CONFIDENTIAL AND
LEGALLY PRIVILEGED
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 30th day of October 1996,
by and between XXXXX CORPORATION, a Delaware corporation maintaining its
principal office at Two Pennsylvania Plaza, New York, New York (the "Company")
and Xxxxxxx X. Xxxxxxxx, an individual now residing at 000 Xxxxxx Xxxx,
Xxxxxxxx, XX 00000 (the "Employee").
WITNESSETH THAT:
WHEREAS, the Employee is currently serving in an executive capacity as a
Vice President-Investor Relations of the Company and the Company desires to
ensure that the Employee will continue to be available to provide investor
relation services for the Company;
WHEREAS, to induce the Employee to provide such services, the Company is
offering to provide the Employee with the compensation, benefits and security
provided for in this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Employment/Capacity/Term.
(a) The Company agrees to and does hereby employ the Employee, and the
Employee agrees to and hereby does enter into the employ of the Company upon the
terms and conditions set forth in this Agreement. Such employment shall be in an
executive capacity as Vice President, Investor Relations of the Company.
(b) This Agreement and such employment shall commence on November 1,
1996 and shall continue through October 31, 1999 (the "Initial Term"), and from
year to year thereafter (the "Extended Term"), subject to the right of the
Employee or the Company to terminate this Agreement and such employment by
written notice stating an intention to terminate such employment at least thirty
(30) days prior to such termination date stating an intention to terminate such
employment (the "Termination Date"). Termination by either party, in accordance
with the provisions of the preceding sentence shall not require a statement of
the reason or cause for such termination and shall not be deemed a breach or
violation of
this Agreement by the party giving such notice. As used in this Agreement, the
phrase "term of this Agreement" shall be deemed to include the period subsequent
to the date hereof and prior to the Termination Date.
2. Time and Effort/Absences.
During the "term of this Agreement", the Employee shall devote his or
her entire time and attention during normal business hours to the business of
the Company subject to the supervision of the Board of Directors of the Company
and the President and Chief Executive Officer of the Company, and he or she
shall not engage in any other business activity whether or not such business
activity is pursued for gain, profit, or other pecuniary advantage, but this
restriction shall not be construed to restrict the Employee (i) from performing
services as a member of the Board of Directors, Board of Trustees or the like of
any non-profit entity for which the Employee receives no compensation, provided
that, such services do not unreasonably interfere with the ability of the
Employee to perform the services and discharge the responsibilities required of
him or her under this Agreement, and (ii) from investing his or her assets in
such form or manner as will not require any services on the part of the Employee
in the operation of the business of the entity in which such investments are
made. The Employee shall be excused from rendering his or her services during
reasonable vacation periods and during other reasonable temporary absences as
authorized from time to time by the Board of Directors or the President and
Chief Executive Officer of the Company.
3. Corporate Offices.
If elected, the Employee will serve, without additional compensation,
as an officer and director (or in either capacity) of the Company.
4. Salary/Bonus/Other Benefits.
In consideration of the services and duties to be rendered and
performed by the Employee during the term of this Agreement, the Company agrees
to pay and provide for the Employee the compensation and benefits described
below:
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(a) An annual salary, payable in equal monthly or bi-weekly
installments, in the amount of One Hundred Seventy Five Thousand
Dollars($175,000) or in such greater amount as may from time to time be fixed by
the Board of Directors of the Company.
(b) An annual incentive bonus in such amount as may from time to time
be fixed by the Board of Directors of the Company.
(c) Other Benefits. It is intended that the Company shall continue to
provide the Employee with benefits at least as favorable as benefits provided on
behalf of other executives of the Company who furnish services of comparable
significance, as they may exist from time to time. Such benefits presently
include (i) Group Life Insurance, Supplemental Executive Group Life Insurance,
Medical and Dental Insurance, Xxxxx Stock Option Plan, Executive Pension Plan,
Xxxxx Select Plan and Xxxxx 401(k) Plan and (ii) an automobile allowance in the
amount of $700 per month. Provided, however, any such participation shall be in
accordance with the provisions of such plans and nothing contained in this
Agreement is intended to or shall be deemed to affect adversely any of the
Employee's rights as a participant under any such plans. Nothing herein shall
prevent the Company from modifying or discontinuing any benefit plan on a
consistent and non-discriminatory basis applicable to all such executives.
5. Expenses.
The Employee shall be reimbursed for out-of-pocket expenses incurred
from time to time on behalf of the company or in the performance of his or her
duties under this Agreement, upon the presentation of such supporting documents
and forms as the Company shall reasonably request.
6. Medical Leave, Reasonable Accommodation, Termination for Medical
Incapacity and Disability Benefits.
The Company agrees to provide the Employee with a medical leave of
absence not to exceed six (6) months in duration in any twelve (12) month period
if the Employee has a medical condition that precludes the Employee from being
fully functional in his or her position. The term "fully functional" means able
to travel to and from work, be at work, perform satisfactorily all essential
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functions of the position as identified herein, and otherwise meet the demands
of the position and the conditions of employment without significant risk of
substantial harm to self or others. Any leave entitlement granted by Federal,
state or local law shall run concurrently with the commencement of his or her
six month period of leave, whether such leave is taken all at once,
intermittently or on a reduced time basis. Nothing herein is intended to
diminish any entitlement granted by law. If appropriate, the Company will
support the Employee's application for disability benefits.
If the Employee is not able to return to the position in a fully functional
capacity at the conclusion of six months of medical leave in a twelve month
period, this Agreement may be terminated by the Board of Directors of the
company at its sole discretion, without prior notice.
Unless otherwise prohibited by law, the Employee agrees that the Employee
will furnish for review by a medical professional designated by the Company,
copies of the Employee's medical records pertaining to any medical condition for
which the Employee requests a medical leave of more than twelve (12) weeks in
duration, return to work from any such leave, work restrictions, modification or
accommodation; or the Employee or the Company believes that the Employee has a
medical condition that may be causing or contributing to performance or conduct
deficiencies. The Employee also agrees to authorize any health care professional
from whom the Employee is receiving diagnostic evaluation, treatment or other
medical care to discuss the Employee's medical condition with the medical
professional designated by the company to receive and review the Employee's
medical records. The Employee further agrees that he or she will undergo, at the
sole expense of the company, any medical specialty evaluation if requested to do
so by the Company.
The Company agrees to provide the Employee, if he or she is otherwise
qualified for the position, with medically necessary accommodation if it likely
will enable the employee to be fully functional in the position and is
reasonable, feasible and will not
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impose undue hardship on Company operations. The term "medically necessary"
means that the accommodation has risk-avoiding or therapeutic value in
accordance with scientifically valid medical principles and practice and that
the Employee requires similar accommodation when performing comparable non-work
functions.
The inability of the Employee to be fully functional in his or her position
for medical reasons shall not constitute a breach of this Agreement by the
Employee. If this Agreement is terminated by the Company because the Employee is
not fully functional in his or her position for medical reasons, as provided for
in this paragraph, the Company shall be obligated to continue the salary of the
Employee as provided in Paragraph 4(a) for a period equal to the greater of
(a) twelve (12) months, or (b) such longer period as may be determined by the
Board of Directors of the Company, in each case, reduced by any disability
insurance benefits provided for the benefit of the Employee at the expense of
the Company.
7. Death/Death Benefit.
In the event of the death of the Employee during the term of this
Agreement, this Agreement shall terminate and the Employee's salary shall
continue to be paid to his or her designated beneficiary or, if none, to his or
her personal representative, through the last day of the month in which such
death occurs.
8. Severance Pay.
If the Company gives notice to terminate in accordance with Paragraph 1 or
if the employment of the Employee is terminated at any time (i) by the Employee
for Good Reason (as defined in Paragraph 9), or (ii) by the Company for any
reason other than for Cause (as hereinafter defined), the Company will be
obligated to pay to the Employee a cash payment in an amount equal to the
product of (i) and (ii); where (i) shall equal the sum of (A) the Employee's
annual salary and (B) the Employee's annual incentive bonus during the twelve
(12) month period ending with the close of the month in which such termination
of employment occurs (the "Date of Termination"), but not less than $70,000,
which represents the 1996 target incentive, divided by twelve (12); and where
(ii) shall
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be the lesser of, (x) thirty-six (36), or (y) the number of months until the
Employee's normal retirement date (the "Severance Pay"). Termination of the
Employee's employment on account of his or her disability, death or retirement
(as hereinafter defined) will not be considered a termination of the Employee's
employment by the Company and will not require the Company to pay and provide
any Severance Pay. No Severance Pay will be required if the employment of the
Employee is terminated by the Company for Cause (as hereinafter defined) or by
the Employee (other than for Good Reason as defined in Paragraph 9) or if the
Employee gives notice to terminate in accordance with Paragraph 1. The Severance
Pay provided herein is provided in order to reinforce and encourage the
continued loyalty, attention, and dedication of the Employee to the Company's
business and affairs without the concerns which normally arise from the
possibility of a loss of employment security. As used herein, the terms
"Retirement" and "Cause" shall have the following meanings, respectively:
(a) Retirement.
Termination of the Employee's employment on account of "Retirement"
shall mean termination on or after the Employee's normal retirement date in
accordance with the terms of the Xxxxx 401(k) Plan; and
(b) Cause.
Termination by the Company of the Employee's employment for "Cause"
shall mean termination as a result of (i) the willful and continued failure by
the Employee to perform substantially the services contemplated by this
Agreement (other than any such failure resulting from the Employee's incapacity
due to physical or mental illness) after a written demand for substantial
performance is delivered to the Employee by a member or representative of the
Board of Directors of the Company which specifically identifies the manner in
which it is alleged that the Employee has not substantially performed such
services, or (ii) the willful engaging by the Employee in gross misconduct which
is materially and demonstrably injurious to the Company; provided that, no act,
or failure to act, on the Employee's part shall be considered "willful"
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unless done, or omitted to be done, in bad faith and without reasonable belief
that such action or omission was in, or not opposed to, the best interests of
the Company. It is also expressly understood that the Employee's attention to or
engagement in matters not directly related to the business of the Company shall
not provide a basis for termination for Cause if such attention or engagement is
authorized by the terms of this Agreement or has otherwise been approved by the
Board of Directors of the Company. Anything in this Agreement to the contrary
notwithstanding, the Employee's employment may not be terminated for Cause
unless and until there shall have been delivered to the Employee a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting of the Board called and held
for that purpose (after reasonable notice to the Employee and an opportunity for
the Employee, together with his counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Employee was guilty of the
conduct set forth in clause (i) or (ii) of this subparagraph (b) and specifying
the particulars thereof in detail. Except as otherwise provided in Paragraphs 1
and 6, no purported termination by the Company of the Employee's employment
which is not justified as a termination of the Employee's employment for Cause
shall be effective.
9. Termination by the Employee for Good Reason.
The termination by the Employee of his employment for "Good Reason" shall
be deemed a justifiable termination of his employment and shall excuse the
Employee from the obligation to render services as provided in Paragraph 2
hereof. Upon such termination, the Employee shall be entitled to Severance Pay
in accordance with the provisions of Paragraph 8 hereof. As used herein, the
phrase "Good Reason" shall mean:
(a) a change in the Employee's status, title or position(s) as an
officer of the Company or the Xxxxx Group in the executive capacity set forth in
this Agreement which, in his or her reasonable judgment, does not represent a
promotion from or enhancement of his status, title and position, or the
assignment by
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the Board of Directors of the Company to the Employee of any duties or
responsibilities which, in his or her reasonable judgment, are inconsistent with
such status, title or position, or any removal of the Employee from or any
failure to reappoint or reelect him or her to such position, except in
connection with a justifiable termination by the Company of the Employee's
employment for Cause or on account of disability, the retirement or death of the
Employee or the termination by the Employee of his or her employment other than
for Good Reason;
(b) a reduction in the Employee's annual salary or a failure by the
Company to pay to the Employee any installment of the annual salary required by
Paragraph 4, which failure continues for a period of twenty (20) days after
written notice thereof is given by the Employee to the Company;
(c) the failure by the Company within ten (10) days of notice from the
Employee to obtain the assumption of this Agreement in form and substance to the
reasonable satisfaction of the Employee by any Successor (other than by merger
or consolidation for which no separate assumption is necessary) as referred to
in Paragraph 12; or
(d) any refusal by the Company to allow the Employee to attend to
matters or engage in activities not directly related to the business of the
Company which is permitted by this Agreement or which, prior thereto, was
permitted by the Board of Directors of the Company.
10. Notice of Termination.
Any purported notice of termination of the Employee's employment shall
be communicated in writing and delivered to the other party as provided in
Paragraph 12, below (hereinafter a "Notice of Termination").
11. Confidentiality and Limited Covenant Not to Compete.
In connection with the performance of the Employee's job duties in a
position of trust and confidence, he or she will develop or receive
confidential, restricted or unpublished information involving trade secrets,
customer-related information, vendor-related information, copyrights, lists,
data and other
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information, strategic planning or operating data, computer programs, financial,
pricing, operating or training data or other confidential business techniques,
processes, methods or information which is not generally known to the public
(collectively referred to as "proprietary information") . He or she will receive
or have access to proprietary information which was obtained and developed
through the investment of substantial amounts of money, time and effort by the
Company. He or she acknowledges and agrees that disclosure of his or her
proprietary information or its use for the benefit of any other person or entity
would be injurious to the Company. He or she also acknowledges and agrees that
unless he or she agrees to maintain the confidentiality of such information and
to limit its use solely to the Company, he or she would not have been granted
employment, if already employed, his or her employment would cease immediately.
Regardless of the cessation of his or her employment for any reason, the
Employee's obligation to continue to maintain the confidentiality of the
propriety information shall continue.
The Employee agrees to deliver to the Company, at its request, or in any
event, upon cessation of Employee's employment with the Company (for whatever
reason and at whatever time) (a) all memoranda, notes, records, files or other
documentation, whether made or compiled by the Employee alone or in conjunction
with others (regardless of whether such persons are employed by the Company);
(b) all proprietary and other information of the Company which is in Employee's
control or possession; and (c) copies of such information, as well as other
corporate property. Regardless of cessation of Employee's employment by the
Company, and without any fee, the Employee will assist the Company in protecting
all rights the Company may have to such proprietary information.
The Employee recognizes that, as a direct consequence of the materials,
information and training provided to him or her by the Company, the access he or
she is granted to proprietary information and the opportunities that he or she
will have while employed by the Company to cultivate the loyalty and goodwill of
the Company's customers, suppliers, vendors and other persons, it is important
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that the Employee refrain from engaging in activities which could result in
damage to the Company's business.
The Employee further recognizes that the Company has invested considerable
time and money to train its employees, in the services provided by the Company
and to develop the special skills required to perform such services. Therefore,
he or she will not, during the term of his or her employment with the Company
and for a period of one (1) year immediately thereafter, solidity, entice, hire
or otherwise seek to persuade, either directly or through any other entity, any
officer, employee, consultant or agent of the Company to discontinue such
relationship for any reason. During such period, the Employee will not solicit
business with any customers of the Company, nor will he or she seek to entice or
persuade any sources of referral, vendors or other entities, who are then doing
business with the Company to reduce, discontinue or curtail any services
provided to the Company in any respect.
To avoid the use of proprietary information, the Employee agrees to refrain
from engaging in competing employment either directly or indirectly on his or
her own behalf or as an agent, consultant or employee of any partnership,
corporation or other entity, in any state where the Company conducts business
for a period of six (6) months after his or her employment ceases (regardless of
the reason for cessation of such employment).
The Employee recognizes and agrees that ascertaining damages in the event
of his or her breach or violation of any covenant or undertaking contained in
this Agreement would be difficult, if not impossible, and further recognizes
that the various rights and duties created in this Agreement are essential for
the operation of the Company's business operations. Consequently, irreparable
injury would result from any violation of this Agreement by him or her. Since it
would be difficult, if not impossible, to compensate fully the Company by
monetary damages in the event of the Employee's breach (although the Company
retains the right to commence a civil action seeking monetary damages), the
Employee agrees that the Company, in addition to and without limiting any other
remedy or right it may have, shall have the immediate right
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to obtain a preliminary, and subsequently, a final injunction against the
Employee, to be issued by a court of competent jurisdiction, enjoining the
Employee from engaging in any breach or violation of this Agreement. An
injunction shall be issued without posting a bond that otherwise might be
required. If an injunction is issued or if monetary damages are awarded against
the Employee, he or she will reimburse the Company for the legal fees and court
costs incurred in obtaining such relief (including all appeals and other
proceedings).
12. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of:
(a) Any successors or assigns of the Company, whether by way of a
merger or consolidation, or liquidation of the Company, or by way of the Company
selling all or substantially all of the assets of the Company to a successor
entity; and
(b) The Employee's estate, his or her executors, administrators, heirs
and beneficiaries.
13. Notices.
Any notice or other communication required under this Agreement shall
be in writing, shall be deemed to have been given and received when delivered in
person, or, if mailed, shall be deemed to have been given when deposited in the
United States mail, first class, registered or certified, return receipt
requested, with proper postage prepaid, and shall be deemed to have been
received on the third business day thereafter, and shall be addressed as
follows:
If to the Company, addressed to:
Xxxxx Corporation
Xxx Xxxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President and Chief Executive
Officer
With a copy to its: General Counsel
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If to the Employee, addressed to:
Xxxxxxx X. Xxxxxxxx
000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
or such other address as to which any party hereto may have notified the other
in writing.
14. Governing Law.
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York, without regard to its conflict or choice of
laws provisions to preserve the parties' intent, and the enforceability of this
Agreement.
15. Entire Agreement.
This Agreement contains the entire arrangement or understanding
between the Employee and the Company relating to the employment of the Employee
by the Company. No provision of the Agreement may be modified or amended except
by any instrument in writing by or for both parties hereto. All references to
paragraphs refer to paragraphs of this Agreement.
16. Waiver.
Failure of either party hereto to insist upon strict compliance by the
other party with any term, covenant or condition hereof shall not be deemed a
waiver of such term, covenant or condition, nor shall any waiver or
relinquishment or failure to insist upon strict compliance of any right or power
hereunder at any one or more times be deemed a waiver or relinquishment of such
right or power at any other time or times.
17. Assignment by Employee.
The rights and benefits of the Employee under this Agreement are
personal to him or her and no such right or benefit shall be subject to
voluntary or involuntary alienation, assignment or transfer; provided, however,
that nothing in this Paragraph shall preclude the Employee from designating a
beneficiary or beneficiaries to receive any benefit payable on his or her death.
18. Severability.
If for any reason any provision of this Agreement shall be held
invalid, such invalidity shall not affect any other
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provision of this Agreement not held so invalid, and all other provisions shall
to the full extent consistent with law continue in full force and effect. If any
such provision shall be held invalid in part, such invalidity shall in no way
affect the remaining portion of such provision not held so invalid, and the
remaining portion of such provision, together with all other provisions of this
Agreement, shall to the full extent consistent with law continue in full force
and effect.
19. Headings.
The headings of paragraphs are included solely for convenience of
reference and shall not control the meaning or interpretation of any of the
provisions of this Agreement.
XXXXX CORPORATION
Dated: By /s/ R. Xxxxxxx Xxxxx
-------------------------- ------------------------------
President and Chief
Executive Officer
Dated: Oct. 29, 1996 By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------- ------------------------------
Xxxxxxx X. Xxxxxxxx
Employee
