Resignation Agreement - Getty Images Inc. and Mark Torrance
GETTY IMAGES, INC.
September 28, 1998
Mark Torrance
2013 Fourth Avenue
Seattle, Washington 98121
Dear Mr. Torrance:
This Agreement (this "Agreement"), dated as of September 28, 1998, reflects
our mutual agreement concerning your resignation as an officer and employee of
Getty Images, Inc., a Delaware corporation (the "Company"), including your
position as Co-Chairman of the Board of Directors (the "Board"), and your
appointment as Vice-Chairman of the Board, in accordance with the terms and
conditions set forth below.
1. RESIGNATION AND APPOINTMENT. By signing this Agreement, effective as
of September 28, 1998 (the "Effective Date"), you hereby agree to resign without
further action by the parties hereto from your position as Co-Chairman of the
Board and a member of the Executive Committee and from each other position in
which you serve as an officer or employee of the Company. In this regard, you
will vacate any offices that you may have in any Company building or buildings,
including, but not limited to, your office in Seattle, Washington. You will have
a reasonable opportunity on and following the Effective Date to remove and take
with you from your offices at the Company your personal property, equipment,
records and files (in whatever form), effects and belongings, and copies of any
other documents, records, and files that you and the Company mutually agree are
appropriate for you to have. Representatives of the Company will be made
available to you to assist you with this process. Both you and the Company will
use your respective best efforts to effect this vacation of the offices promptly
and in a seemly and proper manner. All equipment located in a home of yours and
provided pursuant to Section 3(f) of the Employment Agreement will be yours
without charge.
Upon the Effective Date you will remain a member of the Board and become
its Vice Chairman. You hereby acknowledge that the Vice Chairmanship is a
non-executive, non-employee position with the Company. In accordance with
Section 2.01 of the Stockholders' Agreement among the Company's stockholders,
dated as of February 9, 1998, so long as any combination of you, PDI, L.L.C. and
Wade Torrance beneficially own not less than the greater of (a) 3,000,000 shares
of the Company's $.01 par value common stock (the "Common Stock"), subject to
equitable adjustments in the event of stock splits, stock dividends and similar
events, and (b) such number of shares of Common Stock as is equal to 2% of the
then outstanding shares of Common Stock, the Company will be obligated, unless
you advise it otherwise, to nominate you for reelection, and to use all
reasonable efforts to cause you to be elected to its Board.
2. TERMINATION OF PRIOR AGREEMENTS AND UNDERSTANDINGS. As of the date
hereof, subject to fulfillment by the Company of its obligations under this
Agreement, all written or oral agreements or understandings between you and the
Company regarding your employment with the Company are terminated and of no
further force and effect, and this Agreement shall supersede all prior
agreements or understandings between you and the Company regarding your
employment, including, without limitation, the Employment Agreement between you
and the Company, dated as of February 9, 1998 (the "Employment Agreement").
3. STRATEGIC OVERSIGHT COMMITTEE; BOARD GUIDELINES. Subject to your
execution of this Agreement and your compliance with its terms, the Company
covenants that:
(a) As soon as reasonably practicable following the Effective Date, the
Board shall form a Strategic Oversight Committee (the "Strategic
Committee") that will render advice to the Company's management (the
"Management") on all of the Company's major strategic initiatives,
including those relating to the new products or services and
acquisitions, mergers and other business combinations. You and Mark
Getty will be members of the Strategic Committee, and the Board
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will determine in its discretion the additional members,
responsibilities and procedures of the Strategic Committee.
(b) As soon as reasonably practicable following the Effective Date, the
Board shall establish a set of guidelines (the "Guidelines")
concerning the relationship and communications between the Board and
the Management for the purposes of enabling the Board and the
Management to better carry out their respective duties and
responsibilities to the Company and its stockholders, including their
duties of care and loyalty.
4. NO AGENCY. Nothing contained in this Agreement shall be construed as
creating an agency relationship between you and the Company and, without prior
consent of or direction from an officer of the Company with the proper authority
to exercise such consent or direction, you will have no authority hereunder to
bind the Company or to speak or make any commitments on the Company's behalf.
You agree that you will not take any action in connection with your membership
and position on the Board or the Strategic Committee which you reasonably
believe would cause any third party to assume that you have such authority.
5. PAYMENTS AND BENEFITS IN CONNECTION WITH YOUR RESIGNATION. Subject to
the remedies for breach set forth in Section 8, the Company shall pay and
provide to you the following payments and benefits.
(a) Contract Termination and Release Payments. As soon as practicable (but
in no event later than October 28, 1998), the Company shall pay to you a lump
sum of $560,000.00 as consideration for the termination of your employment
relationship with the Company under the Employment Agreement and the release of
the Company Parties (as hereinafter defined) included in Section 10 hereof.
(b) Accrued Compensation; Bonus. As soon as practicable (but in no event
later than October 28, 1998), the Company agrees to pay you (i) any salary and
deferred compensation accrued pursuant to the Employment Agreement for the
period beginning on September 15, 1998 and ending on the Effective Date, and
(ii) a lump sum payment of $73,333.33 representing the portion of your bonus
earned in 1998 through and including the Effective Date.
(c) Covenant Payment. As soon as practicable (but in no event later than
October 28, 1998), the Company shall pay to you a lump sum of $530,833.00 as
consideration for the covenants included in Section 7 hereof.
(d) Stock Options. After the Effective Date, you shall be entitled to hold
and exercise the stock options granted to you pursuant to the Company's 1998
Stock Incentive Plan, including the Option and the Deal Option (as these terms
are defined in the Employment Agreement) in accordance with the stock option
agreement between you and the Company, dated as of February 9, 1998 (the "Option
Agreement"), as if you had continued to be an employee of the Company. The
Option Agreement provides that you may exercise any vested options until
February 1, 2008. In addition, as long as you comply with the restrictions
described in Section 7 hereof, such options will vest in accordance with the
following schedule: 175,000 options will vest on November 1, 1998 and the
remaining 375,000 options will vest at a rate of 15,000 options per month.
(e) Continuation of Benefits. Beginning on the Effective Date and
continuing until September 27, 2000 (the "Benefits Termination Date"), you will
continue to participate, at the Company's expense, in the health and medical
plans of the Company, on the same terms and conditions as are in effect
immediately prior to the Effective Date. Thereafter, you may continue to
participate in the Company's group health insurance program in accordance with
Section 4980B(f) of the Internal Revenue Code of 1986, as amended (the "Code"),
at your expense. Anything herein to the contrary notwithstanding, the Company
shall have no obligation to continue or maintain, during the period preceding
the Benefits Termination Date, 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) Life Insurance. If you so elect, the life insurance policy maintained
by the Company pursuant to Section 3(d) of the Employment Agreement will, to the
extent permitted by its terms, be assigned and transferred to you.
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(g) Expenses. As soon as practicable (but in no event later than October
28, 1998), the Company will pay to you a lump sum of $70,000.00 as reimbursement
for the costs, fees and expenses (i) incurred in connection with the merger of
PhotoDisc, Inc. and Print Merger, Inc. and still remaining unreimbursed, and
(ii) associated with the termination of your employment and reaching this
Agreement.
6. NO OTHER PAYMENTS OR BENEFITS. Except as otherwise expressly provided
herein, you hereby acknowledge and agree that you are not entitled to any other
compensation or benefits from the Company in connection with your resignation of
employment or otherwise and that, except as expressly set forth herein, you are
not entitled to any severance or similar benefits under any plan, program,
policy or arrangement, whether formal or informal, written or unwritten, of the
Company.
7. PROTECTION OF THE COMPANY'S INTERESTS. In partial consideration of
the payments and benefits to be paid and provided to you in accordance with
Section 5 above, you hereby agree to abide by the terms and covenants included
in this Section 7, which you acknowledge and agree are necessary to protect the
interests of the Company and are reasonable in scope and duration. The
activities described in this Section 7 shall be permitted and prohibited
regardless of whether undertaken by you in an individual or representative
capacity, and regardless of whether performed for your own account or for the
account of any other individual, partnership, firm, corporation, or other
business organization (other than the Company).
(a) You agree that during the period beginning on the Effective Date and
ending on February 9, 2001 (the "Restricted Period"), you shall not, without the
prior 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
Company, its subsidiaries and affiliates (collectively, the "Group") by
providing any goods or services provided or under development by the Group at
the Effective Date; provided, however, that this Section 7(a) shall not
proscribe your ownership, directly or indirectly, of either (i) less than five
percent of any 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 (ii) any limited partnership investment over which
you have no control.
(b) No Interference. You agree that during the Restricted Period, you
shall not, whether for your own account or for the account of any other
individual, partnership, firm, corporation or other business organization,
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 (other than your
current assistant, Debbie Pfeifer) or any key person, team or entity who is, or
was within the most recent twelve-month period, a customer, client or supplier
of the Group.
(c) Secrecy. You understand and acknowledge that in the course of your
employment, you acquired "Confidential Information" (as defined below) 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, you
covenant and agree with the Company that you will not, at any time, except with
the prior written consent of the Board, directly or indirectly disclose to any
person any secret or confidential information that you have learned by reason of
your association with the Group.
"Confidential Information" shall mean 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 (including the revenues, costs or
profits associated with any of the Group's products), business plans, prospects
or opportunities.
(d) Exclusive Property. You confirm that all Confidential Information is
and shall remain the exclusive property of the Group. All business records,
papers and documents kept or made by you relating to the business of the Group
shall be and remain the property of the Group. You 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 you or coming into
your possession concerning the business or affairs of the Group;
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provided, however, that nothing herein will require you to surrender documents
that the Company reasonably believes are necessary for you to retain in your
capacity as a director of the Company; provided, further, that the Company
hereby agrees to provide you with copies (the cost of which shall be borne by
you) of any documents which you request and which you have determined in good
faith are (i) required to establish a defense to a claim that you have not
complied with your duties as an officer of the Company or (ii) necessary to you
in order to comply with applicable law.
(e) Assignment of Developments. All "Developments" (as defined below) that
were at any time made, conceived or suggested by you, whether acting alone or in
conjunction with others, during or as a result of your 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 your part. You acknowledge and confirm
that if such Developments were made, conceived or suggested by you during or as
a result of your employment relationship with the Group, you had and complied
with an affirmative obligation to make prompt and full disclosure of any such
Developments to the Group and, at the Group's cost and expense, to 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 your right and title, if any, to such Developments.
"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 present or
planned activities, or future activities, of the Group of which you are aware as
of the date of this Agreement, excluding any Development for which no equipment,
supplies, facilities or confidential information of the Group was used and which
was developed entirely on your 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 you 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 8(e), the fact that an invention was created using equipment
provided by the Company for your personal use shall not create a presumption
that such invention is a "Development." The parties hereto acknowledge and agree
that "Developments" shall not be construed to include any data, discoveries,
findings, reports, designs, inventions, improvements, methods, practices,
techniques, developments, programs, concepts or ideas of which you became aware
prior to your employment with the Company (each a "Pre-Employment Development");
provided, however, that any enhancement, improvement, refinement or any other
modification to any Pre-Employment Development relating to the present or
planned activities, or any future activities of which you are aware, or the
products and services of the Company of which you became aware during the course
of your employment with the Company shall be construed to be a Development.
(f) Extension of Restricted Period. The Restricted Period shall be
extended by the length of any period during which you are in breach of any of
the terms of this Section 7.
(g) As soon as practicable after the Effective Date, other than as agreed
upon pursuant to Sections 1 and 5(d) of this agreement, you shall return to the
Group all property of the Group then in your possession and all property made
available to you in connection with your service to the Group, including,
without limitation, your Company credit cards, any and all records, drawings,
manuals, reports, papers and documents kept or made by you in connection with
your employment as an officer or employee of the Company, all computer hardware
or software, files, memoranda, correspondence, vendor and customer lists,
financial data, keys and security access cards, and any other materials or
documents described in Section 7(c) above.
(h) Each of the parties hereto hereby agrees to keep the terms of this
Agreement and all communications between either party and its respective counsel
regarding the same and any and all events, allegations, actions and
circumstances related to your resignation from the Company in strict confidence.
The form of the Company's press release to be issued in connection with your
resignation is attached as Exhibit A to this Agreement.
8. REMEDIES. Without intending to limit the remedies available to the
Company, you acknowledge that a breach of any of the covenants contained in
Section 7 may result in material irreparable injury to the
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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 you
from engaging in activities prohibited by Section 7 or such other relief as may
be required to specifically enforce any of the covenants in Section 7. Without
intending to limit the remedies available to you, you shall be entitled to seek
specific performance of the Company's obligations under this Agreement.
9. UNFAVORABLE COMMENTS; STATEMENTS REGARDING YOUR RESIGNATION;
CONFIDENTIALLY. (a) You agree to refrain from making now or at any time in the
future any false, derogatory or defamatory comment, statement or other
communication concerning the Group, its products, its services or any current or
former directors, officers or employees of the Group to any third party,
including, without limitation, the press, employees of the Company and any
individual or entity with whom you or the Company has a current or prospective
business relationship.
(b) The Company agrees to refrain from making now or at any time in the
future any false, derogatory or defamatory comment, statement or other
communication concerning you or your employment relationship with the Company to
any third party, including, without limitation, the press, employees of the
Company and any individual or entity with whom you or the Company has a current
or prospective business relationship.
(c) You and the Company hereby agree that you have resigned from your
employment with the Company pursuant to a mutually acceptable separation
agreement, the terms of which are confidential, and that, upon inquiry regarding
your resignation by any third party, including, without limitation, employees of
the Company, customers of the Company and the press, such inquirer shall not be
given information which is contrary to or violates this Section 9. Exhibit A to
this Agreement sets forth a press release regarding your termination to which
both of us have agreed and which will be used, to the exclusion of any other
such release, to announce your resignation.
10. MUTUAL RELEASE. (a) For purposes of this Mutual Release, "Employee
Parties" means you, your family members, your estate, your beneficiaries, your
heirs and your assigns and the estate, beneficiaries, heirs and assigns of each
of the foregoing; "Company Parties" means the Company (as defined in the first
paragraph of this Agreement) and each of its present, former and future
directors, officers, employees, agents, attorneys, heirs and assigns. The
Employee Parties and the Company Parties together shall hereinafter be referred
to as the "Released Parties."
(b) In recognition of the mutual consideration set forth herein, the
receipt and adequacy of which are herein acknowledged, and intended to be
legally bound hereby, the Company Parties, on the one hand, and the Employee
Parties, on the other hand, hereto do hereby release and discharge each other
from any and all claims, actions, causes of action, suits, costs, controversies,
judgements, decrees, verdicts, damages, liabilities, attorneys' fees, covenants,
contracts, and agreements that any of the Employee Parties or Company Parties
may have, or in the future may possess, with respect to each other, and arising
out of or directly or indirectly relating to your employment by the Company,
including, but not limited to, any claims arising under Title VII of the Civil
Rights Act of 1964, the Rehabilitation Act of 1973, the Americans with
Disabilities Act of 1990, the Civil Rights Act of 1866, the Civil Rights Act of
1991, the Employee Retirement Income Security Act of 1974, the Family Medical
Leave Act of 1993, or any other federal or state or local law, whether such
claim arises under statute, common law or in equity, and whether or not any of
the Released Parties are presently aware of the existence of such claim, damage,
action or cause of action, suit or demand. The Company Parties, on the one hand,
and the Employee Parties, on the other, also do forever release, discharge and
waive any right they may have to recover in any proceeding brought by any
federal, state or local agency against any other party hereto to enforce any
laws. Each of the parties hereto agrees that the value received as described in
this Agreement shall be in full satisfaction of any and all claims, actions or
causes of action for payment or other benefits of any kind that any party or
Released Parties hereto may have against another party hereto and or any
corresponding Released Parties.
11. ACKNOWLEDGMENT. By signing this Agreement, you hereby acknowledge and
confirm that you were advised by the Company in connection with your resignation
to consult with an attorney of your choice prior to signing this Agreement and
to have such attorney explain to you the terms of this Agreement.
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12. ACCEPTANCE. You may indicate your acceptance of this Agreement by
signing and dating both copies of this Agreement and delivering one such copy to
the Company.
13. TAX CONSIDERATIONS. Any payments made to you under this Agreement
shall be reduced by the full amount legally required to be withheld for federal,
state or local income or other payroll tax purposes by the Company.
14. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware without regard to the choice
of law provisions thereof.
15. SUCCESSORS. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of its business and/or assets to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
16. SEVERABILITY. Each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
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Your signature on the line below constitutes your agreement with each
provision contained herein.
GETTY IMAGES, INC.
By:
--------------------------------------
Name:
Title:
ACCEPTED AND AGREED:
Mark Torrance
Date: September 28, 1998
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EXHIBIT A
COMPANY PRESS RELEASE
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