EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT dated as of March 18, 1997 between X. X. Xxxxxxxxx &
Sons Company, a Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxx (the
"Executive").
WHEREAS, the Company is a world leader in distributing, managing and
reproducing print and digital information for the publishing, retailing,
merchandising and information technology markets worldwide;
WHEREAS, the Company desires to employ the Executive to serve as Chairman
of the Board and Chief Executive Officer of the Company, upon the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, the parties hereby agree as follows:
1. Employment. The Company hereby employs the Executive and the
Executive hereby agrees to be employed by the Company upon the terms and subject
to the conditions contained in this Agreement. The term of employment of the
Executive by the Company pursuant to this Agreement (the "Employment Period")
shall commence on the date
hereof and, unless earlier terminated pursuant to Section 4, shall end on March
31, 2002; provided, however, that the term of this Agreement shall be
automatically extended until March 31, 2004, unless either the Company or the
Executive shall have terminated the automatic extension provisions of this
sentence by giving written notice to the other party no later than September 30,
2001; and provided further, that the term of this Agreement shall in no event
extend beyond March 31, 2004.
2. Position and Duties; Responsibilities. (a) Position and Duties. The
Company shall employ the Executive during the Employment Period as its Chief
Executive Officer. Commencing on March 28, 1997, the Company shall employ the
Executive during the Employment Period as its Chairman of the Board. During the
Employment Period, the Executive shall perform the duties properly assigned to
him hereunder, shall devote substantially all of his business time, attention
and effort to the affairs of the Company and shall use his reasonable best
efforts to promote the interests of the Company. Notwithstanding the foregoing,
the Executive may (i) manage his personal investments and affairs; (ii) engage
in charitable, civic or community activities; and (iii) with the prior approval
of the Board of Directors of the Company (the "Board"), serve as a director of
any business corporation, provided that such activities or service do not
materially interfere with the proper performance of his duties and
responsibilities under this Agreement.
(b) Responsibilities. Subject to the powers, authority and
responsibilities vested in the Board and in duly constituted committees of the
Board, the Executive shall have the authority
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and responsibility for the formulation and execution of the corporate policy of
the Company and shall exercise all responsibilities customarily exercised by the
Chief Executive Officer and, on and after March 28, 1997, the Chairman of the
Board, of a company of the size and nature of the Company. The Executive shall
also perform such other duties (not inconsistent with his positions of Chairman
of the Board and Chief Executive Officer) on behalf of the Company and its
subsidiaries as may from time to time be authorized or directed by the Board and
as are customarily performed by someone holding the position of Chairman of the
Board and Chief Executive Officer. The Board has approved the Executive's
continuing to serve as a director of Mallinckrodt, Inc.
3. Compensation. (a) Base Salary. During the Employment Period, the
Company shall pay to the Executive a base salary at the rate of $700,000 per
annum, subject to review by the Human Resources Committee of the Board no less
frequently than annually for increase (such base salary, as increased from time
to time, being hereinafter referred to as "Base Salary"). The Executive's Base
Salary shall be paid in accordance with the Company's executive payroll policy.
(b) Annual Bonus. The Executive shall be eligible to participate in the
X. X. Xxxxxxxxx & Sons Company Senior Management Annual Incentive Plan (the
"Management Incentive Plan") and shall be granted award(s) under the Management
Incentive Plan providing for an annual cash incentive bonus (the "Annual Bonus")
as follows:
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(1) As of the date of this Agreement, the Executive shall be granted an
award in respect of the fiscal year ending December 31, 1997 providing for (i) a
Target Award (as defined in the Management Incentive Plan) equal to 75% of Base
Salary; (ii) a maximum bonus equal to two times the Target Award; (iii) a Base
Annual Salary (as defined in the Management Incentive Plan) equal to $700,000,
which amount shall be pro-rated as provided in the award; and (iv) such other
terms and conditions as set forth in the form of award attached to this
Agreement as Exhibit A; provided, however, that the Annual Bonus in respect of
the fiscal year ending December 31, 1997 shall equal the greater of (x)
$525,000, pro-rated by multiplying such amount by a fraction, the numerator of
which is the number of days during 1997 on which the Executive is employed by
the Company and the denominator of which is 365, and (y) the amount, if any,
determined in accordance with the terms of the award.
(2) In respect of each fiscal year of the Company commencing during the
Employment Period, the Executive shall be granted an award in respect of such
fiscal year providing for (i) a Target Award equal to 75% of Base Salary; (ii) a
maximum bonus equal to two times the Target Award; (iii) a Base Annual Salary
equal to the Executive's Base Salary as of the January 1 of such fiscal year;
and (iv) such other terms and conditions as set forth in the applicable award
substantially in the form attached to this Agreement as Exhibit A. The
Executive shall be paid his Annual Bonus for each year no later than other
senior executives are paid their annual bonuses.
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In respect of the fiscal year ending December 31, 1997, the Executive shall also
be entitled to receive not later than January 31, 1998, an amount equal to
$179,507.
(c) Stock Options. As of the date of this Agreement, the Executive shall
be granted nonqualified stock options under the X. X. Xxxxxxxxx & Sons Company
1995 Stock Incentive Plan (the "Stock Incentive Plan") as follows:
(1) The Executive shall be granted an option to purchase from the Company
500,000 shares of the Company's common stock, par value $1.25 ("Common Stock"),
at a purchase price per share equal to the average of the high and low prices
per share of Common Stock on the date hereof, as reported in the New York Stock
Exchange Composite Transactions report for the date hereof. The stock option
agreement evidencing such option shall be substantially in the form attached to
this Agreement as Exhibit B.
(2) The Executive shall be granted a premium priced option to purchase
from the Company 500,000 shares of Common Stock, at a purchase price per share
equal to 150% of the average of the high and low prices per share of Common
Stock on the date hereof, as reported in the New York Stock Exchange Composite
Transactions report for the date hereof. The stock option agreement evidencing
such option shall be substantially in the form attached to this Agreement as
Exhibit C.
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(d) Long-Term Performance Award. At such time, if any, as Long-Term
Performance Awards are granted under the Stock Incentive Plan for the three-year
performance period commencing on January 1, 1998, the Executive shall be granted
a Long-Term Performance Award providing for an annualized target payout equal to
the greater of 60% of the Executive's then current Base Salary and $420,000;
provided, however, that in the event such Long-Term Performance Awards are not
granted for the performance period commencing January 1, 1998, the Human
Resources Committee of the Board will provide for an alternative form of equity
award of equivalent value.
(e) Retirement Benefit Plan. Notwithstanding any provision of the
qualified X. X. Xxxxxxxxx & Sons Company Retirement Benefit Plan and related
non-qualified Unfunded Supplemental Benefit Plan (collectively, the "Retirement
Plan") to the contrary, the Company shall pay to the Executive a pension (in the
form of a single life annuity) for life of the Executive, commencing on the
first day of the month coinciding with or next following his 65th birthday, in
an annual amount equal to the excess of (A) the greater of (i) $907,000 and (ii)
50% of the Executive's "final average compensation," as defined below, over (B)
the aggregate of (i) such pensions, if any, that as of the date of the
Executive's termination of employment are accrued on behalf of the Executive and
vested pursuant to the terms of the Retirement Plan and any other defined
benefit pension plan of any prior employer of the Executive, plus (ii) the
Executive's "primary social security benefit," as defined below. If the
Executive's employment with the Company is terminated prior to the fifth
anniversary of the date hereof on account of the Executive's voluntary
termination as described in Section 4(f) or for cause as described in Section
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4(c) unless such termination occurs after a Change in Control as defined in
Section 4(e) below, the amount of the pension described above shall be reduced
to an amount determined by multiplying the amount thereof by a fraction, the
numerator of which is the number of days of the Executive's employment by the
Company and the denominator of which is 1,825. For purposes of this Agreement
(x) the "final average compensation" shall mean the average of the Executive's
"compensation" (as defined below) for the five consecutive years of the
Executive's employment by the Company during which his "compensation" was the
greatest, or if the Executive is employed by the Company for less than five
years, twelve times the amount of his aggregate compensation divided by the
number of months of the Executive's employment beginning on the date hereof, (y)
"compensation" shall mean for any year the Executive's Base Salary and Annual
Bonus for such year and (z) "primary social security benefit" shall mean twelve
times the monthly amount available for the benefit of the Executive at age 65
(excluding amounts available for a spouse or dependents) as an old age insurance
benefit under the provisions of Title II of the federal Social Security Act.
For purposes of the preceding sentence, (i) "compensation" shall be determined
on the basis of when paid to the Executive except that, in the event of a
"Termination Bonus", as provided pursuant to Sections 4(a)(3), 4(b)(3) and
4(d)(3) (including Section 4(e) insofar as it incorporates Section 4(d)(3)) such
"Termination Bonus" amount shall be deemed to have been received by the
Executive immediately prior to his termination of employment if it is paid in
respect of one of the first five years of the Employment Period and (ii) a year
shall mean each 12 month period (or, in the case of a partial year, the
applicable portion of such period) commencing on March 18, 1997 and on each
anniversary thereof. The amount of the Executive's primary social security
benefit shall be determined in good faith by the Company on the basis of
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reasonable estimates, based on the Social Security Act as in effect on the date
of the Executive's retirement or other termination of employment. The
Retirement Benefit under this Section 3(e) shall include a pre-retirement
spousal survivor benefit to be determined as provided in the next sentence. The
time and manner of the payment of such pension (including its conversion into a
form of annuity other than described above), and in the event such pension
commences prior to the Executive's 65th birthday, the reduction for early
commencement of such pension, and the eligibility for and amount of any
survivor's benefits shall be determined under the applicable terms of the
Retirement Plan, as if the pension provided herein were payable under the
Retirement Plan; provided that such pension (including, if applicable, such
survivor benefit) shall be determined on a basis that shall be no less favorable
to the Executive (or, if applicable, his surviving spouse) than would be the
case if it were determined under the Retirement Plan as in effect on the date of
this Agreement; provided further that, subject to the foregoing vesting
requirements as set forth in the second sentence of this Section 3(e), the
Executive shall be deemed to have met the service requirements for entitlement
to survivor benefits under the Retirement Plan. Any offsets for amounts
attributable to pension payments (including survivor benefits) under pension
plans of the Company or any prior employer shall be computed using the same
assumptions as to commencement, form and frequency of payments as if such
amounts were payable under the Retirement Plan.
(f) Restricted Stock. As of the date of this Agreement, the Executive
shall be awarded shares of Common Stock under the Stock Incentive Plan as
follows:
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(1) The Executive shall be awarded 50,947 shares of Common Stock, subject
to the restrictions specified in the Restricted Stock Agreement substantially in
the form attached to this Agreement as Exhibit D.
(2) The Executive shall be awarded 269,291 shares of Common Stock, subject
to the restrictions specified in the Restricted Stock Agreement substantially in
the form attached to this Agreement as Exhibit E.
(g) Cash Signing Bonuses. The Executive shall be paid cash signing
bonuses as follows:
(1) As of the date of this Agreement, the Company shall credit the amount
of $1,812,612 (the "Signing Date Bonus") to the account of the Executive
pursuant to a Deferred Cash Signing Agreement, substantially in the form of
Exhibit F-1, to be entered into between the parties concurrently herewith. Such
cash amount is provided to keep the Executive whole in respect of certain
compensation that he will forfeit upon termination of his employment with his
prior employer. The payment of such amount, including any earnings thereon, is
contingent on the Executive signing this Agreement, and is not contingent on the
performance of services for the Company and does not represent compensation for
services rendered. Such cash account shall be credited quarterly in arrears
(beginning on the last day of the calendar quarter in which this Agreement is
executed by the Executive) with an amount of interest on the balance (including
interest previously credited) at an annual rate equal to the then current yield
obtainable on United States government bonds having a
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maturity date of approximately five years. Payment of amounts credited to such
cash account shall be made as provided in the Deferred Cash Signing Agreement.
(2) On November 3, 1997, the Company shall credit the amount of $1,908,606
(the "Deferred Signing Date Bonus") to the account of the Executive pursuant to
a Deferred Cash Signing Agreement substantially in the form of Exhibit F-2 to be
entered into between the parties concurrently herewith. Such cash amount is
provided to keep the Executive whole in respect of certain compensation that he
will forfeit upon termination of his employment with his prior employer, and
which would have been payable to him on November 3, 1997. The payment of such
amount, including any earnings thereon, is contingent on the Executive signing
this Agreement, and is not contingent on the performance of services for the
Company and does not represent compensation for services rendered. Such cash
account shall be credited quarterly in arrears (beginning on December 31, 1997)
with an amount of interest on the balance (including interest previously
credited) at an annual rate equal to the then current yield obtainable on United
States government bonds having a maturity date of approximately five years.
Payment of amounts credited to such cash account shall be made as provided in
the Deferred Cash Signing Agreement.
(h) Relocation Expenses. The Company shall pay the Executive's reasonable
expenses related to the relocation of his primary residence to the Chicago
metropolitan area in accordance with the Company's relocation policy in the form
of Exhibit G; but with the following additions and modifications:
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(1) The Company shall reimburse the Executive for temporary living
expenses for the Executive and his family in the Chicago metropolitan area for a
period not to exceed one year from the date the Executive commences employment
with the Company;
(2) The Company will reimburse the Executive for the expenses of no
more than three trips for the Executive and his spouse to the Chicago
metropolitan area for the purpose of finding a new home or apartment;
(3) At the election of the Executive, the Company shall purchase the
Executive's current primary residence at a price either (A) agreed upon by the
Company and the Executive or (B) established by averaging three independent
appraisals of the property;
(4) The Company shall pay, or reimburse the Executive for, the cost
of installing and maintaining a suitable home security system in the Executive's
new primary residence in the Chicago metropolitan area; and
(5) The Company shall reimburse the Executive for all taxes payable
by the Executive because of relocation-related payments by the Company,
including tax reimbursement payments.
(i) Other Benefits. During the Employment Period, the Executive
shall be entitled to participate in the Company's employee benefit plans
generally available to senior executives of
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the Company (all such benefits being hereinafter referred to as the "Employee
Benefits"). As part of that entitlement, the Executive shall be entitled to
take time off for vacation or illness in accordance with the Company's policy
for senior executives and to receive all other fringe benefits as are from time
to time made generally available to senior executives of the Company. Attached
as Exhibit H is a summary description of certain other employee benefits to be
provided for the Executive, including certain special adjustments made
specifically for the Executive.
(j) Expense Reimbursement. During the Employment Period, the Company
shall reimburse the Executive for all proper expenses incurred by him in the
performance of his duties hereunder in accordance with the Company's policies
and procedures.
(k) Split Dollar Insurance. The Company shall use its reasonable
best efforts to cause the transfer to the Company of the split dollar life
insurance policy under which the Executive is a beneficiary and as to which
Executive's prior employer is the holder; provided, however, that the Company
shall not be required to pay more than 110% of the cash value of such policy in
order to effect such transfer. After such transfer, the Company shall continue
to pay all premiums due on that policy during the Employment Period and shall
reimburse the Executive for any taxes payable by the Executive because of the
payment by the Company of such premiums and any such tax reimbursement payments.
(l) Incentive Plans. The Executive shall be entitled to participate
in the ongoing long-term incentive programs of the Company on the basis as other
senior-level executives of the Company. In the event of any inconsistency
between (i) this Agreement or any restricted stock,
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stock option, annual bonus, long-term performance or other compensation
agreement or award made to the Executive pursuant to it and (ii) the Management
Incentive Plan, the Stock Incentive Plan or any similar or successor plan(s)
adopted by the Company, then any such plan(s) shall be deemed amended to conform
to the provisions of this Agreement and of any such agreement or award.
(m) Grantor Trust. The Company shall establish a grantor trust in
form and substance satisfactory to the Executive into which the Company shall,
within 30 days of the earlier of the date of the Executive's termination of
employment or the date of a Change in Control (as defined herein), deposit the
amount of the Company's retirement benefit obligation under Section 3(e) above
which is then unfunded. The Company shall from time to time make additional
deposits to the grantor trust such that the amount of assets held therein with
respect to the retirement benefit obligation shall equal the then present value
of the unfunded obligation. The establishment of the grantor trust and deposit
of amounts therein shall not affect the obligation of the Company to provide the
retirement benefit described in Section 3(e) and, to the extent not paid by the
Company, such amounts shall be paid from the grantor trust.
4. Termination. (a) Death. Upon the death of the Executive, the
Employment Period shall automatically terminate and the Executive's estate or
his beneficiaries, as the case may be, shall be entitled to:
(1) Base Salary through and including the Executive's date of death;
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(2) any Annual Bonus and any other incentive award earned but not yet paid
for any fiscal year of the Company ended on or prior to the Executive's date of
death;
(3) a bonus (the "Termination Bonus") equal to the product of (x) the
Executive's Annual Bonus for the fiscal year ended immediately preceding such
termination, multiplied by (y) a fraction, the numerator of which is the number
of days during the then current fiscal year in which the Executive was employed
by the Company and the denominator of which is 365; provided, however, that in
the event of termination during the fiscal year ending December 31, 1997, the
Termination Bonus shall equal the product of (x) $525,000, multiplied by (y) a
fraction, the numerator of which is the number of days during 1997 in which the
Executive is employed by the Company and the denominator of which is 365;
(4) the compensation, if any, that is or becomes payable in accordance
with the terms and conditions of any stock option agreements and restricted
stock awards;
(5) any pension survivor benefit that may become due pursuant to Section
3(e) above;
(6) amounts earned, accrued or owing to the Executive but not yet paid
under Sections 3(g), 3(h), 3(i) and 3(j) above; and
(7) other or additional compensation and benefits in accordance with
applicable plans, programs and arrangements of the Company.
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(b) Disability. Either party may terminate the Executive's
employment under this Agreement upon 30 days written notice to the other party
due to the Executive's Disability as defined in the last paragraph of this
Section 4(b). Upon such termination, the Executive shall be entitled to:
(1) Base Salary through and including the effective date of the
Executive's termination of employment;
(2) any Annual Bonus and any other incentive award earned but not yet paid
for any fiscal year of the Company ended on or prior to the effective date of
the Executive's termination of employment;
(3) a Termination Bonus determined in accordance with Section 4(a)(3);
(4) an amount equal to the sum of 60% of Base Salary, at the annual rate
in effect at termination of his employment, for a period ending with the end of
the month in which he becomes 65, less the amount of any disability benefits
provided to the Executive by the Company (other than benefits attributable to
the Executive's own contributions) under any disability plan;
(5) the compensation, if any, that is or becomes payable in accordance
with the terms and conditions of any stock option agreements and restricted
stock awards;
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(6) any pension benefit that may become due pursuant to Section 3(e)
above, offset by any payment in respect of the same period made pursuant to
Section 4(b)(4) above;
(7) any amounts earned, accrued or owing to the Executive but not yet paid
under Sections 3(g), 3(h), 3(i) and 3(j);
(8) continued accrual of credited service for the purpose of the pension
benefit provided under Section 3(e) above during the period of the Executive's
Disability or, if sooner, until the earlier of the Executive's election to
commence receiving his pension under Section 3(e) above or his attainment of age
65;
(9) continued full participation in medical, dental, hospitalization and
life insurance coverage and in all other employee plans and programs in which he
was participating on the date of termination of his employment due to Disability
until he attains age 65; and
(10) other or additional benefits in accordance with applicable plans,
programs and arrangements of the Company.
If the Executive is precluded from continuing full participation in
any employee benefit plan or program as provided in clause (9) above, he shall
be provided the after-tax economic equivalent of the benefits provided under the
plan or program in which he is unable to participate. The economic equivalent of
any benefit foregone shall be deemed to be the lowest
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cost that would be incurred by the Executive in obtaining such benefit himself
on an individual basis. Payment of such after-tax equivalent shall be made
quarterly in advance.
For purposes of the Agreement, Disability shall mean the Executive's
inability to substantially perform his duties and responsibilities under this
Agreement for a period of 180 consecutive days as determined by an approved
medical doctor. For this purpose an approved medical doctor shall mean a
medical doctor selected by the Company and the Executive. If the parties cannot
agree on a medical doctor, each party shall select a medical doctor and the two
doctors shall select a third who shall be the approved medical doctor for this
purpose.
(c) Cause. (1) The Company may, at its option, terminate the
Executive's employment under this Agreement for Cause (as hereinafter defined).
A termination for Cause shall not take effect until and unless the Company
complies with this Section 4(c)(1). The Executive shall be given written notice
by the Board of the intention to terminate his employment hereunder for Cause
(the "Cause Notice"). The Cause Notice shall state the particular action(s) or
inaction(s) giving rise to termination for Cause and shall be given within 30
days of the Board learning of such action(s) or inaction(s). The Executive shall
have 10 days after the Cause Notice is given to cure the particular action(s) or
inaction(s), to the extent a cure is possible. If the Executive so effects a
cure, the Cause Notice shall be deemed rescinded and of no force or effect. If
he fails to effect a cure, the Executive shall then be entitled to a hearing
before the Board. Such hearing shall be held within 20 days of his receiving
such notice, provided he requests a hearing within 10 days of receiving the
notice. If, within 5 days following such hearing, the Board gives written notice
to the Executive confirming that, in its judgment, based on a vote so finding
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supported by at least 3/4 of the members of the Board, Cause for terminating him
on the basis set forth in the original notice exists, he shall thereupon be
terminated for Cause.
(2) As used in this Agreement, the term "Cause" shall mean any one or more
of the following:
(i) the Executive engages in conduct that constitutes willful gross
neglect or willful gross misconduct in carrying out his duties under this
Agreement, resulting, in either case, in material economic harm to the Company
or substantial damage to the Company's reputation, unless the Executive believed
in good faith that such act or nonact was in or not contrary to the best
interests of the Company; or
(ii) the Executive is convicted of a felony involving moral turpitude,
fraud or embezzlement.
(3) The exercise of the right of the Company to terminate the Executive's
employment pursuant to this Section 4(c) shall not abrogate the rights or
remedies of the Company in respect of the breach giving rise to such
termination.
(4) If the Company terminates the Executive's employment for Cause, he
shall be entitled to:
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(i) Base Salary through and including the effective date of the
Executive's termination of employment;
(ii) any Annual Bonus and any other incentive award earned but
not yet paid for any fiscal year of the Company ended on or prior to the
effective date of the Executive's termination of employment;
(iii) any pension benefit that may become due pursuant to
Section 3(e) above;
(iv) any amounts earned, accrued or owing to the Executive but
not yet paid under Sections 3(g), 3(h), 3(i) and 3(j) above;
(v) the compensation, if any, that is or becomes payable in
accordance with the terms and conditions of any stock option agreements and
restricted stock awards; and
(vi) other compensation and benefits, if any, in accordance with
applicable plans, programs and arrangements of the Company.
(5) Notwithstanding anything to the contrary contained in this
Agreement, if, following a termination of the Executive's employment for
Cause, an arbitrator appointed pursuant to Section 13, or a court of
competent jurisdiction, in a final determination, determines
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that the Executive was not guilty of the conduct that formed the basis for
the termination, the Executive shall be entitled to the payments and the
economic equivalent of the benefits he would have received had his
employment been terminated by the Company without Cause.
(d) Termination Without Cause or for Good Reason. If the Company
terminates the employment of the Executive hereunder for any reason other
than a reason set forth in subsections (a), (b) or (c) of this Section 4,
or if the Executive terminates his employment hereunder for Good Reason (as
defined herein), the Executive shall be entitled to:
(1) Base Salary through and including the effective date of the
Executive's termination of employment;
(2) any Annual Bonus and any other incentive award earned but not yet
paid for any fiscal year of the Company ended on or prior to the effective
date of the Executive's termination of employment;
(3) a Termination Bonus determined in accordance with Section
4(a)(3);
(4) a lump sum payment equaling 250% of the sum of the Executive's
annual Base Salary and annual bonus Target Award as of the date of his
termination;
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(5) the compensation, if any, that is or becomes payable in accordance with
the terms and conditions of any stock option agreements and restricted stock
awards and Long-Term Performance Awards;
(6) any pension benefit that may become due pursuant to Section 3(e)
above;
(7) continued accrual of credited service for the purpose of the pension
benefit provided under Section 3(e) above during the 30 month period (the
"Severance Period") in respect of which the lump-sum severance payment described
in Section 4(d)(4) above is made;
(8) any amounts earned, accrued or owing to the Executive but not yet paid
under Sections 3(g), 3(h), 3(i) and 3(j) above;
(9) continued full participation in all medical, dental, hospitalization
and life insurance coverage and in other employee benefit plans or programs in
which he was participating on the date of the termination of his employment
until the earlier of:
(i) the end of the Severance Period; and
(ii) the date, or dates, he receives equivalent coverage and benefits
under the plans and programs of a subsequent employer (such coverages and
benefits to be determined on a coverage-by-coverage, or benefit-by-benefit,
basis);
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provided that (x) if the Executive is precluded from continuing full
participation in any employee benefit plan or program as provided in this clause
(9) of this Section 4(d), he shall be provided with the after-tax economic
equivalent of the benefits provided under the plan or program in which he is
unable to participate for the period specified in this clause (9) of this
Section 4(d), (y) the economic equivalent of any benefit foregone shall be
deemed to be the lowest cost that would be incurred by the Executive in
obtaining such benefit himself on an individual basis, and (z) payment of such
after-tax economic equivalent shall be made quarterly in advance; and
(10) other or additional compensation and benefits in accordance with
applicable plans, programs and arrangements of the Company.
For purposes of this Section 4(d), a termination for Good Reason shall mean
a termination of the Executive's employment at his initiative following the
occurrence, without the Executive's written consent, of one or more of the
following events (except in consequence of a prior termination in accordance
with this Section 4);
(i) a reduction in the Executive's then current Base Salary; a
reduction in the target award opportunity under the Management Incentive
Plan, or successor plan, or under any long term incentive plan; a
termination or material reduction of any employee benefit or perquisite
enjoyed by him (other than as part of an across-the-board reduction in any
employee benefit or perquisite applicable to all executive officers of the
Company); or a failure by the Company to pay the Executive any amount of
Base Salary, incentive
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compensation or other compensation or any material benefit amount due him
by the Company within seven (7) days of the date such amount is due;
(ii) the failure to elect or reelect the Executive to any of the
positions described in Section 2 above, or the removal of him from any such
position;
(iii) a material diminution in the Executive's duties as set forth in
Section 2 above, or the assignment to the Executive of duties or
responsibilities that are materially inconsistent with such duties or which
materially impair the Executive's ability to function as the Chairman and
Chief Executive Officer of the Company;
(iv) the failure to continue the Executive's participation in any
incentive compensation plan unless a plan providing a substantially similar
opportunity is substituted;
(v) the relocation of the Company's principal office, or the
Executive's own office as assigned to him by the Company, to a location
more than 25 miles from Chicago, Illinois; or
(vi) the failure of the Company to obtain the assumption in writing of
its obligation to perform this Agreement by any successor to all or
substantially all of the assets of the Company within 15 days after a
merger, consolidation, sale or similar transaction.
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(e) Termination of Employment and Vesting Following a Change in Control.
If, following a Change in Control, the Executive's employment is terminated
without Cause or he terminates his employment for Good Reason, the Executive
shall be entitled to the payments and benefits provided in Section 4(d) above,
provided that the lump sum payment pursuant to Section 4(d)(4) shall equal 300%
of the sum of the Executive's annual Base Salary and annual bonus Target Award
as of the date of his termination. Also, immediately following a Change in
Control, all stock options, restricted stock awards, long term incentive awards
and other amounts, entitlements and benefits in which he is not yet vested shall
become fully vested.
For purposes of this Agreement, "Change in Control" shall mean the
occurrence of any one of the following events:
(i) any Person (as defined below) is or becomes the Beneficial Owner
within the meaning of Rule 13d-3 under the Securities and Exchange Act of
1934, as amended (the "Exchange Act"), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting
power of the Company's then outstanding securities; or
(ii) during any period of two (2) consecutive years (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board and any new director (other
than a director designated by a Person who has entered into an agreement
with the Company to effect a transaction described in clause (i), (iii) or
(iv) of this paragraph) whose election by the Board or
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nomination for election by the Company's stockholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (A) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity), in combination with the ownership of
any trustee or other fiduciary holding securities under an employee benefit
plan of the Company, more than 50% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person acquires 50% or more of the
combined voting power of the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets or
business.
For purposes of this Section 4(e) "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof; provided,
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however, that a Person shall not include (I) the Company or any of its
Subsidiaries, (II) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, (III) an underwriter temporarily holding
securities pursuant to an offering of such securities or (IV) a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.
For purposes of this paragraph a Subsidiary shall include any corporation,
partnership or other entity, at least a majority of the outstanding voting
shares or controlling interest of which is at the time directly or indirectly
owned or controlled (either alone or through Subsidiaries or together with
Subsidiaries) by the Company or another Subsidiary.
The Executive's employment shall be deemed to have been terminated
following a Change in Control by the Company without Cause or by the Executive
with Good Reason if the Executive's employment is terminated prior to a Change
in Control without Cause at the direction of a Person who has entered into an
agreement with the Company the consummation of which will constitute a Change in
Control or if the Executive terminates his employment with Good Reason prior to
a Change in Control if the circumstance or event which constitutes Good Reason
occurs at the direction of such Person.
(f) Voluntary Termination. In the event of a termination of employment by
the Executive on his own initiative other than a termination due to death or
Disability or for Good Reason, the Executive shall have the same entitlements as
provided in Section 4(c) above for a termination for Cause. A voluntary
termination under this Section 4(f) shall be effective upon 30 days prior
written notice to the Company and shall not be deemed a breach of this
Agreement.
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(g) Computation of Amounts Due. For purposes of determining payments,
benefits and other compensation due to the Executive under this Section 4, any
reduction in Base Salary, annual bonus Target Award, benefits, or other
compensation that would constitute Good Reason for termination shall be
disregarded.
(h) Payment Following a Change in Control Under Section 280G of the
Internal Revenue Code. In the event that the aggregate of all payments or
benefits made or provided to, or that may be made or provided to, the Executive
under this Agreement and under all other plans, programs and arrangements 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, the Company shall pay to the Executive prior to the time any excise tax
imposed by Section 4999 of the Internal Revenue Code ("Excise Tax") is payable
with respect to such Aggregate Payment, an additional amount which, after the
imposition of all income and excise taxes thereon, is equal to the Excise Tax on
the Aggregate Payment. The determination of whether the Aggregate Payment
constitutes a Parachute Payment and, if so, the amount to be paid to the
Executive and the time of payment pursuant to this Section 4(h) shall be made by
an independent auditor (the "Auditor") jointly selected by the Company and the
Executive and paid by the Company. The Auditor shall be a nationally recognized
United States public accounting firm which has not, during the two years
preceding the date of its selection, acted in any way on behalf of the Company
or any affiliate thereof. If the Executive and the Company cannot agree on the
firm to serve as the Auditor, then the Executive and the Company shall each
select one accounting firm and those two firms shall jointly select the
accounting firm to serve as the Auditor. Notwithstanding the foregoing, in the
event that the amount of the Executive's Excise
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Tax liability is subsequently determined to be greater than the Excise Tax
liability with respect to which an initial payment to the Executive under this
Section 4(h) has been made, the Company shall pay to the Executive an additional
amount with respect to such additional Excise Tax (and any interest and
penalties thereon) at the time and in the amount determined by the Auditor. The
Executive and the Company shall cooperate with each other in connection with any
proceeding or claim relating to the existence or amount of liability for Excise
Tax, and all expenses relating to any such proceeding or claim (including all
attorneys' fees and other expenses incurred by the Executive in connection
therewith) shall be paid by the Company promptly upon notice of demand from the
Executive.
(i) Unused Vacation. Upon any termination of his employment, the
Executive shall be entitled to a lump sum payment in respect of accrued but
unused vacation days at his then current Base Salary rate.
(j) No Mitigation; No Offset. In the event of any termination of
employment under this Section 4, the Executive shall be under no obligation to
seek other employment and there shall be no offset against amounts due the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that he may obtain except as specifically provided in
this Section 4 or any claims the Company may have against him.
(k) Nature and Timing of Payments. Any amounts due under this Section 4
are in the nature of severance payments considered to be reasonable by the
Company and are not in the
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nature of a penalty. Such amounts shall be paid as promptly as possible
following determination of the amount due.
5. Federal and State Withholding. The Company shall be entitled to deduct
from the amounts payable to the Executive pursuant to this Agreement the amount
of all required federal, state, local or other withholding taxes in accordance
with the Executive's Form W-4 on file with the Company, and all applicable
federal employment taxes.
6. Noncompetition; Nonsolicitation. (a) The Executive acknowledges that
in the course of his employment with the Company pursuant to this Agreement he
will become familiar with trade secrets and customer lists of, and other
confidential information concerning, the Company and its subsidiaries,
affiliates and clients and that his services have been and will be of special,
unique and extraordinary value to the Company.
(b) The Executive agrees that during the Employment Period and for a
period of two years thereafter (the "Noncompetition Period") he shall not in any
manner, directly or indirectly, through any person, firm, corporation or
enterprise, alone or as a member of a partnership or as an officer, director,
stockholder, investor or employee of or advisor or consultant to any person,
firm, corporation or enterprise or otherwise, engage or be engaged, or assist
any other person, firm, corporation or enterprise in engaging or being engaged,
in any Competitive Activity. A Competitive Activity shall mean a business that
(i) is being conducted by the Company or any subsidiary at the time in question
and (ii) was being conducted at the date of the termination of the Executive's
employment, provided that Competitive Activities shall not
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include any business that (x) is not in the business of distributing, managing
and reproducing print and digital information for the publishing, retailing,
merchandising or information technology markets or (y) contributes less than 5%
of the Company's revenues on a consolidated basis for the fiscal year in
question. Notwithstanding anything to the contrary in this Section 6(b), an
activity shall not be deemed to be a Competitive Activity (A) solely as a result
of the Executive being employed by or otherwise associated with a business of
which a unit is in competition with the Company or any subsidiary but as to
which unit he does not have direct or indirect responsibilities for the products
or product lines involved or (B) if the activity contributes less than 5% of the
revenues for the fiscal year in question of the business by which the Executive
is employed or with which he is otherwise associated.
(c) The Executive further agrees that during the Noncompetition Period he
shall not (i) in any manner, directly or indirectly, induce or attempt to induce
any employee of or advisor or consultant to the Company or any of its
subsidiaries or affiliates to terminate or abandon his or her or its employment
or relationship for any purpose whatsoever, or (ii) in connection with any
business to which Section 6(b) applies, call on, service, solicit or otherwise
do business with any customer of the Company or any of its subsidiaries or
affiliates; provided, however, that the restriction contained in clause (i) of
this Section 6(c) shall not apply to, or interfere with, the proper performance
by the Executive of his duties pursuant to Section 2 of this Agreement.
(d) Nothing in this Section 6 shall prohibit the Executive from being (i)
a stockholder in a mutual fund or a diversified investment company or (ii) a
passive owner of not
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more than two percent of the outstanding common stock, capital stock and equity
of any firm, corporation or enterprise so long as the Executive has no active
participation in the business of such firm, corporation or enterprise.
(e) If, at any time of enforcement of this Section 6, a court or an
arbitrator holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law.
7. Confidentiality. The Executive shall not, at any time during the
Employment Period or thereafter, make use of or disclose, directly or
indirectly, to any person any (i) trade secret or other confidential or secret
information of the Company or of any of its subsidiaries, affiliates or
customers or (ii) other technical, business, proprietary or financial
information of the Company or of any of its subsidiaries, affiliates or
customers not available to the public generally or the competitors of the
Company or the competitors of any of its subsidiaries or affiliates, in each
case that the Executive obtained as a result of his employment by the Company or
any of its subsidiaries ("Confidential Information"), except to the extent that
such Confidential Information (a) is used by the Executive during the Employment
Period in the proper performance of his duties pursuant to this Agreement, (b)
is disclosed by the Executive to his legal counsel in connection with legal
services performed by such counsel for the Executive, provided that such
disclosure is made on a confidential basis, (c) becomes a matter of public
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record or is published in a newspaper, magazine or other periodical available to
the general public, or has otherwise become generally known in the markets in
which the Company does business and to which the Confidential Information
relates, other than as a result of any act or omission of the Executive outside
the proper performance of his duties pursuant to this Agreement, or (d) is
required to be disclosed by any law, regulation or order of any court or
regulatory commission, department or agency. Promptly following the termination
of the Employment Period, the Executive shall surrender to the Company all
records, memoranda, notes, plans, reports, computer tapes and software and other
documents and data which constitute Confidential Information which he may then
possess or have under his control (together with all copies thereof); provided,
however, that the Executive may retain personal diaries and notes and copies of
such documents as are necessary for the preparation of his federal or state
income tax returns.
8. Inventions. The Executive hereby assigns to the Company his entire
right, title and interest in and to all discoveries and improvements, patentable
or otherwise, trade secrets and ideas, writings and copyrightable material,
which may be conceived by the Executive or developed or acquired by him during
the Employment Period, which may pertain directly or indirectly to the business
of the Company or any of its subsidiaries or affiliates. The Executive agrees to
disclose fully all such developments to the Company upon its request, which
disclosure shall be made in writing promptly following any such request. The
Executive shall, upon the Company's request, execute, acknowledge and deliver to
the Company all instruments and do all other acts which are necessary or
desirable to enable the Company or any of its subsidiaries or affiliates to file
and prosecute applications for, and to acquire, maintain and enforce, all
patents, trademarks and copyrights in all countries.
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9. Enforcement. The parties hereto agree that the Company and its
subsidiaries or affiliates may be damaged irreparably in the event that any
provision of Sections 6, 7 or 8 of this Agreement were not performed in
accordance with its terms or were otherwise breached and that money damages
could be an inadequate remedy for any such nonperformance or breach.
Accordingly, the Company and its successors or assigns shall be entitled, in
addition to other rights and remedies existing in their favor, to seek an
injunction or injunctions to prevent any breach or threatened breach of any of
such provisions and to enforce such provisions specifically (without posting a
bond or other security). Each of the parties agrees that he or it will submit
himself or itself to the personal jurisdiction of the courts of the State of
Illinois in any action by the other party to enforce an arbitration award
against him or it or to obtain interim injunctive or other relief pending an
arbitration decision.
10. Indemnification. (a) The Company agrees that (i) if the Executive is
made a party, or is threatened to be made a party, to any Proceeding by reason
of the fact that he is or was a director, officer, employee, agent, manager,
consultant or representative of the Company or is or was serving at the request
of the Company as a director, officer, member, employee, agent, manager,
consultant or representative of another person, or (ii) if any Claim is made, or
is threatened to be made, that arises out of or relates to the Executive's
service in any of the foregoing capacities, then the Executive shall promptly be
indemnified and held harmless by the Company to the fullest extent permitted or
authorized by the Company's certificate of incorporation, bylaws, Board
resolutions or, if greater, by the laws of the State of Delaware, against any
and all costs, expenses, liabilities and losses (including, without limitation,
reasonable attorney's fees, judgments, interest, expenses of investigation,
fines, ERISA excise taxes or
-33-
penalties and amounts paid or to be paid in settlement) incurred or suffered by
the Executive in connection therewith, and such indemnification shall continue
as to the Executive even if he has ceased to be a director, member, employee,
agent, manager, consultant or representative of the Company or other person, and
shall inure to the benefit of the Executive's successors and assigns. The
Company shall advance to the Executive all costs and expenses incurred by him in
connection with any such Proceeding or Claim within 15 days of receiving written
notice requesting such an advance. Such notice shall include an undertaking by
the Executive to repay the amount of such advance if he is ultimately and
conclusively determined not to be entitled to indemnification against such costs
or expenses. As used in this Agreement, "Claim" shall mean any claim, demand,
request, investigation, dispute, controversy, threat, discovery request, or
request for testimony or information, and "Proceeding" shall mean any action,
suit, arbitration, investigation or proceeding, whether civil, criminal,
administrative or other.
(b) Neither the failure of the Company (including its Board, independent
legal counsel or stockholders) to have made a determination in connection with
any request for payment or advancement under Section 10(a) that the Executive
has satisfied any applicable standard of conduct, nor a determination by the
Company (including its Board, independent legal counsel or stockholders) that
the Executive has not met any applicable standard of conduct, shall create a
presumption that the Executive has not met an applicable standard of conduct.
(c) The Company shall at all times during the Employment Period and for
four years thereafter keep in place directors and officers' liability insurance
policy covering the Executive to the extent that the Company provides such
coverage for other senior executives.
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11. Representations. (a) The Company represents and warrants that (i) the
execution of this Agreement has been duly authorized by the Company, including
action of the Board and the Human Resources Committee; (ii) the execution,
delivery and performance of this Agreement by the Company does not and will not
violate any law, regulation, order, judgment or decree or any agreement, plan or
corporate governance document of the Company and (iii) upon the execution and
delivery of this Agreement by the Executive, this Agreement shall be the valid
and binding obligation of the Company, enforceable in accordance with its terms,
except to the extent enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and by the effect of general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law).
(b) The Executive represents and warrants to the Company that (a) the
execution, delivery and performance of this Agreement by the Executive does not
and will not violate any law, regulation, order, judgment or decree or any
agreement to which the Executive is a party or by which he is bound, (b) the
Executive is not a party to or bound by any employment agreement, noncompetition
agreement or confidentiality agreement with any other person or entity that
would interfere with this Agreement or his performance of services hereunder,
and (c) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of the Executive,
enforceable in accordance with its terms, except to the extent enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the effect of general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
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12. Survival. Except as otherwise expressly set forth in this Agreement,
the respective rights and obligations of the parties hereunder shall survive any
termination of the Executive's employment.
13. Alternative Dispute Resolution. (a) Mediation. Neither party shall
initiate arbitration or other legal proceedings (except for any claim under
Section 6, 7 or 8 of this Agreement) against the other party, or, in the case of
the Company, any of its directors, officers, employees, agents or
representatives, relating in any way to this Agreement, the breach of this
Agreement, or otherwise, until 30 days after the party against whom the claim is
made ("Respondent") receives written notice from the claiming party of the
specific nature of any purported claim and the amount of any purported damages.
The Executive and the Company further agree that if Respondent submits the
claiming party's claim to the CPR Institute for Dispute Resolution, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, for nonbinding mediation prior to the
expiration of such 30 day period, the claiming party may not institute
arbitration or other legal proceeding against Respondent until the earlier of:
(i) the completion of nonbinding mediation efforts; or (ii) 90 days after the
date on which Respondent received written notice of the claimant's claim. The
mediation shall be conducted in Chicago, Illinois or such other location to
which the parties may agree. The Company agrees to promptly pay all costs of
mediation, including without limitation, all legal fees and expenses incurred by
the Executive.
(b) Arbitration. Any dispute or controversy between the Company and the
Executive, whether arising out of or relating to this Agreement, the breach of
this Agreement, or otherwise, shall be settled by arbitration administered by
the American Arbitration Association
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("AAA") in accordance with its Commercial Arbitration Rules then in effect and
judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. Any arbitration shall be held before a single
arbitrator who shall be selected by the mutual agreement of the Company and the
Executive, unless the parties are unable to agree to an arbitrator, in which
case, the arbitrator will be selected under the procedures of the AAA. The
arbitrator shall have the authority to award any remedy or relief that a court
of competent jurisdiction could order or grant, including, without limitation,
the issuance of an injunction. However, either party may, without inconsistency
with this arbitration provision, apply to any court having jurisdiction over
such dispute or controversy and seek interim provisional, injunctive or other
equitable relief until the arbitration award is rendered or the controversy is
otherwise resolved. Except as necessary in court proceedings to enforce this
arbitration provision or an award rendered hereunder, or to obtain interim
relief, neither a party nor an arbitrator may disclose the existence, content or
results of any arbitration hereunder without the prior written consent of the
Company and the Executive. The Company and the Executive acknowledge that this
Agreement evidences a transaction involving interstate commerce. Notwithstanding
any choice of law provision included in this Agreement, the United States
Federal Arbitration Act shall govern the interpretation and enforcement of this
arbitration provision. The arbitration proceeding shall be conducted in Chicago,
Illinois or such other location to which the parties may agree.
14. Reimbursement of Legal Expenses. If any contest or dispute shall
arise involving the Executive's employment with the Company, including any
contest or dispute relating to (a) this Agreement, (b) termination of the
Executive's employment with the Company or (c) the failure or refusal of the
Company to perform fully in accordance with the terms hereof, the
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Company shall promptly reimburse the Executive, on a current basis, for all
costs and expenses (including, without limitation, attorneys' fees) relating to
any such contest or dispute. Pending the final and conclusive resolution of any
such contest or dispute, the Company shall continue prompt payment of all
amounts due the Executive under this Agreement (or any amendment thereof) and
prompt provision of all benefits to which the Executive or his successors and
assigns are entitled. The Company shall reimburse the Executive for all legal
expenses incurred by him in connection with his employment arrangements with the
Company including the preparation of this Agreement.
15. Beneficiaries/References. The Executive shall be entitled, to the
fullest extent permitted by law, to select and to change a beneficiary or
beneficiaries to receive any compensation or benefit hereunder following the
Executive's death, by giving written notice to the Company. In the event of the
Executive's death or a judicial determination of his incompetence, references in
this Agreement to the Executive shall be deemed, where appropriate, to refer to
his beneficiary, estate or other legal representative.
16. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed given (a) when delivered
personally or (b), provided that a written acknowledgment of receipt is obtained
for any overnight courier delivery, two days after delivery by overnight courier
to the following addresses of the other party hereto (or such other address for
such party as shall be specified by notice given pursuant to this Section) or
(c) sent by facsimile to the following facsimile numbers of the other party
hereto (or such other facsimile number for such party as shall be specified by
notice given pursuant to this Section),
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with the confirmatory copy delivered by overnight courier to the addresses of
such party pursuant to this Section:
If to the Company, to:
X. X. Xxxxxxxxx & Sons Company
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Secretary
Facsimile No.: (000) 000-0000
If to the Executive, to:
Xxxxxxx X. Xxxxx
(at his most recent home address and/or
facsimile number on file with the Company)
17. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement or the validity, legality or enforceability of such provision in any
other jurisdiction, but this Agreement
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shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
18. Entire Agreement. This Agreement (which includes the agreements
referenced herein), constitutes the entire agreement and understanding between
the parties with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or between
the parties, written or oral, which may have related in any manner to the
subject matter hereof.
19. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
No rights or obligations of the Company under this Agreement may be assigned or
transferred by the Company except that such rights or obligations may be
assigned or transferred pursuant to a merger or consolidation in which the
Company is not the continuing entity, or the sale or liquidation of all or
substantially all of the assets of the Company, provided that the assignee or
transferee is the successor to all or substantially all of the assets of the
Company and such assignee or transferee expressly assumes all the liabilities,
obligations and duties of the Company as contained in this Agreement. In
connection with any transfer or assignment of its rights, duties, or obligations
under this Agreement, the Company shall use its reasonable best efforts to cause
such assignee or transferee to expressly assume the liabilities, obligations and
duties of the Company hereunder. No rights, obligations or duties of the
Executive under this Agreement may be assigned or transferred other than his
rights to compensation and benefits, which may be transferred only by will or
operation of law, except as otherwise expressly provided in this Agreement.
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20. Headings. The headings of the Sections contained in this Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.
21. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Illinois without
regard to principles of conflict of laws.
22. Amendment and Waiver. The provisions of this Agreement may be amended
or waived only by the written agreement of the Company and the Executive, and no
course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.
23. Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed to be an original and both of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
X. X. XXXXXXXXX & SONS COMPANY
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Acting Chairman and CEO
/s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
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