Exhibit 10.10
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of February
26, 1999, between CHIREX INC., a Delaware corporation (the "Company"), and
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Xxxxxx Xxxxx ("Executive").
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RECITALS
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The Company wishes to hire Executive as its General Counsel, Vice
President and Secretary. The parties hereto desire to set forth in writing the
terms of the Executive's employment relationship with the Company.
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment.
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(a) The Company hereby agrees to hire Executive as General Counsel,
Vice President and Secretary to render exclusive and full time legal and
corporate secretarial services to the Company and to perform such other duties
commensurate with such office as Executive shall reasonably be directed by the
senior management and/or Board of Directors of the Company, for the period
specified in Section 2.
(b) Executive hereby accepts such employment and agrees to render the
services described above to the best of Executive's abilities in a diligent,
trustworthy, businesslike and efficient manner. Executive further agrees to
accept election and to serve during all or any part of the term of this
Agreement as an officer or director of the Company and of any subsidiary or
affiliate of the Company, without any compensation therefor, other than that
specified in this Agreement or as otherwise determined by the Board of Directors
of the Company or of any subsidiary or affiliate, as the case may be.
(c) The duties to be performed by Executive hereunder shall be
performed primarily at the principal office of the Company in Connecticut,
subject to reasonable travel requirements on behalf of the Company.
2. Term of Employment.
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The Employment Period of Executive by the Company shall commence on or
before March 22, 1999 and end on December 31, 2001 (the "Initial Term") unless
further extended or
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sooner terminated as hereinafter provided. Executive may terminate his
employment during the Initial Term with six months written notice to the
Company. Commencing on December 31, 2001, and each December 31 thereafter, the
term of Executive's employment shall automatically be extended for one
additional year to, respectively, December 31, 2002 and each December 31
thereafter, unless, not later than six months prior to the end of any renewal
term, either party hereunder shall have given notice to the other party that it
does not wish to extend this Agreement. If the Company gives Executive notice
that it does not wish to extend this Agreement during the Initial Term or any
renewal term, Executive shall be entitled to the severance payments provided in
Section 4(d) hereof.
3. Base Salary and Benefits.
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(a) During the Employment Period, Executive's base salary shall be
$175,000 per annum or such higher rate as the Company may designate from time to
time (the "Base Salary"), which salary shall be payable in regular installments
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in accordance with the Company's general payroll practices and shall be subject
to customary withholding. During the Employment Period, Executive shall be
entitled to participate in all of the Company's employee benefit programs for
which senior executive employees of the Company and its subsidiaries are
generally eligible. In addition, Executive shall be paid a one-time signing
bonus of $25,000 on the first payroll period following his first day of
employment in 1999.
(b) The Company shall reimburse Executive for all reasonable expenses
incurred by his in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses.
(c) In addition to the Base Salary, Executive shall be eligible to
participate in the Company's bonus program, as such program may be established
and/or amended from time to time by the Board of Directors of the Company.
(d) Executive may be awarded, from time to time, additional
compensation (such as stock options, stock appreciation rights, performance
shares, restricted stock or unrestricted stock) pursuant to the Company's 1997
Stock Incentive Plan or any additional or replacement incentive compensation
program established for the key employees of the Company. Any awards under such
programs shall be at such levels or in such amounts as the Board of Directors
deems, in its sole discretion, appropriate for the position occupied by
Executive and his performance therein. Subject to Section 4 herein, the terms,
conditions and rights with respect to any such grants will be subject to the
actual provisions and conditions applicable to such plans.
(e) The Company will relocate Executive from New Jersey to the
Connecticut area in accordance with the ChiRex Relocation policy.
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(f) Executive will be entitled to four weeks paid vacation per year.
In addition, Executive shall also be entitled to paid holidays when the
corporate office is officially closed.
4. Termination and Change of Control
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(a) If the Executive shall die during the Employment Period, this
Agreement shall terminate, except that (i) Executive's surviving spouse or, if
none, his estate, shall be entitled to receive Executive's compensation
(including bonus) to the last day of the third calendar month following the date
of his death; and (ii) such termination shall not affect any rights which
Executive may have at the time of his death pursuant to any insurance or other
death benefit, retirement, stock option or other plans or arrangements of the
Company or of any subsidiary or affiliate of the Company, which rights shall
continue to be governed by the provisions of such plans and arrangements.
(b) At the sole discretion of the Board of Directors, Executive may be
terminated if the Executive is disabled (as defined below) and shall have been
absent from his duties with the Company on a full time basis for one hundred and
eighty (180) consecutive days, and, within thirty (30) days after written notice
by the Company to do so, the Executive shall not have returned to the
performance of his duties hereunder on a full time basis. In the event of such
termination, the Company shall make to Executive the payments specified in
Section 4(d). As used herein, the term "disabled" shall (i) mean that Executive
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is unable, as a result of a medically determinable physical or mental
impairment, to perform the duties and services of his position, or (ii) have the
meaning specified in any disability insurance policy maintained by the Company,
whichever is more favorable to the Executive.
(c) The Company may, by notice to Executive, terminate Executive's
employment hereunder for cause. As used herein, "cause" shall mean (i) the
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conviction of Executive of a felony or conviction of a misdemeanor if such
misdemeanor involves moral turpitude; or (ii) Executive's voluntary engagement
in conduct constituting larceny, embezzlement, conversion or any other act
involving the misappropriation of Company funds in the course of his employment;
or (iii) the willful refusal to carry out specific directions of the Board of
Directors, which directions shall be consistent with the provisions hereof; or
(iv) Executive's committing any act of gross negligence or intentional
misconduct in the performance or non-performance of his duties as an employee of
the Company; or (v) any material breach by the Executive of any material
provision of this Agreement (other than for reasons related only to the business
performance of the Company or business results achieved by Executive). For
purposes of this Section 4(c), no act or failure to act on Executive's part
shall be considered to be reason for termination for cause if done, or omitted
to be done, by Executive in good faith and with the reasonable belief that the
action or omission was in the best interests of the Company.
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(d) Executive's employment may be terminated at any time by the
Company without cause; provided, however, that in such event Executive shall be
entitled to receive (so long as Executive executes and delivers the Company's
standard form of release) 100% of Executive's then effective annual Base Salary
for the remaining term of the then current Employment Period. The foregoing
amounts shall be payable in one lump sum payment within five (5) days after
Executive's last day of active employment. In addition, Executive shall be
entitled to continue participation in the Company's health and other welfare
benefit plans for a period of up to one year or until Executive is covered by a
successor employer's benefit plans, whichever is sooner.
(e) If (i) Executive's employment is terminated pursuant to
subsections (a), (b), (d), (e) or (g) of this Section 4, or (ii) a "Change in
Control" of the Company (as defined in Section 4(f) below) occurs; in either
case, all stock options, restricted stock, deferred compensation and similar
benefits which have not yet become vested on the date of termination or the date
of a Change in Control, as the case shall be, will become vested upon such
event, and Executive shall be permitted to exercise all such rights in
accordance with the administrative provisions of those plans, and in the case of
a Change of Control, whether or not Executive remains employed with the Company
or terminates his employment in accordance with this subsection (e). If a Change
in Control event involves a tender offer for all or part of the Company's
shares, the vesting date for stock options and restricted stock pursuant to this
subsection (e) shall be a date which permits Executive to participate in such
tender offer with such stock options or restricted shares. In addition, if a
Change in Control occurs, Executive may, after such Change in Control, terminate
his employment with the Company for any reason after the expiry of ninety (90)
days immediately following the effective date of such Change in Control, in
which event Executive shall be entitled to the payments specified in Section
4(d) above and to the other rights described elsewhere in this Agreement.
(f) For purposes of this Agreement, a "Change in Control" of the
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Company shall be deemed to have occurred if: (i) any person (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities and Exchange Act of 1934)
becomes the beneficial owner, directly or indirectly, of Company securities
representing 30% or more of the capital stock of the Company; or (ii)
individuals who constitute the Company's Board of Directors as of the date of
this Agreement (the "Incumbent Board") cease for any reason to constitute at
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least a majority thereof, provided, however, that any person becoming a director
subsequent to the date of this Agreement whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least 51%
of the directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for director, without objection to such nomination) shall be, for the
purpose of this clause (ii), considered as though such person were a member of
the Incumbent Board; or (iii) the Company's shareholders approve a merger or
consolidation (where in either case the Company is not the survivor thereof) in
which shareholders of the Company cease to own at least 80% of the surviving
entity's voting power, or a sale or disposition of all or substantially all of
the Company's assets or a plan of partial or complete liquidation of the
Company.
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(g) Executive's employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, "Good Reason" shall mean: (i) the
assignment to Executive of any duties inconsistent in any respect with
Executive's position (including status, offices, titles, and reporting
requirements), authority, duties or responsibilities as contemplated by Section
1(a) hereof, 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 Executive; (ii) any failure by the Company to comply with any of the
provisions of Section 3 hereof, 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 Executive; (iii) the
Company's requiring Executive to be based at any office or location other than
as provided in Section 1(c) hereof; (iv) any purported termination by the
Company of Executive's employment otherwise than as expressly permitted by this
Agreement; or (v) any failure by the Company to obtain an express assumption of
this Agreement by a successor as required pursuant to Section 14 hereof. For
purposes of this Section 4(g), any good faith determination of "Good Reason"
made by Executive shall be conclusive. Upon any termination pursuant to this
subsection (g), Executive shall be entitled to the payment specified in Section
4(d) hereof and to the other rights described therein (subject to his compliance
therewith).
(h) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the Company
to or for the benefit of 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
subsection (h) (a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or
any interest or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties are
hereinafter collectively referred to as the "Excise Tax"), the Company shall pay
to Executive at the time specified in subparagraph (k) below an additional
amount (a "Gross-Up Payment") such that the net amount retained by Executive,
after deduction of any Excise Tax on a Payment and any federal (and state and
local) income tax (and any interest and penalties imposed with respect thereto),
employment tax and Excise Tax on a Payment, shall be equal to the amount of all
the Payments.
(i) For purposes of the foregoing subparagraph (h), the proper
amounts, if any, of the Excise Tax and the Gross-Up Payment shall be determined
in the first instance by the Company. Such determination by the Company shall be
communicated in writing by the Company to Executive at least fourteen (14) days
prior to the occurrence of a Change of Control. Within ten (10) days of being
provided with written notice of any such determination, Executive may provide
written notice to the Chairperson of the Compensation Committee of the Board of
Directors of the Company of any disagreement, in which event the amounts, if
any, of the Excise Tax and the Gross-Up Payment shall be determined by tax
counsel mutually selected by the Company and Executive.
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The determination of the Company (or in the event of disagreement, the tax
counsel selected) shall be final and nonreviewable.
(j) For purposes of determining whether any of the Payments will be
subject to the Excise Tax and the amount of such Excise Tax under subparagraph
(h), the following principles will be applicable:
(A) Any payments or benefits received or to be received by
Executive in connection with a termination of employment
shall be treated as "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, and all "excess
parachute payments" within the meaning of Section
280G(b)(1) of the Code shall be treated as subject to the
Excise Tax unless in the opinion of tax counsel mutually
selected by the parties pursuant to subsection (i) above,
such other payments or benefits (in whole or in part) do
not constitute parachute payments, or such excess
parachute payments (in whole or in part) represents
reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code in
excess of the base amount within the meaning of Section
280G(b)(3) of the Code, or are otherwise subject to the
Excise Tax; and
(B) The value of any non-cash benefits or any deferred payment
or benefit shall be determined in accordance with Section
280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, Executive
shall be deemed to pay federal income taxes at the highest
marginal rate of tax in the calendar year in which the
Gross-Up Payment is to be made and state and local income
taxes at the highest marginal rate of tax in the state and
locality of Executive's residence on the date of
termination, net of the maximum reduction in federal
income taxes which could be obtained from deduction of
such state and local taxes.
(k) The Payments provided for in subparagraph (h) shall be made in a
cash, lump-sum payment, net of any required tax withholdings, upon the later of
(i) the fifth business day following the effective date of termination, or (ii)
the calculation of the amount of the Gross-Up Payment under subparagraph (i).
Any Payment required hereunder that is not made in a timely manner shall bear
interest at a rate equal to one-hundred twenty percent (120%) of the monthly
compounded applicable federal rate, as in effect under Section 1274(d) of the
Code for the month in which Payment is otherwise required to be made.
5. Confidential Information.
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(a) Executive acknowledges and agrees that the information,
observations and data obtained by him while employed by the Company and its
subsidiaries concerning the business or affairs of the Company or any other
subsidiary ("Confidential Information") are the property of the Company or such
subsidiary. Therefore, Executive agrees to keep secret and retain in the
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strictest confidence all Confidential Information, including without limitation,
trade "know-how" secrets, customer lists, pricing policies, operational methods,
technical processes, formulae, inventions and research projects and other
business affairs of the Company, learned by his prior to or after the date of
this Agreement, and not to disclose them to anyone outside the Company, either
during or after his employment with the Company, except (i) in the course of
performing his duties hereunder; (ii) with the Company's express written
consent; (iii) to the extent that the Confidential Information becomes generally
known to and available for use by the public other than as a result of
Executive's acts or omissions; or (iv) where required to be disclosed by court
order, subpoena or other government process. If Executive shall be required to
make disclosure pursuant to the provisions of clause (iv) of the preceding
sentence, Executive promptly, but in no event more than 48 hours after learning
of such subpoena, court order or other governmental process, shall notify the
Company, by personal delivery or fax (pursuant to Section 9 hereof), and, at the
Company's expense, shall take all reasonably necessary steps requested by the
Company to defend against the enforcement of such subpoena, court order or other
governmental process and permit the Company to intervene and participate with
counsel of its own choice in any related proceeding.
(b) Executive shall deliver to the Company at the termination of his
employment, or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) relating to the Confidential
Information, Work Product (as defined below) or the business of the Company or
any subsidiary which Executive may then possess or have under his control.
6. Inventions and Patents. Executive acknowledges that all
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inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) which relate to the Company's or any of its subsidiaries' actual or
anticipated business, research and development or existing or future products or
services and which are conceived, developed or made by Executive while employed
by the Company or its predecessor and its subsidiaries ("Work Product") belong
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to the Company or such subsidiary. Executive shall promptly disclose such Work
Product to the Board and perform all actions reasonably requested by the Board
(whether during or after his employment) to establish and confirm such ownership
(including, without limitation, assignments, consents, powers of attorney and
other instruments).
7. Indemnification. The Company will indemnify Executive and
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his legal representatives, to the fullest extent permitted by the laws of the
State of Delaware and the existing by-laws of the Company or any other
applicable laws or the provisions of any other corporate document of the
Company, and Executive shall be entitled to the protection of any insurance
policies the Company may elect to obtain generally for the benefit of its
directors and officers, against all costs, charges and expenses whatsoever
incurred or sustained by him or his legal representatives in connection with any
action, suit or proceeding to which he or his legal representatives may be made
a party by reason of his being or having been a director or officer of the
Company or of any of its
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subsidiaries or affiliates or actions taken purportedly on behalf of the Company
or of any of its subsidiaries or affiliates.
8. Executive's Representations. Executive hereby represents and
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warrants to the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, and (ii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive hereby acknowledges and represents that he has consulted
with independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.
9. Notices. Any notice provided for in this Agreement shall be in
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writing and shall be deemed to have been duly given if delivered personally with
receipt acknowledged or sent by registered or certified mail or equivalent, if
available, postage prepaid, or by fax (which shall be confirmed by a writing
sent by registered or certified mail or equivalent on the same day that such fax
was sent), addressed to the parties at the following addresses or to such other
address as such party shall hereafter specify by notice to the other:
Notices to Executive: Xxxxxx X.X. Xxxxx
-------------------- 00 Xxxxxxxx Xxxx
Xxxxxxx Xxxxxxxx, XX 00000
(000) 000-0000 (phone)
Notices to the Company: ChiRex Inc.
---------------------- 000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
(Phone) (000) 000-0000
(Fax) (000) 000-0000
Attention: Chief Executive Officer
10. Severability. Whenever possible, each provision of this
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Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced
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in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
11. Complete Agreement. This Agreement constitutes the complete
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agreement and understanding among the parties and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
12. No Strict Construction. The language used in this Agreement
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shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
13. Counterparts. This Agreement may be executed in separate
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counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
14. Successors and Assigns. This Agreement is intended to bind and
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inure to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his obligations hereunder without the prior written
consent of the Company. The Company will require any successor 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.
15. Choice of Law. All issues and questions concerning the
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construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to any choice of
law or conflict of law rules or provisions that would cause the application of
the laws of any jurisdiction other than the State of New York.
16. Amendment and Waiver. The provisions of this Agreement may be
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amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
17. Arbitration. Any controversy or claim arising out of or relating
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to this Agreement, the making, interpretation or the breach thereof, other than
(a) a claim solely for injunctive relief for any alleged breach of the
provisions of Section 5 as to which the parties shall have the right to apply
for specific performance to any court having equity jurisdiction; and (b) the
determination of Excise Tax and Gross-Up Payment pursuant to Section 4 herein;
shall be settled by arbitration in New York City by one arbitrator in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
and judgement upon the award rendered by the
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arbitrator may be entered in any court having jurisdiction thereof and any party
to the arbitration may, if he elects, institute proceedings in any court having
jurisdiction for the specific performance of any such award. The powers of the
arbitrator shall include, but not be limited to, the awarding of injunctive
relief.
18. Legal Fees and Expenses. The Company shall reimburse Executive
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for all reasonable legal fees and expenses incurred by Executive in connection
with (a) review and/or any claims made regarding the Company's determination of
Excise Tax and Gross-Up Amount pursuant to Section 4 herein, or (b) any
arbitration proceeding brought under this Agreement pursuant to Section 17,
where the arbitration is concluded in Executive's favor.
19. No Mitigation or Set-Off. The provisions of this Agreement are
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not intended to, nor shall they be construed to require that Executive mitigate
the amount of any payment provided for in this Agreement by seeking or accepting
other employment, nor shall the amount of any payment provided for in this
Agreement be reduced by any compensation earned by Executive as a result of his
employment by another employer or otherwise. The Company's obligations to make
the payments to Executive required under 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 that the
Company may have against Executive.
* * * * * * * * * * * * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
CHIREX INC.
____________________________
By: Xxxxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
_____________________________
Xxxxxx X.X. Xxxxx
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