Exhibit 10.(a)
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
BETWEEN
XXXXXX X. XXXXXXX
AND
REFAC
(formerly REFAC TECHNOLOGY DEVELOPMENT CORPORATION)
Dated as of March 21, 2002
THIS SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement")
made as of March 21, 2002 between REFAC, a Delaware corporation ("REFAC"), and
Xxxxxx X. Xxxxxxx ("XXXXXXX").
XXXXXXX is currently employed by REFAC under an Amended and Restated
Employment Agreement dated as of December 13, 1996 and amended by agreement
dated as of January 20, 1999. In addition to the duties provided for therein,
REFAC desires that XXXXXXX undertake responsibility to reposition REFAC for sale
or for liquidation. XXXXXXX is willing to undertake these added duties and,
accordingly, the parties hereto desire to continue XXXXXXX'x employment upon the
terms and conditions hereinafter set forth.
The parties hereto desire to modify the contractual arrangements
between them and replace them with this Agreement.
In consideration of the premises and the respective agreements of the
parties herein contained, the parties hereto, intending to be legally bound,
agree as follows:
1. Employment. Subject to the provisions hereof, REFAC shall continue
to employ XXXXXXX and XXXXXXX shall continue to serve as the Chief Executive
Officer, President, and General Counsel of REFAC with full responsibility for
the supervision of all corporate affairs.
2. Term. The employment of XXXXXXX by REFAC hereunder will continue
until March 31, 2004, unless further extended by agreement of XXXXXXX and REFAC
or until sooner terminated as hereinafter provided.
3. Duties.
(a) Regular Duties. XXXXXXX will continue to perform such duties and
have such powers as are customary for the chief executive officer, president and
general counsel of publicly-held corporations of a size and engaging in a
business comparable to REFAC.
(b) Repositioning of REFAC for Sale or Liquidation. In addition to the
services rendered under Section 3(a) above, XXXXXXX shall be responsible for
REFAC's efforts to reposition itself so that it may be sold or liquidated.
(c) Responsible to the Board. XXXXXXX will report and be directly
responsible to the Board of Directors of REFAC (the "Board").
(d) Time Devoted to REFAC's Affairs. XXXXXXX will devote substantially
all his working time and efforts to the business and affairs of REFAC and will
not, without the express prior authorization of the Board, have any active
engagement in or responsibility with respect to any business or commercial
enterprise other than REFAC or a subsidiary of REFAC.
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(e) Post Employment Services. It is contemplated that some of REFAC's
assets may be sold in exchange for contract rights that include periodic
payments and that some of the royalty agreements might be collected until
maturity rather than sold. In such event and with respect to such contracts,
XXXXXXX agrees to be responsible for the contract administration, which shall
include invoicing (where appropriate), collecting the periodic payments,
monitoring performance, and record keeping. XXXXXXX shall be reimbursed for all
of his out-of-pocket costs associated therewith and will perform these services
on a part-time basis.
4. Board Membership. REFAC will use its best efforts to cause XXXXXXX
to be reelected as a member of its Board throughout the term of this Agreement.
XXXXXXX will serve as a Director of REFAC and/or its subsidiaries (including
committees of such boards) without additional compensation.
5. Place of Performance. In connection with XXXXXXX'x employment by
REFAC, XXXXXXX will be based in the New York City metropolitan area, except for
required travel on REFAC's business to an extent consistent with REFAC's
business requirements and his responsibilities hereunder.
6. Base Salary and Incentive Compensation
(a) Base Salary. XXXXXXX'x salary will be $300,000 per annum. Payment
of such salary will be made in accordance with REFAC's customary pay practices
for senior officers and will be subject to such payroll deductions as are
required by law or by the terms of any applicable benefit plan of REFAC.
(b) Incentive Compensation. XXXXXXX shall use reasonable efforts,
consistent with prudent and reasonable business judgment, to convert REFAC's
assets into cash and securities that can be distributed to REFAC's stockholders.
As incentive compensation for this undertaking, upon a Payment Event (as such
term is hereinafter defined) XXXXXXX (or in the case of death, XXXXXXX'x estate)
will be entitled to receive a bonus or bonuses (each, a "Success Bonus") in
consideration of his successful performance of the duties described in Section
3(b) hereof equal to 16% of the "Eligible Consideration" (as hereinafter
defined) in accordance with the terms of this Section 6. For purposes of this
Agreement, "Payment Event" shall mean (i) each Liquidation (as hereinafter
defined) during the term of this Agreement, (ii) termination of XXXXXXX'x
employment with REFAC prior to the expiration of the term of this Agreement due
to his death, Disability (as hereinafter defined) or termination by REFAC
without Cause (as hereinafter defined), (iii) the expiration of the term of this
Agreement, and (iv) the occurrence of a Company Sale. In the event that XXXXXXX
receives a Success Bonus in respect of a Liquidation or Company Sale, he will
remain eligible for additional Success Bonus payments in the event of a
subsequent Liquidation (or Liquidations) or other Payment Event. In the event
that XXXXXXX receives a Success Bonus in respect of a Payment Event subsequent
to a Liquidation or Company Sale, such amount shall be reduced by the amount of
any Success Bonus previously paid to XXXXXXX (hereinafter, the "Offset
Adjustment"). In the event that XXXXXXX receives a Success Bonus in respect of
Payment Event that is not a Liquidation or Company Sale,
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XXXXXXX will not be eligible for additional Success Bonus payments upon the
occurrence of any subsequent event.
(1) Eligible Consideration - Liquidation, Expiration of Term. In
the event of each Liquidation or the expiration of the term of
this Agreement, "Eligible Consideration" shall mean the
amount, if any, by which the Distributable Amount (as
hereinafter defined) exceeds $10 million. "Distributable
Amount" shall mean the aggregate amount of cash and the fair
market value (as determined by the Board in its sole
discretion) of securities that are available for distribution
to REFAC's stockholders (plus the aggregate amount distributed
in any prior Liquidation plus any compensation paid to XXXXXXX
or Xxxxxxx Xxxxxxxx with respect thereto) less the amount of
cash and the fair market value of assets (as determined by the
Board in its sole discretion) reserved to cover actual or
potential liabilities or claims against or relating to REFAC,
including unpaid legal and other fees and expenses incurred by
REFAC in connection with the Liquidation (but excluding
XXXXXXX'x incentive compensation hereunder and Xxxxxxx
Xxxxxxxx'x incentive compensation under his employment
agreement with REFAC).
(2) Eligible Consideration - Termination Due to Death or
Disability or By REFAC Without Cause. In the event that
XXXXXXX'x employment is terminated by REFAC without Cause or
due to XXXXXXX'x Disability or is terminated upon XXXXXXX'x
death, in any such case prior to the expiration of the term of
this Agreement, "Eligible Consideration" shall mean the sum of
(i) the aggregate amount of cash and the fair market value (as
determined by the Board in its sole discretion) of securities
that are available for distribution to REFAC's stockholders
(plus the aggregate amount distributed in any prior
Liquidation plus any compensation paid to XXXXXXX or Xxxxxxx
Xxxxxxxx with respect thereto) plus (ii) the amount (as
determined by the Board in its sole discretion) that
reasonably may be realized upon the sale of REFAC's remaining
assets, minus (iii) the cash and fair market value of assets
(as determined by the Board in its sole discretion) needed to
be reserved for actual or potential liabilities or claims
against or relating to REFAC (but excluding XXXXXXX'x
incentive compensation hereunder and Xxxxxxx Xxxxxxxx'x
incentive compensation under his employment agreement with
REFAC), minus (iv) legal and other fees and expenses expected
by the Board, in its sole discretion, to be incurred by REFAC
in connection with the sale of REFAC's assets, minus (v) $10
million.
(3) Eligible Consideration -- Company Sale. In the event of a
Company Sale (as hereinafter defined), the Eligible
Consideration shall be the amount, if any, by which the Sale
Consideration (as hereinafter defined) and any Distributable
Amount previously calculated to be available for distribution
to REFAC's stockholders in connection with a Liquidation
exceeds $10 million. "Sale Consideration" shall mean (i) in
the case of a Company Sale
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which results in a merger or the sale of 100% of REFAC's
then-outstanding voting securities, the aggregate value of the
consideration (which may consist of cash, securities, other
property or a combination of the foregoing) actually received
by REFAC's stockholders in connection with the consummation of
a Company Sale or (ii) in the case of a Company Sale which
results in the sale of less than 100% of REFAC's
then-outstanding voting securities, the aggregate amount of
consideration which would have been received by REFAC's
stockholders in connection with the consummation of a Company
Sale assuming that the price per-share applicable with respect
to such Company Sale was applied to all outstanding voting
securities, in each case as determined by the Board in its
sole discretion.
(c) Calculation of Eligible Consideration. The Board in its sole
discretion shall make all calculations and determinations necessary to the
calculation of the Eligible Consideration. In the case of a Liquidation, the
Eligible Consideration shall be calculated immediately prior to each date of an
actual distribution to stockholders. In the case of a Payment Event other than a
Liquidation, the Eligible Consideration shall be calculated immediately upon the
occurrence of such Payment Event.
(d) Payment of Success Bonus. (i) In the event of a Liquidation, REFAC
shall pay XXXXXXX the Success Bonus at the time of the payment to shareholders
in respect of such Liquidation. In the event of a Payment Event other than a
Liquidation, REFAC shall pay XXXXXXX the Success Bonus as soon as practicable
following the occurrence of such Payment Event.
(ii) Notwithstanding the foregoing, in the event that some or all of
the Eligible Consideration consists of securities or other property, the Board
may, in its sole discretion, pay XXXXXXX a ratable portion of his Success Bonus
in such securities or other property, which shall be valued by the Board in its
sole discretion. If there are restrictions imposed upon the consideration
(including, without limitation, transfer restrictions or forfeiture conditions),
the Board may, in its sole discretion, require XXXXXXX to consent to the
imposition of similar restrictions upon any share of such consideration conveyed
to him. Payment of such incentive compensation shall be made within thirty (30)
days after the date of calculation except that the Board may also elect to pay
XXXXXXX his share of any consideration that it receives in installment payments
within thirty (30) days after receipt.
(e) Company Sale Defined. For purposes of this Agreement, a "Company
Sale" will be deemed to have occurred if and when the event set forth in any one
of the following paragraphs shall have first occurred:
(1) there is consummated a merger or consolidation of REFAC or any
direct or indirect subsidiary of REFAC with any other
corporation, other than (A) a merger or consolidation which
would result in the voting securities of REFAC outstanding
immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or
any parent
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thereof), in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit
plan of REFAC or any subsidiary of REFAC, at least 60% of the
combined voting power of the securities of REFAC or such
surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of
REFAC (or similar transaction) in which no Person (as
hereinafter defined)is or becomes the Beneficial Owner,
directly or indirectly, of securities of REFAC (not including
in the securities Beneficially Owned by such Person any
securities acquired directly from REFAC or its affiliates
other than in connection with the acquisition by REFAC or its
affiliates of a business) representing 50% or more of the
combined voting power of REFAC's then outstanding securities;
(2) any Person is or becomes the Beneficial Owner (as hereinafter
defined), directly or indirectly, of securities of REFAC (not
including in the securities beneficially owned by such Person
any securities acquired directly from REFAC or its affiliates)
representing 50% or more of the combined voting power of
REFAC's then outstanding securities, excluding any Person who
becomes such a Beneficial Owner in connection with a
transaction described in clause (A) of paragraph (f)(1) above;
or
(3) the Board determines, in its discretion, that a Company Sale
has occurred.
(f) Liquidation Defined. For purposes of this Agreement, a
"Liquidation" shall mean a distribution in cash or securities
made to the stockholders of REFAC in connection with a plan of
complete liquidation or dissolution of REFAC.
(g) Certain Other Definitions.
(1) For purposes of this Section 6, "Person" shall have the
meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) REFAC or any of its
subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of REFAC or any of
its affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv)
a corporation owned, directly or indirectly, by the
stockholders of REFAC in substantially the same proportions as
their ownership of stock of REFAC.
(2) For purposes of this Section 6, "Beneficial Owner" shall have
the meaning set forth in Rule 13d-3 under the Exchange Act.
(h) For purposes of this Section 6, "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended from time to time.
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7. Fringe Benefits, Expenses and Related Matters.
(a) Expenses. During the term of XXXXXXX'x employment hereunder,
XXXXXXX will be entitled to receive prompt reimbursement for all reasonable
expenses incurred by XXXXXXX in performing services hereunder, including all
reasonable expenses of travel and living expenses while away from home on
business or at the request of and in the service of REFAC, provided that such
expenses are incurred and accounted for in accordance with the policies and
procedures established by REFAC.
(a) Automobile. During the term of XXXXXXX'x employment hereunder,
REFAC will provide XXXXXXX with an automobile with a maximum monthly lease
payment of $650.
(b) Other Benefits. XXXXXXX will be entitled to participate in or
receive benefits under any employee benefit plan or arrangement now or in the
future made available by REFAC generally to its executive employees, subject to
and on a basis consistent with the terms, conditions and overall administration
of such plans and arrangements, including health insurance and life insurance
benefits.
(c) Vacations. XXXXXXX will be entitled to four weeks of paid vacation
per calendar year, prorated for any portion thereof and to all paid holidays
given by REFAC in accordance with REFAC's regular paid holidays policy.
8. Facilities and Support Services Furnished. REFAC will furnish
XXXXXXX with office space, secretarial assistance and such other facilities and
services as shall be suitable to XXXXXXX'x position and adequate for the
performance of his duties as herein set forth.
9. Termination. XXXXXXX'x employment hereunder may be terminated under
the following circumstances:
(a) Death. XXXXXXX'x employment hereunder will terminate immediately
upon his death.
(b) Disability. REFAC may terminate XXXXXXX'x employment hereunder if
XXXXXXX should become permanently disabled. For the purposes of this Agreement,
permanent disability ("Disability") means XXXXXXX'x inability, by virtue of
physical or mental illness or injury, to perform his regular duties on a
full-time, continuous basis for 120 consecutive days. XXXXXXX'x disability will
be established if a qualified medical doctor selected by the parties so
certifies in writing. If the parties are unable to agree on the selection of
such a doctor, each party will designate a qualified medical doctor who together
will select a third doctor who will make the determination. XXXXXXX will make
himself available for an examination by a doctor selected in accordance with
this paragraph (b).
(c) Cause. REFAC may terminate XXXXXXX'x employment hereunder for Cause
at any time during the term hereof as hereinafter set forth. For purposes of
this Agreement, REFAC will have "Cause" to terminate XXXXXXX'x employment
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hereunder upon (i) the willful and continued failure, in the reasonable judgment
of the Board, by XXXXXXX to perform substantially his duties with REFAC (other
than any such failure resulting from his death or Disability) after a written
demand for substantial performance is delivered to XXXXXXX by the Board which
specifically identifies the manner in which it is believed that XXXXXXX has not
substantially performed his duties, (ii) the willful engaging by XXXXXXX in
conduct which in the reasonable opinion of the Board is materially and
demonstrably injurious to REFAC or (iii) the conviction of XXXXXXX (or the
entering by XXXXXXX of a plea of guilty or nolo contendere) for any felony or
any lesser crime which involved REFAC or its property. Notwithstanding the
foregoing, XXXXXXX will not be deemed to have been terminated for Cause within
the meaning of clauses (i) and (ii) without (1) reasonable notice to XXXXXXX
setting forth the reasons for REFAC's intention to terminate for Cause, (2) an
opportunity for XXXXXXX, together with his counsel, to be heard before the
Board, and (3) delivery to XXXXXXX of a Notice of Termination, as defined in
paragraph (e) of this Section 9, from the Board finding that, in the good faith
opinion of the Board, clause (i) or (ii) hereof may be invoked, and specifying
the particulars thereof in detail.
(d) Notice of Termination. Any termination of XXXXXXX'x employment by
REFAC or by XXXXXXX (other than termination pursuant to Section 9(a)) will be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" means a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of XXXXXXX'x employment under the provision so
indicated.
(e) Date of Termination. "Date of Termination" shall mean (i) if
XXXXXXX'x employment is terminated by his death, the date of his death, (ii) if
XXXXXXX'x employment is terminated pursuant to paragraph (b) of this Section 9,
three weeks after Notice of Termination, (iii) if XXXXXXX'x employment is
terminated pursuant to paragraph (c) of this Section 9, the date specified in
the Notice of Termination, and (iv) if XXXXXXX'x employment is terminated for
any other reason, the date specified in the Notice of Termination.
(f) XXXXXXX Cooperation. From and after the earlier to occur of (i)
delivery of a Notice of Termination and (ii) termination of XXXXXXX'x employment
hereunder (other than termination due to XXXXXXX'x death) XXXXXXX will, to the
best of his knowledge, disclose or provide for the disclosure to REFAC or any
successor thereof, orally or in writing as appropriate, all information of a
material nature relating to existing or prospective clients and licensees and as
to any other matters in which TUCHMAN shall prior to his Date of Termination
have been personally involved or as to which XXXXXXX will have acquired special
knowledge, and XXXXXXX will thereafter answer to the best of his knowledge any
questions that REFAC may from time to time submit with respect to any such
aforesaid matters.
10. Compensation Upon Termination or During Disability.
(a) Disability. During any period that XXXXXXX fails or is unable to
perform his duties hereunder as a result of Disability, XXXXXXX will continue to
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receive his full salary at the rate then in effect for such period until his
employment is terminated, provided that such payments will be reduced by the
amounts, if any, paid to XXXXXXX under any disability benefit plans of REFAC or
under the Social Security disability insurance program. Following the
termination of his employment, XXXXXXX'x benefits will be determined in
accordance with REFAC's retirement, insurance, and other applicable programs and
plans then in effect, if any.
(b) Death. If XXXXXXX'x employment should be terminated by his death,
REFAC will (i) pay any accrued salary and other compensation and benefits
through the date of death to XXXXXXX'x spouse, or, if he leaves no spouse, to
his estate and (ii) pay or cause the payment to XXXXXXX'x beneficiary, or if he
specified no beneficiary, to his estate, the death benefits payable pursuant to
REFAC's life insurance program in effect at the date of death, if any.
(c) Cause. If XXXXXXX'x employment should be terminated by REFAC for
Cause or by TUCHMAN prior to the expiration date hereof, REFAC will pay XXXXXXX
his full salary through the Date of Termination at the rate in effect at the
time Notice of Termination is given, plus all other amounts to which XXXXXXX is
entitled as of the Date of Termination under any benefit plan of REFAC at the
time such payments are due, and REFAC will have no further obligations to
XXXXXXX under this Agreement.
(d) Without Cause. XXXXXXX'x employment with REFAC may not be
terminated prior to March 31, 2004 for reasons other than those described in
Section 9(a), 9(b) or 9(c) unless, prior to such termination XXXXXXX has
together with his counsel had an opportunity to appear and be heard at a meeting
of the Board which was called and held (after reasonable notice to XXXXXXX) for
the purpose of considering such a termination. In the event that XXXXXXX'x
employment is terminated prior to March 31, 2004 for reasons other than those
described in Section 9(a), 9(b) or 9(c), REFAC will pay XXXXXXX a lump sum equal
to his full salary that would have been payable absent such termination for the
period of time commencing on the Date of Termination and ending on March 31,
2004 at the rate in effect at the time Notice of Termination is given and will
provide, except to the extent that XXXXXXX shall receive similar benefits from a
subsequent employer, the life, health and similar welfare benefits which XXXXXXX
would have been entitled to through the expiration date of the Agreement under
any such benefit plan of REFAC.
(e) Mitigation of Payments. XXXXXXX will not be required to mitigate
the amount of any lump sum payment or bonus entitlement provided for in this
Section 10 by reducing it by the amount of any compensation earned by XXXXXXX as
the result of employment by another employer after the Date of Termination, or
otherwise. However, he will be required to mitigate the costs of the other
benefits provided for in this Section
11. Noncompetition. XXXXXXX will not, except as hereinafter set forth,
engage in any Competitive Activity (as hereinafter defined) during the term of
this Agreement. For purposes of this Section, "Competitive Activity" will mean
directly or indirectly: owning, managing, controlling, investing in, or
otherwise being connected with, in any manner, whether as an officer, director,
employee, partner, investor,
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consultant, lender or otherwise, any business entity or activity which is
engaged in, or is in any way related to, the business of establishing, acquiring
or administrating manufacturing licenses and joint ventures from or with third
parties in the United States; it will also mean the direct or indirect
solicitation or representation for any such business purpose of or for any
existing or prospective client of REFAC or any of its subsidiaries. Nothing
herein contained will prohibit XXXXXXX from (i) investing in securities of a
business entity if the securities of such entity are listed for trading on a
national securities exchange or traded in the over-the-counter market and
XXXXXXX'x holdings therein represent less than five (5%) percent of the total
number of shares or principal amount of other securities of such entity
outstanding or (ii) at any time subsequent to the termination of this Agreement,
engaging in the design, development and licensing of children's toys, games,
stationery products and characters in or with which REFAC, prior to such
termination, shall not have been directly, indirectly or prospectively engaged
for REFAC's own account or in the normal course of REFAC's business..
12. Section 162 (m). In the event that any payment or benefit received
or to be received by XXXXXXX in connection with his employment by REFAC would
otherwise not be deductible (in whole or part), by REFAC as a result of the
operation of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), the delivery of the non-deductible portion of such payment or
benefit to XXXXXXX by REFAC shall be deferred until the earliest date on which
it may be delivered to XXXXXXX without being subject to the limit on
deductibility imposed by Section 162(m) of the Code.
13. Successors; Binding Agreement.
(a) Should any entity succeed (whether by purchase, merger,
consolidation or similar transaction) to all or substantially all of the
business and/or assets of REFAC, XXXXXXX shall continue to perform all of his
duties and obligations hereunder.
(b) REFAC will require any successor (whether by purchase, merger,
consolidation or similar transaction) to all or substantially all of the
business and/or assets of REFAC, by agreement in form and substance reasonably
satisfactory to XXXXXXX, to expressly assume and agree to perform this Agreement
in substantially the same manner and to substantially the same extent that REFAC
would be required to perform it if no such succession had taken place.
(c) This Agreement and all rights of XXXXXXX hereunder shall inure to
the benefit of and be enforceable by XXXXXXX'x personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If XXXXXXX should die while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to XXXXXXX'x devisee, legatee, or other designee or, if there be no
such designee, to XXXXXXX'x estate.
14. Notice. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing and
shall be deemed
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to have been duly given when delivered or (unless otherwise specified) mailed by
United States certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to XXXXXXX:
Xxxxxx X. Xxxxxxx
0 Xxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
If to REFAC:
REFAC
The Xxxxxx River Pier
000 Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx, Esq.
or to such other address as any party may have furnished to the others
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
15. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by XXXXXXX and such other officer of REFAC as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without regard
to its conflicts of law principles. All compensation payable to XXXXXXX pursuant
to this Agreement shall be subject to all applicable withholding taxes, normal
payroll withholding and any other amounts required by law to be withheld.
16. Validity. If any term or provision of this Agreement or the
application thereof to any person, entity or circumstance should to any extent
be invalid or unenforceable, the remainder of this Agreement or the application
of such term or provision to any person, entity or circumstance other than those
as to which it is held invalid or unenforceable shall not be affected thereby,
and each term and provision of this
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Agreement (including, to the extent permitted by law, any such term or provision
which has been held to be otherwise invalid or unenforceable) shall be deemed
valid and enforceable to the fullest extent permitted by law.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
18. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement will be settled exclusively by arbitration in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
19. Confidentiality. As an officer and director of REFAC, XXXXXXX is
privy to information generally regarded as confidential and often proprietary
with respect to REFAC, its business relationships, negotiations and activities.
Such information may include details of REFAC's business and client
relationships (past, present and prospective) and related REFAC and client
plans, products, property rights, technical and market data.
By reason of the foregoing:
(a) XXXXXXX will not at any time divulge or negligently permit the
communication of any of the foregoing types of information in any way that could
conflict with the interests of REFAC and its clients and the responsibilities of
REFAC to its clients and business associates.
(b) For a period of two (2) years after termination, XXXXXXX will not
without REFAC's prior written approval by a designated REFAC officer, directly
or indirectly, either as a principal, agent, employee or employer or in any
other capacity, solicit, serve, engage or assist in the business of any REFAC
client or business associate or of any prospective client or business associate
with whom REFAC shall have been in contact for business purposes at any time
prior to the termination date of XXXXXXX'x employment by REFAC, provided that
this clause shall not apply following a termination of XXXXXXX'x employment upon
a Company Sale or a Liquidation unless its continued effectiveness is a
condition of such Company Sale or, to the extent required, in connection with
any assets sold.
(c) For a period of two (2) years after termination, neither XXXXXXX
nor any company which XXXXXXX directly or indirectly owns, controls or manages
shall employ or solicit the employment of any present or future REFAC employee,
provided that this Section 19(c) shall not apply following a termination of
XXXXXXX'x employment upon a Company Sale or a Liquidation unless its continued
effectiveness is a condition of such Company Sale or, to the extent required, in
connection with any assets sold.
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20. Breach of Confidentiality Covenant. Each of the parties hereto
acknowledges that in the event of any breach of Section 19 of this Agreement by
XXXXXXX, XXXXX would be irreparably harmed and could not be made whole by
monetary damages. Therefore REFAC, in addition to any other remedy to which it
may be entitled at law or in equity, may compel specific performance of such
Sections of this Agreement. XXXXXXX hereby acknowledges and agrees that the
covenants contained in Section 19 of this Agreement are reasonable and fully
necessary for the protection of the legitimate interests of REFAC and are not
oppressive to the interest of XXXXXXX.
21. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements (including, without limitation, the Amended and
Restated Employment Agreement between XXXXXXX and REFAC dated as of December 13,
1996 and the amendment to such agreement dated as of January 20, 1999),
promises, agreements, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of any party hereto; and any prior agreement of the parties hereto in respect of
the subject matter contained herein is hereby terminated and canceled.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx
REFAC
By: /s/ Xxxx X. Austrian
-----------------------------
Title: Director
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