Exhibit 10.15
EXECUTION COPY
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (the “ Agreement
”) dated as of February 1, 2008 (the “
Restatement Date ”), between The Reader’s Digest
Association, Inc., a Delaware corporation (the “
Company ”), and Mary G. Berner (“
Executive ”).
WHEREAS
, the Company and the Executive entered into an
Employment Agreement as to the terms of her continuing employment
dated as of March 1, 2007 (the “ Initial
Agreement ”);
WHEREAS, the
Company and the Executive desire to enter into the Agreement to
bring the Initial Agreement into compliance with Section 409A
of the Internal Revenue Code of 1986, as amended (the “
Code ”), and the regulations and Treasury guidance
thereunder as in effect from time to time (collectively
hereinafter, “ Section 409A ”);
WHEREAS
, except as otherwise expressly provided herein, this
Agreement shall supersede any prior written agreement entered into
between the Executive and the Company prior to the Restatement Date
with respect to the subject matter hereof, including, without
limitation, the Initial Agreement; and
WHEREAS the
Company desires to continue to employ Executive as its Chief
Executive Officer and Executive continues to be willing to serve
the Company in such capacity for the period and upon such other
terms and conditions of this Agreement.
NOW, THEREFORE, in
consideration of the mutual agreements, provisions and covenants
contained herein, and intending to be legally bound hereby, the
parties hereto agree as set forth below:
1. Term . (a)
Duration . The term of Executive’s employment
under this Agreement was effective as of the consummation of the
merger of Doctor Acquisition Co., a Delaware corporation, with the
Company on March 2, 2007 (the “ Effective Date
”), and shall continue until the fifth anniversary of the
Effective Date (the “ Expiration Date ”).
On the Expiration Date, and on each subsequent anniversary of the
Expiration Date, the term of Executive’s employment under
this Agreement shall be extended for one additional year unless
either party provides written notice to the other party at least 60
days prior to the Expiration Date (or any such anniversary, as
applicable) that Executive’s employment hereunder shall not
be so extended; provided , however , that
Executive’s employment under this Agreement may be terminated
at any time pursuant to the provisions of Section 4. The
period of time from the Effective Date through the termination of
Executive’s employment under this Agreement is herein
referred to as the “ Term .”
(b) No Obligation . The
parties agree and acknowledge that neither the Company nor
Executive has an obligation to extend the Term or to continue
employment following the Expiration Date, and each party expressly
acknowledges that no promises or understandings to the contrary
have been made or reached. The parties also agree and
acknowledge that, should Executive and the Company choose to
continue Executive’s employment for any period of
time
following the
Expiration Date without extending the term of Executive’s
employment under this Agreement or entering into a new written
employment agreement, Executive’s employment with the Company
shall be “at will,” such that the Company may terminate
Executive’s employment at any time, with or without reason
and with or without notice, and Executive may resign at any time,
with or without reason and with or without notice.
(c) Definitions . For
purposes of this Agreement, the following terms, as used herein,
shall have the definitions set forth below.
“ Affiliate(s) ” means, with
respect to any specified Person, any other Person that directly or
indirectly, through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such specified
Person, provided that, in any event, any business in which
the Company has any direct or indirect ownership interest shall be
treated as an Affiliate of the Company.
“ Control ” (including, with
correlative meanings, the terms “ Controlled by
” and “ under common Control with ”), as
used with respect to any Person, means the direct or indirect
possession of the power to direct or cause the direction of the
management or policies of such Person, whether through the
ownership of voting securities, by contract or
otherwise.
“Limited Affiliate(s) ”
means, with respect to any specified Person, any other Person that
directly or indirectly, through one or more intermediaries,
Controls, is Controlled by, or with respect to Persons in the
publishing or media business, is under common Control with, such
specified Person, provided that, in any event, any business
in which the Company has any direct or indirect ownership interest
shall be treated as an Affiliate of the Company.
“ Person ” means any
individual, firm, corporation, partnership, limited liability
company, trust, joint venture, association, governmental entity,
unincorporated entity or other entity.
2. Duties and Responsibilities
. (a) During the Term, Executive agrees to be employed
and devote substantially all of Executive’s business time,
attention and efforts to the Company and the promotion of its
interests and the performance of Executive’s duties and
responsibilities hereunder, upon the terms and conditions of this
Agreement. Executive shall render Executive’s services
hereunder as Chief Executive Officer of the Company, with the
duties, responsibilities and authority commensurate with
Executive’s status, including any duties and responsibilities
as directed from time to time by the Board of Directors of the
Company (the “ Board ”) consistent with
Executive’s position hereunder. Executive shall report
to the Board. Executive acknowledges that the Board is
currently comprised of at least a majority of directors who are
selected or designated by Ripplewood Holdings L.L.C. or one of its
Affiliates (collectively, “ Ripplewood ”).
As of the Effective Date and during the Term while the Company is
not publicly traded, Ripplewood shall cause Executive to be
appointed or elected (and re-elected, as applicable) as a member of
the Board.
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(b) Place of Employment; Business
Travel . During the Term, Executive’s principal
place of employment shall be based initially at the Company’s
Pleasantville, New York office or in New York, New York, as
determined by the Board, consistent with the needs of the Company
and as required in connection with the performance of
Executive’s duties and responsibilities hereunder.
Executive acknowledges that Executive’s duties and
responsibilities shall require Executive to travel on business to
the extent reasonably necessary to fully perform Executive’s
duties and responsibilities hereunder.
(c) Board Membership; No Conflict
. During the Term, Executive shall not be permitted to
be a member of the board of directors of any for-profit company
without the consent of the Company (such consent not to be
unreasonably withheld) (for all purposes under this Agreement, any
required consent of the Company shall be evidenced by the written
approval of the Chairman of the Board), provided that
(i) Executive may serve on the board of directors of any other
portfolio company in which Ripplewood has any ownership interest;
(ii) Executive may continue to serve on the boards of
directors listed on Exhibit A attached hereto and
Executive may serve, without approval, on the boards of directors
of not-for-profit entities; provided that such activities do
not interfere with the performance of the Executive’s duties
and responsibilities hereunder.
3. Compensation and Related
Matters . (a) Base Salary.
During the Term, for all services rendered under this Agreement,
Executive shall receive an aggregate annual base salary (“
Base Salary ”) at an initial rate of $500,000, payable
in accordance with the Company’s applicable payroll
practices. Base Salary shall be subject to review by the
Board for increases, but not decrease, in its sole discretion and
references in this Agreement to “ Base Salary ”
shall be deemed to refer to the most recently effective annual base
salary rate.
(b) Annual Bonus . During
the Term, for each fiscal year, Executive shall be paid a
guaranteed annual bonus of $500,000 (the “ Guaranteed
Bonus ”). In addition, Executive shall be eligible
to earn an annual performance bonus in an amount up to 400% of Base
Salary based on performance against specified objective performance
criteria as set forth on Exhibit B hereto (the “
Annual Bonus ”). The Guaranteed Bonus, and any
Annual Bonus that Executive shall actually become entitled to
receive hereunder, will be payable by the Company at such time and
in such manner that bonuses are paid to other senior executives of
the Company, but in no event later than the end of the calendar
year in which the fiscal year for which such bonus is earned
ends. Nothing herein to the contrary, Executive shall be
entitled to an Annual Bonus for the fiscal year ending
June 30, 2007 prorated from November 1, 2006, which
Annual Bonus shall be paid in calendar year 2007. Executive
acknowledges that this payment has been made.
(c) Benefits and Perquisites.
During the Term, Executive shall be entitled to participate
in the benefit and perquisite plans and programs, commensurate with
Executive’s position, that are established by the Company
from time to time for executive employees generally, subject to the
terms and conditions of such plans. Executive shall also be
entitled to the use of a car service when traveling between New
York, NY and Pleasantville, NY. All amounts payable to
Executive under this Section 3(c) shall be reimbursed as
soon as practicable after Executive incurs such expense and submits
documentation thereof (which shall be submitted within ninety (90)
days of the incurrence of the expense), but, to the extent taxable
income to Executive, in no event later than the “Short-Term
Deferral Date” (as defined below).
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The “Short-Term
Deferral Date” shall mean, with respect to any fee or
expense, the 15th day of the third month following the later of the
end of the calendar year or the end of the Company’s fiscal
year in which the fee or expense is incurred.
(d) Vacation . During the
Term, Executive shall be entitled to paid vacation in accordance
with the Company’s vacation policies applicable to senior
executives of the Company, but in no event less than four
(4) weeks per year.
(e) Business Expense
Reimbursements. During the Term, the Company shall
promptly reimburse Executive for Executive’s reasonable
business expenses incurred in connection with performing
Executive’s duties hereunder in accordance with its
then-prevailing policies and procedures for expense reimbursement,
which shall provide for travel and entertainment at a level
commensurate with Executive’s position. In addition to
the foregoing, Executive shall be entitled to reimbursement for the
use of a car service when traveling between New York, NY and
Pleasantville, NY. All amounts payable to Executive under
this Section 3(e) shall be reimbursed as soon as
practicable after Executive incurs such expense and submits
documentation thereof (which shall be submitted within ninety (90)
days of the incurrence of the expense), but, to the extent taxable
income to Executive, in no event later than the Short-Term Deferral
Date.
(f) Stock Option . Promptly
following the Effective Date, Executive shall be granted an option
to purchase 3% of the outstanding shares of common stock of RDA
Holding Co. (“ Common Stock ”) at an exercise
price equal to the fair market value on the date of grant (the
“ Stock Option ”), pursuant to the Nonqualified
Stock Option Agreement the form of which is attached hereto as
Exhibit C (with such changes thereto as mutually agreed
by the parties). The parties agree that the Stock Option is
not intended to qualify as an “incentive stock option”
within the meaning of Section 422 of the Code.
(g) Restricted Stock Units .
Promptly following the Effective Date, Executive shall be granted
restricted stock units (“ Restricted Stock Units
”) with an initial value of $2 million, which will vest and
pay out in accordance with the terms of the Restricted Stock Unit
Agreement the form of which is attached hereto as
Exhibit D (with such changes thereto as mutually
agreed by the parties).
(h) Co-investment .
Executive shall be entitled to co-invest on a carry-free basis
side-by-side with Ripplewood in shares of Common Stock in an amount
up to $4.5 million, of which 50% shall be funded with third-party
leverage guaranteed by the Company.
(i) Legal Fees . The Company
shall pay all reasonable attorneys’ fees and disbursements
incurred by Executive prior to the expiration of the Term in
connection with the negotiation of (i) this Agreement, and
(ii) the negotiation of any other agreements documenting
Executive’s initial equity arrangements with the Company and
concomitant revisions of this Agreement. Any reimbursement
pursuant to this Section 3(i) shall be paid to Executive
promptly and in no event later than the Short-Term Deferral
Date.
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4. Separation from Service with the
Company .
(a) Death or Disability
.
(i) Executive’s employment shall
automatically terminate upon Executive’s death. The
Company may terminate Executive’s employment hereunder in the
event of Executive’s “ Disability ” (as
defined below) upon 30 days’ written notice to
Executive. In the event of a termination of Executive’s
employment hereunder by reason of death or by reason of Disability,
the Company shall pay to Executive or her estate, as applicable,
any accrued but unpaid Base Salary, accrued but unused vacation
time, unreimbursed business expenses, and unpaid Annual Bonus for
any completed fiscal year prior to the year of termination, and
Executive or her estate shall be entitled to receive employee
benefits pursuant to the terms of the benefit plans and programs
applicable to terminated employees (collectively, the “
Accrued Rights ”). The Accrued Rights shall be
payable on their normal payment dates; provided that accrued
but unused vacation time shall be paid within 30 days following the
date of termination of Executive’s employment. In
addition, Executive shall be entitled to a pro-rata portion of the
Annual Bonus for the fiscal year of termination based on actual
results of the Company, which amount shall be calculated based upon
a formula, the denominator of which shall be 365 and the numerator
of which shall be the number of days during the fiscal year during
which Executive was employed by the Company, and shall be paid at
such time as annual bonuses are ordinarily paid to other senior
executives of the Company in respect of the fiscal year in which
Executive’s termination occurs, but in no event later than
the end of the calendar year in which such fiscal year ends (the
“ Pro-Rata Bonus ”).
(ii) For purposes of this Agreement,
“ Disability ” means Executive has been
physically or mentally incapable for 6 consecutive months to
perform her material duties hereunder. Any question as to the
existence of the Disability of Executive as to which the Company
and Executive shall not agree shall be determined in writing by a
qualified independent physician mutually acceptable to Executive
and the Company (and if Executive and the Company cannot agree as
to a qualified independent physician, each shall appoint a
physician and those two physicians shall select a third physician
who shall make such determination in writing, which shall be final
and conclusive for all purposes of this Agreement). In
connection therewith, Executive agrees to submit to any medical
examination(s) as may be reasonably requested by the Company
for such purpose.
(b) By the Company for Cause or
By Executive Without Good Reason .
(i) The Company may terminate
Executive’s employment hereunder for “Cause” (as
defined below) at any time upon 30 days’ written notice to
Executive and Executive may terminate her employment hereunder
without “Good Reason” (as defined below) at any time
upon 30 days’ written notice to the Company. In the
event the Company terminates Executive’s employment hereunder
for Cause or Executive terminates her employment hereunder without
Good Reason, Executive shall be entitled to her Accrued Rights and
the Company shall have no further obligations to Executive under
this Agreement. The Accrued Rights shall be payable
on
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their normal payment
dates; provided that accrued but unused vacation time shall be paid
within 30 days following the date of termination of
Executive’s employment.
(ii) For purposes of this Agreement,
“ Cause ” means:
(A) Executive’s willful failure to substantially perform
Executive’s duties hereunder (other than due to physical or
mental illness) after written notice of such failure to Executive,
(B) Executive’s conviction of, or plea of guilty or
nolo contendere to a felony (or the equivalent of a felony
in a jurisdiction other than the United States) other than, in any
case, vicarious liability or traffic violations,
(C) Executive’s willful material breach of Sections 6,
7, or 9 hereof that, to the extent curable, is uncured by Executive
promptly following receipt of written notice given by the Company
of such breach, (D) Executive’s willful material
violation of the Company’s written policies of a material
nature that has a detrimental impact on the Company and that, to
the extent curable, is uncured by Executive promptly following
receipt of written notice given by the Company of such breach;
(E) Executive’s fraud or embezzlement with respect to
the Company; (F) Executive’s misappropriation or
misuse of funds or property belonging to the Company that is done
in bad faith and is more than de minimis in nature;
(F) Executive’s use of illegal drugs that interferes
with the performance of Executive’s duties hereunder; or
(G) Executive’s gross misconduct, whether or not done in
connection with employment, other than an action done in the good
faith belief that it was in the best interests of the Company, that
materially adversely affects the business or reputation of the
Company, its subsidiaries or Affiliates.
(iii) For purposes of this Agreement,
“ Good Reason ” means (A) any diminution in
Executive’s title or position or a material diminution in
Executive’s duties, authorities or responsibilities
(excluding for this purpose an insubstantial or inadvertent action
taken in good faith and which is remedied by the Company promptly
after receipt of notice thereof given by Executive); (B) the
assignment to Executive of duties inconsistent with her position
(excluding for this purpose an insubstantial or inadvertent action
taken in good faith and which is remedied by the Company promptly
after receipt of notice thereof given by Executive); (C) any
material breach by the Company of this Agreement, any
Exhibit hereto or any other agreement or letter executed
between the Company and the Executive simultaneously with or
following the date of this Agreement that specifically provides
that such agreement or letter is intended to modify or supplement
this Agreement, in each case that, to the extent curable, is
uncured by the Company promptly following receipt of written notice
thereof from Executive; (D) any reduction of Executive’s
Base Salary, Guaranteed Bonus or Annual Bonus opportunity;
(E) the transfer or relocation of Executive’s principal
place of employment to a location further in miles and/or travel
time from New York, New York than is Pleasantville, New York;
(F) any failure to re-elect Executive to the Board if the
Company is not public, or to nominate Executive for election to the
Board if the Company is public, or the removal of Executive from
the Board other than for cause in accordance with the
Company’s by-laws or in connection with a termination for
“Cause” under the terms of this agreement; or
(G) the failure of the Company to obtain the assumption of
this Agreement by any person, firm, corporation or other business
entity which at any time, whether by purchase, merger or otherwise,
directly or indirectly acquires all or substantially all of the
assets or business of the Company and the failure to deliver a copy
of the document effecting such assumption to the Executive upon
Executive’s written request.
(c) By the Company Other Than for
Cause or by Executive for Good Reason . The Company may
terminate Executive’s employment hereunder other than for
Cause (and other
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than due to
Disability) at any time upon thirty (30) days’ advance
written notice to Executive and Executive may terminate her
employment hereunder at any time upon thirty (30) days’
advance written notice to the Company. In the event of a
termination of Executive’s employment hereunder by the
Company other than for Cause or by Executive for Good Reason,
Executive shall be entitled to her Accrued Rights (payable on their
normal payment dates; provided that accrued but unused vacation
time shall be paid within thirty (30) days following the date of
termination of Executive’s employment) plus the following
benefits (collectively, the “ Separation Benefits
”): (i) a severance payment equal to two times the
sum of (A) Executive’s then current Base Salary and
(B) the Guaranteed Bonus, which amount shall be paid, subject
to the provisions of Section 16 hereof, in a lump-sum on the
53rd day following the date of termination; (ii) a Pro-Rata
Bonus, payable at such time as annual bonuses are ordinarily paid
to other senior executives of the Company in respect of the fiscal
year in which Executive’s termination occurs, but in no event
later than the end of the calendar year in which such fiscal year
ends; (iii) continuation of any fully insured health, dental
and vision insurance benefits and any life insurance benefits for
Executive and her dependents, for twelve (12) months following
termination of employment (at a cost no less favorable than that
applicable to other participants in the Company’s benefit
plans during such time); (iv) subject to the provisions of
Section 16 hereof, monthly payments to Executive of the
difference between Executive’s share of the monthly COBRA
premiums for any fully or partially self-funded health, dental and
vision plan coverage provided by the Company and the active
employee monthly contribution therefor, for twelve (12) months
following termination of employment (provided that any such
payments otherwise payable to Executive within the first 52 days
following such termination shall not be paid on the otherwise
scheduled payment date but shall instead accumulate and be paid on
the 53rd day following the date of termination); (v) an
additional twelve (12) months of vesting credit with respect to the
Stock Option. Notwithstanding the foregoing, unless, on or
prior to the 52nd day following the date of termination of
employment, Executive shall have signed the Release of Claims in
the form attached hereto as Exhibit E and such Release
of Claims shall have become effective in accordance with its terms,
(w) no payment shall be paid or made available to Executive
under clause (i) or (iv) of this Section 4(c),
(x) the Company shall be relieved of all obligations to make
any further payments, or provide or make available any further
benefits, to Executive pursuant to clause (ii) or
(iii) of this Section 4(c), (y) Executive shall be
required to repay the Company, in cash, within five
(5) business days after written demand is made therefor by the
Company, an amount equal to the value of any payments or benefits
received by Executive pursuant to clause (ii) or (iii) of
this Section 4(c) and (z) Executive shall forfeit
any portion of the Stock Option that vested pursuant to clause
(v) of Section 4(c). Notwithstanding anything in
this Agreement to the contrary, payment of any or all of the
Separation Benefits is expressly contingent upon the
Executive’s continued substantial compliance with the terms
and conditions of Sections 6, 7, 8 and 9 of this Agreement;
provided Executive had received notice thereof and failed
promptly to cure any such breach to the extent curable.
Executive recognizes that, except as expressly provided in this
Section 4 or pursuant to the terms of Executive’s equity
grant agreements, no compensation is owed to her after termination
of her employment.
(d) Expiration of Term . If
Executive’s employment shall terminate by reason of the
expiration of the Term as a result of either party giving notice of
non-extension of the Term to the other party pursuant to
Section 1(a), Executive shall be entitled to the Accrued
Rights. The Accrued Rights shall be payable on their normal
payment dates; provided that accrued but unused
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vacation time shall be
paid within 30 days following the date of termination of
Executive’s employment.
(e) Resignation from Board .
Upon termination of Executive’s employment for any reason,
and regardless of whether Executive continues as a consultant to
the Company, upon the Company’s request Executive agrees to
resign, as of the date of such termination of employment or such
other date requested, from the Board and any committees thereof
(and, if applicable, from the board of directors (and any
committees thereof) of any subsidiary or Affiliate of the Company)
to the extent Executive is then serving thereon.
(f) Amounts Due Under Plans
. Subject to the provisions hereof, the payment of any
amounts accrued under any benefit plan, program or arrangement in
which Executive participates shall be subject to the terms of the
applicable plan, program or arrangement, and any elections
Executive has made thereunder.
(g) Waiver of Notice . The
Board may waive any notice required of Executive and Executive may
waive any notice required of the Company under this Section 4
without liability, penalty or cost.
5. Acknowledgments .
(a) Executive acknowledges that the Company has expended and
shall continue to expend substantial amounts of time, money and
effort to develop business strategies, employee and customer
relationships and goodwill and build an effective
organization. Executive acknowledges that Executive is and
shall become familiar with the Company’s Confidential
Information (as defined below), including trade secrets, and that
Executive’s services are of special, unique and extraordinary
value to the Company, its subsidiaries and Affiliates.
Executive acknowledges that the Company has a legitimate business
interest and right in protecting its Confidential Information,
business strategies, employee and customer relationships and
goodwill, and that the Company would be seriously damaged by the
disclosure of Confidential Information and the loss or
deterioration of its business strategies, employee and customer
relationships and goodwill. The Company acknowledges that
Executive is a long serving executive in the industry and has
acquired significant industry experience and knowledge during her
career.
(b) Executive acknowledges (i) that
the business of the Company, its subsidiaries and Affiliates is
national in scope and without geographical limitation within the
United States and (ii) notwithstanding the jurisdiction of
formation or principal office of the Company, its subsidiaries and
Affiliates, or the location of any of their respective executives
or employees (including, without limitation, Executive), it is
expected that the Company and its subsidiaries and Affiliates will
have business activities and have valuable business relationships
within their respective industries throughout the United
States. Executive also agrees and acknowledges that the
potential harm to the Company of the non-enforcement of
Sections 6, 7, 8, 9 and 12 outweighs any potential harm to
Executive of its enforcement by injunction or otherwise. In
addition, the Company agrees and acknowledges that the potential
harm to the Executive of the non-enforcement of Section 12
outweighs any potential harm to the Company of its enforcement by
injunction or otherwise.
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(c) Executive acknowledges that she has
carefully read this Agreement and has given careful consideration
to the restraints imposed upon Executive by this Agreement, and is
in full accord as to the necessity of such restraints for the
reasonable and proper protection of the Confidential Information,
business strategies, employee and customer relationships and
goodwill of the Company and its subsidiaries and Affiliates now
existing or to be developed in the future. Executive
expressly acknowledges and agrees that each and every restraint
imposed by this Agreement is reasonable with respect to subject
matter, time period and geographical area. Executive further
acknowledges that although Executive’s compliance with the
covenants contained in Sections 6 and 7 may prevent Executive
from earning a livelihood in a business similar to the business of
the Company, Executive’s experience and capabilities are such
that Executive has other opportunities to earn a livelihood and
adequate means of support for Executive and Executive’s
dependents.
6. Restrictive Covenants .
(a) Noncompetition and Nonsolicitation .
Executive
agrees that Executive
shall not, while an employee of the Company and during the one-year
period following termination of employment (such one-year period,
the “ Restriction Period ”), directly or
indirectly, without the prior written consent of the
Company:
(i) engage in activities or businesses
within the United States on behalf of any Person that is in
competition with a portion of the Company’s business from
which the Company derives at least 15% of its revenues based on the
Company’s fiscal prior to the earlier of the activity or
termination (“ Competitive Activities ”),
including (A) selling goods or services of the type sold by
the Company or any of its subsidiaries; (B) soliciting or
attempting to solicit any customer or client or prospective
customer or client of the Company or any of its subsidiaries or
Limited Affiliates including, without limitation, actively sought
prospective customers or clients, to purchase any goods or services
of the specific type sold by the Company or any of its subsidiaries
from anyone other than the Company or any of its subsidiaries; and
(C) assisting any Person in any way to do, or attempt to do,
anything prohibited by (A) or (B) above; provided
, however, that the foregoing shall not prevent or be violated by
Executive’s service in a non-competitive portion of a company
or business enterprise which is engaged in Competitive Activities
with the Company or, as a result thereof, owning compensatory
equity in such a company or business enterprise engaged in
Competitive Activities; or
(ii) (A) solicit, recruit or hire
any employees of the Company or any of its subsidiaries or Limited
Affiliates or Persons who have worked for the Company or any of its
subsidiaries or Limited Affiliates in the prior 6 months;
(B) solicit or encourage any employee of the Company or any of
its subsidiaries or Limited Affiliates to leave the employment of
the Company or any of its subsidiaries or Limited Affiliates; or
(C) intentionally interfere with the relationship of the
Company or any of its subsidiaries or Limited Affiliates with any
Person who or which is employed by or otherwise engaged to perform
services for the Company or any of its subsidiaries or Limited
Affiliates. The restrictions in this
Section 6(a)(ii) shall not apply to (x) general
solicitations that are not specifically directed to employees of
the Company or any Limited Affiliate, (y) serving as a
reference at the request of an employee or (z) actions taken
in the good faith performance of her duties for the
Company.
(iii) Notwithstanding the foregoing
provisions of this Section 6(a), in the event
Executive’s employment hereunder terminates due to the
expiration of the Term, the Restriction
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Period shall not apply
unless the Company provides Executive with at least 60 days advance
written notice prior to the date of such expiration of its election
to have the Restriction Period apply and in connection therewith
agrees to pay the Executive $1,000,000 payable ratably over the
Restriction Period in equal monthly installments.
The
Restriction Period shall be tolled during (and shall be deemed
automatically extended by) any period in which Executive is
determined to be in violation of the provisions of this
Section 6 by a relevant trier of fact, but only with respect
to specific provisions to which the breach relates.
(b) Notwithstanding anything to the
contrary contained in this Agreement, the provisions of
Section 6(a) shall not be deemed breached as a result of
Executive’s passive ownership of: (i) less than an
aggregate of 3% of any class of securities of a Person engaged,
directly or indirectly, in Competitive Activities; provided
, however , that such stock is listed on a national
securities exchange, is quoted on the National Market System of
NASDAQ or is otherwise
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