Employment Agreement - Getty Images Inc. and Mark Torrance
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of this 9th day of February, 1998, by and
between GETTY IMAGES, INC., a Delaware corporation (the "COMPANY"), whose
principal executive offices are located at 500 North Michigan Avenue, Suite
1700, Chicago, Illinois 60611 and MARK TORRANCE, an individual whose mailing
address is 2013 Fourth Avenue, Seattle, Washington 98121 (the "EXECUTIVE").
W I T N E S S E T H:
WHEREAS, the Executive is presently serving as Chairman of the Board
and Chief Executive Officer of PhotoDisc, Inc. ("PHOTODISC"); and
WHEREAS, Getty Communications, plc, the predecessor to the Company, is
a party to a merger agreement dated as of September 15, 1997 (the "MERGER
AGREEMENT"), pursuant to which PhotoDisc shall merge into a merger subsidiary of
the Company; and
WHEREAS, the Company seeks to employ the Executive and the Executive
seeks to become employed by the Company; and
WHEREAS, both parties desire that the terms and conditions of the
Executive's employment with the Company be governed by the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. EMPLOYMENT AND DUTIES.
(a) GENERAL. The Company hereby employs the Executive, effective as
of the closing of the transactions contemplated by the Merger Agreement (the
"EFFECTIVE DATE"), and the Executive agrees upon the terms and conditions herein
set forth to serve, effective as of the Effective Date, as Co-Chairman of the
Board of Directors of the Company (the "BOARD"). In such capacity, the
Executive shall report directly and only to the Board. The Executive's
principal place of business shall be Seattle, Washington.
(b) SERVICES AND DUTIES. For so long as the Executive is employed
by the Company, the Executive shall devote his full business time to the
performance of his duties hereunder; shall faithfully serve the Company;
shall in all respects conform to and comply with the lawful and good faith
directions and instructions given to him by the Board as the same are
consistent with his status and the terms hereof; and shall use his best
efforts to promote and serve the interests of the Company. Specifically, the
Executive shall share equal duties and authority with his Co-Chairman and
Chief Executive Officer for the financial performance of
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the Company, the management of the Company's shareholders, developing
strategic alliances and partnerships and maximizing their commercial
benefits, communications to both internal and external audiences and external
relationships with business, industry and academic communities and strategic
leadership. In addition, the Executive shall be jointly responsible with his
Co-Chairman for chairing the Board and managing relationships with members
and provide leadership for the research and development function of the
Company. The Executive shall have a special emphasis on technology and
corporate culture. It is expressly acknowledged that the Executive may be
required to travel to London, England in order to perform his duties
hereunder.
(c) NO OTHER EMPLOYMENT. Except as provided below, for so long as
the Executive is employed by the Company, he shall not, directly or indirectly,
render services to any other person or organization for which he receives
compensation without the prior approval of the Board. No such approval will be
required if the Executive seeks to perform inconsequential services without
direct compensation therefor in connection with the management of personal
investments or in connection with the performance of charitable and civic
activities, provided that such activities do not contravene the provisions of
Section 6 hereof. In addition, the Company expressly agrees that the Executive
may continue his management activities relating to the Torrance Real Estate
Partnership, WestLake Marina, PDI LLP, and Marshall Building LLP; PROVIDED,
HOWEVER, that the foregoing shall not compromise in any way the Executive's
obligation to carry out his duties hereunder as set forth in Section 1(b).
(d) BOARD MEMBERSHIP. The Executive shall be a member of the Board
and of the Executive Committee. In addition, the Executive shall be entitled to
attend the meetings of all other committees of the Board, such as the Audit
Committee and the Compensation Committee, and shall be a member of any strategy
committee of the Board. After his initial term as director, the Company shall
nominate the Executive for reelection to the Board and shall use all reasonable
efforts to cause the Executive to be elected to such term.
2. TERM OF EMPLOYMENT. The term of the Executive's employment under
this Agreement (the "TERM") shall commence on the Effective Date and continue
until the second anniversary date of the Effective Date. Thereafter, the Term
shall continue until it is terminated by either party giving the other at least
twelve months' written notice of termination of the Term, with no such notice to
be given so as to expire before the third anniversary of the Effective Date.
3. COMPENSATION AND OTHER BENEFITS. Subject to the provisions of
this Agreement, the Company shall pay and provide the following compensation and
other benefits to the Executive during the Term as compensation for all services
rendered hereunder:
(a) SALARY. The Company shall pay to the Executive an annual salary
(the "SALARY") at the initial rate of $275,000 (retroactive to February 1,
1998), payable to the
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Executive in accordance with the normal payroll practices of the Company for
its executive officers as are in effect from time to time. The amount of the
Executive's Salary shall be reviewed annually by the Board on or about April
1 of each year during the Term beginning in the 1999 calendar year and may be
increased, but not decreased below such amount, on the basis of such review
and then-current market practices.
(b) ANNUAL BONUS. During the Term, the Executive shall be eligible
for each calendar year within the Term to participate in an annual incentive
bonus program established by the Company in accordance with the policies of
the Company, its subsidiaries and affiliates (hereinafter, collectively the
"GROUP") and subject to such terms and conditions as may be approved annually
by the Compensation Committee of the Board (the "COMPENSATION COMMITTEE").
Under the terms of the annual incentive bonus program, the Executive will be
afforded the opportunity to earn up to 50% of his Salary (the "BONUS") in
effect for the applicable calendar year if the Company achieves the
performance targets established by the Compensation Committee for that year,
to be paid on a pro-rata basis in the event that the Executive is employed
for less than twelve months of any calendar year within the Term (for
purposes of determining the 1998 Bonus, the Executive shall be deemed to have
commenced employment as of January 1, 1998).
(c) STOCK OPTIONS. Effective as of the Closing Date (as defined
in the Merger Agreement), the Company shall grant the Executive an option
(the "DEAL OPTION") to purchase 50,000 shares of the common stock of the
Company pursuant to the terms of the Company's 1998 Stock Incentive Plan (the
"OPTION PLAN"). The per share exercise price of the Deal Option shall equal
the fair market value of a share of Common Stock on the Closing Date, as
determined in accordance with the terms of the Option Plan. The Deal Option
shall vest and become exercisable in full on February 1, 1999. Also
effective as of the Effective Date, the Company shall grant the Executive an
option (the "OPTION") to purchase 500,000 shares of the common stock of the
Company pursuant to the terms of the Option Plan. The per share exercise
price of the Option shall equal the fair market value of a share of Common
Stock on the Closing Date, as determined in accordance with the terms of the
Option Plan. The Option shall vest and become exercisable as to 25% on
February 1, 1999; the remainder of the Option shall vest ratably on the first
day of each month over the following three years. Both the Deal Option and
the Option shall be subject to the terms of the Option Plan and to such other
terms and conditions as may be specified by the Compensation Committee in the
form of a standard option agreement between the Company and the Executive.
In the event that the Executive ceases to be an employee of the Company for
any reason other than (i) if he is terminated for "Cause", "Disability" or on
account of his death, or (ii) if he resigns without "Good Reason" (as each
such term is defined below), the vesting under both the Deal Option and
Option shall accelerate and all options thereunder shall become immediately
exercisable and the Executive shall be entitled to retain such options, for
the remainder of their respective terms, as if he had remained an employee of
the Company. In the event that the Executive ceases to be an employee of the
Company because he is terminated for Cause or resigns without Good Reason,
the Executive shall be entitled to retain the then-vested portion of such
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options as if he had remained an employee of the Company, but the unvested
portion of such options shall lapse. In the event of the Executive's death
or Disability (as defined below), the vesting under both the Deal Option and
Option shall accelerate and all options thereunder shall become immediately
exercisable and shall remain outstanding for a period of twelve (12) months.
(d) PENSION SCHEME AND LIFE INSURANCE. During the Term, the
Company shall pay, in addition to amounts payable under Sections 3(a) and (b)
above, an amount equal to 20% of the Executive's Salary through equal monthly
contributions in arrears, which amounts shall either be paid to the Executive
as additional compensation or, to the extent the Executive so elects with
respect to any such payments not yet earned by him, be paid into a
non-qualified deferred compensation arrangement that will enable him to
effectively defer such compensation for U.S. federal income tax purposes. In
addition, during the Term, the Company shall maintain a life insurance policy
on the life of the Executive for the benefit of the Executive's estate
providing a benefit equal to the greater of (i) $750,000 and (ii) four times
the Executive's Salary (and maximum Bonus).
(e) COMPANY AUTOMOBILE. During the Term, the Company will provide
the Executive with an automobile of such make and model as the Board deems
appropriate and suitable for his status with the Company for his sole use and
will reimburse the Executive for all costs and expenses incurred by the
Executive in connection with the use of that vehicle, or, at the Executive's
sole discretion, the Company shall pay an equivalent amount of such
perquisite to him as additional compensation.
(f) OTHER SPECIFIC BENEFITS. The Company shall install and pay
the rental and unit charges attributable to a dedicated business telephone
and/or ISDN line at his home. During the Term, the Company shall also pay
for the Executive's purchase, line charges, rental and unit charges for his
mobile phones. The Company shall provide the Executive with a fax machine
and computer modem to be installed at the Executive's home and a suitable
desktop and laptop computer, as well as all ancillary equipment and
maintenance therefor. In addition, the Company will pay for the cost of the
Executive's membership in or subscriptions to the internet service provider
of his choice, and such professional memberships and journals as are
appropriate to his duties under this Agreement.
(g) EXPENSES. The Company shall pay or reimburse the Executive
for all reasonable out-of-pocket expenses incurred by the Executive in
connection with his employment hereunder and expressly agrees that it will
reimburse the Executive for his business class airfare on international
flights which are over five hours in duration taken in connection with
Company business. Such expenses shall be paid upon the periodic submission
of invoices and shall be paid reasonably promptly after the date of such
invoice. The reimbursement of expenses under this Section 3(g) shall be
subject to the Executive's providing the Company with such documentation of
the expenses as the Company may from time to time reasonably request. The
Company also agrees that, in the event that the Executive is required
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to travel abroad in connection with the performance of his duties hereunder
for a period in excess of two weeks, the Company will reimburse the Executive
for the airfare, hotel and other transportation expenses only of his spouse
and minor children so that they may accompany him on such trip.
(h) WELFARE AND FRINGE BENEFITS. During the Term, the Executive
shall be eligible to participate in the Company's medical and disability plans
applicable to senior officers of the Company in accordance with the terms of
such plans as in effect from time to time. The Executive shall participate in
any disability plan of the Company that replaces his Salary under this Agreement
in the event that he suffers a Disability (as defined in Section 4(b) below).
(i) LONG-TERM INCENTIVE PROGRAM. During the Term, the Executive
shall participate in all long-term incentive plans and programs of the Company
that are applicable to its senior officers in accordance with their terms and in
a manner consistent with his position with the Company.
(j) HOLIDAYS. In addition to the usual public and bank holidays, the
Executive shall be entitled to thirty days' paid vacation annually, which shall
be taken at such times as are approved by the Board or the Executive Committee.
4. TERMINATION OF EMPLOYMENT. Subject to the notice and other
provisions of this Section 4, as well as the provisions of Section 5.13 of the
Bylaws of the Company, the Company shall have the right to terminate the
Executive's employment hereunder, and he shall have the right to resign, at any
time for any reason or for no stated reason.
(a) TERMINATION FOR CAUSE; RESIGNATION WITHOUT GOOD REASON. (i) If,
prior to the expiration of the Term, the Executive's employment is terminated by
the Company for Cause or if the Executive resigns from his employment hereunder
other than for Good Reason, he shall be entitled to payment of the pro rata
portion of his Salary, accrued Bonus and supplemental pension contributions as
described in Section 3(d) through and including the date of termination or
resignation as well as any unreimbursed expenses. Except to the extent required
by the terms of any applicable compensation or benefit plan or program or as
otherwise required by applicable law, the Executive shall have no rights under
this Agreement or otherwise to receive any other compensation or to participate
in any other plan, program or arrangement after such termination or resignation
of employment with respect to the year of such termination or resignation and
later years.
(ii) Termination for "CAUSE" shall mean termination of the Executive's
employment with the Company because of (A) willful or persistently repeated
material non-performance of the Executive's duties to the Company (other than by
reason of the incapacity of the Executive due to physical or mental illness)
after notice by the Board of such failure and
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the Executive's non-performance and continued, willful or persistently
repeated material non-performance after such notice, (B) the indictment of
the Executive for a felony offense, (C) fraud against the Group or any
willful misconduct that brings the reputation of the Group into serious
disrepute or causes the Executive to cease to be able to perform his duties,
(D) any other material breach by the Executive of any material term of this
Agreement, or (E) the Executive files for personal bankruptcy under the
United States Bankruptcy Code.
(iii) Termination of the Executive's employment for Cause shall be
communicated by delivery to the Executive of a written notice from the Company
stating that the Executive has been terminated for Cause, specifying the
particulars thereof and the effective date of such termination. The date of a
resignation by the Executive without Good Reason shall be the date specified in
a written notice of resignation from the Executive to the Company. The
Executive shall provide at least 90 days' advance written notice of resignation
without Good Reason.
(b) INVOLUNTARY TERMINATION. (i) If, prior to the expiration of the
Term, the Company terminates the Executive's employment for any reason other
than Disability or Cause or Executive resigns from his employment hereunder for
Good Reason (collectively hereinafter referred to as an "INVOLUNTARY
TERMINATION"), the Company shall pay to the Executive his Salary and Bonus
accrued up to and including the date of such Involuntary Termination, as well as
any unreimbursed expenses. In addition, the Company shall pay to the Executive
as severance (the "SEVERANCE PAYMENTS") within 30 days after the date of
termination a lump sum payment in an amount equal to the sum of his Salary, at
the rate in effect immediately prior to such Involuntary Termination, plus his
maximum Bonus as described in Section 3(b) and his supplemental pension
contributions as described in Section 3(d), in each case for the remainder of
the Term. Anything in this Agreement to the contrary notwithstanding, no
amounts shall be payable under this Section 4(b) if the Executive's employment
with the Company ends at the expiration of the Term in accordance with
Section 2.
(ii) In the event of the Executive's Involuntary Termination, the
Executive shall continue to participate on the same terms and conditions as are
in effect immediately prior to such termination or resignation in the Company's
health and medical plans provided to the Executive pursuant to Section 3(h)
above at the time of such Involuntary Termination for a period equal to the
longer of (A) two years following the Involuntary Termination or (B) the
remainder of the Term (the "CONTINUATION PERIOD"). Anything herein to the
contrary notwithstanding, the Company shall have no obligation to continue to
maintain during the Continuation Period any plan or program solely as a result
of the provisions of this Agreement but this obligation shall apply in respect
of any substitute or replacement plan.
(iii) Resignation for "GOOD REASON" shall mean resignation by
Executive because of (A) an adverse and material change in the Executive's
duties, titles or reporting responsibilities, (B) a material breach by the
Company of any term of the Agreement, (C) a reduction in the Executive's Salary
or bonus opportunity or the failure of the Company to pay
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the Executive any material amount of compensation when due, (D) failure by
the Company to nominate the Executive for reelection to the Board during the
Term, (E) the failure of the Executive to be reelected to the Board during
the Term, or (F) a relocation of the Executive's principal place of business
without his prior written consent. The Company shall have 30 business days
from the date of receipt of such notice to effect a cure of the material
breach described therein and, upon cure thereof by the Company to the
reasonable satisfaction of the Executive, such material breach shall no
longer constitute Good Reason for purposes of this Agreement.
(iv) The date of termination of employment without Cause shall be the
date specified in a written notice of termination to the Executive. The date of
resignation for Good Reason shall be the date specified in a written notice of
resignation from the Executive to the Company; PROVIDED, HOWEVER, that no such
written notice shall be effective unless the cure period specified in Section
4(b)(iii) above has expired without the Company having corrected, to the
reasonable satisfaction of the Executive, the event or events subject to cure.
(c) TERMINATION FOLLOWING A CHANGE IN CONTROL. In the event of a
Change in Control (defined as it is for purposes of the Option Plan), the
Executive shall have the right to resign his employment with the Company and
will be entitled to receive within 30 days a lump sum payment in an amount equal
to the Executive's Salary, at the rate in effect immediately prior to such
Involuntary Termination, plus his maximum Bonus as described in Section 3(b) and
his supplemental pension contributions as described in Section 3(d), in each
case for the remainder of the Term. In addition, the Executive shall continue to
participate on the same terms and conditions as are in effect immediately prior
to such resignation in the Company's health and medical plans provided to the
Executive pursuant to Section 3(h) above at the time of such resignation for the
a period equal to the longer of (A) two years following the resignation or (B)
the remainder of the Term (the "CIC CONTINUATION PERIOD"). Anything herein to
the contrary notwithstanding, the Company shall have no obligation to continue
to maintain during the CIC Continuation Period any plan or program solely as a
result of the provisions of this Agreement but this obligation shall apply in
respect of any substitute or replacement plan.
(d) TERMINATION DUE TO DISABILITY. In the event of the Executive's
Disability (as hereinafter defined), the Company shall be entitled to terminate
his employment upon providing the Executive with six months' prior written
notice. If the Company terminates the Executive's employment due to Disability,
the Executive shall be entitled to receive, for the remainder of the Term, his
Salary at the rate in effect immediately prior to his Disability, plus his
maximum Bonus as described in Section 3(b) and supplemental pension
contributions as described in Section 3(d), less any sums paid to the Executive
under any disability plan of the Company. In addition, the Executive shall
continue to be covered by the Company's health and medical benefit plans as
described in Section 3(h) for the longer of (A) two years or (B) the remainder
of the Term. As used in this Section 4(d), the term "DISABILITY" shall mean a
physical or mental incapacity that substantially prevents the Executive from
performing his
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duties hereunder and that has continued for at least six of the last twelve
months and that can reasonably be expected to continue indefinitely. Any
dispute as to whether or not the Executive is disabled within the meaning of
the preceding sentence shall be resolved by a physician reasonably
satisfactory to the Executive and the Company, and the determination of such
physician shall be final and binding upon both the Executive and the Company.
(e) DEATH. In the event of the Executive's death, the Executive's
Beneficiary shall be entitled to receive within 30 days a lump sum payment in an
amount equal to the Executive's Salary, at the rate in effect immediately prior
to his death, plus his maximum Bonus as described in Section 3(b) and
supplemental pension contributions as described in Section 3(d), in each case
for the remainder of the Term, less any death benefits which are provided to the
Executive's Beneficiary under the terms of any plan, program or arrangement
referred to in Section 3(d) or 3(h) applicable to the Executive at the time of
death. In addition, the Executive's spouse and then-eligible dependents shall
continue to participate on the same terms and conditions as are in effect
immediately prior to such termination or resignation in the Company's health and
medical plans provided pursuant to Section 3(h) above at the time of the
Executive's death for a period equal to the longer of (A) two years following
his death or (B) the remainder of the Term (the "DEATH CONTINUATION PERIOD").
Anything herein to the contrary notwithstanding, the Company shall have no
obligation to continue to maintain during the Death Continuation Period any plan
or program solely as a result of the provisions of this Agreement but this
obligation shall apply in respect of any substitute or replacement plan.
(f) BENEFICIARY. For purposes of this Agreement, except as provided
in Section 3(d) or 3(h), "BENEFICIARY" shall mean the person or persons
designated in writing by the Executive to receive benefits under a plan, program
or arrangement or to receive the balance of the Severance Payments, if any, in
the event of the Executive's death, or, if no such person or persons are
designated by the Executive, the Executive's estate. No Beneficiary designation
shall be effective unless it is in writing and received by the Company prior to
the date of the Executive's death.
5. LIMITATION ON PAYMENTS.
Notwithstanding anything herein to the contrary, if any of the
payments made hereunder would constitute a "PARACHUTE PAYMENT" (as defined in
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the
"Code")), and the net after-tax amount of the parachute payment is less than the
net after-tax amount if the aggregate payments to be made to the Employee were
three times his "BASE AMOUNT" (as defined in Section 280G(b)(3) of the Code),
less $1.00, then the aggregate of the amounts constituting the parachute payment
shall be reduced to an amount that will equal three times the base amount, less
$1.00. The determinations to be made with respect to this Section 5 shall be
made by an independent accounting firm of national standing (other than the
Company's regular auditors). The accounting firm shall be paid by the Company
for its services performed hereunder.
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6. PROTECTION OF THE COMPANY'S INTERESTS.
(a) NO COMPETING EMPLOYMENT. For so long as the Executive is
employed by the Company, and in circumstances where the Executive receives a
payment pursuant to Section 4(b), 4(c) or 4(d) or his employment is
terminated for Cause, and in no other circumstances, continuing for the
remainder of the Term (such period being referred to hereinafter as the
"RESTRICTED PERIOD"), the Executive shall not, without the prior written
consent of the Board, directly or indirectly, own an interest in, manage,
operate, join, control, lend money or render financial or other assistance to
or participate in or be connected with, as an officer, employee, partner,
stockholder, consultant or otherwise, any individual, partnership, firm,
corporation or other business organization or entity that competes with the
Group by providing any goods or services provided or under development by the
Group at the effective date of the Executive's termination of employment
under this Agreement; PROVIDED, HOWEVER, that this Section 6(a) shall not
proscribe the Executive's ownership, either directly or indirectly, of either
less than five percent of any class of securities which are listed on a
national securities exchange or quoted on the automated quotation system of
the National Association of Securities Dealers, Inc. or any limited
partnership investment over which the Executive has no control.
(b) NO INTERFERENCE. During the Restricted Period, in
circumstances where the Executive receives a payment pursuant to Section
4(b), 4(c) or 4(d) or his employment is terminated for Cause, and in no other
circumstances, the Executive shall not, whether for his own account or for
the account of any other individual, partnership, firm, corporation or other
business organization (other than the Company), intentionally endeavor to
entice away from the Group, or otherwise interfere with the relationship of
the Group with, any key person or team who is employed by or otherwise
engaged to perform services for the Group or any key person or team or entity
who is, or was within the then most recent twelve-month period, a customer,
client or supplier of the Group.
(c) SECRECY. The Executive recognizes that the services to be
performed by him hereunder are special, unique and extraordinary in that, by
reason of his employment hereunder, he may acquire confidential information
and trade secrets concerning the operation of the Group, the use or
disclosure of which could cause the Group substantial losses and damages
which could not be readily calculated and for which no remedy at law would be
adequate. Accordingly, the Executive covenants and agrees with the Company
that he will not at any time, except in performance of the Executive's
obligations to the Company hereunder or with the prior written consent of the
Board, directly or indirectly disclose to any person any secret or
confidential information that he may learn or has learned by reason of his
association with the Group. The term "CONFIDENTIAL INFORMATION" means any
information not previously disclosed to the public or to the trade by the
Group with respect to the Group's, products, facilities and methods, trade
secrets and other intellectual property, systems, procedures, manuals,
confidential reports, product price lists, customer lists, financial
information
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(including the revenues, costs or profits associated with any of
the Group's products), business plans, prospects or opportunities.
(d) EXCLUSIVE PROPERTY. The Executive confirms that all
confidential information is and shall remain the exclusive property of the
Group. All business records, papers and documents kept or made by the
Executive relating to the business of the Group shall be and remain the
property of the Group. Upon the termination of his employment with the
Company or upon the request of the Company at any time, the Executive shall
promptly deliver to the Company, and shall not without the consent of the
Board retain copies of, any written materials not previously made available
to the public, or records and documents made by the Executive or coming into
his possession concerning the business or affairs of the Group; PROVIDED,
HOWEVER, that subsequent to any such termination, the Company shall provide
the Executive with copies (the cost of which shall be borne by the Executive)
of any documents which are requested by the Executive and which the Executive
has determined in good faith are (i) required to establish a defense to a
claim that the Executive has not complied with his duties hereunder or (ii)
necessary to the Executive in order to comply with applicable law.
(e) ASSIGNMENT OF DEVELOPMENTS. All "DEVELOPMENTS" (as defined
below) that were or are at any time made, conceived or suggested by
Executive, whether acting alone or in conjunction with others, during
Executive's employment with the Group shall be the sole and absolute property
of the Group, free of any reserved or other rights of any kind on the part of
Executive. During Executive's employment and, if such Developments were made,
conceived or suggested by Executive during his employment with the Group,
thereafter, Executive shall promptly make full disclosure of any such
Developments to the Group and, at the Group's cost and expense, do all acts
and things (including, among others, the execution and delivery under oath of
patent and copyright applications and instruments of assignment) deemed by
the Group to be necessary or desirable at any time in order to effect the
full assignment to the Group of Executive's right and title, if any, to such
Developments. For purposes of this Agreement, the term "DEVELOPMENTS" shall
mean all data, discoveries, findings, reports, designs, inventions,
improvements, methods, practices, techniques, programs, concepts, and ideas,
whether or not patentable, relating to the activities of the Group of which
Executive is as of the date of this Agreement aware or of which Executive
becomes aware at any time during the Term, excluding any Development for
which no equipment, supplies, facilities or confidential information of the
Group was used and which was developed entirely on Executive's own time,
unless (i) the Development relates directly to the business of the Group,
(ii) the Development relates to actual or demonstrably anticipated research
or development of the Group, or (iii) the Development results from any work
performed by Executive for the Group (the foregoing is agreed to satisfy the
written notice and other requirements of Section 49.44.140 of the Revised
Code of Washington). It is understood that for purposes of this Section
6(e), the fact that an invention was created using equipment provided by the
Company for the Executive's personal use shall not create a presumption that
such invention is a "Development."
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(f) INJUNCTIVE RELIEF. Without intending to limit the remedies
available to the Company, the Executive acknowledges that a breach of any of
the covenants contained in this Section 6 may result in material irreparable
injury to the Group for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and that,
in the event of such a breach or threat thereof, the Company shall be
entitled to obtain a temporary restraining order and/or a preliminary or
permanent injunction restraining the Executive from engaging in activities
prohibited by this Section 6 or such other relief as may be required to
specifically enforce any of the covenants in this Section 6. Without
intending to limit the remedies available to the Executive, the Executive
shall be entitled to seek specific performance of the Company's obligations
under this Agreement.
(g) The Executive shall during the continuance of his employment
(and shall procure that his spouse or partner and his minor children shall
comply) comply with all applicable rules of law, stock exchange regulations
and codes of conduct applicable to employees, officers and directors of the
Company and any company which is a holding company or a subsidiary of the
Company or a subsidiary of the Company's holding company (an "ASSOCIATED
COMPANY") for the time being in force in relation to dealings in the shares,
debentures and other securities of the Company or any Associated Company or
any unpublished price sensitive information affecting the securities of any
other company with which the Company has business dealings (provided that the
Executive shall be entitled to exercise any options granted to him under any
share option scheme established by the Company or any Associated Company
subject to the rules of such scheme).
(h) The Executive shall in relation to any dealings in securities
of overseas companies comply with all laws of any foreign state affecting
dealings in the securities of such companies and all regulations of any
relevant stock exchange on which such dealings take place.
(i) During the continuance of his employment, the Executive shall
observe the terms of any policy issued by the Company in relation to
payments, rebates, discounts, gifts, entertainment or other benefits
("GRATUITIES") from any third party in respect of any business transacted or
proposed to be transacted (whether or not by him) by or on behalf of the
Group or any Associated Company.
7. GENERAL PROVISIONS.
(a) SOURCE OF PAYMENTS. All payments provided under this
Agreement, other than payments made pursuant to a plan which provides
otherwise, shall be paid in cash from the general funds of the Company, and
no special or separate fund shall be established, and no other segregation of
assets made, to assure payment. The Executive shall have no right, title or
interest whatever in or to any investments which the Company may make to aid
the Company in meeting its obligations hereunder. To the extent that any
person acquires a right to receive payments from the Company hereunder, such
right shall be no greater than the right
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of an unsecured creditor of the Company; PROVIDED, HOWEVER, that this
provision shall not be deemed to waive or abrogate any preferential or other
rights to payment accruing to the Executive under applicable bankruptcy laws
by virtue of the Executive's status as an employee of the Company.
(b) NO OTHER SEVERANCE BENEFITS. Except as specifically set forth in
this Agreement, the Executive covenants and agrees that he shall not be entitled
to any other form of severance benefits from the Company, including, without
limitation, benefits otherwise payable under any of the Company's regular
severance policies, in the event his employment hereunder ends for any reason
and, except with respect to obligations of the Company expressly provided for
herein, the Executive unconditionally releases the Company and its subsidiaries
and affiliates, and their respective directors, officers, employees and
stockholders, or any of them, from any and all claims, liabilities or
obligations under this Agreement or under any severance or termination
arrangements of the Company or any of its subsidiaries or affiliates for
compensation or benefits in connection with his employment or the termination
thereof.
(c) TAX WITHHOLDING. Payments to the Executive of all compensation
contemplated under this Agreement shall be subject to all applicable tax
withholding.
(d) NOTICES. Any notice hereunder by either party to the other shall
be given in writing by personal delivery, or certified mail, return receipt
requested, or (if to the Company) by telex or facsimile, in any case delivered
to the applicable address set forth below:
(i) To the Company: Getty Images, Inc.
500 North Michigan Avenue
Suite 1700
Chicago, Illinois 60611
With copies to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attn.: John J. Cannon, III, Esq.
Shearman & Sterling
555 California Street
San Francisco, CA 94104
Attn.: Christopher D. Dillon, Esq.
Clifford Chance
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13
200 Aldersgate Street
London EC1A 4JJ England
Attn.: Michael Francies
(ii) To the Executive: Mark Torrance
2013 Fourth Avenue
Seattle, Washington 98121
or to such other persons or other addresses as either party may specify to
the other in writing.
(e) REPRESENTATION BY THE EXECUTIVE. The Executive represents and
warrants that his entering into this Agreement does not, and that his
performance under this Agreement and consummation of the transactions
contemplated hereby will not, violate the provisions of any agreement or
instrument to which the Executive is a party, or any decree, judgment or
order to which the Executive is subject, and that this Agreement constitutes
a valid and binding obligation of the Executive in accordance with its terms.
Breach of this representation will render all of the Company's obligations
under this Agreement void AB INITIO.
(f) LIMITED WAIVER. The waiver by the Company or the Executive of
a violation of any of the provisions of this Agreement, whether express or
implied, shall not operate or be construed as a waiver of any subsequent
violation of any such provision.
(g) ASSIGNMENT; ASSUMPTION OF AGREEMENT. No right, benefit or
interest hereunder shall be subject to assignment, encumbrance, charge,
pledge, hypothecation or setoff by the Executive in respect of any claim,
debt, obligation or similar process. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business or assets of the Company to
assume expressly and to agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no
such succession had taken place.
(h) AMENDMENT; ACTIONS BY THE COMPANY. This Agreement may not be
amended, modified or canceled except by written agreement of the Executive
and the Company. Any and all determinations, judgments, reviews,
verifications, adjustments, approvals, consents, waivers or other actions of
the Company required or permitted under this Agreement shall be effective
only if undertaken by the Company pursuant to authority granted by a
resolution duly adopted by the Board; PROVIDED, HOWEVER, that by resolution
duly adopted in accordance with this Section 7(h), the Board may delegate its
responsibilities hereunder to one or more of its members other than the
Executive.
(i) SEVERABILITY. If any term or provision hereof is determined
to be invalid or unenforceable in a final court or arbitration proceeding,
(i) the remaining terms and provisions hereof shall be unimpaired and (ii)
the invalid or unenforceable term or provision shall be deemed replaced by a
term or provision
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14
that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.
(j) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (determined
without regard to the choice of law provisions thereof).
(k) ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the matters
covered hereby and supersedes all prior agreements and understandings of the
parties with respect to the subject matter hereof.
(l) HEADINGS. The headings and captions of the sections of this
Agreement are included solely for convenience of reference and shall not
control the meaning or interpretation of any provisions of this Agreement.
(m) COUNTERPARTS. This Agreement may be executed by the parties
hereto in counterparts, each of which shall be deemed an original, but both
such counterparts shall together constitute one and the same document.
(n) DISCIPLINARY AND GRIEVANCE PROCEDURES. For statutory
purposes, there is no formal disciplinary procedure in relation to the
Executive's employment. The Executive shall be expected to maintain the
highest standards of integrity and behavior. If the Executive has any
grievance in relation to his employment or is not satisfied with any
disciplinary procedure taken in relation to him, he may apply in writing
within 14 days of that decision to the Board, whose decision shall be final.
The foregoing shall not be construed, however, to limit the Executive's
remedies at law or otherwise.
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15
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the day and year first written above.
GETTY COMMUNICATIONS, INC.
By:
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Name:
Title:
EXECUTIVE
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Mark Torrance