EXHIBIT 99.4
EMPLOYMENT AGREEMENT
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AGREEMENT by and between Bankers Trust New York Corporation, a New York
corporation (the "Company") and _____________ (the "Executive"), dated as of the
______ day of __________, 1997.
1. Employment Period. Subject to the consummation of the
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transactions contemplated by the Plan and Agreement of Merger among the Company,
Merger Sub and Alex. Xxxxx Incorporated, a Maryland corporation ("Pathfinder")
dated as of April 6, 1997 (the "Merger Agreement"), the Company hereby agrees to
employ the Executive, and the Executive hereby agrees to remain in the employ of
the Company subject to the terms and conditions of this Agreement, for the
period commencing on the closing date of the transactions contemplated by the
Merger Agreement (the "Commencement Date") and ending on December 31, 199- (the
"Employment Period").
2. Terms of Employment. (a) Position and Duties. (i) During the
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Employment Period, the Executive shall serve as a Managing Director of the
Company with the duties and responsibilities set forth on Exhibit A hereto.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote full attention and time during normal business hours to the business
and affairs of the Company and to use the Executive's reasonable best efforts to
perform such responsibilities in a professional manner. It shall not be a
violation of this Agreement for the executive to (A) serve on corporate, civic
or charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and agreed that to
the extent that any such activities have been conducted by the Executive prior
to the Commencement Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) subsequent to the
Commencement Date shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities to the Company.
(b) Compensation. (i) General. Until such time as the long-term
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incentives described in Section 2(b)(ii) below are fully vested, the Executive
will be compensated in
a manner consistent with practice prior to the Commencement Date.
(ii) Long-Term Incentives. Upon commencement of the Employment
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Period, the Executive shall receive a grant of stock options as set forth on
Exhibit A hereto (the "Stock Options") and shares of restricted stock with a
Fair Market Value of the amount set forth on Exhibit A hereto (the "Restricted
Stock"). The Stock Options and Restricted Stock shall vest and become
exercisable one-third on the second anniversary of the date of grant, an
additional one-third on the third anniversary of the date of grant and a final
one-third on the fourth anniversary of the date of grant. For purposes this
Section 2(b)(ii), the "Fair Market Value" of the Company's common stock shall be
the average closing price of the Company's common stock on the New York Stock
Exchange for the five trading days prior to the date of grant. The Executive
shall be eligible to participate in the incentive compensation plans of the
Company available to peer executives of the Company, provided that in
determining the Executive's level of participation, the Company may take into
account the provisions of this Agreement. The Stock Options and Restricted
Stock grants shall provide that if the Company shall terminate the Executive's
employment other than for Cause during or after the Employment Period, including
by reason of the Executive's death or Disability, or the Executive shall
terminate employment for Good Reason during or after the Employment Period, such
Stock Options and Restricted Stock shall become immediately vested.
(iii) Savings and Retirement Plans. During the Employment
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Period, the Executive shall be eligible to participate in all savings and
retirement plans, practices, policies and programs to the extent applicable
generally to other peer executives of the Company and its affiliated companies,
provided that the Executive's participation in the Company's qualified
retirement plan may be delayed until the effectiveness of the Company's cash
balance pension plan. For purposes of all such plans, the Company shall credit
the Executive with full credit for all service credited under the Pathfinder
Retirement Savings Plan (including service with Pathfinder prior to the
Commencement Date) for purposes of eligibility to participate and receive
benefits and vesting but not for benefit accruals in any Company retirement
plan.
(iv) Welfare and Other Benefit Plans. During the Employment
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Period, the Executive and/or the
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Executive's family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare, fringe, change of control
protection, vacation and other similar benefit plans, practices, policies and
programs provided by the Company and its affiliated companies (including,
without limitation, medical, prescription, dental, disability, employee life,
group life, accidental death and travel accident insurance plans and programs)
to the extent applicable generally to other peer executives of the Company and
its affiliated companies. For purposes of all such plans, the Company shall
credit the Executive with full credit for all service credited under the
corresponding Pathfinder benefit plans for purposes of eligibility to
participate and receive benefits but not for purposes of vesting benefit
accruals. With respect to the Company's welfare benefit plans, the Company shall
cause any such plan to waive any pre-existing condition exclusions and actively-
at-work requirements thereunder with respect to the Executive and the
Executive's eligible dependents and shall ensure that any covered expenses
incurred on or before the Commencement Date shall be taken into account for
purposes of satisfying applicable deductible, coinsurance and maximum out-of-
pocket provisions after the Commencement Date to the extent that such expenses
are taken into account for the benefit of peer executives of the Company.
(v) Expenses. During the Employment Period, the Executive shall
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be entitled to receive prompt reimbursement for all reasonable business expenses
incurred by the Executive, in accordance with the policies of the Company.
(vi) Indemnity. The Executive shall be indemnified by the
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Company against claims arising in connection with the Executive's status as an
employee, officer, director or agent of the Company in accordance with the
Company's indemnity policies for its senior executives, subject to applicable
law.
3. Termination of Employment. (a) Death or Disability. The
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Executive's employment shall terminate automatically upon the Executive's death
during the Employment Period. If the Company determines in good faith that the
Disability of the Executive has occurred during the Employment Period (pursuant
to the definition of Disability set forth below), it may give to the Executive
written notice in accordance with Section 12(b) of this Agreement of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such
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notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to full-
time performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall have the meaning set forth in the Company's Long-Term
Disability Plan.
(b) Cause. The Company may terminate the Executive's employment
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during the Employment Period for Cause. For purposes of this Agreement, "Cause"
shall mean:
(i) intentional gross misconduct by the Executive damaging in a
material way to the Company, or
(ii) a material breach of this Agreement, after the Company has
given the Executive notice thereof and a reasonable opportunity to cure.
(c) Good Reason. The Executive's employment may be terminated by the
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Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean a material breach by the Company of this Agreement after the Executive has
given the Company notice of the breach and a reasonable opportunity to cure.
(d) Notice of Termination. Any termination by the Company for Cause,
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or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 10(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
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Executive's employment is terminated by the
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Company for Cause, or by the Executive for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
4. Obligations of the Company upon Termination. (a) Good Reason;
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Other Than for Cause. If, during the Employment Period, the Company shall
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terminate the Executive's employment other than for Cause, including by reason
of the Executive's death or Disability, or the Executive shall terminate
employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the amount of any
compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) to the extent not theretofore paid (the
"Accrued Obligations");
(ii) the Stock Options and Restricted Stock shall become
immediately vested; and
(iii) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive is entitled
to receive under any plan, program, policy or practice or contract or
agreement of the Company and its affiliated companies, excluding any
severance plan or policy except to the extent that such plan or policy
provides, in accordance with its terms, benefits with a value in excess of
the benefits payable to the Executive under this Section 4 (such other
amounts and benefits shall be hereinafter referred to as the "Other
Benefits").
(b) Cause; Other than for Good Reason. If the Executive's
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employment shall be terminated for Cause or the Executive terminates employment
without Good Reason during the Employment Period, this Agreement shall terminate
without further obligations to the Executive other than the obligation to pay to
the Executive (x) Accrued Obligations, and (y) Other Benefits, in each case to
the extent theretofore unpaid.
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5. Arbitration. The Company and the Executive agree that any
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disputes with respect to this Agreement shall be subject to binding arbitration
in New York City in accordance with the rules of the American Arbitration
Association. The proceedings and the results of such arbitration shall be
treated as confidential information subject to Section 6(a) hereof. The Company
agrees to pay for the costs of arbitration and shall reimburse the Executive for
the Executive's reasonable attorney's fees provided that the Executive prevails
on at least one material issue in the arbitration.
6. Confidential Information/Noncompetition. (a) The Executive shall
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hold in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any of
its affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Company or
any of its affiliated companies and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process
(provided the Company has been given notice of and opportunity to challenge or
limit the scope of disclosure purportedly so required), communicate or divulge
any such information, knowledge or data to anyone other than the Company and
those designated by it.
(b) While employed by the Company, the Executive shall comply with the
rules and policies of the Company, including without limitation the Company's
Rules for Business Conduct and compliance policies. After termination of the
Executive's employment with the Company, the Executive shall comply with those
aspects of such rules and policies which apply to conduct after termination of
employment.
(c) Until December 31, 1999, the Executive will not directly or
indirectly, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as an officer, employee,
partner, director or otherwise with, or have any financial interest in, any
business which is in competition with the investment banking, corporate finance,
corporate advisory, asset management or M&A business conducted by Pathfinder or
the Company or any of its affiliates in any geographic area where such business
is being conducted during such period.
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Ownership, for personal investment purposes only, of not to exceed 2% of the
voting stock of any publicly held corporation shall not constitute a violation
hereof.
(d) While employed by the Company or any of its affiliates or
Pathfinder and for one year after the Executive's termination of employment, the
Executive will not, directly or indirectly, solicit for employment by other than
the Company any person employed by the Company or its affiliates or Pathfinder
at the effective time of the Merger (as defined in the Merger Agreement) (the
"Merger"), nor will the Executive, directly or indirectly, solicit for
employment by other than the Company any person known by the Executive to be
employed at the time by Pathfinder or the Company or its affiliates.
(e) The provisions of Section 6(c) and (d) shall remain in full force
and effect until the expiration of the period specified herein notwithstanding
the earlier termination of the Executive's employment hereunder.
7. Specific Performance. The Executive acknowledges that a violation
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on the Executive's part of any of the covenants contained in Section 6 hereof
would cause immeasurable and irreparable damage to the Company. Accordingly,
the Executive agrees that the Company shall be entitled to injunctive relief in
any court of competent jurisdiction for any actual or threatened violation of
any such covenant in addition to any other remedies it may have. The Executive
agrees that in the event that any arbitrator or court of competent jurisdiction
shall finally hold that any provision of Section 6 hereof is void or constitutes
an unreasonable restriction against the Executive, the provisions of such
Section 6 shall not be rendered void but shall apply to such extent as such
arbitrator or court may determine constitutes a reasonable restriction under the
circumstances.
8. Successors. (a) This Agreement is personal to the Executive and
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without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
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(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
9. Certain Additional Payments by the Company.
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(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the Company to
or for the benefit of the Executive whether pursuant to this Agreement or
otherwise, and determined without regard to any additional payments required
under this Section 9) (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Code or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by KPMG Peat
Marwick (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 9, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting
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Firm shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and
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shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section 9(c), the Company
shall control all proceedings taken in connection with such contest and, at its
sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive to pay the
tax claimed and xxx for a refund or contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to
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be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
10. Miscellaneous. (a) This Agreement shall be governed by and
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construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
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c/o Alex. Xxxxx Incorporated
000 X. Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
If to the Company:
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One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The Company's obligation to make the payments provided for in
this Agreement and otherwise to perform obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Executive or others, other than
claims for a breach of Section 6 of this Agreement. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement, and such amounts shall not be reduced whether or
not the Executive obtains other employment.
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(d) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(e) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(f) On and after the Commencement Date, this Agreement shall
supersede any other agreement between the parties or between Pathfinder and the
Executive with respect to the subject matter hereof.
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