Employment Agreement dated as of January 1, 2002, between WRC Media Inc. and Ralph D. Caulo.
Exhibit
99.1
Employment
Agreement dated as of January 1, 2002, between WRC Media Inc. and
Xxxxx X. Xxxxx.
This
Restated and Revised EMPLOYMENT AGREEMENT (“Agreement") is made and entered into
as of the 1st day of January, 0000, xxxxxxx XXX
MEDIA INC.,
a Delaware corporation (the "Company"), and
XXXXX X. XXXXX,
an individual resident of the State of Florida (the "Executive").
WHEREAS.
the Company wishes to continue to employ Executive, and Executive wishes to
accept such employment, on the following terms and Conditions, effective as of
the date set forth above.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties hereby agree as
follows:
SECTION
1. Employment.
The Company hereby employs Executive and Executive accepts employment by the
Company, on the terms and Conditions contained in this Agreement.
SECTION
2. Term.
The employment of Executive pursuant hereto shall commence on January 1,
2002 and shall remain in effect until December 31, 2004, and shall be renewed
automatically thereafter for successive one year terms, unless terminated by
Executive upon 90 days prior written notice to the Company or by the Company
upon 90 days prior written notice to Executive. The period of time between
January 1, 2002 and the termination of this Agreement pursuant to its terms is
herein referred to as the "Term".
SECTION
3. Duties
and Extent of Service.
Executive shall serve the Company as Vice Chairman or in such other position as
may be mutually agreed upon by Executive and the Company and shall perform such
services and duties for the Company as are customarily performed by an executive
in Executive's position at a business such as the Company's business as the
Board of Directors of the Company (the "Board of Directors") may assign or
delegate to him from time to time as provided in the By-laws of the Company.
Executive shall devote his full business knowledge, skill, time and effort
exclusively to the performance of his duties for the Company and the promotion
of its interests. Executive's duties hereunder shall be performed at such place
or places as the interests, needs, businesses or opportunities of the Company
shall require. Executive shall report to the Board of Directors of the
Company.
SECTION
4. Base
Salary.
Commencing January 1, 2002 Executive shall be paid a base salary (the "Base
Salary") at a rate of $390,000 per annum (the "Base Salary"), in accordance with
the Company’s payroll practices. The Base Salary shall not be reviewed for
increase until December 31, 2003 and shall thereafter be annually
reviewed.
SECTION
5. Bonuses.
Executive
shall receive an annual bonus ("Bonus"), based on the achievement of specific
objectives to be established by the Board of Directors on an annual basis in
connection with the development of the Company's annual operating budget for
earnings before interest, depreciation, taxes and amortization and after
deductions for any bonus payments payable by the Company (“Bonus EBIDTA”). For
achievement of the following percentages of budgeted Bonus EBITDA the
corresponding Bonus will be paid to Executive:
1
|
95% |
$
50,000 |
|
100% |
$
75,000 |
|
105% |
$100,000 |
|
110% |
$125,000 |
|
115% |
$150,000 |
|
120% |
$175,000 |
|
125% |
$200,000 |
|
130% |
$225,000 |
|
135% |
$250,000 |
|
140% |
$275,000 |
For
each year of the Term, Bonus EBIDTA will be computed according to the budget of
the Company adopted by the Board of Directors on or before March 31 or, in the
event no budget is so approved, the prior year budget; provided
that the March 31 approval date shall be equitably extended if management of the
Company has not delivered to the Board of Directors on or before January 30 a
good faith proposed budget for the relevant fiscal year. Payment dates shall be
determined by the Board of Directors but will in no event occur later than 30
days after delivery to the Board of Directors of audited financial statements
for the relevant fiscal year of the Company.
In
the event the fiscal year of the Company is changed to other than a calendar
year basis, a pro-rated Bonus opportunity will be made available to Executive,
the terms and conditions of which (including applicable Bonus EBITDA for the
stub period applicable to the pro rated Bonus) shall be determined in good faith
by the Board of Directors in a manner reasonably consistent with the Bonus in
effect for the fiscal year in which such change is made.
In
the event of a sale or disposition of any business unit of the Company
(including subsidiaries and their subsidiaries, or discrete business operations
owned by them), budgeted Bonus EBITDA shall be adjusted by reducing the Bonus
EBITDA by an amount equal to the anticipated EBITDA for the remainder of the
then-current year attributable in the budget for the then-current year to the
operations of the disposed-of unit.
SECTION
6. Fringe
Benefits.
Executive shall be entitled to participate, to the extent eligible, in such
medical, dental, disability, life insurance, deferred compensation and other
benefit plans (such as pension and profit sharing plans) as the Company shall
maintain for the benefit of employees generally, on the terms and subject to the
Conditions set forth in such plans. Executive shall accrue vacation in
accordance with the Company’s applicable policy.
SECTION
7. Expenses.
The
Company shall reimburse Executive promptly for all reasonable
2
expenses
incurred by Executive in accordance with the Company's budget and policy in
connection with his duties and responsibilities hereunder, including, without
limitation, expenses associated with any relocation requested by the Company.
SECTION
8. [Intentionally Omitted]
SECTION
9. Stock
Options.
(a) Grant.
In addition to any other stock option grant made or to be made to Executive by
the Company, the Company shall grant Executive a nonqualified option to purchase
40,000 shares of Common Stock at an exercise price of $40.00 per share. Such
option shall vest 33.3% on December 31, 2002, 33.3% on December 31, 2003 and the
final 33.4% on December 31, 2004 ; provided
that such option shall vest immediately upon a Change of Control (as defined
below); and provided
further
that such option shall terminate in its entirety in the event that Executive's
employment hereunder is terminated by the Company for "Good Cause" (as defined
in Section 13) and Executive shall have no rights with respect to any portion
thereof, whether or not vested. If Executive's employment hereunder is
terminated by the Company for any reason other than "Good Cause" or by Executive
for any reason then the foregoing vesting schedule shall apply.
If
a Change of Control (as defined below) occurs, the option shall be deemed to
have fully vested as of the date of such Change of Control. "Change of Control"
shall mean the acquisition of direct or indirect Control (as defined below) of
the Company by any Person (other than EAC III L.L.C. (“EAC III”), SGC Partners
II LLC (“SGC”) or any of their Affiliates (as defined below) or group other than
any group including EAC III or SGC or any of their Affiliates. "Affiliate"
means, with respect to any specified Person, any other Person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such specified Person. For purposes of this
Section 9(a), "Control" (including, with correlative meanings, the terms
"Controlled by" and "under common Control with"), as used with respect to any
Person, means the direct or indirect possession of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. “Person” means any
individual, corporation, partnership, trust, association, limited liability
company, joint venture, joint-stock company or any other entity or organization,
including a government or governmental agency. A consummated private sale of 50%
or more of the common stock of the Company (including any rights to convert
securities to the common stock of the Company, whether or not such right is
exercised) in a single transaction or in a series of related transactions, in
each case, with any Person or their Affiliates shall presumptively constitute a
Change of Control.
(b) [reserved]
(c) Exercise
of Stock Options.
The Executive may exercise the vested portion of options granted pursuant to
Sections 9(a) by notifying the Company of the number of shares of Common Stock
to be purchased under such option and delivering with such notice an amount
equal to the aggregate exercise price for such number of shares in cash.
Notwithstanding the foregoing, Executive may notify the Company that Executive
desires to make a cashless exercise
3
of
such option with respect to a specified number of shares of Common Stock, in
which case such option shall be deemed exercised with respect to such specified
number of shares but Executive shall only be entitled to receive a number of
shares of Common Stock equal to the product of (A) such specified number
multiplied by (B) the quotient of (1) the aggregate Fair Market Value of such
specified number of shares of Common Stock (determined as of the date the
Company receives such notice in accordance with Section 14(b) minus the
aggregate exercise price for such specified number of shares divided by (2) such
aggregate Fair Market Value. Delivery of shares with respect to any exercise
shall take place within 10 days of exercise.
(d) Transfer,
Adjustment of Stock Options.
The options granted hereby shall not be transferable or assignable by Executive,
otherwise than by will or the laws of descent and distribution, and no such
option shall be subject to execution, attachment or other similar process. In no
event shall any such option be exercisable on or after the tenth anniversary of
the date hereof In the event of changes in the outstanding Common Stock by
reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations or
other changes in capitalization occurring after the date of this Agreement, the
number of shares and exercise price under such option shall be equitably
adjusted by the Board of Directors of the Company. Any amount payable under such
option shall be subject to applicable withholding taxes.
(e) Tag-Along
Rights.
If EAC III, SGC and their Affiliates (the "Sellers") desire to transfer in
excess of 10% of their shares of Common Stock to a prospective transferee (or
transferees) other than (A) in connection with a public offering of the Common
Stock (a "Permitted Transfer") or (B) to EAC III, SGC or their Affiliates (a
"Permitted Transferee"), and, after giving effect to such transfer, the Sellers
shall have transferred in excess of 75% of their aggregate shares of Common
Stock to a transferee (or transferees) other than in connection with a Permitted
Transfer or to Permitted Transferees, the Sellers shall, as a condition to such
transfer, (i) provide a notice to Executive in writing (a "Tag-Along
Notice") of the material terms of the proposed transfer at least 15 days
prior to such transfer and (ii) permit Executive (or cause Executive to be
permitted) to sell (either to the prospective transferee or to another
financially reputable transferee reasonably acceptable to Executive) the same
portion of his respective shares of Common Stock (including such shares issuable
pursuant to any option) (the “Shares”) as that transferred by the Sellers in the
aggregate to transferees other than Permitted Transferees or in Permitted
Transfers (after giving effect to such proposed transfer) on the same terms and
conditions, subject to the same agreements and at the same price as the proposed
sale by the Sellers (less any option exercise price), which sale shall take
place on the date the Sellers' shares of Common Stock (or such portion) are
transferred to such transferee (or transferees). Executive shall have five days
from the date of receipt of a Tag-Along Notice to exercise his right to sell
pursuant to clause (ii) above by delivering written notice to the
Sellers of his intent to exercise such right. Executive's right to sell pursuant
to clause (ii) above shall terminate if not exercised within such
five-day period. If Executive elects to exercise his right to sell pursuant
to clause (ii), Executive shall share, on a pro rata basis, the legal,
investment banking and other expenses of the Sellers incurred in connection with
such transfer.
(f) Drag-Along
Rights. If
at any time the Sellers desire to transfer all (or any portion in excess of 50%)
of their shares of Common Stock to any person or entity that is not
4
considered
a Permitted Transferee under Section 9(e), above (a "Third Party Purchaser"),
the Sellers shall have the right to require that Executive transfer the same
portion of his respective Shares to such Third Party Purchaser(s) on the same
terms and conditions, subject to the same agreements and at the same price as
the sale by the Sellers. The Sellers shall provide a notice to Executive in
writing (a "Drag-Along Notice") of such sale at least 10 days prior to such
transfer, and the Drag-Along Notice shall identify such Third Party
Purchaser(s), all material terms of the sale and the date of closing. Upon the
closing of any sale by the Sellers of all (or such portion) of its shares of
Common Stock as described in a Drag-Along Notice, such Third Party Purchaser(s)
shall pay to Executive the consideration payable to Executive in connection with
such sale of all (or such portion) of his Shares to such Third Party
Purchaser(s), net of any option exercise price and Executive's proportionate
share of the legal, investment banking and other expenses of the Sellers
incurred in connection with such sale, and the Executive's Shares (or such
portion) shall be deemed transferred to such Third Party
Purchaser(s).
SECTION
10. Registration
Rights.
Beginning no earlier than 180 days after the consummation of a public offering
of Common Stock, the Company shall grant to the management of the Company the
right to require the Company to register for re-sale under applicable federal
securities laws shares of Common Stock held by Executive (the “Registration
Right”); provided
that
(i) the Registration Right may be exercised only once by the management of the
Company, (ii) the Registration Right shall be exercised on behalf of all members
of management by the Chief Executive Officer of the Company, and (iii) the
Registration Right may not be exercised at any time or during any period the
Company or lead underwriter to the Company determines in good faith that such
exercise would adversely affect a public offering of Common Stock that the
Company is in good faith considering. The terms and conditions of the
Registration Right (including, without limitation, the number of shares of
Common Stock that may be registered) shall be customary for the private equity
industry.
SECTION
11.
Noncompete and Nonsolicitation. During
the Term, and for eighteen months thereafter, Executive shall not directly or
indirectly (other than as an employee of or consultant to the Company or an
affiliate of the Company):
(a)
engage in activities or businesses within the United States which are
substantially in competition with the Company (“Competitive Activities"),
including (i) selling goods or services of the type sold by the Company or any
of its subsidiaries; (ii) soliciting or attempting to solicit any customer or
client or prospective customer or client of the Company (or any of its
subsidiaries) including, without limitation, actively sought prospective
customers or clients, to purchase any goods or services of the type sold by the
Company or any of its subsidiaries from anyone other than the Company or any of
its subsidiaries; and (iii) assisting any person in any way to do, or attempt to
do, anything prohibited by (i) or (ii) above;
(b)
perform any action, activity or course of conduct which is substantially
detrimental to the business or business reputation of the Company or any of its
subsidiaries ("Detrimental Activities"), including (i) soliciting, recruiting or
hiring any employees of the Company or persons who have worked for Ripplewood
Holdings L.L.C. ("Ripplewood"), the Company or any of their respective
affiliates; (ii) soliciting or encouraging any employee of Ripplewood,
the Company or any of their respective affiliates to leave the employment of
5
Ripplewood,
the Company or any of their respective affiliates; (iii) intentionally
interfering with the relationship of Ripplewood, the Company or any of their
affiliates with any person or entity who or which is employed by or otherwise
engaged to perform services for Ripplewood, the Company or any such affiliate;
and (iv) disclosing or furnishing to anyone any confidential information
relating to Ripplewood, the Company or any of their respective affiliates or
otherwise using such confidential information for its own benefit or the benefit
of any other person; or
(c)
establish in the United States any new business which engages in Competitive
Activities.
Notwithstanding
anything to the contrary contained in this Agreement, the foregoing covenant
shall not be deemed breached as a result of the ownership by Executive of: (i)
less than an aggregate of 5% of any class of stock of a person engaged, directly
or indirectly, in Competitive Activities; provided,
however,
that such stock is listed on a national securities exchange or is quoted on the
National Market System of NASDAQ; (ii) less than an aggregate of 10% in value of
any instrument of indebtedness of a person engaged, directly or indirectly, in
Competitive Activities; or ( iii) stock or other debt or equity interests in the
Company, or the participation by Executive in the activities and business
conducted by the Company or any of its subsidiaries; provided,
however,
that, for the lesser of a period of eighteen months from the date hereof or so
long as Executive owns stock or other debt or equity interests in the Company or
participates in the activities or business conducted by the Company or any of
its subsidiaries, Executive shall not engage in any Competitive Activities
except to the extent Executive engaged in such Competitive Activities as of
November 17, 1999.
If
a judicial determination is made that any of the provisions of this Section 11
constitutes an unreasonable or otherwise unenforceable restriction against
Executive, the provisions of this Section 11 shall be rendered void only to the
extent that such judicial determination finds such provisions to be unreasonable
or otherwise unenforceable. Moreover, notwithstanding the fact that any
provisions of this Section 11 is determined not to be specifically enforceable,
the Company shall nevertheless be entitled to recover monetary damages as a
result of Executive's breach of such provision.
Executive
agrees that the provisions of this Section 11 are reasonable and properly
required for the adequate protection of the business and the goodwill of the
Company.
SECTION
12. Nondisclosure.
The parties hereto agree that during the course of his employment by the
Company, Executive will have access to, and will gain knowledge with respect to,
the Company's Confidential Information (as defined below). The parties
acknowledge that unauthorized disclosure or misuse of such Confidential
Information would cause irreparable damage to the Company and its subsidiaries.
Accordingly Executive agrees to the nondisclosure covenants in this Section 12.
Executive represents that his experience and capabilities are such that the
provisions of Section 11 and this Section 12 will not prevent him from earning
his livelihood. Executive agrees that he shall not (except as may be required by
law), without the prior written consent of the Company during his employment
with the Company under this Agreement, and any extension or renewal hereof, and
thereafter for so long as it remains
6
Confidential
Information, use or disclose, or knowingly permit any unauthorized person to
use, disclose or gain access to, any Confidential Information; provided,
however,
that Executive may disclose Confidential Information to a person to whom
disclosure is reasonably necessary or appropriate in connection with the
performance by Executive of his duties under this Agreement. Upon termination of
this Agreement for any reason, Executive shall return to the Company the
original and all copies of all documents and correspondence in his possession
relating to the business of the Company or any of its affiliates, including but
not limited to all Confidential Information, and shall not be entitled to any
lien or right of retention in respect thereof.
For
purposes of this Agreement, "Confidential Information" shall mean all business
information (whether or not in written form) which relates to the Company, any
of its affiliates or their respective businesses or products and which is not
known to the public generally, including but not limited to technical
information or reports; trade secrets; unwritten knowledge and "know-how";
operating instructions; training manuals; customer lists; customer buying
records and habits; product sales records and documents, and product
development, marketing and sales strategies; market surveys; marketing plans;
profitability analyses; product cost; long-range plans; information relating to
pricing, competitive strategies and new product development; information
relating to any forms of compensation or other personnel-related information;
contracts; and supplier lists. Confidential Information shall not include such
information known to Executive prior to his involvement with
Ripplewood.
SECTION
13. Severance.
(a)
If Executive's employment hereunder is terminated (1) upon a breach by the
Company of this Agreement; (2) by the Company for any reason other than for
"Good Cause" (as defined below) including a refusal to renew the Agreement by
the Company, or (3) by the Company as a result of the occurrence of the death or
total disability of Executive (total disability meaning the failure of Executive
to perform his normal required services hereunder for a period of three
consecutive months during the term hereof by reason of Executive's mental or
physical disability, as determined by an independent physician reasonably
satisfactory to Executive and the Company) the Company shall pay to Executive as
severance pay lump sum cash payments totaling the amount (in each case prorated
for any portion of a year less than a full year) of his (i) Base Salary and (ii)
Guaranteed Bonus for a Payment Period which is the longer of (x) the balance of
the Term of this agreement and (y) eighteen months and (if applicable) (iii) the
Supplemental Payment described in sub-paragraph (c) below. Payment of the Base
Salary and Guaranteed Bonus components of such severance pay will be made within
thirty (30) days of such termination.
(b)
Executive shall have the option of receiving the Base Salary and Guaranteed
Bonus components of severance pay specified in the preceding sub-paragraph in
the form of equal continuation payments for 18 months (the "Severance Period").
In the event that Executive elects to receive severance pay in the form of
continuation payments, Executive shall continue to receive medical, dental and
vision coverage for the Severance Period, subject to Executive’s payment of the
costs of such benefits to the extent such benefits are paid for by active
employees. For purposes of this Agreement, termination for "Good Cause" shall
exist upon the occurrence of any of the following: (i) Executive is convicted
of, pleads guilty to,
7
confesses
to, or enters a plea of nolo contendere to, any felony or any crime that
involves moral turpitude or any act of fraud, misappropriation or embezzlement;
(ii) Executive has wilfully engaged in a fraudulent act to the damage or
prejudice of the Company or any affiliate of the Company; (iii) any act or
omission by Executive involving malfeasance or gross negligence in the
performance of Executive's duties to the Company; or (iv) Executive otherwise
wilfully fails to comply in any material respect with the terms of this
Agreement or deviates in any material respect from any reasonable written
policies or reasonable directives of the Board of Directors and, within 30 days
after written notice from the Company of such failure or deviation, Executive
has not corrected such failure.
(c)
If Executive is entitled to severance payments hereunder, the Company shall pay
Executive an additional amount (the "Supplemental Payment") equal to the product
of A and B, where A is the Bonus that would have been paid to Executive under
the terms of this Agreement for that fiscal year of the Company that includes
Executive's date of termination (which shall be based on the Company's actual
performance for that year), and B is a fraction, the numerator of which is the
number of months in the applicable Payment Period and the denominator of which
is 12. The Supplemental Payment, if any, shall be made at the time the Company
is required to pay Bonus for the fiscal year of the Company that includes
Executive's date of termination in accordance with the provisions for payment of
Bonus in SECTION 5.
SECTION
14. Options
to Purchase and Sell Common Stock.
(a)
(i) If Executive's employment is terminated for any reason, the Company shall
have an option to purchase all or any portion of Executive's shares of Common
Stock (including any shares obtained or obtainable through the exercise of any
option) at a purchase price equal to the Fair Market Value (as defined below),
determined in accordance with Section 14(b) as of the date of such termination.
The Company shall within 90 days of such date of termination give notice in
writing to Executive of its election to exercise or not to exercise such option,
which notice shall set forth the portion, if any, of Executive's shares of
Common Stock that the Company elects to purchase (the “Acquired Interest”). The
purchase of Executive's shares of Common Stock shall take place at the principal
office of Ripplewood, currently at One Rockefeller Plaza, New York, New York on
the date specified by the Company (not later than the later of the twentieth
business day following the receipt by Executive of the required notice from the
Company and the satisfaction of any legal requirements to the purchase of the
Acquired Interest). The consideration for the purchase of the Acquired Interest
shall be paid by delivery to Executive of a certified or bank check made payable
to Executive or by wire transfer of immediately available funds to a bank
account designated by Executive, within one business day after delivery of
certificates or other instruments representing Executive's shares of Common
Stock so purchased, appropriately endorsed by Executive, free and clear of all
security interests, liens, claims, encumbrances, charges, options, restrictions
on transfer, proxies and voting and other agreements of whatever nature. The
Company may assign its rights under this Section 14 to any person.
(ii)
If Executive's employment is terminated by the Company for other than Good
Cause, including a refusal to renew the Agreement by the Company, Executive
shall have an option to sell to the Company all or any portion of Executive's
shares of Common Stock
8
purchased
on the Closing Date (as defined in the Redemption, Stock Purchase and
Recapitalization Agreement dated as of August 13, 1999, as amended, among
PRIMEDIA Inc., a Delaware corporation, and the Company) at a purchase price
equal to the Fair Market Value of such shares, determined in accordance with
Section 14(b) as of the date of such termination; provided,
that to the extent that the Board of Directors of the Company reasonably
determines that such purchase, if made, would (x) cause the Company to be or
remain in default under any agreements with lenders or financing sources,
despite commercially reasonable efforts by the Company to obtain consents or
amendments necessary to permit such purchase, or (y) conflict with the
terms (including with respect to priority of payment) of the 15% Senior
Exchangeable Preferred Stock Due 2011, par value $0.01 per share, of the
Company, the Company shall be relieved of its obligations to make such purchase
under this Section 14(a)(ii) while and to the extent such conditions continue to
exist. Executive shall within 90 days of such date of termination give
notice in writing to the Company of his election to exercise or not to exercise
such option, which notice shall set forth the portion, if any, of Executive's
shares of Common Stock that Executive elects to sell. The sale of Executive's
shares of Common Stock shall take place at the principal office of Ripplewood,
currently located at One Rockefeller Plaza, New York, New York, on the date
specified by Executive (not later than the later of the twentieth business day
following the receipt by the Company of the required notice from Executive and
the satisfaction of any legal requirements to the sale of Executive's shares of
Common Stock). The consideration for the sale of Executive's shares of Common
Stock shall be paid by delivery to Executive of a certified or bank check made
payable to Executive or by wire transfer of immediately available funds to a
bank account designated by Executive, against delivery of certificates or other
instruments representing Executive's shares of Common Stock so purchased,
appropriately endorsed by Executive, free and clear of all security interests,
liens, claims, encumbrances, charges, options, restrictions on transfer, proxies
and voting and other agreements of whatever nature.
(b)(i)
If a determination of the Fair Market Value of any shares of Common Stock is
required by this Agreement when there is no public trading market for shares of
Common Stock, such "Fair Market Value" shall be such amount as is determined in
good faith by the Company's Board of Directors as of the date such Fair Market
Value is required to be determined hereunder. In making a determination of such
Fair Market Value, the Company's Board of Directors shall give due consideration
to such factors as it deems appropriate, including, without limitation, the
earnings and certain other financial and operating information of the Company
and its subsidiaries in recent periods, its potential value and that of its
subsidiaries as a whole, its future prospects and that of its subsidiaries and
the industries in which they compete, its history and management and that of its
subsidiaries, the general condition of the securities markets and the fair
market value of securities of privately owned companies (with transfer
restrictions) engaged in businesses similar to those of the Company's, if any.
The Fair Market Value as determined in good faith by the Company's Board of
Directors shall be binding and conclusive upon Executive.
(ii)
If a determination of the Fair Market Value of any shares of Common Stock is
required by this Agreement when there is a public trading market for shares of
Common Stock, such "Fair Market Value" shall mean the average daily closing
sales price of shares of
9
Common
Stock for the ten consecutive trading days preceding the date the Fair Market
Value is required to be determined hereunder. The closing price for each day
shall be the last reported sales price regular way or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the principal national securities exchange
on which shares of Common Stock are listed and admitted to trading, or, if not
listed and admitted to trading on any such exchange, on the NASDAQ National
Market System, or, if not quoted on the National Market System, the average of
the closing bid and asked prices in the over-the-counter market as furnished by
any New York Stock Exchange member firm selected from time to time by the
Company's Board of Directors for that purpose.
SECTION
15. Termination;
Survival.
This Agreement shall terminate upon the termination of Executive’s employment by
the Company. Notwithstanding the foregoing, Sections 11, 12, 14 and 16 and, if
Executive's employment terminates in a manner giving rise to a payment under
Section 13, Section 13 shall survive the termination of this
Agreement.
SECTION
16. Miscellaneous.
(a)
This Agreement shall inure to the benefit of and shall be binding upon Executive
and his executor, administrator, heirs, personal representative and permitted
assigns, and the Company and its successors and permitted assigns; provided,
however, that Executive shall not be entitled to assign or delegate any of his
rights or obligations hereunder without the prior written consent of the
Company.
(b)
This Agreement shall be deemed to be made in, and in all respects shall be
interpreted, construed and governed by and in accordance with, the laws of the
State of Delaware, without regard to the conflicts of law principles of such
State. No provision of this Agreement or any related document shall be construed
against or interpreted to the disadvantage of any party hereto by any court or
other governmental or judicial authority by reason of such party having or being
deemed to have structured or drafted such provision.
(c)
This Agreement constitutes the entire agreement between the Company and
Executive with respect to Executive's employment by the Company, and supersedes
all prior agreements, if any, whether written or oral, between them, relating to
Executive's employment by the Company or any of its subsidiaries. All prior
agreements between the Company or any of its subsidiaries and Executive with
respect to Executive's employment by the Company or any of its subsidiaries
shall terminate and be without further force or effect as of the execution of
this Agreement; provided, however, that any award of any compensation or other
benefits earned during the term of such agreement(s), including but not limited
to Bonus for the year 2001, shall survive. Executive hereby releases the Company
its subsidiaries and its affiliates from any claims or rights under such
agreements, without any liability or other adverse consequence to the Company,
its affiliates or its subsidiaries.
(d)
All notices or other communications required or permitted by this Agreement
shall be made in writing and any such notice or communication shall be deemed
delivered when delivered in person, transmitted by telecopier, or one business
day after it has been sent by a nationally recognized overnight courier, at the
address for notices as follows:
10
|
(i) if
to the Company, |
|
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Attention:
Chief Executive Officer
Fax
000-000-0000 |
|
with
a copy to: |
|
Ripplewood
Holdings L.L.C.
Xxx
Xxxxxxxxxxx Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxxx Xxxxxx
Fax
000-000-0000 |
|
(ii) if
to Executive, |
|
Xx.
Xxxxx X. Xxxxx
0000
Xxxxx Xxxx.
Xxxxxxxxxx,
XX 00000
Facsimile: |
Communications
by telecopier also shall be sent concurrently by overnight courier, but shall in
any event be effective the first business hour after confirmation of receipt by
electronic transmission. Each party may from time to time change its address for
notices under this Section 16(d) by giving at least five days' notice of such
changed address to the other parties hereto.
(e)
This Agreement maybe executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when one or
more of the counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.
(f)
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.
(g)
No failure or delay by Executive or the Company in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment of any steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to an agreement in
writing entered into by Executive and the Company.
(h)
Any controversy, dispute or claim arising out of, in connection with, or in
relation to the interpretation, performance, non-performance, validity or breach
of this
11
Agreement
or otherwise arising out of, or in any way related to, this Agreement shall be
determined, at the request of any party, by arbitration conducted in New York
City, before and in accordance with the then-existing Rules for Commercial
Arbitration of the American Arbitration Association, and any judgment or award
rendered by the arbitrator shall be final, binding and unappealable, and any
judgment may be entered by any state or Federal court having jurisdiction
thereof. In its award the arbitrator shall allocate, in its discretion, among
the parties to the arbitration all costs of the arbitration, including the fees
and expenses of the arbitrator and reasonable attorneys' fees, costs and expert
witness expenses of the parties.
(i)
All amounts paid hereunder will be net of any applicable withholdings required
by existing or future tax laws.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
By____________________________
_____________________________
XXXXX X.
XXXXX
