THIS AGREEMENT is made the 1st day of August, 1997 (the
"Effective Date") by and between MUREX BIOTECH LIMITED a company
incorporated in England and Wales (the "Company") and F XXXXXXX X
XXXXXX (the "Executive").
WHEREAS, the Company and Executive previously entered into an
Employment Agreement dated January 1, 1992; and
WHEREAS, the term of the employment relationship created by such
Employment Agreement has not expired; and
WHEREAS, the Company and Executive desire to amend and restate
the terms and conditions of their employment relationship as it
relates to the period subsequent to 1 August, 1997.
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the Company and Executive agree as
follows:-
1. Employment
----------
The Company hereby employs Executive, and Executive
accepts such employment and agrees to perform services for
the Company, for the period and upon the other terms and
conditions set forth in this Agreement.
2. Term
----
The initial term of Executive's employment hereunder shall
be for a period of three (3) years, commencing as of 1
August 1997 (the "Commencement Date") subject to earlier
termination as hereinafter specified in Section 9. At
each anniversary date of the Commencement Date (each a
"Renewal Date"), the then remaining term of this Agreement
shall be extended for an additional one year period in
addition to the then remaining term unless either party
hereto shall have provided written notice to the other
party of such non-renewal of this Agreement on or within
three (3) months before such Renewal Date. In the event
that either party shall provide the other party with
written notice of non-renewal of this Agreement, this
Agreement shall not be extended as of any subsequent
Renewal Date but shall remain effective in accordance with
its terms (subject to termination in accordance with
Section 9 hereof) until the end of the then current term
of this Agreement. A non-renewal of this Agreement in
accordance with this Section 2 shall not constitute a
termination of this Agreement for the purpose of Sections
6 or 9.
3. Position and Duties
-------------------
3.1 Service with the Company
------------------------
During the term of this Agreement, Executive shall serve
in such position as Executive and the Board of Directors
shall from time to time agree. In such position,
Executive agrees to perform such executive employment
duties consistent with such positions as the Board of
Directors of the Company shall assign to him from time to
time. Executive also agrees to serve, during the Term
hereof, as requested by the Board, and without any
additional compensation, as a Director of the Company and
as an executive officer and/or director of any
corporations affiliated with the Company. The
compensation payable to Executive herein shall be paid by
the Company or by a subsidiary, holding company or
subsidiary of such holding company of the Company as
designated by Executive.
3.2 Performance of Duties
---------------------
3.2.1 Executive agrees to serve the Company faithfully and to
the best of his ability and to devote the time, attention
and efforts necessary to advance the business and affairs
of the Company during the Term of this Agreement. It is
understood and agreed that Executive may pursue personal
investments requiring time commitments that do not
conflict with his obligations to the Company, including
those in the preceding sentence. Executive hereby
confirms that he is under no contractual commitments
inconsistent with his obligations set forth in this
Agreement, and that during the Term of this Agreement, he
shall not render or perform services, or enter into any
contract to do so, for any other corporation, firm, entity
or person which are inconsistent with the provisions of
this Agreement.
3.2.2 All duties performed by Executive hereunder (other than
incidental duties) shall be performed at such locations in
the United Kingdom as the Board of Directors of the
Company may from time to time direct.
4. Compensation
------------
4.1 Base Salary
-----------
As compensation for all services to be rendered by
Executive under this Agreement, the Company shall pay to
Executive an initial base annual salary (the "Base
Salary") of US$107,206 which salary shall be paid in
semi-monthly instalments in accordance with the Company's
normal payroll procedures and policies. The base salary
shall be increased on January 1, 1998 and on each January
1 thereafter by the percentage equal to the percentage
increase in the Consumer Price Index maintained by the
United States Bureau of Labour Statistics for the Atlanta,
Georgia metropolitan area or an equivalent index (the
"Index") as of January 1 of such year over the Index for
the immediately preceding January 1. Should the Index be
modified or discontinued, appropriate adjustment shall be
made to reflect such modification or to refer to a similar
index. Additionally, Executive's Base Salary shall be
reviewed annually and may be increased by an amount to be
determined by the Compensation/Option Committee (the
"Committee") on the basis of Executive's performance.
4.2 Incentive Compensation
----------------------
In addition to the Base Salary described in Section 4.1,
Executive shall be eligible to receive incentive
compensation pursuant to the Senior Management Incentive
Plan as approved by the Committee or such other plans as
may from time to time be available.
4.3 Deferral of Compensation
------------------------
Executive shall be entitled to elect to defer the receipt
of up to seventy-five percent (75%) of his Base Salary and
Incentive Compensation for each calendar year during which
this Agreement is in effect. Executive shall make the
election to defer his compensation for a calendar year by
giving written notice to the Company of his desire to do
so in writing no later than December 31 of the immediately
preceding calendar year. In the event that Executive
elects to defer the payment of any compensation due
hereunder in the manner contemplated by this Section 4.3,
the terms and conditions set forth in Exhibit A hereto
with respect to the circumstances under which Executive
shall be entitled to the payment of the deferred
compensation as well as the interest earned thereon and
the timing and method of those payments shall be
applicable. Also in such event, each of the periodic
payments of Executive's Base Salary for any year in which
Executive has elected to defer receipt of a portion of his
Base Salary shall be reduced by the percentage amount of
his total Base Salary which he has elected to defer.
4.4 Participation in Benefit Plans
------------------------------
Executive shall also be entitled, to the extent that his
position, title, tenure, salary, and other qualifications
make him eligible, to participate in all employee benefit
plans or programs (including medical/dental and life
insurance, retirement pension, and stock option incentives
relating to stock in International Murex Technologies
Corporation) of the Company currently in existence on the
date hereof or as my hereafter be instituted from time to
time. Executives participation in any such plan or program
shall be subject to the provisions, rules and regulations
applicable thereto.
4.5 Expenses
--------
In accordance with the Company's policies established from
time to time, the Company shall pay or reimburse Executive
for all reasonable and necessary out-of-pocket expenses
incurred by him in the performance of his duties under
this Agreement, subject to the timely presentment of
appropriate vouchers and receipts.
4.6 Car Allowance
-------------
The Company shall provide Executive with a car or pay a
car allowance in amount recommended by the Executive
Committee and approved by the Committee.
4.7 Accommodation
-------------
During the term of this Agreement and whilst Executive
continues to reside in the United Kingdom the Company
shall provide accommodation for Executive in the United
Kingdom of a type commensurate with the status and needs
of Executive and the image of the Company and its
associates. The accommodation shall be provided on terms
to be recommended by the Executive Committee of the
Company and agreed in writing between the Committee and
Executive.
4.8 Club and Professional Dues
--------------------------
During the term of this Agreement, Executive will be
entitled to reimbursement of club/professional society
membership dues and monthly charges and an annual physical
examination by the physician of Executive's choice.
Amounts paid for club/professional society membership dues
and monthly charges shall not exceed US$5,000 annually.
In the event that Executive is required to pay any tax on
such reimbursement, the amount to be reimbursed to
Executive shall be grossed up by such amount as shall
ensure that Executive receives the same amount as he would
have received had not such tax been payable.
4.9 Double Tax Liability
--------------------
In the event that in any year during the term of this
Agreement Executive is required to pay income taxes on any
portion of his income for that year both to Canada and to
the United Kingdom, the Company shall pay to Executive the
amount which, after taking into account the taxes required
to be paid by Executive as a result of Executive's receipt
of such payment from the Company, shall cause Executive's
after-tax return on his income to equal the amount which
would have been available to Executive had no United
Kingdom taxes been due with respect to such income. The
amounts due from the Company pursuant to the immediately
preceding sentence shall be determined by Executive's tax
return preparer, shall take into account any foreign tax
credits or other credits and deductions allowed against
his Canadian tax liability, and shall be paid to Executive
no later than fifteen (15) days following the date on
which Executive files the first tax return in which the
income subject to taxation in both Canada and the United
Kingdom is reported in any year or within fifteen (15)
days following the date on which the relevant taxing
authority determines that Executive's income is subject to
taxation both in Canada and in the United Kingdom, as the
case may be.
4.10 Additional Benefits
-------------------
During the term of this Agreement, Executive shall be
entitled to participate in all present and future employee
benefit plans and all other compensation and benefit
plans, programs and structures as may from time to time be
made available by the Company to all other key corporate
executives of the Company, and on terms and conditions no
less favourable than those generally available to other
such employees. In the event that the Company elects to
obtain key man life insurance insuring Executive,
Executive shall make himself available for the necessary
physical examinations and shall cooperate in all other
respects with the Company's efforts to obtain such
insurance.
5. Sickness
--------
5.1 If Executive is absent because of sickness or injury he
shall report this fact forthwith to the Company and if
Executive is so prevented for seven or more consecutive
days he should provide a medical practitioners statement
on the eighth day and weekly thereafter so that the whole
period of absence is certified by such statement.
Immediately following his return to work after a period of
absence Executive shall complete a self certification form
available from the Company detailing the reason for his
absence.
5.2 If Executive shall be absent due to sickness or injury
duly certified in accordance with the provisions of
Section 5.1, he shall be paid his full compensation
(including incentive compensation) for up to twelve (12)
weeks absence in any period of twelve consecutive months
and thereafter such remuneration, if any, as the board of
directors of the Company shall determine from time to time
provided that such compensation shall be inclusive of any
Statutory Sick Pay to which Executive is entitled under
the provisions of the Social Security and Housing Benefits
Xxx 0000 and any social security sickness benefit or other
benefit recoverable by Executive (whether or not
recovered) may be deducted therefrom.
6. Compensation upon Termination
-----------------------------
6.1 In the event this Agreement is terminated pursuant to sub-
section 9.1(a) hereof, in addition to any benefits to
which Executive may then or following the termination of
his employment be entitled under any other applicable
policy or plan of the Company then the Company shall pay
to Executive's estate his Base Salary, incentive
compensation and benefits due through the effective date
of termination. In the event that such termination occurs
on any date other than the last day of the fiscal year,
the incentive compensation shall be based upon the
performance goals achieved at the end of the fiscal year,
but shall be prorated based upon the number of days which
have elapsed in the fiscal year through the date of
termination. Payment of this incentive compensation or
release of any stock representing incentive compensation
due under this Section 6.1 shall be made no later than 120
days following the end of the fiscal year with respect to
which it is being paid. Payment of all other amounts under
this Section 6.1 shall be made not later than the 30th day
following the effective date of termination. Executive's
estate shall be entitled to receive an amount equal to
twenty-four (24) times his then current monthly Base
Salary.
6.2 In the event this Agreement is terminated pursuant to sub-
section 9.1(b)(i) hereof, Executive or his representative
shall be entitled to receive an amount equal to twenty
four (24) times his then current monthly Base Salary, less
any disability insurance benefits payable to Executive
during such twenty-four month period from disability
policies provided by the Company.
6.3 In the event this Agreement is terminated pursuant to sub-
section 9.1(b)(ii) or (iii) hereof, Executive shall not be
entitled to any compensation other than his then current
Base Salary which has accrued through his date of
termination, subject to the Company's right of offset
based upon acts of Executive which gave rise to the
termination.
6.4 In the event that Executive is terminated pursuant to sub-
section 9.1(c) hereof, Executive shall be entitled to a
severance allowance equal to the greater of (i) his Base
Salary for all months remaining in his then current term,
or (ii) his then current monthly Base Salary for twenty
four (24) months.
6.5 Subject to Section 6.1, payments or the release of stock
representing compensation to Executive pursuant to this
Section 6 shall be made in either a lump sum payment or,
at the sole discretion of the Company in four (4) equal
payments within six (6) months of termination of this
Agreement.
6.6 In the event that Executive is terminated pursuant to sub-
sections 9.1(a), 9.1(b)(i) or 9.1(c) hereof, the
expiration dates of Executive's options currently
outstanding pursuant to any of the Company's stock option
plans will be extended twenty four (24) months from the
date of such termination or such lesser period as may be
permitted by law or under the terms of the relevant plan.
7. Confidential Information
------------------------
Except as permitted or directed by the Company's Board of
Directors, Executive shall not during the Term of this
Agreement or at any time thereafter divulge, furnish or
make accessible to anyone for use in any way (other than
in the ordinary course of the business of the Company) any
confidential or secret knowledge or information of the
Company (for the purposes of Sections 7 through 10 hereof,
the term "Company" shall be deemed to include any
subsidiary or affiliate of the Company) which Executive
has acquired or become acquainted with or will acquire or
become acquainted with prior to the termination of the
period of his employment by the Company, whether developed
by himself or by others, concerning any trade secrets,
confidential or secret designs, processes, formulae, plans
devices or material (whether or not patented or
patentable) directly or indirectly useful in any aspect of
the business of the Company, and confidential customer or
supplier lists of the Company, any confidential or secret
development or research work of the Company, or any other
confidential or secret aspects of the business of the
Company. Executive acknowledges that the above described
knowledge or information constitutes a unique and valuable
asset of the Company acquired at great time and expense by
the Company and its predecessors, and that any disclosure
or other use of such knowledge or information other than
for the sole benefit of the Company would be wrongful and
would cause irreparable harm to the Company. Both during
and after the Term of this Agreement, Executive shall
refrain from any acts or omissions that would reduce the
value of the use of such knowledge or information to the
Company. The foregoing obligations of confidentiality,
however, shall not apply to any knowledge or information
which is now published or which subsequently becomes
generally publicly known, other than as a direct or
indirect result of the breach of this Agreement by
Executive.
8. Non-Competition, Solicitation of Customers, Solicitation
--------------------------------------------------------
of Employees
-------------
8.1 Non-Competition
---------------
(a) Executive agrees that, during the period of his
employment hereunder and for a period of one (1)
year following the termination of such employment,
he shall not directly engage in competition with
the Company within the "Territory" (as hereinafter
defined) in any management capacity in any phase of
the Company's business of developing,
manufacturing, distributing, marketing, leasing or
selling any of the products which the Company is in
the business of developing, manufacturing,
distributing, marketing, leasing to others or
selling (the "Competitive Areas") during the Term
of this Agreement or which the Company has
definitive plans to develop, manufacture or market.
(b) The "Territory" shall be that area throughout the
world in which the Company presently markets its
products. This Agreement shall be deemed
automatically amended without the need of further
action by any party to add any new countries or
parts thereof where after the date hereof and prior
to the termination of Executive's employment the
Company begins to market its products and to delete
any countries after no Company products have been
sold there for a period of six months.
(c) The restrictions in this Section 8 shall not apply
with respect to (i) a passive investment by
Executive of less than 5% of the outstanding shares
of capital stock of any corporation, or (ii)
employment by Executive with an entity in a
management capacity in an area of business which is
not, directly or indirectly, a Competitive Area.
8.2 Agreement not to Solicit Customers
----------------------------------
Executive agrees that during his employment by the Company
hereunder and for the two (2) year period following the
termination of such employment, he shall not, without the
prior written consent of the Company, within the
Territory, either directly or indirectly, on his own
behalf or in the service or on behalf of others, solicit,
divert or appropriate, or attempt to solicit, divert or
appropriate, to any competing business any person or
entity whose account with the Company was sold or serviced
by or under the supervision of Executive during the year
preceding the termination of such employment.
8.3 Agreement not to Solicit Employees
----------------------------------
Executive agrees that during his employment by the Company
hereunder and for the two (2) year period following the
termination of such employment, he shall not, either
directly or indirectly, on his own behalf or in the
service or on behalf of others, solicit, divert, or
attempt to solicit or divert any person then employed by
the Company.
9. Termination
-----------
9.1 Grounds for Termination
-----------------------
This Agreement shall terminate prior to the expiration of
the Initial Term set forth in Section 2 or any extension
thereof in the event that at any time during such Initial
Term or any extension thereof:
(a) Executive shall die; or
(b) The Board of Directors of the Company shall
determine that:
(i) Executive has become disabled; or
(ii) Executive has breached this Agreement in any
material respect, which breach is not cured
by Executive or is not capable of being
cured (as determined in the sole discretion
or the Company's Board of Directors) by
Executive within thirty (30) days after
written notice of such breach is delivered
to Executive; or
(iii) In its sole discretion cause exists.
"Cause" means (A) conduct amounting to
fraud, embezzlement or misappropriation as
against the Company, (B) the wilful and
knowing material breach of any fiduciary
duty owed to the Company as an officer of
the Company other than done at the direction
of the Board of Directors, (C) having been
convicted of a criminal offence which may
have a material adverse effect on the
Company or the ability of Executive to carry
out his duties of employment, or (D) the
knowing failure of Executive to follow
specific directives of the Board of
Directors of the Company consistent with his
duties. If the Board of Directors
terminates this Agreement pursuant to this
Section 9.1(b)(iii), Executive will be
provided ninety (90) days written notice.
(c) The Board of Directors of the Company shall
determine, in its sole discretion, that the
termination of this Agreement is in the best
interest of the Company, and in which event
Executive shall have no duty to mitigate his
damages. If the Board of Directors terminates this
Agreement pursuant to this Section 9.1(c),
Executive will be provided ninety (90) days written
notice.
(d) Notwithstanding any termination of this Agreement,
Executive, in consideration of his employment
hereunder to the date of such termination, shall
remain bound by the provisions of this Agreement
which specifically relate to periods, activities or
obligations upon or subsequent to the termination
of Executive's employment.
9.2 "Disability" Defined
--------------------
The Board of Directors may determine that Executive has
become disabled, for the purpose of this Agreement, in the
event that Executive shall fail, because of illness or
other physical or mental incapacity, to render services of
the character contemplated by this Agreement for an
aggregate of more than twelve (12) weeks during any twelve
(12) month period.
9.3 Surrender of Records and Property
---------------------------------
Upon termination of his employment with the Company,
Executive shall deliver promptly to the Company all
records, manuals, books, blank forms, documents, letters,
memoranda, notes, notebooks, reports, data, tables,
calculations or copies thereof, which are the property of
the Company and which relate in any way to the business,
products, practices or techniques of the Company, and all
other property, trade secrets and confidential information
of the Company, including, but not limited to, all
documents which in whole or in part contain any trade
secrets or confidential information of the Company, which
in any of these cases are in his possession or under this
control.
10. Assignment and Enurement
------------------------
This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective
heirs, successors, administrators, and permitted assigns.
The Company may, without the consent of Executive, assign
its rights and obligations under this Agreement to any
corporation, firm or other business entity with or into
which the Company may merge or consolidate, or to which
the Company may sell or transfer all or substantially all
of its assets or of which 50% or more of the equity
investment and of the voting control is owned, directly or
indirectly, by, or is under common ownership with, the
Company; provided, however, that if the assignee was not
previously part of a consolidated group with the Company,
Executive will receive payments and benefits as outlined
in Exhibit B attached hereto and incorporated herein.
11. Injunctive Relief
-----------------
Executive agrees that it would be difficult to compensate
the Company fully for damages for any violation of the
provisions of this Agreement, including without limitation
the provisions of Section 7, 8 and 9.3. Accordingly,
Executive specifically agrees that the Company shall be
entitled to temporary and permanent injunctive relief to
enforce the provisions of this Agreement. This provision
with respect to injunctive relief shall not, however,
diminish the right of the Company to claim and recover
damages in addition to injunctive relief.
12. Miscellaneous
-------------
12.1 Governing Law
-------------
This Agreement is made under and shall be governed by and
construed in accordance with the laws of the Province of
Ontario subject to any principles of conflict of laws.
12.2 Prior Agreements
----------------
This Agreement contains the entire agreement of the
parties relating to the subject matter hereof and
supersedes all prior agreements and understandings with
respect to such subject matter, and the parties hereto
have made no agreements, representations or warranties
relating to the subject matter of this Agreement which are
not set forth herein.
12.3 Amendments
----------
No amendment or modification of this Agreement shall be
deemed effective unless made in writing signed by the
party against whom enforcement of the waiver or estoppel
is sought. Any written waiver shall not be deemed a
continuing waiver unless specifically stated, shall
operate only as to the specific term or condition for the
future or as to any act other than that that specifically
waived.
12.4 Notices
-------
Any notice, request, demand or other document to be given
hereunder shall be in writing, and shall be delivered
personally or sent by registered mail or facsimile
followed by mail as follows:
If to the Company:
Murex Biotech Limited
Xxxxxxx Xxxx
Xxxxxx Xxxx
Xxxxxxxx
Xxxx XX0 0XX
If to Executive:
Xxxx 0
00-00 Xxxxxxxxx Xxxxxx
Xxxxxx X0X 0XX
or to such other address as either party hereto may
hereinafter duly give to the other.
12.5 Severability
------------
To the extent any provision of this Agreement shall be
invalid or unenforceable, it shall be considered deleted
herefrom and the remainder of such provision and of this
Agreement shall be unaffected and shall continue in full
force and effect. In furtherance and not in limitation of
the foregoing, should the duration or geographical extent
of, or business activities covered by any provision of
this Agreement be in excess of that which is valid or
enforceable under applicable law, then such provision
shall be construed to cover only that duration, extent or
activities which may validly and enforceably be covered.
Executive acknowledges the uncertainty of the law in this
respect and expressly stipulates that this Agreement be
give the construction which renders its provisions valid
and enforceable to the maximum extent (not exceeding its
express terms) possible under applicable law.
12.6 Withholding Taxes
-----------------
The Company may withhold from any benefits payable under
this Agreement all federal, state, city and other taxes as
shall be required pursuant to any law or governmental
regulation or ruling.
IN WITNESS WHEREOF, the parties have executed this Agreement the
day and year set forth above.
SCHEDULE
--------
Statement of Terms of Employment
--------------------------------
1. Amplification of Terms of Employment
(a) Name of Employer: Murex Biotech Limited
(b) Address of Employer: Central Road, Temple Hill, Dartford,
Kent DA1 5LR
(c) Name of Executive: Xxxxxxxx Xxxxxxx Xxxxxxx Xxxxxx
(d) Address of Executive: Xxxx 0, 00-00 Xxxxxxxxx Xxxxxx,
Xxxxxx X0X 0XX
(e) Date of Commencement of Employment with the Company:
January 1 1992
(f) Compensation: See Section 4
(g) Notice: See Section 9
(h) Job Title: See Section 3
2. In accordance with Section 1(3) of the Employment
Protection (Consolidation) Xxx 0000 the following terms of
the Executive's employment apply on the date of the
agreement to which this is a schedule:
(a) Hours of Work: there are no fixed hours of work provided
that Executive shall be required to devote not less than
25 hours per week to the performance of his duties under
the Agreement.
(b) Holidays: Executive is not entitled to any paid holidays
under the Agreement other than Bank Holidays
(c) Sickness or injury: see Section 5 of the Agreement
(d) Other benefits: see Section 4 of the Agreement
3. The following information is supplied pursuant to the
Employment Protection (Consolidation) Xxx 0000 (as may be
amended from time to time)
(a) Disciplinary Rules: there are no formal disciplinary
procedures applicable to this employment;
(b) Grievance Procedure: all grievances relating to the
employment under the agreement to which this is a schedule
should be reported to the board of directors of the
Company;
(c) A Contracting Out certificate is not in force in respect
of this employment.
Signed by )
XXXXXX X XXXX )
for and on behalf of )
MUREX BIOTECH )
LIMITED )
in the presence of:- )
Signed by F XXXXXXX P )
XXXXXX in the presence )
of:- )
EXHIBIT A
---------
DEFERRED COMPENSATION PLAN
--------------------------
1. At the time the Executive elects to defer
compensation pursuant to Section 4.3 of the Employment Agreement,
the Executive shall also elect the percentage of such
compensation to be credited from the date of deferral to the date
it is paid to the Executive with either (a) simple interest at a
rate per annum equal to the average of the rates then being
earned by the Company on deposits with a term of ninety days or
less, adjusted on the first day of each calendar quarter or (b)
the same rate of return experienced by the common stock of the
Company. The portion of the compensation deferred by the
Executive to which the Executive elects to have the Company
common stock rate of return apply shall be hypothetically
invested in shares of the Company's common stock based on the
closing price of the Company's common stock on the Nasdaq
National Market System, or such other exchange that the Company's
common stock may be listed at the time, on the business day prior
to the date on which the compensation would otherwise be paid.
The number of shares of the Company's common stock in which the
Executive has hypothetically invested shall be adjusted to
reflect stock splits, stock dividends and other capital changes
affecting the outstanding common stock of the Company in the same
manner as an equivalent number of actual shares of the Company's
common stock are adjusted. In addition, all cash distributions
and the fair market value (as determined in good faith by the
Company) of any property distributions with respect to shares of
common stock of the Company shall be reinvested in the common
stock of the Company based on the closing price of the common
stock as reported on the Nasdaq National Market System, or such
other exchange that the Company's common stock may be listed at
the time, on the business day prior to the distribution. The
portion of the Executive's compensation deferred hereunder and
credited with simple interest, together with such simple
interest, shall be referred to herein as "Deferred Compensation".
The portion of Executive's compensation deferred hereunder and
credited with the rate of return of the common stock of the
Company shall be reflected in hypothetical shares of the
Company's common stock with each such share being referred to
herein as a "Stock Credit". On December 31st of each year during
which any Deferred Compensation or Stock Credits remain unpaid,
the Company shall provide the Executive with a statement setting
forth the amount of his unpaid Deferred Compensation and the
number of outstanding Stock Credits.
2. The Deferred Compensation shall be paid to
Executive in a lump sum following the termination of his
employment with the Company for any reason on the 30th day
following the date of termination. The number of Stock Credits
credited to the Executive shall be paid to the Executive on the
30th date following the date of his termination, by the release
of common stock to the Executive."
3. Notwithstanding the foregoing, in the event of the
occurrence of an "unforeseeable emergency," as hereinafter
defined, Executive shall be entitled to a payment from the
Deferred Compensation (or release of common stock representing
Stock Credits) prior to the date set forth in paragraph 2 of this
Exhibit A of that amount reasonably required to satisfy the
emergency need. As used herein, "unforeseeable emergency" shall
be limited to (i) severe financial hardship to Executive
resulting from a sudden and unexpected illness or accident of
Executive or of a dependent of Executive, as dependent is defined
in Section 152 of the Internal Revenue Code or any successor
provision thereto, (ii) loss of Executive's property due to
casualty, or (iii) other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of
Executive. The circumstances that will constitute an
unforeseeable emergency will depend upon the facts of each case,
but, in any case, a payment (or release) of all or any portion of
the Deferred Compensation in the event of an unforeseeable
emergency may not be made to the extent that such hardship is or
may be relieved;
(i) Through reimbursement or compensation by
insurance or otherwise,
(ii) By liquidation of Executive's assets, to the
extent the liquidation of such assets would not itself
cause severe financial hardship, or
(iii) By cessation of the deferral of the payment
of the Deferred Compensation pursuant to paragraph 2,
above.
4. The Company's obligation to pay the Deferred
Compensation or release of common stock representing Stock
Credits constitutes a mere promise by the Company to make these
payments at the times specified herein. Accordingly, Executive
shall have the status of a general unsecured creditor with
respect to the Deferred Compensation. Executive's rights to the
payment of Deferred Compensation or the release of common stock
representing Stock Credits shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors of Executive
or his estate or any beneficiary of either Executive or his
estate.
