Exhibit 10.24
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.
2
(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).
3
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.
4
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
5
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
6
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
7
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.
8
(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
9
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
,
|
