EXHIBIT 10
(Certain confidential portions of this Exhibit have been omitted,
as indicated by an {*} on the margin or in the text,
and filed with the Commission.)
CHANGE IN EMPLOYMENT STATUS AGREEMENT ("Agreement")
I, Xxxxx X. Xxxxxxx, and Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co., a Delaware
corporation (the "Company"), agree to resolve all issues regarding my employment
status as follows:
Section 1 -- Termination and Resignation
I hereby terminate my employment and resign from all positions,
offices and directorships with the Company and its affiliates effective as of
September 1, 2000 (the "Termination Date").
Section 2 -- Payments and Benefits
(a) In General: Provided that I do not revoke this Agreement, which I
may do within seven (7) days after I sign it, and subject to Section 4(k) of
this Agreement, the Company will pay me the amounts and provide me with the
benefits set forth in this Section in consideration for my acceptance of the
terms of this Agreement.
(b) Bonus for Fiscal Year 2000: The Company will pay me in cash a
bonus amount for fiscal year 2000 equal to my Adjusted Compensation (as defined
below), less any applicable withholding. Such bonus amount will be paid to me at
the same time that bonuses for fiscal year 2000 are paid to other senior
executives of the Company, but no later than February 15, 2001. For the purposes
of this Agreement, my Adjusted Compensation will equal (i) 95.83% of the
aggregate dollar value of the "Total Reward" for fiscal year 2000, as determined
and valued by the Compensation Committee of the Company's Board of Directors,
and as defined in the Report of the Compensation Committee on Executive
Compensation in the Proxy Statement for the Company's Annual Meeting of
Stockholders on April 6, 2000, of the Chief Executive Officer of the Company,
minus (ii) my annualized base salary in effect on the Termination Date ("Base
Salary").
(c) Base Salary for Fiscal Year: The Company will pay me in cash the
remainder of my Base Salary for fiscal year 2000, less any applicable
withholding. Such Base Salary will be paid to me for the period from the
Termination Date until November 30, 2000 at the same time that my salary
payments for such period would have been paid.
(d) Severance Payments: The Company will pay me in cash a severance
amount equal to the sum of my annualized Base Salary and my Adjusted
Compensation for fiscal year 2000, less any applicable withholding. Such
severance amount will be paid to me in two equal installments at the time that
bonuses for fiscal year 2001 and fiscal year 2002 are paid to senior executives
of the Company, but no later than February 15 of the years in which such bonuses
are paid.
(e) Treatment of Stock Option and Restricted Stock Unit Awards: The
Company acknowledges and agrees that my termination will be treated as a "Full
Career Retirement" for purposes of any awards of stock options and restricted
stock units previously granted to me by the Company that have a Full Career
Retirement feature. Any remaining transfer or sale restrictions (and, to the
extent provided in Section 2(f), existing subsequent forfeiture conditions)
applicable to such awards or shares of the Company's common stock underlying
such awards will be removed or waived by the Company, subject to obtaining any
necessary approval of the Company's Board of Directors (or the appropriate
committee thereof) and subject to the other provisions of this Section 2(e) and
Section 2(f). Accordingly, any stock options that are listed in Schedule A and
that are unvested on the date hereof (except the 239,708 unvested shares under
the option award of February 26, 1996) will vest not later than the Termination
Date. The remaining unvested stock options shall not be deemed forfeited as a
result of my resignation pursuant to this Agreement and will vest on February
26, 2001.
All stock options listed in Schedule A will be exercisable in
accordance with the terms and conditions of such awards (including, subject to
Section 2(f), existing subsequent forfeiture conditions); provided, however,
that (i) no provision in any award restricting exercisability shall be
applicable after the "Window Date", as defined in Section 2(f) below (except for
such provision in the award with respect to shares vesting on February 26, 2001,
which shall cease to be applicable after vesting), and (ii) all options that are
vested shall remain exercisable for their full terms.
All restricted stock units listed in Schedule A will vest on the
Termination Date and will be converted to shares of common stock in accordance
with Section 2(f) and the terms and conditions of such awards (including,
subject to Section 2(f), existing subsequent forfeiture conditions but not
including any term or condition that would change the conversion date set forth
in Section 2(f)).
Any notice requirements applicable in any way to such stock options
and restricted stock units, including, without limitation, with respect to
giving notice of resignation, shall be deemed met by my execution of this
Agreement. To the extent that any award of restricted stock units requires an
election with respect to the stock payment date, or any award of stock options
requires an election with respect to vesting or a transfer restriction date,
such requirements shall be deemed discharged or superseded by this Agreement.
The Company shall use its best efforts to cause its Board of Directors (or the
appropriate committee thereof) to take any action necessary to implement the
provisions of this paragraph.
The Company shall use its best efforts to obtain any Board or Board
committee approvals needed to effect the terms and conditions of this Agreement
at or before the next regularly scheduled Board meeting.
(f) Treatment of Company Stock: Effective as of the Termination Date,
the Company will cease to treat me as an active employee for purposes of any
applicable employee voting agreements and group sales programs.
Effective as of the third business day following the announcement by
the Company of its earnings for the third quarter of fiscal year 2000 (the
"Window Date"), the
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Company will waive or remove any remaining restrictions (other than any
restrictions imposed under applicable law) on the transfer or sale of the shares
of the Company's common stock designated on Schedule A as "Section 1 Awards"
(including all shares subject to stock options so designated) and, effective as
of the Window Date, the Company will remove any remaining forfeiture conditions
on such shares and any unexercised options that are so designated (including all
shares subject to stock options so designated), in each case subject to any
necessary approval of the Company's Board of Directors (or the appropriate
committee thereof).
Effective as of the first anniversary of the Termination Date, the
Company will convert the restricted stock units, all of which are designated on
Schedule A as "Section 2 Awards", into shares of common stock and will waive or
remove any remaining transfer or sale restrictions and any remaining forfeiture
conditions (other than any restrictions imposed under applicable law) on all
shares of common stock (including shares subject to stock options) and any
unexercised options designated on Schedule A as "Section 2 Awards", subject to
any necessary approval of the Company's Board of Directors (or the appropriate
committee thereof) and any applicable withholding requirements. All shares of
common stock (including shares subject to stock options) listed in Schedule A
are referred to in this Agreement as "Company Shares".
The Company shall use its best efforts to obtain any Board or Board
committee approvals needed to effect the terms and conditions of this Agreement
at or before the next regularly scheduled Board meeting.
I hereby acknowledge and agree with the Company that (i) I will not
transfer, sell, hypothecate, margin or enter into any derivative transaction
with respect to (for purposes of this Section 2(f), "transfer"), or attempt to
transfer, any Company Shares during the period beginning on the date of
signature hereof and ending on the Window Date, (ii) during the period beginning
on the Window Date and ending on the first anniversary of the Termination Date,
I will not transfer, or attempt to transfer, any Company Shares designated on
Schedule A as "Section 2 Awards", and (iii) from and after the first anniversary
of the Termination Date, I may transfer all of the Company Shares, subject to
any restrictions imposed under applicable law.
The Company is not aware of any restriction on the sale by me of
Company Shares beyond those imposed by Section 2(e) and this Section 2(f). All
Company Shares are and will continue to be registered under applicable
securities laws so as to permit their immediate sale by me as a selling
shareholder in the public markets. All certificates delivered to me for Company
Shares shall be without any restrictive legend; the Company will remove any such
legend from any Company Shares in my possession upon request.
For purposes of this Agreement, the direct or indirect surrender or
cancellation of Company Shares in connection with the payment of an option
exercise price or the satisfaction of a tax or other withholding obligation will
be considered a transfer of such Company Shares.
The Company will afford me the opportunity from time to time after the
Window Date to offer to sell to the Company any specified amount of Company
Shares (which Company Shares are then transferable under this Section 2 (f)), at
the current market price as of the time
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and date of such offer (or the market price as of the time of acceptance of the
trade, if higher), or at such other price (or for such other quantity of shares)
as the Company and I shall mutually agree; the Company shall have 30 minutes to
accept such offer on my part, measured from the time I place a call to its
"Designated Representative" as defined below for this purpose; after such 30-
minute period, if the Company does not purchase the Company Shares so offered, I
may sell such Company Shares on the open market, or in a block transaction with
another firm. The Company shall provide me with the telephone number of a
brokerage unit or block-trading desk that will be authorized promptly to respond
to any such offer on my part (the "Designated Representative"), and procedures
for prompt payment to an account designated by me upon settlement of any
transaction. I shall not at any time be obligated to follow these procedures.
Any sale of Company Shares by me to the Company shall be free of any commission,
fee or charge by the Company.
(g) Continuation of Medical Plan Coverage: The Company will cause my
coverage and, if I so elect, my dependents' coverage under its insured group
medical plan to continue at the level in effect upon the Termination Date
(provided that I continue to timely make any regularly required contributions in
accordance with practices then in effect under such plan) until the earliest of
(i) my attainment of age 65, or (ii) my eligibility for coverage under another
group medical plan of a full-time employer that does not contain any exclusion
or limitation with respect to any preexisting condition I or my dependents have.
In the event I cease to be eligible for coverage under the Company's insured
group medical plan (including a termination of that plan or failure of the
Company to adopt a replacement plan under which I am eligible for comparable
insured coverage), the Company shall pay to me no less frequently than quarterly
in advance an amount that, after payment by me of any taxes on that amount, is
equal to the Company's cost of such insured coverage immediately prior to the
date of the cessation of insured coverage.
(h) D&O Coverage: The Company will continue to provide to me, at the
greater of (y) the level provided to senior executive officers of the Company
from time to time or (z) the level provided to me immediately prior to the
Termination Date, directors' and officers' insurance coverage with respect to
all activities that have been or shall be undertaken by me on behalf of the
Company. Such coverage shall be provided until such time as actions against me
are no longer permitted by law with respect to such activities.
(i) Indemnification: (i) The Company agrees that if I am made a party
to, threatened to be made a party to, or otherwise receive any other legal
process in, any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact that I
was a director, officer or employee of the Company or was serving at the request
of the Company as director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefits plans, whether or not the basis of
such Proceeding is my alleged action in an official capacity while serving as
director, officer, member, employee or agent, I shall be indemnified and held
harmless by the Company to the fullest extent permitted or authorized by the
Company's certificate of incorporation and bylaws or, if greater, by the laws of
the State of Delaware, against all cost, expense, liability and loss (including,
without limitation, attorney's fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement and any cost and fees
incurred in enforcing my rights to indemnification or
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contribution) reasonably incurred or suffered by me in connection therewith, and
such indemnification shall continue even though I have ceased to be a director,
officer, member, employee or agent of the Company or other entity and shall
inure to the benefit of my heirs, executors and administrators. The Company
shall advance to me all reasonable costs and expenses incurred by me in
connection with a Proceeding within 20 days after receipt by the Company of a
written request for such advance. Such request shall include an undertaking to
repay the amount of such advance, less any applicable taxes, if it shall
ultimately be determined that I am not entitled to be indemnified against such
costs and expenses.
(ii) Neither the failure of the Company (including its board of
directors, independent legal counsel or stockholders) to have made a
determination that my indemnification is proper because I have met the
applicable standard of conduct, nor a determination by the Company (including
its Board of Directors, independent legal counsel or stockholders) that I have
not met such applicable standard of conduct, shall create a presumption or
inference that I have not met the applicable standard of conduct. Similarly, a
determination by the Company's Board of Directors, independent legal counsel or
stockholders that I have met such applicable standard of conduct shall not
create a presumption or inference that I have met the applicable standard of
conduct.
(j) Retirement and Deferred Compensation Benefits: Any retirement
and/or deferred compensation benefits payable to me under the qualified and non-
qualified retirement and deferred compensation plans of the Company and its
predecessors will be calculated and become payable in accordance with the terms
and conditions of such plans. The Company acknowledges that my termination will
be treated as a full career retirement, normal retirement or equivalent for
purposes of such plans and benefits. I shall be eligible for any future
enhancements in post-termination retirement or deferred compensation benefits to
the extent such enhancements are provided generally to other retired senior
executives of the Company who retired on or before the Termination Date.
(k) Additional Payments: In the event that the aggregate of all
payments or benefits made or provided to me under this Agreement and under all
other plans and programs of the Company (the "Aggregate Payment") is determined
to constitute a Parachute Payment as such term is defined in Section 280G(b)(2)
of the Internal Revenue Code of 1986, as amended (the "Code"), the Company shall
pay to me, prior to the time any excise tax imposed by Section 4999 of the Code
("Excise Tax") is payable with respect to such Aggregate Payment, an additional
amount which, after the imposition of all income, employment and excise taxes
thereon, including any interest and penalties, is equal to the Excise Tax on the
Aggregate Payment.
(l) Transition Assistance: The Company shall provide me with
transition assistance to the extent I shall require such assistance from one or
both of my current secretaries and shall continue to take telephone, e-mail and
other messages for me and to forward such messages and any personal mail
received by the Company addressed to me (other than mail that is applicable to
the Company's business and not to me in my personal capacity), in each case for
a period of six months following the Termination Date.
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(m) Beneficiaries/References: I shall be entitled, to the extent
permitted under applicable law or any applicable plan, to select and change a
beneficiary or beneficiaries to receive any compensation or benefit payable
hereunder following my death, by giving the Company written notice thereof. In
the event of my death or a judicial determination of my incompetence, payments
provided herein shall be made to my beneficiary, estate or legal representative,
and reference in this Agreement to me shall be deemed, where appropriate, to
refer to my beneficiary, estate or other legal representative.
Section 3 -- Complete Release
(a) As additional consideration for the compensation and severance
granted to me hereunder, which exceeds any amount that the Company is otherwise
required to pay me, I hereby irrevocably and unconditionally release all the
Claims described in Sections 3(b) and 3(c) that I may now have, or may hereafter
have, against the Released Parties listed in Section 3(d). However, I am not
releasing: (i) my right to enforce the terms and conditions of this Agreement;
(ii) any rights or claims that arise after I sign this Agreement under the Age
Discrimination in Employment Act; (iii) my right, if any, to government-provided
unemployment benefits; (iv) my rights under any stock option, stock purchase or
other equity-based benefit plan; (v) my rights under any deferred compensation
or retirement plan of the Company; (vi) my right to obtain contribution as
permitted by law in the event of entry of judgment against me as a result of any
act or failure to act for which I and one or more of the Released Parties are
jointly liable; (vii) eligibility for indemnification in accordance with this
Agreement and applicable laws and corporate by-laws as in existence on the
Termination Date with respect to any liability incurred as a result of my
employment or other service, or the termination thereof, with the Company or any
affiliate of the Company as an officer, director or employee; (viii) any rights
I may have as a limited partner or investor in any partnership or fund
affiliated with or advised by any of the Released Parties or (ix) any rights
arising out of any investor or customer relationship I may have with any of the
Released Parties, including but not limited to any claims pertaining to credit
cards or securities, or other financial instruments, including brokerage
accounts, and investment partnerships.
(b) Claims Released: Except as otherwise set forth in this Agreement,
I am releasing all known and unknown claims, promises, causes of action, or
similar rights of any type that I may have attributable to events or
circumstances occurring prior to the Termination Date that relate to my
employment or termination of employment with the Company or its affiliates
("Claims") with respect to any Released Parties listed in Section 3(d). Except
as otherwise set forth in this Agreement, these include, but are not limited to,
Claims that in any way relate to: (i) Claims for compensation, bonuses,
commissions, lost wages, or unused accrued vacation or sick pay; (ii) the design
or administration of any employee benefit program; (iii) any rights I may have
to severance or similar benefits or to post-employment health or group insurance
benefits; or (iv) any Claims to attorneys' fees or other indemnities relating to
the foregoing. I understand that the Claims I am releasing might arise under
many different laws, including the following:
Anti-discrimination statutes, such as the Age Discrimination in
----------------------------
Employment Act and Executive Order 11141, which prohibit age
discrimination in employment; Title VII of the Civil Rights Act of
1964, Section 1981 of the Civil Rights Act of 1866, and Executive
Order 11246, which prohibit discrimination based on race,
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color, national origin, religion, or sex; the Equal Pay Act, which
prohibits paying men and women unequal pay for equal work; the
Americans With Disabilities Act and Sections 503 and 504 of the
Rehabilitation Act of 1973, which prohibit discrimination against the
disabled; and any other federal, state, or local laws prohibiting
employment discrimination such as the New York City and New York State
Human Rights Laws.
Federal employment statutes, such as the WARN Act, which requires that
---------------------------
advance notice be given of certain work force reductions; the Employee
Retirement Income Security Act of 1974, which, among other things,
protects employee benefits; the Fair Labor Standards Act of 1938,
which regulates wage and hour matters; the Family and Medical Leave
Act of 1993, which requires employers to provide leaves of absence
under certain circumstances; and any other federal laws relating to
employment, such as veterans' reemployment rights laws.
Other laws, such as any federal, state, or local laws, restricting an
----------
employer's right to terminate employees, or otherwise regulating
employment; any federal, state, or local law enforcing express or
implied employment contracts or requiring an employer to deal with
employees fairly or in good faith; any other federal, state, or local
laws providing recourse for alleged wrongful discharge, physical or
personal injury, emotional distress, fraud, negligent
misrepresentations, defamation, and similar or related claims.
The law referred to in this subsection includes statutes, regulations, other
administrative guidance and common law doctrines.
(c) Unknown Claims: I understand that, except as otherwise set forth
in this Agreement, I am releasing Claims attributable to events or circumstances
arising prior to the Termination Date that I may not know about, except to the
extent that my lack of knowledge about such Claims is owing to fraud,
misrepresentation or intentional or negligent withholding of material
information by the Company, any Key Person or any other senior officer of the
Company. That is my knowing and voluntary intent, even though I recognize that
someday I might learn that some or all of the facts I currently believe to be
true are untrue and even though I might then regret having signed this
Agreement. Nevertheless, I am assuming that risk and I agree that this Agreement
shall remain effective in all respects in any such case, except as otherwise
provided in this Section 3(c). I expressly waive all rights I might have under
any law that is intended to protect me from waiving unknown claims. I understand
the significance of doing so.
(d) Released Parties: The Released Parties are the Company, all
Company-related entities, subsidiaries, affiliates, partnerships, or joint
ventures, and, with respect to each of them, their predecessors, and successors;
and, with respect to each such entity, all of its past and present employees,
officers, partners, directors, stockholders, members, owners, representatives,
assigns, attorneys, agents, and employee benefit programs (and the trustees,
administrators, fiduciaries, and insurers of such programs).
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(e) Mutual Release: The Company, its related entities, subsidiaries,
affiliates, partnerships and joint ventures and each of their predecessors and
successors also agree that, subject to this Agreement's becoming effective, they
hereby irrevocably and unconditionally release all claims, promises, causes of
action or similar rights of any type they may have attributable to events or
circumstances occurring prior to the Termination Date against me or my family,
estate, agents, attorneys, heirs, executors, successors and assigns, except that
this release shall not apply to any act that constitutes a criminal act under
any federal or state statute committed or perpetrated by me against the Company
or its affiliates during the course of my employment with the Company or its
affiliates (including any criminal act of fraud, misappropriation of funds or
embezzlement for my personal enrichment or any other criminal action against the
Company or its affiliates) of which the Company is unaware as of the date of
this Agreement owing to fraud, misrepresentation or intentional or negligent
withholding of material information regarding the Company or its business on my
part. The Company represents and warrants that, as of the date of this
Agreement, it is not aware of any conduct on my part that would constitute
fraud, misappropriation of funds, or embezzlement for my personal enrichment or
other criminal act against the Company.
Section 4 -- Additional Covenants
(a) Pursuit of Released Claims: I have not filed or caused to be
filed any lawsuit, complaint or charge with respect to any Claim I am releasing
in this Agreement. I promise never to file or prosecute a lawsuit, complaint, or
charge based on the Claims released by this Agreement.
(b) Company Property: On or before the Termination Date, I will
return to the Company all "Company Property" in my possession. "Company
Property" for this purpose shall mean all papers containing confidential
information relating to the Company and its affiliates, including file and other
documents, memoranda and records, and copies of the foregoing, as well as
corporate credit cards, keys, and any other property of the Company or its
affiliates in my possession, and I will not take or destroy any Company
Property, including confidential financial data, or records or other
confidential information. Anything herein to the contrary notwithstanding,
nothing in this Section 4(b) shall prevent my retaining papers and other
material of a personal nature, including but not limited to personal diaries,
calendars or rolodexes or information showing my compensation or relating to
reimbursement of expenses, information that I reasonably believe may be needed
for tax purposes, and copies of plans, programs and agreements relating to my
employment.
(c) Taxes: I acknowledge that I am responsible for paying any taxes
properly due from me with respect to payments and benefits that I receive
pursuant to this Agreement.
(d) Ownership of Claims: I have not assigned or transferred any Claim
I am releasing, nor have I purported to do so.
(e) Assistance; Defense of Claims: (i) Between the Termination Date
and November 30, 2000, I agree to make myself reasonably available to Key
Persons (as defined in Section 4(1) below) of the Company upon request during
regular business hours for consultation with respect to on-going issues that
arose before the Termination Date or general policy matters
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with which I have been familiar during my employment with the Company; provided,
however, that I shall not be required to attend regular management meetings or
to be involved with matters involving material, non-public information as to the
Company or any of its affiliates or any other corporation or entity, or
regarding any transaction in which the Company or any of its affiliates is
involved. The Company will advise any Key Persons (as defined below) who may
wish to consult with me of the requirements of the preceding sentence.
(ii) I agree to assist the Company in connection with any pending
claim against the Company or claims or disputes that relate to the period of my
employment with the Company, including offering testimony on behalf of the
Company if I am requested to do so, meeting with its attorneys or other
representatives or otherwise cooperating reasonably in the investigation,
defense or prosecution of such matters. The Company agrees to reimburse me for
reasonable lost compensation or expenses I may incur in connection with
rendering such assistance, including without limitation reasonable fees and
disbursements for separate counsel, if I reasonably determine that any
litigation, arbitration, proceeding or investigation of any such claim or
dispute is of a nature that indicates I should have separate representation by
reason of potential conflicts of interest between the Company on the one hand
and me on the other hand. Such expenses shall be reimbursed or advanced
promptly after my submission to the Company of statements thereof. I shall not
be obligated to make more than 20 days in any calendar year available for the
purpose of furnishing cooperation pursuant to this Section 4(e). In any event,
(i) in any matter subject to this Section 4(e), I shall not be required to act
against the best interests of any new employer and (ii) any request for such
cooperation shall take into account (A) the significance of the matters at issue
in the litigation, arbitration, proceeding or investigation and (B) my other
personal and business commitments. From and after the close of fiscal year
2001, I will be entitled to a fee of $1,000 per hour for furnishing such
cooperation (including, without limitation, for time taken in travel undertaken
in connection with such cooperation), such fee to be paid promptly following my
submission of a statement setting forth the number of hours spent.
(f) This Agreement to be Kept Confidential: Each party agrees not to
disclose the terms, conditions or existence of this Agreement to anyone other
than such party's attorneys, accountants and other professional advisors and, in
my case, (i) members of my immediate family or (ii) prospective employers until
such time as counsel to the Company determine such disclosure is required under
Regulation S-K of the Securities and Exchange Commission or any other applicable
law, rule or regulation. In addition, this subsection does not prohibit a
party's disclosure of the terms, conditions or existence of this Agreement to
the extent necessary legally to enforce this Agreement or as otherwise permitted
pursuant to Section 4(h) below.
(g) Encouragement of Claims: I agree that under no circumstances will
I induce, encourage, or solicit any person or entity to file or pursue any
proceeding of any kind against any person or entity released by me under Section
3(d) above. This Agreement does not prohibit me from giving any statement or
testimony pursuant to legal process or as otherwise required by law.
(h) Confidential Information: I will not disclose to anyone or make
use of any trade secret or proprietary or confidential information of the
Company or its affiliates, including such trade secret or proprietary or
confidential information of any customer or other entity to
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which the Company owes an obligation not to disclose such information, that I
acquired during my employment, including but not limited to records kept in the
ordinary course of business, except (i) as such disclosure or use may be
required or appropriate in connection with my work as an employee of the
Company, (ii) when required to do so by a court of law, by any governmental
agency having supervisory authority over the business of the Company or by any
administrative or legislative body (including a committee thereof) with apparent
jurisdiction to order me to divulge, disclose or make accessible such
information, or (iii) as to such confidential information that becomes generally
known to the public or trade without violation of this Section 4(h).
(i) Non-compete: I agree that, during the period ending 24 months
after the Termination Date, I will not, directly or indirectly, without the
prior written consent of the Company's Chief Executive Officer, become, act as,
hold myself out as, or allow myself to be held out as, a shareholder, partner,
joint venturer, promoter, employee, consultant, advisor and/or agent, of any
entity identified in Schedule B, any entity controlled by, controlling of, or
under common control with, any such entity, or any successor to any of the
foregoing entities. Notwithstanding the foregoing, the Company agrees that I
will not be deemed to have breached the foregoing covenant (i) solely as a
result of my direct or indirect ownership of less than an aggregate of 3% of any
class of securities of any such entity, provided that such securities are listed
on a national securities exchange or are quoted on the NASDAQ National Market
System, (ii) if, after the first anniversary of the Termination Date, an entity
with which I have become affiliated in one or more of the capacities described
in Section 4(i) above shall be acquired by, merge with, or transfer
substantially all of its business or assets to, an entity identified in Schedule
B or any entity controlled by, controlling of, or under common control with,
such entity, or any successor to any of the foregoing entities, provided that
upon the consummation of such transaction the entity with which I have become
affiliated and that is so acquired has been actively engaged in the Financial
Services Business (as defined below) for at least five years, or (iii) solely as
a result of a passive investment as a limited partner or other venturer, with no
management or supervisory authority or other role as a service provider,
provided that such investment does not exceed 10% of the equity in such
partnership or other venture.
(j) Non-solicitation: I agree that, during the period ending 24
months after the Termination Date, (i) I will not knowingly, without the prior
written consent of the Company's Chief Executive Officer, recruit or solicit any
employee of the Company or any of its affiliates for employment with any other
person or entity that does business in securities, commodities, financial
futures, insurance, tax advantaged investments, mutual funds or any other line
of business in which the Company or any of its affiliates is engaged ("Financial
Services Business"), and (ii) I will not knowingly encourage any such entity
with which I am affiliated in one or more of the capacities described in Section
4(i) above to hire any such employee. Anything herein to the contrary not
withstanding, the Company acknowledges and agrees that (y) my responding to an
unsolicited request of an employee of the Company for advice on employment
matters or (z) my responding to an unsolicited request for employment reference
from any third party by providing a reference setting forth my personal views
about an employee of the Company, shall not by themselves be deemed a violation
of this Section 4(j) or any forfeiture condition of any stock option or
restricted stock unit award or plan referred to in Section 2(e) or 2(f).
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(k) Non-hire: I agree that, if, during the period ending 24 months
after the Termination Date,
i) any entity with which I am affiliated as a shareholder, partner,
employee or agent hires or retains in any capacity any person
identified in Schedule C, then the amounts then remaining to be paid
to me under this Agreement will be offset by the Total Reward paid to
such person for the preceding fiscal year by the Company and its
affiliates,
ii) any entity with which I am affiliated as a shareholder, partner,
employee or agent hires more than three persons who are employees of
the Company or any of its affiliates on the date of execution of this
Agreement (other than the persons identified in Schedule C) and the
Total Reward paid for the preceding fiscal year by the Company and
its affiliates to each such person exceeds $1 million, then the
amounts then remaining to be paid to me under this Agreement will be
offset by the amount that the Total Reward paid to all such persons
for the preceding fiscal year by the Company and its affiliates
exceeds $3 million, and
iii) any entity with which I am affiliated as a shareholder, partner,
employee or agent hires persons who are employees of the Company or
its affiliates on the date of execution of this Agreement and the
Total Reward paid for the preceding fiscal year by the Company and
its affiliates to all such persons exceeds $5 million in the
aggregate, then the amounts then remaining to be paid to me under
this Agreement will be offset by the amount that such Total Reward
exceeds $5 million.
The Company acknowledges and agrees that the foregoing offsets are
not intended to be duplicative and that the Total Reward paid to a person may be
counted in determining whether more than one restriction has been violated, but
will be offset against amounts remaining to be paid to me only once.
Anything herein to the contrary notwithstanding, I will not be
considered affiliated with an entity for purposes of this Section 4(k) solely as
a result of a passive investment by me in such entity as a limited partner or
other venturer, with no management or supervisory authority or other role as a
service provider, provided that such investment does not exceed 10% of the
equity in such partnership or other venture.
(l) No Disparagement or Harm: I agree that, during the period ending
24 months after the Termination Date, I will not intentionally make any
statement or release any information that is disparaging or derogatory of the
Company or any of its subsidiaries, any of their officers, directors and
employees, or any of the Company's partnerships and joint ventures (the
"Protected Parties"), including but not limited to the Company's business,
policies, practices, performance or decisions except pursuant to the last
sentence of this Section 4(l). I also agree that, during the period ending 60
months after the Termination Date, I will not intentionally make any public
statement or publicly release any information that is disparaging or derogatory
of the Company or any other Protected Party, including but not limited to the
Company's business, policies, practices, performance or decisions except
pursuant to the last sentence of this Section 4(l). The Company agrees that,
during the period ending 24 months after the
11
Termination Date, it will not make, and it will use its reasonable efforts to
cause its Chairman of the Board, its President, its Chief Financial Officer, its
Chief Strategic and Administrative Officer, its Chief Legal Officer, its
directors and the members of its Management Committee on the date hereof (the
"Key Persons"), whether or not they continue on the Management Committee but
only so long as they remain employees or directors of the Company, not
intentionally to make any statement or release any information that is
disparaging or derogatory of me, including but not limited to my business,
policies, practices, performance or decisions except pursuant to the last
sentence of this Section 4(l). The Company also agrees that, during the period
ending 60 months after the Termination Date, it will not make, and it will use
its reasonable efforts to cause the Key Persons not intentionally to make any
public statement or publicly release any information that is disparaging or
derogatory of me, including but not limited to my business, policies, practices,
performance or decisions except pursuant to the last sentence of this Section
4(l). I agree that, during the period ending 60 months after the Termination
Date, I will not, directly or indirectly, publish, write, lecture or otherwise
publicly disseminate disparaging information about the Company or any other
Protected Party except pursuant to the last sentence of this Section 4(l). The
Company agrees that, during the period ending 60 months after the Termination
Date, it will not, and it will use its reasonable efforts to cause the Key
Persons not to, directly or indirectly, publish, write, lecture or otherwise
publicly disseminate disparaging information about me except pursuant to the
last sentence of this Section 4(1). Anything herein to the contrary
notwithstanding, my responding to an unsolicited request for an employment
reference from any third party by providing a reference setting forth my
personal views about an employee of the Company or any of its subsidiaries shall
not, by itself, be deemed a violation of this Section 4(1). This Section 4(l)
shall not prevent any person or entity subject to such Section from responding
publicly to incorrect, disparaging or derogatory public statements made in
violation hereof to the extent reasonably necessary to correct or refute such
public statements or from making truthful statements when required by order of a
court of law, by any governmental agency having supervisory authority over the
business of the Company or by any administrative or legislative body (including
a committee thereof) with apparent jurisdiction to order such party to divulge,
disclose or make accessible any relevant information.
(m) Cooperation With Respect to Press Releases: I agree to cooperate
with the Company with respect to all internal announcements and external press
releases regarding my employment and termination of employment with the Company.
I acknowledge and agree that the press release attached as Schedule D may be
issued by the Company, and that I will not release or cause to be released any
other releases or statements regarding my employment or termination of
employment with the Company. The Company acknowledges and agrees that I will be
entitled to review in advance any other press release that refers to me and that
no such press release or other internal or public announcement will be released
by the Company without my prior written approval. This Section 4(m) shall not
prevent any person or entity subject to such Section from responding publicly to
incorrect, disparaging or derogatory announcements or public statements made in
violation hereof to the extent reasonably necessary to correct or refute such
public statements or from making truthful statements when required by order of a
court or of law, by any governmental agency having supervisory authority over
the business of the Company or by any administrative or legislative body
(including a committee thereof) with apparent jurisdiction to order such party
to divulge, disclose or make accessible any relevant information.
12
(n) Reasonableness of Restrictive Covenants: I acknowledge and agree
that the restrictions contained in the preceding Sections 4(e)-(m) are
reasonable and justified in light of the nature of the Company's business and
customers, and further in light of the trade secret or proprietary or
confidential information to which I have had exposure and access during the
course of my employment by the Company.
(o) Severability of Requirements: I acknowledge that the provisions
pertaining to the scope of the restrictions contained in Sections 4(e)-(m) are
severable by their terms. If any provision of those restrictions or of this
Agreement is found to be invalid or void under applicable law, rule or
regulation, the remaining provisions of this Agreement shall not be affected and
shall continue in full force and effect. By executing this Agreement, the
Company and I agree that in the event a court of competent jurisdiction
determines that any provision of this Agreement is unreasonable or
unenforceable, such court shall have the right and is authorized by the Company
and me to modify such provision so as to render that provision reasonable and
enforceable.
(p) Injunctive Relief: I acknowledge that any breach of Sections
4(e)-4(j) or 4(l)-4(m) of this Agreement will result in irreparable harm to the
Company, that no remedy at law will be adequate for such breach and that the
Company shall be entitled to temporary, preliminary and permanent injunctive
relief and specific enforcement, in addition to all other remedies at law or in
equity. The Company acknowledges that any breach of Section 4(f) or 4(l)-4(m) of
this Agreement will result in irreparable harm to me, that no remedy at law will
be adequate for such breach and I shall be entitled to temporary, preliminary
and permanent injunctive relief and specific enforcement, in addition to all
other remedies at law or in equity.
Section 5 -- Consideration of Release
(a) Opportunity for Review: I acknowledge that, before signing this
Agreement, I am entitled to a period of at least 21 days in which to consider
this Agreement, even though I may sign the Agreement at any time during such 21-
day period. I waive any right I might have to additional time beyond this
consideration period within which to consider this Agreement. I further
acknowledge that: (i) I took advantage of this period to consider this Agreement
before signing it; (ii) I carefully read this Agreement; (iii) I fully
understand it; (iv) I am entering into it voluntarily; and (v) I consulted with
an attorney before signing it.
(b) Right of Revocation: I have been advised that I may revoke this
Agreement within seven calendar days of signing it. Revocation can be made by
delivering a written notice of revocation to Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co.,
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Chairman and Chief Executive
Officer. For such revocation to be effective, written notice must be received by
the Company no later than the close of business on the seventh day after I sign
this Agreement. I acknowledge that, if I revoke this Agreement, it shall not be
effective or enforceable, I will not receive the benefits described in Section 2
of the Agreement, and the Company will have no obligation to renegotiate or
reconsider the terms of the Agreement.
13
Section 6 -- Miscellaneous
(a) Entire Agreement: This Agreement constitutes the entire agreement
between the parties regarding the subject matter hereof. I agree that I will not
be entitled to receive, nor will I receive, nor will I seek, any compensation or
benefits from the Company or any of its affiliates other than the compensation
and benefits recited or referred to herein. This Agreement may not be modified
or cancelled in any manner except by a writing signed by both me and an
authorized officer of the Company. If any provision in this Agreement is found
to be unenforceable, all other provisions will remain fully enforceable. This
Agreement may be executed in counterparts.
(b) Successors: This Agreement inures to the benefit of and binds my
heirs, administrators, representatives, executors, successors, and assigns. This
Agreement also binds the Company and its related entities, subsidiaries,
affiliates and successors. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
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. As used in this Agreement, "Company" shall mean the Company as defined
above and any successor to its business or assets that by reason hereof assumes
and agrees to perform this Agreement, by operation of law or otherwise.
(c) Interpretation: This Agreement shall be construed as a whole
according to its fair meaning. Unless the context indicates otherwise, the term
"or" shall be deemed to include the term "and" and the singular or plural number
shall be deemed to include the other. Captions are intended solely for
convenience of reference and shall not be used in the interpretation of this
Agreement. This Agreement shall be governed by the statutes and common law of
the State of New York, excluding its choice of laws statutes or common law.
(d) Agreements Superseded: This Agreement supersedes any
confidentiality, non-competition, non-solicitation and non-disclosure agreements
I may have signed during my employment with the Company, or included in the
terms of any plan or award, subject to any necessary approvals of the Company's
Board of Directors (or the appropriate committee thereof). The Company will use
its best efforts to obtain any Board or Board committee approvals needed at the
next regularly scheduled Board meeting.
(e) Representations and Warranties: The Company represents and
warrants to me that (u) it will use its best efforts to obtain any necessary
approvals by its Board of Directors (or the appropriate committee thereof) at or
before the next regularly scheduled Board meeting of the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, (v) all corporate action required to be taken by the
Company for the execution, delivery and performance of this Agreement has been
or will be taken as soon as practicable, and in any event no later than at or
before the next regularly scheduled Board meeting, (w) it will use its best
efforts to cause its Board of Directors (or the appropriate committee thereof)
to make any necessary amendments to any applicable plans, awards or agreements,
or take any other necessary action with respect thereto, at or before the next
regularly scheduled Board meeting, (x) no regulatory approvals are necessary for
the execution
14
and performance of this Agreement by the Company, (y) the Company's entering
into this Agreement and the performance of its obligations hereunder will not
violate any applicable law, regulation, order, judgment or decree or any
agreement, plan or corporate governance document to which it is a party or by
which it is bound and (z) this Agreement is a legal, valid and binding,
obligation of the Company, enforceable in accordance with and subject to its
terms and conditions, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally. The Company acknowledges that I have relied upon such representations
and warranties in entering into this Agreement.
(f) No Mitigation; No Offset: I shall be under no obligation to seek
other employment and there shall be no offset against amounts due to me on
account of any remuneration or benefits attributable to any subsequent
employment that I may obtain, except as otherwise provided herein.
(g) Notices: All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given (a) when
delivered personally, (b) two business days after being sent by certified or
registered mail, postage prepaid and return receipt requested to the party
concerned at the address indicated below or at such changed address as such
party shall have given notice of pursuant to this Section 6(g) or (c) two
business days after being sent by nationally recognized overnight courier,
written confirmation of receipt requested, to the party concerned at the address
indicated below or at such changed address as such party shall have given notice
of pursuant to this Section 6(g):
If to me:
Xxxxx X. Xxxxxxx
{*}
If to the Company:
Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co.
39/th/ Floor
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Legal Officer
Section 7 -- Arbitration of Disputes
(a) Arbitrable Disputes: The Company and I agree to use final and
binding arbitration to resolve any dispute ("Arbitrable Dispute") between me and
the Company. This arbitration agreement applies to, among others, disputes about
the validity, interpretation, or effect of this Agreement or alleged violations
of it, or other statutory violation claims. This paragraph (a) shall not,
however, be deemed a waiver of either party's right to injunctive relief as
provided in Section 4(p).
(b) The Arbitration: Arbitration shall take place under the rules of
the American Arbitration Association, before a panel of three arbitrators, in
accordance with the rules and
----------------
{*} = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED.
15
procedures of the Association. Each party shall select an arbitrator and the two
arbitrators shall select a third and these three arbitrators shall form the
panel. The decision in such arbitration shall be final and conclusive on the
parties and judgment upon such decision may be entered in any court having
jurisdiction thereof.
(c) Fees and Expenses: Each party shall pay the fees of its attorneys,
the expenses of its witnesses, and any other expenses that such party incurs in
connection with the arbitration, but all other costs of the arbitration,
including the fees of the arbitrator, the cost of any record or transcript of
the arbitrations, administrative fees, and other fees and costs shall be paid in
equal shares by me and the Company.
(d) Exclusive Remedy: Arbitration in this manner shall be the
exclusive remedy for any Arbitrable Dispute. Should I or the Company attempt to
resolve an Arbitrable Dispute by any method other than arbitration pursuant to
this Section except as provided in Section 7(a) above, the responding party will
be entitled to recover from the initiating party all damages, expenses, and
attorneys' fees incurred as a result of that breach.
Executed at New York, New York, this 29/th/ day of August, 2000.
/s/ Xxxxx X. Xxxxxxx
-----------------------
Xxxxx X. Xxxxxxx
Executed at New York, New York, this 29/th/ day of August, 2000.
XXXXXX XXXXXXX XXXX XXXXXX & CO.
BY: /s/ Xxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman and Chief Executive Officer
BY: /s/ Xxxx X. Xxxx
------------------
Name: Xxxx X. Xxxx
Title: President and Chief Operating Officer
16
Schedule A
As of August 29, 2000
{*}
----------
{*} = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED.
17
Schedule B
{*}
--------
{*} = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED.
18
Schedule C
{*}
---------
{*} = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED.
19
Schedule D
Press Release
XXXXXX XXXXXXX XXXX XXXXXX ANNOUNCES RETIREMENT OF
XXXXX X. XXXXXXX
Institutional Securities Group to Report to Xxxx X. Xxxx
New York City, August 29, 2000. Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co. (NYSE: MWD)
today announced that Xxxxx X. Xxxxxxx, President and Chief Operating Officer of
Xxxxxx Xxxxxxx Xxxx Xxxxxx'x Institutional Securities and Investment Banking
Group has decided to retire after 25 years of service to the Firm. Xxxx X.
Xxxx, President and Chief Operating Officer of Xxxxxx Xxxxxxx Xxxx Xxxxxx, will
assume Xx. Xxxxxxx' responsibilities in the management of the Institutional
Securities and Investment Banking Group.
"Xxxxx Xxxxxxx has contributed to the success of our Firm in many ways over a
long and distinguished career," Xxxxxx X. Xxxxxxx, Chairman and Chief Executive
of Xxxxxx Xxxxxxx Xxxx Xxxxxx, said. "In his years in the Firm's Fixed Income
Division, he had management responsibility for a wide range of trading and sales
operations--from corporate bonds, to mortgage backed securities, to high yield
bonds and emerging markets--before taking responsibility for all of the Firm's
global fixed income operations in 1992. Since he took over leadership of the
Institutional Securities and Investment Banking Group in 1997, that business has
experienced tremendous growth and has been a major driver of our profitability
since the merger of Xxxx Xxxxxx and Xxxxxx Xxxxxxx in the same year. We are
grateful to Xxxxx for all of his efforts on behalf of the Firm and wish him all
the best."
"Xxxxx has played an important role in developing Xxxxxx Xxxxxxx Xxxx Xxxxxx
into a global financial services provider that is recognized as a leader in the
many markets it serves around the world," Xx. Xxxx added. "The growth in the
Institutional Securities and Investment Banking business under his guidance and
leadership has been nothing less than spectacular. I shall miss Xxxxx as a good
friend as well as a colleague, and all of us want to thank him for his
dedication and commitment to the Firm over these many years."
"My quarter century career at this firm has been a rich and rewarding one for
me," said Xx. Xxxxxxx. "I have taken both pleasure and some measure of pride in
watching our Firm develop and prosper over that period, and I have enjoyed
working with several generations of the most talented and capable professional
people in our industry. While my career here has been a wonderful professional
and personal experience for me, I believe that now is the right time for me to
focus my attention on some other goals and priorities that I have set for
myself. I am comfortable that I am leaving the Firm in great shape and with a
momentum that will carry it to even greater success in the future."
Xx. Xxxxxxx joined the Firm in 1976 and became a Managing Director in 1985. He
was named head of the Worldwide Fixed Income Division in 1992. In 1997 Xx.
Xxxxxxx became President and Chief Operating Officer of the Institutional
Securities and Investment Banking Group and was appointed to the Management
Committee of Xxxxxx Xxxxxxx Xxxx Xxxxxx.
Xxxxxx Xxxxxxx Xxxx Xxxxxx is a global financial services firm and a market
leader in securities, asset management and credit services. The Company has
offices in Xxx Xxxx, Xxxxxx, Xxxxx, Xxxx Xxxx and other principal financial
centers around the world and more than 500 securities branch offices throughout
the United States.
Access this press release on-line @ xxx.xxxx.xxx
------------
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Contacts for Xxxxxx Xxxxxxx Xxxx Xxxxxx:
Xxxxxx Xxxxxxx Xxxx Xxxxxx, New York
Xxxxxxx X'Xxxxxx
(000) 000-0000
# # #
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