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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of this 10th day of April, 2000, by and between GETTY
IMAGES, INC., a Delaware corporation (the "Company"), and Xxxx Xxxxxxxx, an
individual (the "Employee").
W I T N E S S E T H:
WHEREAS, both parties desire that the terms and conditions of the Employee's
employment with the Company be governed by the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the promises and the mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. Employment and Duties.
(a) General. The Company hereby employs the Employee, effective as of the date
hereof (the "Effective Date"), and the Employee agrees upon the terms and
conditions herein set forth to serve, effective as of the Effective Date, as
President, xxx.xxx of the Company and shall perform all duties customarily
appurtenant to such position. In such capacity, the Employee shall report
directly to Xxxxxxxx Xxxxx, Chief Executive Officer of the Company, or to such
other person designated by the Board of Directors of the Company. The Employee's
principal place of business shall be Chicago, Illinois.
(b) Services and Duties. For so long as the Employee is employed by the Company,
the Employee shall devote his full business time to the performance of his
duties hereunder; shall faithfully serve the Company; shall in all respects
conform to and comply with the lawful and good faith directions and instructions
given to him by Xxxxxxxx Xxxxx, or such other person designated by the Board of
Directors of the Company; and shall use his best efforts to promote and serve
the interests of the Company.
(c) No Other Employment. For so long as the Employee is employed by the Company,
he shall not, directly or indirectly, render services to any other person or
organization for which he receives compensation without the prior approval of
Xxxxxxxx Xxxxx, or such other person designated by the Board of Directors of the
Company. No such approval will be required if the Employee seeks to perform
inconsequential services without direct compensation therefor in connection with
the management of personal investments or in connection with the performance of
charitable and civic activities, provided that such activities do not contravene
the provisions of Section 6 hereof.
2. Term of Employment. The term of the Employee's employment under this
Agreement (the "Term") shall commence on the Effective Date and continue until
it is terminated by either party giving the other at least one month written
notice; provided, however, that in no event may a non-renewal notice be given
prior to March 1, 2001; and provided further, however, that, in any event, the
Term shall not extend beyond the last day of the month in which the Employee
attains age 65.
3. Compensation and Other Benefits. Subject to the provisions of this Agreement,
the Company shall pay and provide the following compensation and other benefits
to the Employee during the Term as compensation for all services rendered
hereunder and the covenants contained in Section 6 hereof:
(a) Salary. The Company shall pay to the Employee an annual salary (the
"Salary") at the initial rate of $260,000, payable to the Employee in accordance
with the normal payroll practices of the Company for its employees as are in
effect from time to time. The amount of the Employee's Salary shall be reviewed
annually by the Company in April of each year during the Term beginning in the
2001 calendar year. The Company shall pay to the Employee a one time signing
bonus of $20,000 to be paid at the time the Employee receives his first paycheck
from the Company.
(b) Annual Bonus. The Employee shall be eligible for 2000 and each calendar year
thereafter that begins during his employment to participate in an annual
incentive bonus program established by the Company, in accordance with the
policies of the Company, its subsidiaries and affiliates (hereinafter,
collectively the "Group") and subject to such terms and conditions as may be
approved annually by the Company. Under the terms of the annual incentive bonus
program, the Employee will be afforded the opportunity to earn up to 30% of his
Salary (the "Bonus") in effect for the applicable calendar year, subject to the
achievement of the performance targets established by the Company for that year,
to be paid on a pro-rata basis in the event that the Employee is employed for
less than a full calendar year (for purposes of determining the 2000- bonus, the
Employee shall be deemed to have commenced employment as of April 1, 2000).
(c) Stock Options. Effective as of the Effective Date, the Company shall grant
the Employee an option (the "Option") to purchase 30,000 shares of the common
stock of the Company pursuant to the terms the Company's 1998 Stock Option Plan
(the "Option Plan"). The per share exercise price of the Option shall equal the
fair market value of a share of Common Stock on the Effective Date, as
determined in accordance with the terms of the Option Plan. The Option shall
vest and become exercisable as to 25% on April 10, 2001; the remainder of the
Option shall vest ratably on the first day of each month over the following
three years. Except as otherwise specified herein, the Option shall be subject
to the terms of the Option Plan and to such other terms and conditions as may be
specified by the Compensation Committee of the Company in the form of a standard
option agreement between the Company and the Employee.
(d) Expenses. The Company shall pay or reimburse the Employee for all reasonable
out-of-pocket expenses incurred by the Employee in connection with his
employment hereunder in accordance with Group. Such expenses shall be paid upon
the periodic submission of invoices and shall be paid reasonably promptly after
the date of such invoice. The reimbursement of expenses under this Section 3(d)
shall be subject to the Employee's providing the Company with such documentation
of the expenses as the Company may from time to time reasonably request in
accordance with the policies of the Group.
(e) 401k plan, Health and Fringe Benefits. During the Term, the Employee shall
be eligible to participate in the Company's 401k plan, medical, disability and
life insurance plans applicable to executives of the Company in accordance with
the terms of such plans as in effect from time to time. The Employee shall also
be provided with free parking at the place of employment.
(f) Long-Term Incentive Program. During the Term, the Employee shall participate
in all long-term incentive plans and programs of the Group that are applicable
to its senior executives in accordance with their terms and in a manner
consistent with his position with the Company.
(g) Holidays. In addition to the usual public and bank holidays, the Employee
shall be entitled to twenty days' paid vacation annually, which shall be taken
at such times as are approved by the Company. The Employee shall be
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permitted to carry forward any portion of his vacation time for up to one year
and, upon the expiration of such one-year period, the Employee shall be paid in
lieu of such vacation days.
(h) Relocation Expenses. The Company shall pay and/or reimburse all reasonable
temporary housing expenses and moving expenses as outlined in the attached
relocation agreement.
4. Termination of Employment. Subject to the notice and other provisions of this
Section 4, the Company shall have the right to terminate the Employee's
employment hereunder, and he shall have the right to resign, at any time for any
reason or for no stated reason.
(a) Termination for Cause; Resignation Without Good Reason. (i) If, prior to
April 10, 2001, the Employee's employment is terminated by the Company for Cause
or if the Employee resigns from his employment hereunder other than for Good
Reason, he shall be entitled to payment of the pro rata portion of his Salary
and accrued Bonus (for purposes of this Agreement, "accrued Bonus" shall be
determined using the number of days in the applicable calendar year that the
Employee was employed by the Company and the applicable performance criteria
under the bonus plan, in each case through the date of termination or
resignation) through and including the date of termination or resignation, as
well as any unreimbursed expenses. Except to the extent required by the terms of
any applicable compensation or benefit plan or program or as otherwise required
by applicable law, the Employee shall have no rights under this Agreement or
otherwise to receive any other compensation or to participate in any other plan,
program or arrangement after such termination or resignation of employment with
respect to the year of such termination or resignation and later years.
(ii) In addition, the Employee shall be entitled to retain the then-vested
portion of his options to purchase shares of the Company's common stock until
such options expire in accordance with their terms.
(iii) Termination for "Cause" shall mean termination of the Employee's
employment with the Company because of (A) willful, material or persistently
repeated non-performance of the Employee's duties to the Company (other than by
reason of the incapacity of the Employee due to physical or mental illness)
after notice by the Board of such failure and the Employee's non-performance and
continued, willful, material or persistent repeated non-performance after such
notice, (B) the indictment of the Employee for a felony offense, (C) fraud
against the Group or any willful misconduct that brings the reputation of the
Group into serious disrepute or causes the Employee to cease to be able to
perform his duties, (D) any other material breach by the Employee of any
material term of this Agreement, (E) the Employee files for personal bankruptcy
under the United States Bankruptcy Code, or (F) the Employee is unable to
perform his duties, by reason of disability, for a period of six (6) months or
more.
(iv) Termination of the Employee's employment for Cause shall be communicated by
delivery to the Employee of a written notice from the Company stating that the
Employee has been terminated for Cause, specifying the particulars thereof and
the effective date of such termination. The date of a resignation by the
Employee without Good Reason shall be the date specified in a written notice of
resignation from the Employee to the Company. The Employee shall provide at
least 30 days' advance written notice of resignation without Good Reason.
(b) Involuntary Termination. (i) If the Company terminates the Employee's
employment for any reason other than Cause or Employee resigns from his
employment hereunder for Good Reason (collectively hereinafter referred to as an
"Involuntary Termination"), the Company shall pay to the Employee his salary and
any accrued bonus up to and including the date of such Involuntary Termination,
as well as any unreimbursed expenses. In addition, the Company shall continue to
pay to the Employee as severance (the "Severance Payments") in accordance with
the Company's normal payroll practices, his Salary, at the rate in effect
immediately prior to such Involuntary Termination, for one year from the date of
such Involuntary Termination.
(ii) In addition, in the event of the Employee's Involuntary Termination prior
to April 10, 2001, all of the Employee's then-outstanding options to purchase
shares of the Company's common stock shall continue to vest until April 10,
2001. The Employee shall be entitled to retain the vested portion of his options
as if he had remained an Employee until April 10, 2001.
(iii) Resignation for "Good Reason" shall mean resignation by Employee because
of (A) an adverse and material change in the Employee's duties, titles or
reporting responsibilities, (B) a material breach by the Company of any term of
the Agreement, (C) a reduction in the Employee's Salary or bonus opportunity or
the failure of the Company to pay the Employee any material amount of
compensation when due, (D) the assignment to Employee of any material duties
that are inconsistent with those described in Section 1 of this Agreement
without the Employee's consent, or (E) the Company's requirement that Employee
perform a substantial portion of his duties outside the Chicago, Illinois
metropolitan area, except for travel in furtherance of the Company's business.
The Company shall have 30 business days from the date of receipt of such notice
to effect a cure of the material breach described therein and, upon cure thereof
by the Company to the reasonable satisfaction of the Employee, such material
breach shall no longer constitute Good Reason for purposes of this Agreement.
(iv) The date of termination of employment without Cause shall be the date
specified in a written notice of termination to the Employee. The date of
resignation for Good Reason shall be the date specified in a written notice of
resignation from the Employee to the Company; provided, however, that no such
written notice shall be effective unless the cure period specified in Section
4(b)(iii) above has expired without the Company having corrected, to the
reasonable satisfaction of the Employee, the event or events subject to cure.
(v) Anything in this Agreement to the contrary notwithstanding, no amounts shall
be payable under this Section 4(b) if the Employee's employment with the Company
ends, for any reason, on or after April 10, 2001.
5. Limitation on Payments.
Notwithstanding anything herein to the contrary, if any of the payments made
hereunder would constitute a "parachute payment" (as defined in Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code"), and
the net after-tax amount of the parachute payment is less than the net after-tax
amount if the aggregate payments to be made to the Employee were three times his
"base amount" (as defined in Section 280G(b)(3) of the Code), less $1.00, then
the aggregate of the amounts constituting the parachute payment shall be reduced
to an amount that will equal three times the base amount, less $1.00. The
determinations to be made with respect to this Section 5 shall be made by an
independent accounting firm of national standing (other than the Company's
regular auditors). The accounting firm shall be paid by the Company for its
services performed hereunder.
6. Protection of the Company's Interests.
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(a) No Competing Employment. For so long as the Employee is employed by the
Company and for one (1) year thereafter (such period being referred to
hereinafter as the "Restricted Period"), the Employee shall not, without the
prior written consent of the Board, directly or indirectly, own an interest in,
manage, operate, join, control, lend money or render financial or other
assistance to or participate in or be connected with, as an officer, employee,
partner, stockholder, consultant or otherwise, any individual, partnership,
firm, corporation or other business organization or entity that competes with
the Group by providing any goods or services provided or under development by
the Group at the effective date of the Employee's termination of employment
under this Agreement; provided, however, that this Section 6(a) shall not
proscribe the Employee's ownership, either directly or indirectly, of either
less than five percent of any class of securities which are listed on a national
securities exchange or quoted on the automated quotation system of the National
Association of Securities Dealers, Inc..
(b) No Interference. During the Restricted Period, the Employee shall not,
whether for his own account or for the account of any other individual,
partnership, firm, corporation or other business organization (other than the
Company), intentionally solicit, endeavor to entice away from the Group or
otherwise interfere with the relationship of the Group with, any key person or
team who is employed by or otherwise engaged to perform services for the Group
or any key person or team or entity who is, or was within the then most recent
twelve-month period, a customer, client or supplier of the Group.
(c) Secrecy. The Employee recognizes that the services to be performed by him
hereunder are special, unique and extraordinary in that, by reason of his
employment hereunder, he may acquire confidential information and trade secrets
concerning the operation of the Group, the use or disclosure of which could
cause the Group substantial losses and damages which could not be readily
calculated and for which no remedy at law would be adequate. Accordingly, the
Employee covenants and agrees with the Company that he will not at any time,
except in performance of the Employee's obligations to the Company hereunder or
with the prior written consent of the Board, directly or indirectly disclose to
any person any confidential information that he may learn or has learned by
reason of his association with the Group. The term "confidential information"
means any information not previously disclosed to the public or to the trade by
the Group with respect to the Company's, or any of its affiliates' or
subsidiaries', products, facilities and methods, trade secrets and other
intellectual property, systems, procedures, manuals, confidential reports,
product price lists, customer lists, financial information (including the
revenues, costs or profits associated with any of the Group's products),
business plans, prospects or opportunities.
(d) Exclusive Property. The Employee confirms that all confidential information
is and shall remain the exclusive property of the Group. All business records,
papers and documents kept or made by the Employee relating to the business of
the Group shall be and remain the property of the Group. Upon the termination of
his employment with the Company or upon the request of the Company at any time,
the Employee shall promptly deliver to the Company, and shall not without the
consent of the Board retain copies of, any written materials not previously made
available to the public, or records and documents made by the Employee or coming
into his possession concerning the business or affairs of the Group; provided,
however, that subsequent to any such termination, the Company shall provide the
Employee with copies (the cost of which shall be borne by the Employee) of any
documents which are requested by the Employee and which the Employee has
determined in good faith are (i) required to establish a defense to a claim that
the Employee has not complied with his duties hereunder or (ii) necessary to the
Employee in order to comply with applicable law.
(e) Assignment of Developments. All "Developments" (as defined below) that were
or are at any time made, conceived or suggested by Employee, whether acting
alone or in conjunction with others, during Employee's employment with the Group
shall be the sole and absolute property of the Group, free of any reserved or
other rights of any kind on the part of Employee. During Employee's employment
and, if such Developments were made, conceived or suggested by Employee during
his employment with the Group, thereafter, Employee shall promptly make full
disclosure of any such Developments to the Group and, at the Group's cost and
expense, do all acts and things (including, among others, the execution and
delivery under oath of patent and copyright applications and instruments of
assignment) deemed by the Group to be necessary or desirable at any time in
order to effect the full assignment to the Group of Employee's right and title,
if any, to such Developments. For purposes of this Agreement, the term
"Developments" shall mean all data, discoveries, findings, reports, designs,
inventions, improvements, methods, practices, techniques, developments,
programs, concepts, and ideas, whether or not patentable, relating to the
activities of the Group of which Employee is as of the date of this Agreement
aware or of which Employee becomes aware at any time during the Term, excluding
any Development for which no equipment, supplies, facilities or confidential
information of the Group was used and which was developed entirely on Employee's
own time, unless (i) the Development relates directly to the business of the
Group, (ii) the Development relates to actual or demonstrably anticipated
research or development of the Group, or (iii) the Development results from any
work performed by Employee for the Group (the foregoing is agreed to satisfy the
written notice and other requirements of Section 49.44.140 of the Revised Code
of Washington).
(f) Injunctive Relief. Without intending to limit the remedies available to the
Company, the Employee acknowledges that a breach of any of the covenants
contained in this Section 6 may result in material irreparable injury to the
Group for which there is no adequate remedy at law, that it will not be possible
to measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, the Company shall be entitled to obtain a temporary
restraining order and/or a preliminary or permanent injunction restraining the
Employee from engaging in activities prohibited by this Section 6 or such other
relief as may be required to specifically enforce any of the covenants in this
Section 6. Without intending to limit the remedies available to the Employee,
the Employee shall be entitled to seek specific performance of the Company's
obligations under this Agreement.
7. General Provisions.
(a) Source of Payments. All payments provided under this Agreement, other than
payments made pursuant to a plan which provides otherwise, shall be paid in cash
from the general funds of the Company, and no special or separate fund shall be
established, and no other segregation of assets made, to assure payment. The
Employee shall have no right, title or interest whatever in or to any
investments which the Company may make to aid the Company in meeting its
obligations hereunder. To the extent that any person acquires a right to receive
payments from the Company hereunder, such right shall be no greater than the
right of an unsecured creditor of the Company; provided, however, that this
provision shall not be deemed to waive or abrogate any preferential or other
rights to payment accruing to the Employee under applicable bankruptcy laws by
virtue of the Employee's status as an employee of the Company.
(b) No Other Severance Benefits. Except as specifically set forth in this
Agreement, the Employee covenants and agrees that he shall not be entitled to
any other form of severance benefits from the Company, including, without
limitation, benefits otherwise payable under any of the Company's regular
severance policies, in the event his employment hereunder ends for any reason
and, except with respect to obligations of the Company expressly provided for
herein, the Employee unconditionally releases the Company and its subsidiaries
and affiliates, and their respective directors, officers, employees and
stockholders, or any of them, from any and all claims, liabilities or
obligations under this Agreement or under any severance or termination
arrangements of the Company or any of its subsidiaries or affiliates for
compensation or benefits in connection with his employment or the termination
thereof.
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(c) Tax Withholding. Payments to the Employee of all compensation contemplated
under this Agreement shall be subject to all applicable tax withholding.
(d) Notices. Any notice hereunder by either party to the other shall be given in
writing by personal delivery, or certified mail, return receipt requested, or
(if to the Company) by telex or facsimile, in any case delivered to the
applicable address set forth below:
(i) To the Company: Getty Images
000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
(ii) To the Employee: Xxxx Xxxxxxxx
or to such other persons or other addresses as either party may specify to the
other in writing.
(e) Representation by the Employee. The Employee represents and warrants that
his entering into this Agreement does not, and that his performance under this
Agreement and consummation of the transactions contemplated hereby will not,
violate the provisions of any agreement or instrument to which the Employee is a
party, or any decree, judgment or order to which the Employee is subject, and
that this Agreement constitutes a valid and binding obligation of the Employee
in accordance with its terms. Breach of this representation will render all of
the Company's obligations under this Agreement void ab initio.
(f) Limited Waiver. The waiver by the Company or the Employee of a violation of
any of the provisions of this Agreement, whether express or implied, shall not
operate or be construed as a waiver of any subsequent violation of any such
provision.
(g) Assignment; Assumption of Agreement. No right, benefit or interest hereunder
shall be subject to assignment, encumbrance, charge, pledge, hypothecation or
setoff by the Employee in respect of any claim, debt, obligation or similar
process. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company to assume expressly and to agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place.
(h) Amendment; Actions by the Company. This Agreement may not be amended,
modified or canceled except by written agreement of the Employee and the
Company. Any and all determinations, judgments, reviews, verifications,
adjustments, approvals, consents, waivers or other actions of the Company
required or permitted under this Agreement shall be effective only if undertaken
by the Company pursuant to authority granted by a resolution duly adopted by the
Board; provided, however, that by resolution duly adopted in accordance with
this Section 7(h), the Board may delegate its responsibilities hereunder to one
or more of its members other than the Employee.
(i) Severability. If any term or provision hereof is determined to be invalid or
unenforceable in a final court or arbitration proceeding, (i) the remaining
terms and provisions hereof shall be unimpaired and (ii) the invalid or
unenforceable term or provision shall be deemed replaced by a term or provision
that is valid and enforceable and that comes closest to expressing the intention
of the invalid or unenforceable term or provision.
(j) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware (determined without regard to
the choice of law provisions thereof).
(k) Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the matters covered hereby
and supersedes all prior agreements and understandings of the parties with
respect to the subject matter hereof.
(l) Headings. The headings and captions of the sections of this Agreement are
included solely for convenience of reference and shall not control the meaning
or interpretation of any provisions of this Agreement.
(m) Counterparts. This Agreement may be executed by the parties hereto in
counterparts, each of which shall be deemed an original, but both such
counterparts shall together constitute one and the same document.
(n) Disciplinary and Grievance Procedures. For statutory purposes, there is no
formal disciplinary procedure in relation to the Employee's employment. The
Employee shall be expected to maintain the highest standards of integrity and
behavior. If the Employee has any grievance in relation to his employment or is
not satisfied with any disciplinary procedure taken in relation to him, he may
apply in writing within 14 days of that decision to the Board, whose decision
shall be final. The foregoing shall not be construed, however, to limit the
Employee's remedies at law or otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
day and year first written above.
GETTY IMAGES, INC.
By:
Name:
---------------------------------
Title:
Date:
EMPLOYEE
By:
Name:
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Date:
