1
EXHIBIT 4.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of May 4,
2000, between XXXXXX XXXXXXXX, INC (the "Company"), and Xxxxx X. Xxxxxxxxxxxxx
("Executive").
RECITALS
WHEREAS, Executive is currently employed by Xxxxxx Xxxxxxxx
Public Limited Company, a public limited company ("Warner");
WHEREAS, Warner and Xxxxx Holdings plc ("Xxxxx") have entered
into an agreement pursuant to which Xxxxx will exchange all of the outstanding
securities of the Company for ordinary shares in Xxxxx pursuant to a scheme of
arrangement pursuant to Section 201 of the Irish Companies Act (the
"Acquisition");
WHEREAS, the Company is a subsidiary of Warner;
WHEREAS, upon consummation of the Acquisition, the Company
desires to employ Executive and Executive desires to be employed by the Company
upon the terms and conditions herein set forth; and
WHEREAS Executive and Warner are parties to an Employment
Agreement, dated August 1, 1999 (the "Prior Agreement"), which is hereby
superceded and replaced by this Agreement provided that this Agreement shall
only have legal force upon a consummation of the Acquisition and in the event
the Acquisition is not consummated the Prior Agreement shall remain in full
force and effect.
NOW THEREFORE in consideration of the promises and mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. EMPLOYMENT.
(a) Executive shall be employed as the Chief Executive Officer of
Xxxxx and agrees to render full time services under this Agreement and to
perform such other duties commensurate with such office.
(b) Executive shall perform substantially all of his duties under
this Agreement at the Company's Rockaway, New Jersey office provided, however,
that the Executive may be required to perform incidental services outside the
United States from time to time. Executive may from time to time be required to
perform duties on behalf of any company within the group of companies of which
Xxxxx is a member ("Group Companies"), which duties shall be performed by
Executive without additional compensation or remuneration.
(c) Executive hereby accepts such employment and agrees to render
the services described above to the best of his abilities in a diligent,
trustworthy, businesslike and efficient
2
manner. It shall not be a violation of this Agreement for Executive to serve on
corporate, civic or charitable boards or committees so long as such activities
do not significantly interfere with Executive's commitment to work in accordance
with this Agreement notwithstanding the foregoing, Executive shall not waive or
forfeit his right to have his existing options and warrants become vested due to
the Acquisition (pursuant to Sections 4(h)(i)(i) and (k) of the Prior
Agreement).
(d) During the Employment Period (as defined in Section 2 below),
Executive shall be included in any slate of nominees proposed by Xxxxx for
election or reelection, as the case may be, to Galen's Board of Directors.
Executive shall serve as a director of Xxxxx for no additional compensation from
the Company, Warner or Xxxxx. Upon termination of Executive's employment under
this Agreement for any reason, or the expiration of this Agreement, Executive
shall immediately submit his resignation from the Board of Directors of Xxxxx.
During his employment hereunder, Executive shall report to the Board of
Directors of Xxxxx.
(e) Upon this Agreement becoming effective, Executive hereby
specifically waives and forfeits all rights and benefits he may have under the
Prior Agreement including all severance and other termination rights which may
accrue solely due to the Acquisition notwithstanding the foregoing, Executive
shall not waive or forfeit his right to have his existing options and warrants
become vested due to the Acquisition (pursuant to Sections 4(h)(i)(j) and (k) of
the Prior Agreement).. In addition, in consideration for the grant of Xxxxx
options as described in Section 3(d), and the retention bonus described in
Section 3(e), Executive hereby waives all right, title and interest that he may
have and effectively consents to the termination of and cancellation of Warner's
obligations to grant to him options to purchase 100,000 shares of common stock
of Warner on May 16, 2000 (the "Pending Options") and the right to a special
incentive bonus to be paid in the event that there is an event that precipitates
an increase in the per share price of Warner between February 28, 2000 ($15.50)
and May 16, 2000. In consideration for such waiver and Executive's covenants and
obligations hereunder, Executive shall be paid a signing bonus (the "Signing
Bonus") as more particularly set out in Appendix A hereto which shall become
payable upon this Employment Agreement becoming effective.
2. TERM OF EMPLOYMENT. Executive's employment by the Company shall commence
on the date of the consummation of the Acquisition and shall continue unless
terminated as hereinafter provided (the "Employment Period"). Executive may
terminate his employment during the Employment Period with twelve months written
notice to the Company. If the Company gives Executive notice of termination
without cause, Executive shall be entitled to the severance payments provided in
Section 4(d) hereof.
3. BASE SALARY AND BENEFITS.
(a) During the Employment Period, Executive's base salary shall be
$285,000 per annum (the "Base Salary"). The Base Salary shall be subject to
adjustment from time to time in accordance with the compensation policies and
practices of the Company; however, in no case shall Executive's salary be
reduced below $285,000 per annum. The Base Salary shall be
3
payable in regular installments in accordance with the Company's general payroll
practices and shall be subject to customary withholding.
(b) The Company shall reimburse Executive for all reasonable
expenses incurred by him 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. The
parties agree that such expenses shall include, by way of example and not
limitation, cellular telephone service and home fax machine and telephone line.
(c) Except for any bonus which is subject to the provisions of
Section 3(e) and (f) hereof, Executive shall be entitled to participate, on a
basis comparable to other key executives of the Company, in any benefit plan,
incentive compensation plan, or program of the Company for which key executives
are or shall become eligible, including, without limitation, pension, 401(k),
life and disability insurance and stock schemes, subject to the approval of the
Remuneration Committee of the Board of Directors of the Company and the terms
and conditions of such plans and schemes.
(d) Notwithstanding the limitations contained in Section 3(c)
hereof, in consideration for Executive's agreement to forfeit his rights with
respect to the Pending Options, Executive shall be granted options to purchase
shares of Gershwin in the amount and subject to the terms and conditions set
forth on Appendix A hereto.
(e) Notwithstanding the limitations of Section 3(f), on the first
anniversary of the Acquisition (the "Payment Date"), the Executive shall be
eligible to receive a retention bonus in the amount more particularly set out in
Appendix A to this Agreement (the "Retention Bonus"), subject to the following
conditions: (i) the Executive must be employed by the Company on the Payment
Date or Executive's employment is terminated prior to the Payment Date without
cause or for Good Reason (as defined in Sections 4(c) and 4(e) respectively),
(ii) the Chairman determines that Executive has accomplished his assigned task
to successfully integrate Warner into Xxxxx, and (iii) in the event that any
amount paid to the Executive pursuant to this Section 3(e) would not be
deductible for tax purposes to the Company or appropriate Group Company under
U.S. law, the Executive hereby agrees that payment of such amount (or such
portion of such amount which would render the total amount non-tax deductible)
shall be deferred until the earliest time as payment of the whole amount would
be treated as deductible for U.S. tax purposes. Executive shall forfeit the
Retention Bonus if he terminates his employment with the Company other than for
Good Reason prior to the Payment Date.
(f) In addition to the Base Salary, Executive shall be eligible to
receive an annual cash bonus in a target amount equal to 50% of his then current
Base Salary. Such bonus shall be provided on such terms and in such amounts, if
any as the Board of Directors of Xxxxx may deem appropriate in its sole
discretion.
(g) Executive shall be entitled to vacation time with compensation
of 20 days per annum. Executive shall also be entitled to all paid holidays
given by the Company to its key officers.
4
4. TERMINATION.
(a) If the Executive shall die during the Employment Period, this
Agreement shall terminate effective as of the date of Executive's death, except
that Executive's surviving spouse or, if none, his estate, shall be entitled to
receive the benefits set forth in Section 4(d) below.
(b) At the sole discretion of the Board of Directors of the Company,
Executive's employment 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 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
conviction of Executive of a felony (other than violation of a motor vehicle or
moving violation law) 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 any Group Company funds in the course of his employment; or
(iii) the willful refusal (following written notice) to carry out specific
directions of the Board of Directors of Xxxxx, 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. Upon the termination of Executive's employment for cause, the Company
shall pay to Executive (x) his Base Salary accrued through the effective date of
termination, payable at the time such payment is otherwise due and payable
hereunder, and (y) all other amounts and benefits to which Executive is
entitled, including, without limitation, vacation pay and expense reimbursement
amounts accrued to the effective date of termination and amounts and benefits
owing under the terms of any benefit plan of the Company in which Executive
participates and Executive shall not be entitled to any severance payments.
(d) The Executive and the Company agree that the Company in its
absolute discretion, may terminate the Executive's employment hereunder without
cause provided, however that in such event Executive shall be entitled to
receive (so long as he executes and delivers the Company's standard form of
release) an amount equal to Executive's then current Base Salary for a period of
twelve months plus all other amounts and benefits to which Executive
5
is entitled, including without limitation, expense reimbursement amounts accrued
to the effective date of termination and amounts and benefits owing under the
terms of any benefit plan of the Company in which Executive participates (the
"Severance Payment"). The foregoing amounts shall be payable either in equal
monthly installments, payable on or before the last day of each month during the
Severance Period, or in a lump sum payment within ten (10) days after
Executive's last day of active employment. Notwithstanding the foregoing, if
such termination is following a Change in Control, Executive shall be entitled
to receive an amount equal to his then current Base Salary for a period of
eighteen months payable in a lump sum. In addition, Executive shall be entitled
to continue participation in the Company's health and other welfare benefit
plans, at the Company's expense, for the applicable Severance Period. For the
purposes of this Agreement, the "Severance Period" shall mean either 12 months
or 18 months for which the Company is obliged to make payments to the Executive
under this section 4(d) regardless of whether such payments are made in a lump
sum.
(e) For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred if any person (or persons "acting in concert" as defined
in the UK's City Code on Takeovers and Mergers) obtains "control" (as that term
is defined in s.840 of the UK Income and Corporation Taxes Act 1988) of the
Company or Xxxxx and that control is unconditional in all respects; but
excluding any reconstruction or amalgamation of the Company or Xxxxx.
(f) Executives employment may be terminated by the Executive,
(i) for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean: (A) other than as contemplated by Section 1(e) the
assignment to Executive of duties materially inconsistent 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 or Xxxxx 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 or Xxxxx promptly after receipt of notice
thereof given by Executive; (B) 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; (C) the
Company's requiring Executive to be based at any office or location other than
as provided in Section 1(b); (D) any purported termination by the Company of
Executive's employment otherwise than as expressly permitted by this Agreement;
or (E) any failure by the Company to obtain an express assumption of this
Agreement by a successor as required pursuant to Section 15 hereof. Upon any
termination pursuant to this subsection (f), 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).
(ii) by resignation or retirement. If Executive resigns or
retires, this Agreement shall terminate as of the effective date of Executive's
retirement or resignation and thereupon Executive shall be entitled solely to
the payments and benefits set forth in Sections 4(c) and (l).
6
(g) If (i) Executive's employment is terminated pursuant to
sub-sections (a), (b), (d) or (f)(i) of this Section 4; or (ii) a "Change in
Control" of the Company (as defined in Section 4(e) occurs, all stock options,
restricted stock, warrants, deferred compensation and similar benefits which
have not yet become vested on the date of a Change in Control, will become
vested upon such event, and Executive shall be permitted to exercise all such
rights in the eighteen month period immediately following Executive's date of
termination (or such longer date as determined in good faith by the Company in
the event securities laws prevent exercise of such rights in such period)
following any Change of Control, whether or not Executive remains employed with
the Company or terminates his employment in accordance with this subsection (g).
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 sixty (60) 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.
(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 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
of the Gross-Up Payment retained by Executive, after deduction of all federal,
state and local income tax (and any interest and penalties imposed with respect
thereto), employment tax and Excise Tax on the Gross-Up Payment, shall be equal
to the amount of the Excise Tax imposed on such Payment.
(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 an
independent accounting firm mutually selected by the Company and Executive. The
determination of the Company (or in the event of disagreement, the accounting
firm 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
7
"parachute payments" within the meaning of Section
28OG(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 the accounting firm selected above determines
based on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of
the Code, with substantial authority (within the meaning
of Section 6662 of the Code), 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; and
(B) The value of any non-cash benefits or any deferred
payment or benefit shall be determined in accordance
with Section 28OG(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 the prime rate quoted on the date the payment is
first overdue by Citibank N.A., New York, New York plus two percent until paid.
(l) Amounts which are vested benefits or which Executive is
otherwise entitled to receive under any plan, policy, practice or program of or
in any contract or agreement with the Company or any of its affiliated companies
at or subsequent to the date of termination of Executive's employment for any
reason shall be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement.
5. CONFIDENTIAL INFORMATION.
(a) Executive acknowledges and agrees that the information,
observations and data obtained by him concerning Xxxxx or any Group Company
while employed under this Agreement ("Confidential Information") are the
property of Xxxxx and/or the relevant Group Company (as appropriate). Therefore,
Executive agrees to keep secret and retain in the 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, Warner and Xxxxx, learned by
8
him prior to or after the date of this Agreement, and not to disclose them to
anyone outside the Company, Warner or Xxxxx, either during or after his
employment with the Company, except (i) in the course of performing his duties
hereunder; (ii) with Galen'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 10 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 he may then possess or have under his control.
6. INVENTIONS AND PATENTS. Executive acknowledges that all 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 Warner and its subsidiaries ("Work Product") belong to the Company,
Warner or such subsidiary. Executive shall promptly disclose such Work Product
to the Board of Directors of Xxxxx and perform all actions reasonably requested
by the Board of Directors of Xxxxx (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 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 him being or
having been a director or officer of the Company or of any of its subsidiaries
or affiliates or actions taken purportedly on behalf of the Company or of any of
its subsidiaries or affiliates. The Company shall advance to Executive the
amount of his expenses incurred in connection with any proceeding relating to
such service or function to the fullest extent legally permissible under
Delaware law. The indemnification and expense reimbursement obligations of the
Company in this Section 7 will continue as to Executive after he ceases to be an
officer of the Company and shall inure to the benefit of his heirs, executors
9
and administrators. The Company shall not, without Executive's written consent,
cause or permit any amendment of the Company's governing documents which would
affect Executive's rights to indemnification and expense reimbursement
thereunder.
8. NON-COMPETE. NON-SOLICITATION.
(a) Subject to Section 1(b) hereof, Executive covenants and agrees
that, during the Employment Period and for the following periods after the
termination of this Agreement howsoever arising save with the prior written
consent of the Board of Directors of the Company which shall not be unreasonably
refused or delayed directly or indirectly, either alone or jointly with or on
behalf of any person, firm, company or entity and whether on his own account or
as principal, partner, shareholder, director, employee, consultant or in any
other capacity whatsoever, Executive shall not:
(i) for the greater of the Severance Period or six months
following termination in the Relevant Territory (as defined in Section
8(b) below) and in competition with the Company or any of the Relevant
Group Companies engage, assist or be interested in any undertaking which
provides services/products similar to those provided by the Company or
any Relevant Group Companies;
(ii) for the greater of the Severance Period or six months
following termination in the Relevant Territory solicit or interfere
with or endeavor to entice away from the Company or any of the Relevant
Group Companies any person, firm, company or entity who was a customer
or potential customer of the Company or any of the Relevant Group
Companies ;
(iii) for the greater of the Severance Period or six months
following termination in the Relevant Territory be concerned with the
supply of services/products to any person, firm, company or entity which
was a customer or potential customer of the Company or any of the
Relevant Group Companies where such services/products are in competition
with those services/products supplied by the Company or any of the
Relevant Group Companies;
(iv) for the greater of the Severance Period or six months
following termination offer to employ or engage or solicit the
employment or engagement of any person who immediately prior to the date
of termination was an employee, contractor or director of the Company or
any of the Relevant Group Companies (whether or not such person would
commit any breach of their contact of employment or engagement by reason
of leaving the service of such company); and
(v) represent himself as being in any way connected with or
interested in the business of the Company or any of the Relevant Group
Companies other than in his capacity as a shareholder of any such
company.
(b) For the purposes of Section 8(a):
10
(i) a "RELEVANT GROUP COMPANY" means the Company and all
subsidiary (within the meaning of Article 4 of the Companies (Northern
Ireland) Order 1986) and associated companies (within the meaning of
Statement of Standard Accounting Practice No. 1 of the Institute of
Chartered Accountants in England and Wales) for which the Executive has
performed services or in which he has held office and, if applicable,
their predecessors in business; and
(ii) "RELEVANT TERRITORY" means the area constituting the
market of the Company or any of the Relevant Group Companies for
products and services with which the Executive shall have been concerned
during the term of his employment with the Company and/or Warner.
(iii) "POTENTIAL CUSTOMER" means any entity, person or
otherwise that the Company and any of the Relevant Group Companies has
actively solicited business during the 12 month period prior to the
Executive's termination of employment.
(c) Nothing contained in Section 8(a) shall prohibit the Executive
from holding shares or securities of a company any of whose shares or securities
are quoted or traded on any recognized investment or stock exchange provided
that any such holding shall not exceed three percent of the issued share capital
of the Company and is held passively by way of bona fide investment only.
(d) If, at the time of enforcement of this Section 8, a court shall
hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law. Executive agrees that the restrictions
contained in this Section 8 are reasonable.
(e) In the event of the breach or a threatened breach by Executive
of any of the provisions of this Section 8, the Company, in addition and
supplementary to other rights and remedies existing in its favor, may apply to
any court of law or equity of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce or prevent any violations
of the provisions hereof (without posting of any bond).
9. EXECUTIVE'S REPRESENTATIONS. Executive hereby represents and 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 parties, 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 had the opportunity to
consult with independent legal counsel regarding his rights and obligations
under this Agreement and that he fully understands the terms and conditions
contained herein.
11
10. NOTICES. Any notice provided for in this Agreement shall be in 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: Xxxxx X. Xxxxxxxxxxxxx
0 Xxxxx Xxxxxx Xxxxx
Xxxx Xxxxxx, Xxx Xxxxxx 00000
(000) 000-0000 (Phone)
Notices to the Company: Xxxxxx Xxxxxxxx, Inc.
Rockaway 80 Corporate Center
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
(000) 000-0000 (Phone)
(000) 000-0000 (Fax)
Attention: General Counsel
11. SEVERABILITY. Whenever possible, each provision of this 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 in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
12. COMPLETE AGREEMENT. This Agreement constitutes the complete 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.
13. NO STRICT CONSTRUCTION. The language used in this Agreement 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.
14. COUNTERPARTS. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.
15. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and 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
12
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.
16. CHOICE OF LAW. All issues and questions concerning the 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 Jersey 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 Jersey.
17. AMENDMENT AND WAIVER. The provisions of this Agreement may be 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.
18. ARBITRATION. Any controversy or claim arising out of or relating 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
Sections 5 and/or 8 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 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.
19. LEGAL FEES AND EXPENSES. The Company agrees to pay, as incurred, to the
full extent permitted by law, all reasonable legal fees and expenses which
Executive may reasonably incur as a result of (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 contest brought in good faith (regardless of the
outcome thereof) by the Company, the Executive or others of the validity, or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Code.
20. NO MITIGATION OR SET-OFF. The provisions of this Agreement are 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.
13
21. TAX WITHHOLDING. The parties agree to treat all amounts paid to
Executive hereunder as compensation for services. Accordingly, the Company may
withhold from any amount payable under this Agreement such Federal, state or
local taxes as shall be required to be withheld pursuant to any applicable law
or regulation.
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
XXXXXX XXXXXXXX, INC.
[XXXX X. XXXXX] SIGNED
---------------------------------
NAME: XXXX X. XXXXX
TITLE: DIRECTOR
EXECUTIVE:
[XXXXX XXXXXXXXXXXXX] SIGNED
---------------------------------
XXXXX X. XXXXXXXXXXXXX
15
APPENDIX A
TO
EMPLOYMENT AGREEMENT
DATED MAY 4, 2000 BY AND BETWEEN
XXXXXX XXXXXXXX, INC. AND XXXXX XXXXXXXXXXXX
SIGNING BONUS:
Pursuant to the terms of Section 1(e) of the Employment Agreement, the
amount of Executive's Signing Bonus is $114,000 (40% of Base Salary).
RETENTION BONUS:
Pursuant to the terms of Section 3(e) of the Employment Agreement, the
amount of Executive's Retention Bonus is $342,000 (120% of Base Salary)
OPTIONS:
As of the date of the closing of the Acquisition, Executive shall be
granted pursuant to the terms and conditions of the 2000 US Option Scheme of
Xxxxx Holdings PLC an option to purchase 250,000 ordinary shares of Xxxxx
Holdings PLC represented by 62,500 American Depository Shares (ADSs) at an
exercise price equal to the fair market value thereof on such date (the
"Replacement Option"). For this purpose, fair market value shall be the closing
price of an ADS of Xxxxx Holdings on the date of the Acquisition. Executive
shall vest in the Replacement Option based upon continued employment with the
Company. One-eighteenth of the Replacement Options shall vest as of the last day
of each calendar month following date of grant, with full vesting therein on the
last day of the eighteenth month following the date of grant. In addition, the
Replacement Option shall expire on the earlier of 10 years from date of grant or
eighteen months following the termination of Executive's employment. Except as
provided herein, the Replacement Option will be subject to the terms and
conditions of the 2000 US Option Scheme of Xxxxx Holdings PLC.
ACKNOWLEDGED AND ACCEPTED:
[XXXXX XXXXXXXXXXXX] SIGNED
---------------------------
Xxxxx Xxxxxxxxxxxx
