conditions as are
in effect immediately prior to such termination or resignation in the Company's
health and medical plans provided to the Employee pursuant to Section 3(e) above
at the time of such Involuntary Termination for a period equal to the greater of
(x) one year following the Involuntary Termination or (y) the remainder of the
Term (the "CONTINUATION PERIOD"); PROVIDED, HOWEVER, that the Company shall have
no obligation to continue to maintain during the Continuation Period any plan or
program solely as a result of the provisions of this Agreement, but this
obligation shall apply in respect of any substitute plan.
(iii) In addition, in the event of the Employee's Involuntary
Termination, all of the Employee's then-outstanding options to purchase shares
of the Parent's common stock
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shall continue to vest for the longer of (A) the remainder of the Term or (B)
twelve months; PROVIDED, HOWEVER, that to the extent that any such option vests
on an annual basis, the Employee shall also be vested as to a pro-rata portion
of the next tranche through the longer of (A) the remainder of the term or (B)
twelve months. The Employee shall be entitled to retain the vested portion of
his options as if he had remained an Employee until such options otherwise
expire in accordance with their terms.
(iv) Resignation for "GOOD REASON" shall mean resignation by
Employee because of (A) an adverse and material change in the Employee's duties,
titles or reporting responsibilities, (B) a material breach by the Company of
any term of the Agreement, (C) a reduction in the Employee's Salary or bonus
opportunity or the failure of the Company to pay the Employee any material
amount of compensation when due, (D) the assignment to Employee of any material
duties that are inconsistent with those described in Section 1 of this Agreement
without the Employee's consent, or (E) the Company's requirement that Employee
perform a substantial portion of his duties outside the Seattle, Washington
metropolitan area, except for travel in furtherance of the Company's business to
an extent substantially consistent with his business travel as of the date of
this Agreement, but acknowledging that the Company is now part of a larger
international Group, without the Employee's prior written consent. The Company
shall have 30 business days from the date of receipt of such notice to effect a
cure of the material breach described therein and, upon cure thereof by the
Company to the reasonable satisfaction of the Employee, such material breach
shall no longer constitute Good Reason for purposes of this Agreement.
(v) The date of termination of employment without Cause shall be
the date specified in a written notice of termination to the Employee. The date
of resignation for Good Reason shall be the date specified in a written notice
of resignation from the Employee to the Company; PROVIDED, HOWEVER, that no such
written notice shall be effective unless the cure period specified in Section
4(b)(iv) above has expired without the Company having corrected, to the
reasonable satisfaction of the Employee, the event or events subject to cure.
(vi) Anything in this Agreement to the contrary notwithstanding,
no amounts shall be payable under this Section 4(b) if the Employee's employment
with the Company ends at the expiration of the Term in accordance with the
provisions of Section 2. Notwithstanding the foregoing, upon such expiration,
all of the Employee's then-outstanding options to purchase the Parent's common
stock shall continue to vest for an additional twelve months; PROVIDED, HOWEVER,
that to the extent that any such option vests on an annual basis, the Employee
shall also be vested as to a pro-rata portion of the next tranche through the
longer of (A) the remainder of the term or (B) twelve months. The Employee
shall be entitled to retain the vested portion of his options as if he had
remained an Employee until such options otherwise expire in accordance with
their terms.
7
(c) TERMINATION DUE TO DISABILITY. (i) In the event of the
Employee's Disability (as hereinafter defined), the Company shall be entitled to
terminate his employment upon providing the Employee with six months' prior
written notice. In the case that the Company terminates the Employee's
employment due to Disability, the Employee shall be entitled to receive, for the
remainder of the Term, his Salary at the rate in effect immediately prior to the
Disability, plus his maximum Bonus as described in Section 3(b), less any
amounts paid to the Employee under any disability plan of the Company. In
addition, the Employee shall continue to be covered by the Company's health and
medical benefit plans as described in Section 3(e) for the remainder of the
Term.
(ii) In addition, in the event of the Employee's Disability, all
of the Employee's then-outstanding options to purchase shares of the Parent's
common stock shall continue to vest for a period of the longer of (A) the
remainder of the Term or (B) twelve months; PROVIDED, HOWEVER, that to the
extent that any such option vests on an annual basis, the Employee shall also be
vested as to a pro-rata portion of the next tranche through the longer of (A)
the remainder of the term or (B) twelve months. The Employee shall be entitled
to retain the vested portion of his options as if he had remained an Employee
until such options otherwise expire in accordance with their terms.
(iii) As used in this Section 4(c), the term "DISABILITY" shall
mean a physical or mental incapacity that substantially prevents the Employee
from performing his duties hereunder and that has continued for at least six of
the last twelve months and that can reasonably be expected to continue
indefinitely. Any dispute as to whether or not the Employee is disabled within
the meaning of the preceding sentence shall be resolved by a physician
reasonably satisfactory to the Employee and the Company, and the determination
of such physician shall be final and binding upon both the Employee and the
Company.
(d) DEATH. In the event of the Employee's death, the Employee's
Beneficiary shall be entitled to receive, for the remainder of the Term, the
Employee's Salary at the rate in affect immediately prior to his death, plus the
maximum Bonus described in Section 3(b), less any death benefits which are
provided under the terms of any plan, program or arrangement referred to in
Section 3(e) applicable to the Employee at the time of death. In addition, the
Employee's spouse and then-eligible dependents shall continue to be covered by
the company's health and medical benefit plans as described in Section 3(e) for
the remainder of the Term. In addition, in the event of the Employee's death,
all of the Employee's then-outstanding options to purchase shares of the
Parent's common stock shall continue to vest for a period of the longer of (A)
the remainder of the Term or (B) twelve months; PROVIDED, HOWEVER, that to the
extent that any such option vests on an annual basis, the Employee shall also be
vested as to a pro-rata portion of the next tranche through the longer of (A)
the remainder of the term or (B) twelve months. The Employee's estate shall be
entitled to retain the vested portion of his options as if he had remained an
Employee until such options otherwise expire in accordance with their terms.
8
(e) BENEFICIARY. For purposes of this Agreement, except as
provided in Section 3(e), "BENEFICIARY" shall mean the person or persons
designated as the beneficiary of the Employee's account under the 401(k) plan,
or, if no such person or persons are designated by the Employee, the Employee's
estate. No Beneficiary designation shall be effective unless it is in writing
and received by the Company prior to the date of the Employee's death.
5. LIMITATION ON PAYMENTS.
Notwithstanding anything herein to the contrary, if any of the
payments made hereunder would constitute a "parachute payment" (as defined in
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the
"Code")), and the net after-tax amount of the parachute payment is less than the
net after-tax amount if the aggregate payments to be made to the Employee were
three times his "BASE AMOUNT" (as defined in Section 280G(b)(3) of the Code),
less $1.00, then the aggregate of the amounts constituting the parachute payment
shall be reduced to an amount that will equal three times the base amount, less
$1.00. The determinations to be made with respect to this Section 5 shall be
made by an independent accounting firm of national standing (other than the
Company's regular auditors). The accounting firm shall be paid by the Company
for its services performed hereunder.
6. PROTECTION OF THE COMPANY'S INTERESTS.
(a) NO COMPETING EMPLOYMENT. For so long as the Employee is
employed by the Company and in circumstances where (i) the Employee receives a
payment pursuant to Section 4(b)(i), continuing for the longer of one year
period following his termination or the remainder of the Term, (ii) the
Employee's employment is terminated for Cause or pursuant to Section 4(c), for
the one year period following his termination or the remainder of the Term, if
less and, (iii) the Employee's employment terminates due to a non-renewal of the
Agreement pursuant to Section 2 or without Good Reason for one year at the
Company's option exercised within 10 business days of the termination, (such
notice shall bind the Company continues to pay the Employee's Salary and maximum
Bonus during such year (such period being referred to hereinafter as the
"RESTRICTED PERIOD")), the Employee shall not, without the prior written consent
of the Board, directly or indirectly, own an interest in, manage, operate, join,
control, lend money or render financial or other assistance to or participate in
or be connected with, as an officer, employee, partner, stockholder, consultant
or otherwise, any individual, partnership, firm, corporation or other business
organization or entity that competes with the Group by providing any goods or
services provided or under development by the Group at the effective date of the
Employee's termination of employment under this Agreement; PROVIDED, HOWEVER,
that this Section 6(a) shall not proscribe the Employee's ownership, either
directly or indirectly, of either less than five percent of any class of
securities which are listed on a national securities exchange or quoted on the
automated quotation system of the National
9
Association of Securities Dealers, Inc. or any other limited partnership
investment over which the Employee has no control.
(b) NO INTERFERENCE. During the Restricted Period, the Employee
shall not, whether for his own account or for the account of any other
individual, partnership, firm, corporation or other business organization (other
than the Company), intentionally solicit, endeavor to entice away from the Group
or otherwise interfere with the relationship of the Group with, any key person
or team who is employed by or otherwise engaged to perform services for the
Group or any key person or team or entity who is, or was within the then most
recent twelve-month period, a customer, client or supplier of the Group.
(c) SECRECY. The Employee recognizes that the services to be
performed by him hereunder are special, unique and extraordinary in that, by
reason of his employment hereunder, he may acquire confidential information and
trade secrets concerning the operation of the Group, the use or disclosure of
which could cause the Group substantial losses and damages which could not be
readily calculated and for which no remedy at law would be adequate.
Accordingly, the Employee covenants and agrees with the Company that he will not
at any time, except in performance of the Employee's obligations to the Company
hereunder or with the prior written consent of the Board, directly or indirectly
disclose to any person any confidential information that he may learn or has
learned by reason of his association with the Group. The term "CONFIDENTIAL
INFORMATION" means any information not previously disclosed to the public or to
the trade by the Group with respect to the Company's, or any of its affiliates'
or subsidiaries', products, facilities and methods, trade secrets and other
intellectual property, systems, procedures, manuals, confidential reports,
product price lists, customer lists, financial information (including the
revenues, costs or profits associated with any of the Group's products),
business plans, prospects or opportunities.
(d) EXCLUSIVE PROPERTY. The Employee confirms that all
confidential information is and shall remain the exclusive property of the
Group. All business records, papers and documents kept or made by the Employee
relating to the business of the Group shall be and remain the property of the
Group. Upon the termination of his employment with the Company or upon the
request of the Company at any time, the Employee shall promptly deliver to the
Company, and shall not without the consent of the Board retain copies of, any
written materials not previously made available to the public, or records and
documents made by the Employee or coming into his possession concerning the
business or affairs of the Group; PROVIDED, HOWEVER, that subsequent to any such
termination, the Company shall provide the Employee with copies (the cost of
which shall be borne by the Employee) of any documents which are requested by
the Employee and which the Employee has determined in good faith are
(i) required to establish a defense to a claim that the Employee has not
complied with his duties hereunder or (ii) necessary to the Employee in order to
comply with applicable law.
10
(e) ASSIGNMENT OF DEVELOPMENTS. All "DEVELOPMENTS" (as defined
below) that were or are at any time made, conceived or suggested by Employee,
whether acting alone or in conjunction with others, during Employee's employment
with the Group shall be the sole and absolute property of the Group, free of any
reserved or other rights of any kind on the part of Employee. During Employee's
employment and, if such Developments were made, conceived or suggested by
Employee during his employment with the Group, thereafter, Employee shall
promptly make full disclosure of any such Developments to the Group and, at the
Group's cost and expense, do all acts and things (including, among others, the
execution and delivery under oath of patent and copyright applications and
instruments of assignment) deemed by the Group to be necessary or desirable at
any time in order to effect the full assignment to the Group of Employee's right
and title, if any, to such Developments. For purposes of this Agreement, the
term "DEVELOPMENTS" shall mean all data, discoveries, findings, reports,
designs, inventions, improvements, methods, practices, techniques, developments,
programs, concepts, and ideas, whether or not patentable, relating to the
activities of the Group of which Employee is as of the date of this Agreement
aware or of which Employee becomes aware at any time during the Term, excluding
any Development for which no equipment, supplies, facilities or confidential
information of the Group was used and which was developed entirely on Employee's
own time, unless (i) the Development relates directly to the business of the
Group, (ii) the Development relates to actual or demonstrably anticipated
research or development of the Group, or (iii) the Development results from any
work performed by Employee for the Group (the foregoing is agreed to satisfy the
written notice and other requirements of Section 49.44.140 of the Revised Code
of Washington).
(f) INJUNCTIVE RELIEF. Without intending to limit the remedies
available to the Company, the Employee acknowledges that a breach of any of the
covenants contained in this Section 6 may result in material irreparable injury
to the Group for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, the Company shall be entitled to obtain a
temporary restraining order and/or a preliminary or permanent injunction
restraining the Employee from engaging in activities prohibited by this Section
6 or such other relief as may be required to specifically enforce any of the
covenants in this Section 6. Without intending to limit the remedies available
to the Employee, the Employee shall be entitled to seek specific performance of
the Company's obligations under this Agreement.
7. GENERAL PROVISIONS.
(a) SOURCE OF PAYMENTS. All payments provided under this
Agreement, other than payments made pursuant to a plan which provides otherwise,
shall be paid in cash from the general funds of the Company, and no special or
separate fund shall be established, and no other segregation of assets made, to
assure payment. The Employee shall have no right, title or interest whatever in
or to any investments which the Company may make to aid the Company in meeting
its obligations hereunder. To the extent that any person acquires a
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right to receive payments from the Company hereunder, such right shall be no
greater than the right of an unsecured creditor of the Company; PROVIDED,
HOWEVER, that this provision shall not be deemed to waive or abrogate any
preferential or other rights to payment accruing to the Employee under
applicable bankruptcy laws by virtue of the Employee's status as an employee of
the Company.
(b) NO OTHER SEVERANCE BENEFITS. Except as specifically set
forth in this Agreement, the Employee covenants and agrees that he shall not be
entitled to any other form of severance benefits from the Company, including,
without limitation, benefits otherwise payable under any of the Company's
regular severance policies, in the event his employment hereunder ends for any
reason and, except with respect to obligations of the Company expressly provided
for herein, the Employee unconditionally releases the Company and its
subsidiaries and affiliates, and their respective directors, officers, employees
and stockholders, or any of them, from any and all claims, liabilities or
obligations under this Agreement or under any severance or termination
arrangements of the Company or any of its subsidiaries or affiliates for
compensation or benefits in connection with his employment or the termination
thereof.
(c) TAX WITHHOLDING. Payments to the Employee of all
compensation contemplated under this Agreement shall be subject to all
applicable tax withholding.
(d) NOTICES. Any notice hereunder by either party to the other
shall be given in writing by personal delivery, or certified mail, return
receipt requested, or (if to the Company) by telex or facsimile, in any case
delivered to the applicable address set forth below:
(i) To the Company: PhotoDisc, Inc.
0000 Xxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
With copies to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxx X. Xxxxxx, III, Esq.
Shearman & Sterling
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn.: Xxxxxxxxxxx X. Xxxxxx, Esq.
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(ii) To the Employee: Xxxxxx X. Xxxxxxxxxxx
0000-00xx Xxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
or to such other persons or other addresses as either party may specify to the
other in writing.
(e) REPRESENTATION BY THE EMPLOYEE. The Employee represents and
warrants that his entering into this Agreement does not, and that his
performance under this Agreement and consummation of the transactions
contemplated hereby will not, violate the provisions of any agreement or
instrument to which the Employee is a party, or any decree, judgment or order to
which the Employee is subject, and that this Agreement constitutes a valid and
binding obligation of the Employee in accordance with its terms. Breach of this
representation will render all of the Company's obligations under this Agreement
void AB INITIO.
(f) LIMITED WAIVER. The waiver by the Company or the Employee of
a violation of any of the provisions of this Agreement, whether express or
implied, shall not operate or be construed as a waiver of any subsequent
violation of any such provision.
(g) ASSIGNMENT; ASSUMPTION OF AGREEMENT. No right, benefit or
interest hereunder shall be subject to assignment, encumbrance, charge, pledge,
hypothecation or setoff by the Employee in respect of any claim, debt,
obligation or similar process. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to assume expressly
and to agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place.
(h) AMENDMENT; ACTIONS BY THE COMPANY. This Agreement may not be
amended, modified or canceled except by written agreement of the Employee and
the Company. Any and all determinations, judgments, reviews, verifications,
adjustments, approvals, consents, waivers or other actions of the Company
required or permitted under this Agreement shall be effective only if undertaken
by the Company pursuant to authority granted by a resolution duly adopted by the
Board; PROVIDED, HOWEVER, that by resolution duly adopted in accordance with
this Section 7(h), the Board may delegate its responsibilities hereunder to one
or more of its members other than the Employee.
(i) SEVERABILITY. If any term or provision hereof is determined
to be invalid or unenforceable in a final court or arbitration proceeding, (i)
the remaining terms and provisions hereof shall be unimpaired and (ii) the
invalid or unenforceable term or provision shall be deemed replaced by a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.
13
(j) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (determined
without regard to the choice of law provisions thereof).
(k) ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the matters
covered hereby and supersedes all prior agreements and understandings of the
parties with respect to the subject matter hereof.
(l) HEADINGS. The headings and captions of the sections of this
Agreement are included solely for convenience of reference and shall not control
the meaning or interpretation of any provisions of this Agreement.
(m) COUNTERPARTS. This Agreement may be executed by the parties
hereto in counterparts, each of which shall be deemed an original, but both such
counterparts shall together constitute one and the same document.
(n) DISCIPLINARY AND GRIEVANCE PROCEDURES. For statutory
purposes, there is no formal disciplinary procedure in relation to the
Employee's employment. The Employee shall be expected to maintain the highest
standards of integrity and behavior. If the Employee has any grievance in
relation to his employment or is not satisfied with any disciplinary procedure
taken in relation to him, he may apply in writing within 14 days of that
decision to the Board, whose decision shall be final. The foregoing shall not
be construed, however, to limit the Employee's remedies at law or otherwise.
14
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the day and year first written above.
PHOTODISC, INC.
By:
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Name:
Title:
EMPLOYEE
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Xxxxxx X. Xxxxxxxxxxx
