EXHIBIT (10l)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement"), made
and entered into and to become effective on the 20th day of November, 2002 (the
"Effective Date"), by and between XXXXXXX CORPORATION, an Alabama corporation
(the "Company"), and XXXXXXXX X. XXXXXXX (the "Executive").
R E C I T A L S:
WHEREAS, the Company and the Executive entered into that certain
Employment Agreement dated November 20, 1998, which has a term through and
including November 19, 2002; and
WHEREAS, the Company and the Executive entered into that certain Tier I
Change-of-Control Employment Agreement dated as of December 19, 2001 (the
"Change-of-Control Employment Agreement") to ensure that the Company will have
the continued service of Executive, to reduce the distraction of Executive that
would result from the personal uncertainties caused by a pending or threatened
change of control of the Company, and to provide Executive with compensation and
benefits upon a change of control which ensure that the expectations of
Executive will be satisfied and are competitive with those of similarly-situated
corporations;
WHEREAS, the Company and the Executive desire to amend and restate the
Employment Agreement and to include therein the material provisions of the
Change-of-Control Employment Agreement as set forth herein;
WHEREAS, the Company and Executive agree that the Agreement, as set
forth herein, shall supersede and replace the Change-of-Control Employment
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations herein and the compensation the Company agrees herein to pay the
Executive, and of other good and valuable consideration, the receipt of which is
hereby acknowledged, the Company and the Executive agree as follows:
ARTICLE 1. EMPLOYMENT OF EXECUTIVE
Subject to the terms and conditions set forth in this Agreement, the
Company hereby employs the Executive and the Executive hereby accepts such
employment for the period stated in ARTICLE 3 of this Agreement.
ARTICLE 2. POSITION, RESPONSIBILITY AND DUTIES
2.1 Position and Responsibilities. During the Term (as defined in
Section 3.1), the Executive shall serve as President and Chief Operating Officer
of the Company on the conditions herein provided. The Executive shall report to
the Chief Executive Officer of the Company (the "CEO") and provide such
executive services in the management of the Company's business not
inconsistent with his position and the provisions of Section 2.2 as shall be
assigned to him from time to time by the CEO.
2.2 Duties. During the Term and except for illness and reasonable
vacation periods, the Executive shall devote his full business time, attention,
skill, energies and efforts to the faithful performance of his duties hereunder
and to the business and affairs of the Company and any subsidiary or affiliate
of the Company, such duties being those customary to executives at the same
level in companies of similar size.
2.3 Other Activities. Executive may (a) serve on corporate, civic
or charitable boards or committees, (b) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (c) manage personal
investments, so long as such activities are consistent with the policies,
practices or procedures (collectively, the "Policies") of the Company at the
Effective Date and do not significantly interfere with the performance of
Executive's duties under this Agreement. To the extent that any such activities
have been conducted by Executive immediately prior to the Effective Date and
were consistent with the Policies of the Company at the Effective Date, the
continued conduct of such activities (or activities similar in nature and scope)
after the Effective Date shall not be deemed to interfere with the performance
of Executive's duties under this Agreement.
ARTICLE 3. TERM
3.1 Term of Employment. The term ("Term") of the Executive's
employment under this Agreement shall commence on the Effective Date and shall
continue until the earliest to occur of the following dates (the "Termination
Date"): (a) November 19, 2005 (or, if later, the date to which this date is
extended under the following sentence) or if later, the third anniversary of the
Change of Control (as defined below); (b) the date of death of the Executive;
(c) the Disability Effective Date (as defined in Section 7.1) in the event of
"Total Disability" of the Executive (as defined in Section 7.4); (d) the
effective date of a termination of the Executive's employment hereunder, by the
Company, including any termination by the Company for Cause (as defined in and
pursuant to Sections 3.2 and 3.4); or (e) the effective date of the Executive's
resignation from his employment hereunder, including but not limited to
termination by the Executive for Good Reason (as defined in and pursuant to
Sections 3.3 and 3.4). Commencing on the first anniversary of the Effective
Date, the November 19, 2005 date shall automatically be changed on such date and
on each day thereafter to the next following date until the Company or the
Executive, at any time after the first anniversary of the Effective Date,
delivers written notice (an "Expiration Notice") to Executive or Company, as
applicable, that the date shall not change on or after the date specified in the
Expiration Notice; provided that such date specified in the Expiration Notice is
not prior to the date in effect at the time of the delivery of the Expiration
Notice.
3.2 Termination for Cause; Automatic Termination.
(a) The Company may terminate Executive's employment for
Cause solely in accordance with all of the substantive and procedural
provisions of this Section 3.2.
(b) For purposes of this Agreement, "Cause" means any one
or more of the following:
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(i) Executive's conviction of a felony other
than those felonies involving use of an automobile in
violation of any vehicle statute and excluding any liability
which is based on acts of the Company for which Executive is
responsible solely as a result of his office(s) with the
Company, provided that (A) he was not directly involved in
such acts and either had no prior knowledge of such intended
actions or promptly acted reasonably and in good faith to
attempt to prevent the acts causing such liability or (B) he
did not have a reasonable basis to believe that a law was
being violated by such acts;
(ii) Final determination (which for purposes of
this paragraph shall mean the exhaustion of all available
remedies and appeals by the Executive or the Executive's
refusal to pursue such remedies and appeals) in any action the
effect of which is to permanently enjoin Executive from
fulfilling his duties under this Agreement;
(iii) Executive's willful or intentional material
breach of this Agreement;
(iv) Executive's gross negligence in performing
his duties under this Agreement;
(v) Executive's willful or intentional
misconduct in the performance of his duties under this
Agreement;
Provided, however, that for purposes of clauses (i) through (v), Cause
shall not include any one or more of the following:
(A) Executive's bad judgment or negligence;
(B) any act or omission believed by Executive in good
faith to have been in or not opposed to the interest of the Company
(without intent of Executive to gain, directly or indirectly, a profit
to which Executive was not legally entitled);
(C) any act or omission by Executive with respect to
which a determination could properly have been made by the Board of
Directors of the Company (the "Board") that Executive met the
applicable standard of conduct for indemnification or reimbursement
under the Company's by-laws, any applicable indemnification agreement
or arrangement (including but not limited to any insurance policy for
which there is applicable coverage), or applicable law, in each case in
effect at the time of such act or omission; or
(D) any act or omission by Executive with respect to
which the Company gives Executive a Notice of Consideration (as defined
below) more than six months after the earliest date on which any member
of the Board, not a party to the act or omission, knew or should have
known of such act or omission; and
further provided that, if a breach of the Agreement involved an act, or
a failure to act, which was done, or omitted to be done, by Executive
in good faith and with a reasonable belief that Executive's act, or
failure to act, was in the best interests of the Company or
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was required by applicable law or administrative regulation, such
breach shall not constitute Cause if, within thirty (30) days after
Executive is given written notice of such breach that specifically
refers to this Section, Executive cures such breach to the fullest
extent that it is curable.
(c) The Company shall strictly observe each of the
following procedures in connection with any termination of employment
for Cause:
(i) The issue of determining whether Executive's
acts or omissions satisfy the definition of "Cause" herein
and, if so, whether to terminate Executive's employment for
Cause shall be raised and discussed in good faith at a meeting
of the Board.
(ii) Not less than 30 days prior to the date of
such meeting the Company shall provide Executive and each
member of the Board written notice (a "Notice of
Consideration") of (A) a detailed description of the acts or
omissions alleged to constitute Cause, (B) the date, time and
location of such meeting of the Board, and (C) Executive's
rights under clause (iii) below.
(iii) Executive shall have the opportunity to
appear before the Board at such meeting in person and, at
Executive's option, with or without legal counsel, and to
present to the Board a written and/or oral response to the
Notice of Consideration.
(iv) Executive's employment may be terminated for
Cause only if (A) the acts or omissions specified in the
Notice of Consideration did in fact occur and do constitute
Cause as defined in this Section 3.2, (B) the Board makes a
specific determination to such effect and to the effect that
Executive's employment should be terminated for Cause and (C)
the Company thereafter provides Executive with a Notice of
Termination pursuant to Section 3.4 which specifies in
specific detail the basis of such termination of employment
for Cause and which Notice shall be based upon one or more of
the acts or omissions set forth in the Notice of
Consideration. The Board's determination specified in clause
(B) of the preceding sentence shall require the affirmative
vote of at least 75% of the members of the Board.
(d) In the event that the Company terminates Executive's
employment for Cause upon an Imminent Change Date (as defined below) or
on or after a Change of Control (as defined below) and the issue of
whether Executive was properly terminated for Cause becomes a disputed
issue in any action or proceeding between the Company and Executive,
the Company shall, notwithstanding the determination referenced in
clause (iv) of Section 3.2(c), have the burden of establishing by clear
and convincing evidence that the actions or omissions specified in the
Notice of Termination did in fact occur, do constitute Cause, were the
basis for Executive's termination and that the Company has, in each and
every respect, satisfied the procedural requirements of Section 3.2(c).
(e) For purposes of this Agreement, the following terms
shall have the following meanings:
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(i) "Beneficial Owner" has the meaning specified
in Rule 13d-3 of the SEC under the Exchange Act.
(ii) "Change of Control" means any one or more of
the following:
(A) any person (as such term is used in Rule 13d-5 of the
SEC under the Securities Exchange Act of 1934 ("Exchange Act") or group
(as such term is defined in Section 3(a)(9) and 13(d)(3) of the
Exchange Act), other than a Subsidiary (as defined below), any employee
benefit plan (or any related trust) of the Company or any of its
Subsidiaries or any Excluded Person (as defined below), becomes the
Beneficial Owner (as defined above) of 20% or more of the common stock
of the Company or of Voting Securities (as defined below) representing
20% or more of the combined voting power of the Company (such a person
or group, a "20% Owner"), except that (1) no Change of Control shall be
deemed to have occurred solely by reason of such beneficial ownership
by a corporation with respect to which both more than 70% of the common
stock of such corporation and Voting Securities representing more than
70% of the aggregate voting power of such corporation are then owned,
directly or indirectly, by the persons who were the direct or indirect
owners of the common stock and Voting Securities of the Company
immediately before such acquisition in substantially the same
proportions as their ownership, immediately before such acquisition, of
the common stock and Voting Securities of the Company, as the case may
be, and such corporation shall not be deemed a 20% Owner and (2) if any
person or group owns 20% or more but less than 30% of the common stock
of the Company or of the voting power of the Voting Securities and such
person or group has a "No Change of Control Agreement" with the Company
(as defined below), no Change of Control shall be deemed to have
occurred solely by reason of such ownership for so long as the No
Change of Control Agreement remains in effect and such person or group
is not in violation of the No Change of Control Agreement; or
(B) the Incumbent Directors (as defined below)
(determined using the Effective Date as the baseline date) cease for
any reason to constitute at least two-thirds of the directors of the
Company then serving; or
(C) approval by the stockholders of the Company of a
merger, reorganization, consolidation, or similar transaction, or a
plan or agreement for the sale or other disposition of all or
substantially all of the consolidated assets of the Company or a plan
of liquidation of the Company (any of the foregoing transactions, a
"Reorganization Transaction") which, based on information included in
the proxy and other written materials distributed to the Company's
stockholders in connection with the solicitation by the Company of such
stockholder approval, is not expected to qualify as an Exempt
Reorganization Transaction (as defined below); or
(D) the consummation by the Company of a Reorganization
Transaction that for any reason fails to qualify as an Exempt
Reorganization Transaction as of the date of such consummation,
notwithstanding the fact that such Reorganization Transaction was
expected to so qualify as of the date of such stockholder approval.
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A person or group shall be deemed to have a "No Change of Control
Agreement" for so long as the person or all members of the group have
executed a legal, binding and enforceable agreement with the Company
which provides that: (1) such person or group shall be bound by the
agreement for the time period of not less than five years from its date
of execution; (2) such person or group shall not acquire beneficial
ownership or voting control equal to a percentage of the common stock
of the Company or the voting power of the Voting Securities which
exceeds a percentage specified in the agreement which percentage shall
in all events be less than 30%; (3) such person or group may not
designate for election as directors a number of directors in excess of
30% of the number of directors on the Board; and (4) such person or
group shall vote the common stock of the Company and Voting Securities
in all matters in the manner directed by the majority of the Incumbent
Directors. If any agreement described in the preceding sentence is
violated by such person or group or is amended in a fashion such that
it no longer satisfies the requirements of the preceding sentence, such
agreement shall, as of the date of such violation or amendment, be
treated for purposes hereof as no longer constituting a No Change of
Control Agreement.
Notwithstanding the occurrence of any of the foregoing events, a Change
of Control shall not occur with respect to an Executive if, in advance
of such event, the Executive agrees in writing that such event shall
not constitute a Change of Control.
(iii) "Excluded Person" means any Person who,
along with such Person's Affiliates and Associates (as such
terms are defined in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act), is the Beneficial Owner
of 15% or more of the common stock of the Company or of the
Voting Securities of the Company outstanding as of the
Effective Date, provided that such Person, including such
Person's Affiliates and Associates, does not acquire, after
the Effective Date, additional common stock or Voting
Securities of the Company in excess of 1% of the then
outstanding common stock or Voting Securities, exclusive of
(A) common stock or Voting Securities acquired by such Person
and such Person's Affiliates and Associates as a result of
stock dividends, stock splits, recapitalizations or similar
transactions in which the Company did not receive any
consideration for issuing the shares in question or as a
result of repurchases of stock by the Company; (B) common
stock or Voting Securities acquired by such Person and such
Person's Affiliates and Associates as a result of gifts,
devises, bequests and intestate succession; and (C) common
stock or Voting Securities acquired by such Person and such
Person's Affiliates and Associates as a result of
participation by such Person and such Person's Affiliates and
Associates in any dividend reinvestment plan, stock option
plan or other similar plan or arrangement of the Company.
(iv) "Exempt Reorganization Transaction" means a
Reorganization Transaction which results in the Persons who
were the direct or indirect owners of the outstanding common
stock and Voting Securities of the Company immediately before
such Reorganization Transaction becoming, immediately after
the consummation of such Reorganization Transaction, the
direct or indirect owners of both more than 70% of the
then-outstanding common stock of the Surviving Corporation and
Voting Securities representing more than
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70% of the aggregate voting power of the Surviving
Corporation, in substantially the same respective proportions
as such Persons' ownership of the common stock and Voting
Securities of the Company immediately before such
Reorganization Transaction.
(v) "Incumbent Directors" means, as of any
specified baseline date, individuals then serving as members
of the Board who were members of the Board as of the date
immediately preceding such baseline date; provided that any
subsequently-appointed or elected member of the Board whose
election, or nomination for election by stockholders of the
Company or the Surviving Corporation, as applicable, was
approved by a vote or written consent of at least two-thirds
of the directors then comprising the Incumbent Directors shall
also thereafter be considered an Incumbent Director, unless
the initial assumption of office of such subsequently-elected
or appointed director was in connection with (A) an actual or
threatened election contest, including a consent solicitation,
relating to the election or removal of one or more members of
the Board, (B) a "tender offer" (as such term is used in
Section 14(d) of the Exchange Act), (C) a proposed
Reorganization Transaction, or (D) a request, nomination or
suggestion of any Beneficial Owner of Voting Securities
representing 15% or more of the aggregate voting power of the
Voting Securities of the Company or the Surviving Corporation,
as applicable (excluding any Beneficial Owner who is subject
to and not in violation of a No Change of Control Agreement
both on the date of any such request, nomination or suggestion
and on the date of such Director's election or appointment).
(vi) "Imminent Change Date" means any date on
which one or more of the following occurs (A) a presentation
to the Company's stockholders generally or any of the
Company's directors or executive officers of a proposal or
offer which, if consummated, would be a Change of Control, (B)
the public announcement (whether by advertisement, press
release, press interview, public statement, Security and
Exchange Commission ("SEC") filing or otherwise) of a proposal
or offer which if consummated would be a Change of Control, or
(C) such proposal or offer remains effective and unrevoked.
(vii) "Parent Corporation" means a corporation
which owns 50% or more of the common stock or Voting
Securities of any corporation and any other corporation which
owns any corporation which is in an unbroken chain of
corporations each of which owns successively in an unbroken
chain of corporations which includes the subject corporation.
(viii) "Person" means any individual, sole
proprietorship, partnership, joint venture, limited liability
company, trust, unincorporated organization, association,
corporation, institution, public benefit corporation, entity
or government instrumentality, division, agency, body or
department.
(ix) "Subsidiary" means with respect to any
Person (A) any corporation of which more than 50% of the
Voting Securities are at the time, directly or indirectly,
owned by such Person and (B) any partnership or limited
liability
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company in which such Person has a direct or indirect interest
(whether in the form of voting power, participation in profits
or capital contribution) of more than 50%.
(x) "Surviving Corporation" means the
corporation resulting from a Reorganization Transaction and
any Parent Corporation of such corporation.
(xi) "Voting Securities" of a corporation means
securities of such corporation that are entitled to vote
generally in the election of directors of such corporation,
but not including any other class of securities of such
corporation that may have voting power by reason of the
occurrence of a contingency which contingency has not
occurred.
3.3 Good Reason.
(a) During the Term, Executive may terminate his
employment hereunder for Good Reason in accordance with the substantive
and procedural provisions of this Article. For purposes of this
Agreement, Good Reason means the occurrence of any one or more of the
following actions or omissions that, unless otherwise specified, occurs
during the Term of the Agreement:
(i) any failure by the Company to pay
Executive's Base Salary or annual bonus in violation of
Article 4 of the Agreement;
(ii) any failure by the Company to comply with
any provision of Articles 2 (including, but not limited to,
failure by the Company to reappoint or reelect Executive as
President and Chief Operating Officer), 4, 5, 6, 8, 9 or 16 of
the Agreement;
(iii) any material adverse modification in
Executive's position (including offices, titles, reporting
requirements or responsibilities), authority, duties or other
terms and conditions of Executive's employment;
(iv) requiring Executive to be based at any
office or location other than the Atlanta, Georgia
metropolitan area;
(v) any material breach of the Agreement by the
Company;
(vi) any termination of employment by the Company
that purports to be for Cause, but is not in full compliance
with all of the substantive and procedural requirements of
this Agreement (any such purported termination shall be
treated as a termination of employment without Cause for all
purposes of this Agreement);
(vii) the failure at any time of a successor to
the Company and a Parent Corporation of a successor to the
Company explicitly to assume and agree in writing upon request
by the Executive to be bound by the Agreement; or
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(viii) the termination or cessation of Xxxx
Xxxx'x employment as CEO with the Company for any reason
and the failure of the Company, within 60 days after said
termination, to elect Executive as Chief Executive Officer of
the Company and to enter into a mutually satisfactory
superseding employment agreement with Executive reflecting
Executive's modified responsibilities, compensation and
benefit arrangements that result from said change of office.
(b) In the event Executive determines there is Good
Reason to terminate, Executive shall notify the Company of the events
constituting such Good Reason by a Notice of Termination pursuant to
Section 3.4. A delay in the delivery of such Notice of Termination or a
failure by Executive to include in the Notice of Termination any fact
or circumstance which contributes to a showing of Good Reason shall not
waive any right of Executive under this Agreement or preclude Executive
from asserting such fact or circumstance in enforcing rights under this
Agreement; provided, that no act or omission by the Company shall
qualify as Good Reason if Executive's delivery of Notice of Termination
occurs more than 12 months after Executive first obtains actual
knowledge of such act or omission.
(c) If the Termination Date occurs on or after a Change
of Control and during any portion of the Term, any reasonable
determination by Executive that any of the events specified in the
definition of Good Reason, has occurred and constitutes Good Reason
shall be conclusive and binding for all purposes, unless the Company
establishes by clear and convincing evidence that Executive did not
have any reasonable basis for such determination.
(d) In the event that the Company on or after a Change of
Control conceals any act or omission by the Company that occurs during
the Term and qualifies as Good Reason, any subsequent termination of
employment (whether by the Company or by Executive and regardless of
the circumstances of such termination) that occurs at any time after
such act or omission shall conclusively be deemed to be a termination
of employment by Executive for Good Reason, notwithstanding any
provision of this Agreement to the contrary.
(e) If Executive has a termination of employment during
the Imminent Change Period (as defined below) and a Change of Control
occurs within six (6) months of such termination of employment, the
provisions of this Section 3.3 and the other provisions of this
Agreement shall be applied in the same manner and to the same extent as
if the termination of employment had occurred after the date of a
Change of Control. During the Imminent Change Period, if Executive
terminates his employment for reasons that would constitute Good Reason
during the Term, Executive shall be deemed to terminate in accordance
with the procedures set forth in this Section 3.3 as if the termination
had taken place following a Change of Control.
(f) "Imminent Change Period" means the period commencing
on the Imminent Change Date and ending on the earlier to occur of (i) a
Change of Control or (ii) the date the offer or proposal for a Change
of Control is no longer effective or has been revoked.
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3.4 Notice of Termination. Any termination by the Executive for
Good Reason or by the Company for Cause shall be communicated by Notice of
Termination to the Company or the Executive, as the case may be. For purposes
hereof, a "Notice of Termination" means a written notice given in accordance
with Article 33 of the Agreement which sets forth (a) the specific termination
provision in this Agreement relied upon by the party giving such notice, (b) in
reasonable detail the specific facts and circumstances claimed to provide a
basis for such termination of employment, and (c) if the Termination Date is
other than the date of receipt of such Notice of Termination, the Termination
Date shall be any later date, not more than 15 days after the giving of such
Notice, specified in such notice; provided, however, that if no Notice of
Termination is given, the Termination Date shall be the last date on which
Executive is employed by the Company.
ARTICLE 4. COMPENSATION
4.1 Base Salary. For all services rendered by the Executive during
the Term, the Company shall pay the Executive as compensation a base annual
salary (the "Base Salary"), payable in appropriate installments to conform with
regular payroll dates for salaried personnel of the Company. On the Effective
Date, the annual rate of the Executive's Base Salary shall be $385,000 (the
"Annual Base Salary Rate"). The Executive's Annual Base Salary Rate may be
increased annually by the Board in its sole discretion. The timing of the annual
increase shall coincide with increases of other top executives, in accordance
with Company policy.
4.2 Bonus. In addition to the Base Salary provided for in Section
4.1 and the other benefits provided for in this Agreement, the Executive shall
be eligible, upon the achievement of certain goals established and communicated
to the Executive by the Board, to receive an annual bonus of at least 100% of
his base salary (with a midpoint/target of 50% of his base salary as described
in the Company's executive bonus plan) for the year for which the bonus is to be
paid. The annual bonus, if any, shall be paid within 90 days after the end of
the applicable fiscal year of the Company.
ARTICLE 5. STOCK OPTIONS AND OTHER AWARDS
5.1 Stock Options. In addition to the Base Salary and bonus
provided to the Executive pursuant to Article 4, the Board, in its discretion
and during the Term, may grant options to the Executive for the purchase of
Xxxxxxx Corporation common stock. The exercise price for options, which may be
granted, shall equal the average of the high and low of the stock price on the
day the grant is made. Such options shall have a term of ten years and the
options given in any year shall vest and become exercisable over a four-year
period from the date of grant, with 25% of the options granted vesting and
becoming exercisable on each anniversary of the date of grant of such options.
If the Executive's employment is terminated by reason of death, Total
Disability, by the Company for any reason other than for Cause or by the
Executive for Good Reason, all options granted to Executive to purchase common
stock of the Company under this Article 5 or otherwise shall immediately become
vested and shall be exercisable at the Executive's option for a period of three
(3) years from the date of termination but in no event after the date on which
such options would have expired if Executive had remained an employee of the
Company; if the Executive's employment is terminated by the Company for Cause or
by the Executive other than for Good Reason, all options granted under this
Article 5 or otherwise that are not vested as of the Termination Date shall
lapse and be forfeited to the Company.
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5.2 Restricted Stock. In addition to the Base Salary and bonus
provided to the Executive pursuant to Article 4, the Board, in its discretion
and during the Term, may grant restricted shares of common stock of Xxxxxxx
Corporation to the Executive. If the Executive's employment is terminated by
reason of death, Total Disability, by the Company for any reason other than for
Cause or by the Executive for Good Reason, all restrictions on such restricted
shares and any other restricted stock granted to Executive shall immediately
lapse; if the Executive's employment is terminated by the Company for Cause or
by the Executive other than for Good Reason, all shares of restricted common
stock granted under this Article 5 or otherwise as to which the restrictions
have not lapsed as of the Termination Date shall be forfeited to the Company.
5.3 Performance Shares. In addition to the Base Salary and bonus
provided to the Executive pursuant to Article 4, the Board, in its discretion
and during the Term, may grant performance shares to the Executive. If the
Executive's employment is terminated by reason of death, Total Disability, by
the Company for any reason other than for Cause or by the Executive for Good
Reason, the Company shall immediately pay to the Executive with respect to any
performance share with respect to which the performance period has not ended as
of the date of such termination the award or awards that would be payable to the
Executive upon achieving target performance goals.
ARTICLE 6. OTHER EMPLOYEE BENEFITS
6.1 Special Health Care Benefit. In addition to the other benefits
provided for in this Agreement (including participation by the Executive and his
spouse in the Company Plan (as defined herein) during the Term of this
Agreement), if the Executive's employment is terminated by reason of the
Executive's death, Total Disability, by the Company for any reason other than
for Cause, by the Executive for Good Reason or by the Executive for any reason
after completing ten years of employment with the Company or any Affiliate, the
Executive (or his spouse if the Executive predeceases his spouse before he
attains the age of 65) shall be entitled, for the period commencing on the
effective Termination Date and ending on the earlier of (a) the date of death
for the survivor of the Executive and his spouse or (b) the Executive and his
spouse attaining the age of 65 (the "Coverage Period"), to participate, at the
Executive's expense (which shall be no more than and limited to the then-current
expense and rate normally payable by the Company's senior executives for
purposes of coverage and benefits under the Company Plan as provided herein), in
any group health plan or program (whether insured or self-insured , or any
combination thereof) provided by the Company for the benefit of its active
employees (the "Company Plan"). The Company, consistent with sound business
practices, shall use its best efforts to provide the Executive with coverage for
the Executive and his spouse under the Company Plan during the Coverage Period
(and any period thereafter to the extent required by applicable state and
federal law), including, if necessary, amending the applicable provisions of the
Company Plan and negotiating the addition of any necessary riders to any group
health insurance contract. In the event the Company is unable for whatever
reason to provide the Executive and his spouse with coverage under the Company
Plan, the Company, at the Executive's expense (which shall be no more than and
limited to the then-current expense and rate normally payable by the Company's
senior executives for purposes of coverage and benefits under the Company Plan
as provided herein), shall provide the Executive with an individual policy of
health insurance providing coverage for the Executive and his spouse (the
"Individual Policy") during the Coverage Period. The coverage to be provided to
the Executive and his
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spouse pursuant to this Section 6.1 (whether under the Company Plan or the
Individual Policy) shall consist of coverage which, as of the time the coverage
is being provided, is identical (or, with respect to an Individual Policy,
substantially identical) to the coverage provided under the Company Plan to
active employees and their dependents. Notwithstanding the foregoing, the
Company shall coordinate coverage for the Executive under this Section 6.1 with
any applicable federal or state government programs (e.g., Medicare and
Medicaid) when the Executive (or his spouse) is eligible to begin receiving
benefits under such program. Any premiums required to be paid for coverage of
the Executive (or his spouse) under such government programs shall be paid by
the Executive (or his spouse).
6.2 Participation in Benefit Plans. During the Term, the Executive
shall be entitled to participate in any and all retirement, health, disability,
life insurance, long-term disability insurance, long-term incentive plans,
nonqualified deferred compensation and tax-qualified retirement plans or any
other plans or benefits offered by the Company to its executives generally, if
and to the extent the Executive is eligible to participate in accordance with
the terms and provisions of any such plan or benefit program. During the Term of
this Agreement, an automobile of appropriate value shall be provided by the
Company. All operating and maintenance expenses of the automobile shall be paid
by the Company. Notwithstanding the foregoing, all vesting periods under all
Xxxxxxx benefit plans shall be waived (except where waiving such period would
violate ERISA) and the Executive, upon termination of employment for any reason
before the age of retirement under those plans, shall be considered to have
attained the minimum retirement age provided in those plans. Nothing in this
Section 6.2 is intended, or shall be construed, to require the Company to
institute any particular plan, program or benefit. If the Executive is
prohibited from participating in, or accruing benefits under, any such plan or
policy, the Company shall provide the Executive with comparable benefits outside
such plan or policy.
ARTICLE 7. DISABILITY BENEFITS
7.1 Termination on Total Disability. The Company may only
terminate the Executive's employment because of Executive's Total Disability (as
defined below) by giving Executive or his legal representative, as applicable,
(a) written notice to Executive in accordance with Section 33 of the Company's
intention to terminate Executive's employment pursuant to this Section 7.1 and
(b) a Certification delivered to Executive (as defined in Section 7.4.)
Executive's employment shall terminate effective on the 30th day (the
"Disability Effective Date") after Executive's receipt of such notice unless,
before the Disability Effective Date, Executive shall have resumed the full-time
performance of Executive's duties hereunder.
7.2 Disability Benefits. If the Company terminates Executive's
employment by reason of Executive's Total Disability during the Term, the
Company's sole obligation to Executive under Articles 2, 4 and 10 (other than
Section 10.1) shall be as follows:
(a) to pay Executive, in addition to all vested rights
arising from Executive's employment as specified in Section 6.2, a
lump-sum cash amount equal to all Accrued Obligations (as defined in
Section 10.3(a) (iii))determined as of the Termination Date,
(b) to continue Executive's Base Salary for a period of
180 days following the last day of the Termination Month (as defined in
Section 10.1), and
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(c) if the Termination Date is on or after a Change of
Control, to provide Executive disability and other benefits after the
Termination Date that are not less than the most favorable of such
benefits then available under this Agreement, Plans of the Company or
its Affiliates to disabled peer executives of the Company or its
Affiliates or, if more favorable, those such benefits provided by the
Company or its Affiliates to any person at any time during the 12-month
period immediately preceding the date of the Change of Control.
7.3 Other Benefits. The rights of the Executive as enumerated
under this Article 7 upon any said termination of employment in the event of
Total Disability of Executive (which shall be treated as retirement for purposes
of all Company Plans and benefits) are in addition to any and all other rights
and benefits to which the Executive is entitled (or those in which the Executive
is otherwise vested or which the Executive has otherwise earned), under the
terms of this Agreement (including but not limited to those rights described in
Articles 5,6, 11 and 12) and the aforementioned Employment Agreement dated
November 20, 1998 or otherwise.
7.4 Definition of Total Disability. For purposes of this
Agreement, "Total Disability" means any medically determinable physical or
mental impairment that has lasted for a continuous period of not less than six
(6) months and can reasonably be expected to be permanent or of indefinite
duration, and that renders Executive unable to perform the duties required under
the Agreement. Such determination shall be made by written certification
("Certification") of Executive's Total Disability by a physician jointly
selected by the Company and the Executive; provided that if the Company and
Executive cannot reach agreement on the physician, the Certification shall be by
a panel of physicians consisting of one physician selected by the Company, one
physician selected by the Executive and a third physician jointly selected by
those two physicians.
ARTICLE 8. REIMBURSEMENT OF EXPENSES, OFFICE AND SECRETARIAL ASSISTANCE
The Company recognizes that the Executive will incur, from time to
time, expenses for the benefit of the Company and in furtherance of the
Company's business, including, but not limited to, expenses for entertainment,
travel and other business expenses. The Executive shall be reimbursed for all
said expenses in accordance with the Company's policy and practice applicable
thereto. In the event of the termination of the Executive's employment for any
reason, the Company shall reimburse the Executive (or in the event of death, his
personal representative) for expenses incurred by the Executive on behalf of the
Company prior to the Termination Date to the extent such incurred expenses have
not been previously reimbursed by the Company. Moreover, the Company agrees
that, during the Term of this Agreement, the Executive shall be provided, at the
Company's expense and under applicable policies of the Company, a fully
furnished office at the Company's Atlanta, Georgia headquarters, accompanying
office, voice-mail, e-mail, access, and other privileges, adequate secretarial
and administrative assistance, and all other similar privileges and/or rights
(as may be requested by the Executive), as are consistent with the Executive's
position and duties and as are customary to executives at the same level in
companies of similar size.
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ARTICLE 9. VACATION
The Executive shall be entitled to a minimum four (4) weeks paid
vacation during each Employment Year.
ARTICLE 10. TERMINATION COMPENSATION
10.1 Monthly Compensation. Upon the expiration of the Term for any
reason, the Executive shall be entitled to continue to receive his Base Salary
through the last day of the month in which the Termination Date occurs (the
"Termination Month").
10.2 Compensation Continuance Prior to Change of Control. In
addition to the compensation provided for in Section 10.1, upon the termination
of the Executive's employment prior to a Change of Control by the Executive for
Good Reason or by the Company other than for Cause, the Executive (or in the
event of his subsequent death, his designated beneficiary) shall receive the
bonus for which he was eligible in the year of termination, prorated for the
portion of such year for which Executive was employed (such period to be deemed
to end on the Termination Date) at the rate such bonus was earned but in no
event less than 50% of the Executive's Base Salary for such period and he shall
continue to receive (a) from the last day of the Termination Month through the
end of the twenty-fourth calendar month following the Termination Month (the
"Compensation Continuance Period") the Base Salary that he would have received
pursuant to Section 4.1 during the Compensation Continuance Period as if the
Term had not expired and (b) a bonus with respect to the Compensation
Continuance Period paid at a rate of 50% of the Base Salary of the Executive
during the Compensation Continuance Period to be paid at such times as bonus
payments are normally paid to other executives of the Company.
10.3 Termination After Change of Control. If, during the Term (or,
if applicable, as provided in Section 10.4 during the Imminent Change Period),
the Company terminates Executive's employment on or after a Change of Control
other than for Cause or Total Disability, or if Executive terminates employment
on or after a Change of Control for Good Reason, the Company's sole obligations
to Executive under Articles 2, 4 and 10 (other than Section 10.1) shall be as
follows:
(a) The Company shall pay Executive, in addition to all
vested rights arising from Executive's employment as specified in
Section 6.2, a lump-sum cash amount equal to the sum of the following:
(i) the amount of Executive's Base Salary that
is accrued but not yet paid as of the Termination Date (the
"Accrued Base Salary");
(ii) the amount of any annual bonus earned by
Executive under Section 4.2 of the Agreement but not yet paid
with respect to the Company's latest fiscal year ended prior
to the Termination Date (the "Accrued Annual Bonus");
(iii) any accrued but unpaid vacation pay, and any
other amounts and benefits which are then due to be paid or
provided to Executive by the Company, but have not yet been
paid or provided (as applicable) (the sum of (i), (ii) and
(iii) shall be collectively referred to in this Agreement as
the "Accrued Obligations");
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(iv) Executive's Pro-rata Annual Bonus (as
defined below) reduced (but not below zero) by the amount of
any annual bonus paid to Executive with respect to the
Company's fiscal year in which the Termination Date occurs;
(v) all amounts previously deferred by, or
accrued to the benefit of, Executive under any defined
contribution Non-Qualified Plans (as defined in Section 16.1),
whether vested or unvested, together with any accrued earnings
thereon, to the extent that such amounts and earnings have not
been previously paid by the Company (whether pursuant to
Article 16 or otherwise);
(vi) an amount equal to the number of years in
the Severance Period (as defined below) times the sum of (A)
Base Salary, (B) the greater of (I) Target Annual Bonus (as
defined below) or (II) Historical Bonus (as defined below) and
(C) Employer Defined Contribution Plan Contribution (as
defined below), each determined as of the Termination Date;
provided, however, that any reduction in Executive's Base
Salary or Target Annual Bonus that would qualify as Good
Reason shall be disregarded for purposes of this clause; and
(vii) to the extent not paid pursuant to any other
clause of this Section 10.3(a), an amount equal to the sum of
the value of the unvested portion of Executive's accounts or
accrued benefits under any Non-Qualified Plans or any plan
which meets the qualification requirements of Section 401(a)
or 403(a) of the Internal Revenue Code (a "Qualified Plan")
(other than a defined benefit plan) maintained by the Company
as of the Termination Date and forfeited by Executive by
reason of the termination of employment.
Such lump-sum amount shall be paid no more than thirty (30) days after
the Termination Date.
(b) The Company shall pay, in lieu of all
previously-accrued benefits under all Non-Qualified Plans that are
defined benefit plans, a lump-sum cash amount equal to the positive
difference, if any, between:
(i) the sum of the Lump-Sum Values (as defined
below) of each Maximum Annuity (as defined below) that would
be payable to Executive under any defined benefit Plan
(whether or not qualified under Section 401(a)) if Executive
had:
(A) become fully vested in all such previously-unvested
benefits,
(B) accrued a number of years of service (for purposes of
determining the amount of such benefits, entitlement to early
retirement benefits, and all other purposes of such defined benefit
plans) that is a number of years equal to the number of years of
service actually accrued by Executive as of the Termination Date
increased by the number of years in the Severance Period, and
(C) received the lump-sum severance benefits specified in
Section 10.3(a)(iv) and (vi) as covered compensation in equal monthly
installments during the Severance Period,
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minus
(ii) the sum of (A) the Lump-Sum Values of the
Maximum Annuity benefits actually payable to Executive in the
future under each defined benefit Plan that is qualified under
Section 401(a) of the Code and (B) the aggregate amounts
previously paid to Executive pursuant to Section 16.1.
Such lump-sum amount shall be paid no more than 30 days after
a Termination Date.
(c) The Company shall pay all reasonable fees and costs
charged by the outplacement firm selected by Executive to provide
outplacement services to Executive or, at the election of Executive,
shall pay to Executive within thirty (30) business days of its receipt
of notice of Executive's election an amount equal to the reasonable
fees and expenses such outplacement firm would charge.
(d) Until a number of years subsequent to the Termination
Date equal to the length of the Severance Period or such later date as
any plan or program may specify, the Company shall continue to provide
to Executive and Executive's family welfare benefits (including
medical, prescription, dental, disability, individual life, group life,
accidental death and travel accident insurance plans and programs but
excluding those benefits which are provided after the Executive's
Termination Date pursuant to Section 6.1 of the Agreement and excluding
any salary continuation benefits)which are at least as favorable as the
most favorable Plans of the Company applicable to other peer executives
of the Company and their families as of the Termination Date, but which
are in no event less favorable than the most favorable Plans of the
Company applicable to other peer executives and their families during
the 12-month period immediately before the date of the Change of
Control. The cost of such welfare benefits to Executive shall not
exceed the cost of such benefits to Executive immediately before the
Termination Date or, if less, the date of the Change of Control.
Executive's rights under this paragraph shall be in addition to, and
not in lieu of, any post-termination continuation coverage or
conversion rights Executive may have pursuant to applicable law,
including continuation coverage required by Section 4980 of the Code.
Notwithstanding any of the above, the welfare benefits provided under
this paragraph shall be secondary to any similar welfare benefits
provided to Executive by Executive's subsequent employer.
10.4 Termination During Imminent Change Period. If during the
Imminent Change Period:
(a) the Company terminates Executive's employment other
than for Cause or Total Disability, or if Executive terminates
employment for Good Reason, and
(b) a Change of Control occurs within six (6) months of
Executive's Termination Date,
Executive shall receive the benefits provided in Section 10.3,
(rather than in Section 10.2), as if such termination of
employment occurred as of the date of the Change of Control
reduced by any similar benefits actually paid to Executive on
or after the termination of employment pursuant to Section
10.2.
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10.5 Death After Change of Control. If, on or after a Change of
Control, Executive's employment is terminated by reason of Executive's death
during the Term, the Company's sole obligations to Executive under Articles 2, 4
and 10 (other than Section 10.1) shall be as follows:
(a) to pay Executive's estate or Beneficiary, in addition
to all vested rights arising from Executive's employment as specified
in Section 6.1, a lump-sum cash amount equal to all Accrued
Obligations; and
(b) to provide Executive's estate or Beneficiary survivor
and other benefits that are not less than the most favorable survivor
and other benefits then available under Plans of the Company to the
estates or the surviving families of peer executives of the Company or,
if more favorable, those such benefits provided by the Company at any
time during the 12-month period immediately preceding the date of the
Change of Control.
10.6 For purposes of this Agreement, the terms specified below
shall have the following meanings:
(a) "Employer Defined Contribution Plan Contribution"
means the product of (i) the maximum amount stated as a percentage of
Executive's Base Salary paid within the three-year period immediately
preceding the date of the Change of Control by the Company for any
12-month period to or for the benefit of Executive as an employer
contribution under the Company's Non-Qualified Plans and Qualified
Plans which are defined contribution plans on behalf of Executive,
multiplied by (ii) Executive's Base Salary as of the Termination Date
or, if greater, during the 12-month period immediately preceding the
date of the Change of Control.
(b) "Historical Bonus" means a percentage of the
Executive's current Base Salary multiplied by the highest percentage of
Base Salary from time to time in effect represented by the Executive's
highest annual bonus on a percentage basis over the three-year period
immediately preceding the date of the Change of Control.
(c) "Lump Sum Value" of an annuity payable pursuant to a
defined benefit plan means, as of a specified date, the present value
of such annuity, as determined, as of such date, under generally
accepted actuarial principles using (i) the applicable interest rate,
mortality tables and other methods and assumptions that the Pension
Benefit Guaranty Corporation ("PBGC") would use in determining the
value of an immediate annuity of a terminated plan on the Termination
Date or (ii) if such interest rate and mortality assumptions are no
longer published by the PBGC, interest rate and mortality assumptions
determined in a manner as similar as practicable to the manner by which
the PBGC's interest rate and mortality assumptions were determined
immediately prior to the PBGC's cessation of publication of such
assumptions.
(d) "Maximum Annuity" means, in respect of a defined
benefit plan (whether or not qualified under Section 401 (a) of the
Code), an annuity computed in whatever manner permitted under such plan
(including frequency of annuity payments, attained age upon
commencement of annuity payments, and nature of surviving spouse
benefits, if any) that yields the greatest Lump Sum Value.
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(e) "Pro-rata Annual Bonus" means, in respect of the
Company's fiscal year during which the date of the Change of Control
(in the case of a Pro-rata Annual Bonus payable pursuant to Section
16.2 hereof) or the Termination Date (in the case of a Pro-rata Annual
Bonus payable pursuant to Article 10 hereof), as applicable, occurs, an
amount equal to the product of the greater of Executive's Historical
Bonus or Executive's Target Annual Bonus (determined as of the date of
the Change of Control or Termination Date, as applicable) multiplied by
a fraction, the numerator of which equals the number of days from and
including the first day of such fiscal year through and including the
date of the Change of Control or the Termination Date, as applicable,
and the denominator of which equals 365.
(f) "Severance Period" means a period equal to three
years.
(g) "Target Annual Bonus" as of a certain date means the
amount equal to the product of Base Salary determined as of such date
multiplied by the percentage of such Base Salary to which Executive
would have been entitled immediately prior to such date under
Executive's Agreement and any applicable bonus plan for the annual
performance period for which the annual bonus is awarded if the
performance goals established pursuant to such bonus plan were achieved
at the 100% level as of the end of the annual performance period.
ARTICLE 11. REIMBURSEMENT OF CERTAIN EXPENSES
The Company shall reimburse the Executive for all legal costs and
expenses, including attorneys' fees, reasonably incurred by the Executive in
connection with any dispute or disputes arising out of alleged violations of
agreements between the Executive and his prior employer provided that:
(a) the Company was notified of each such agreement or
agreements prior to the execution of the prior employment agreement
dated November 20, 1998;
(b) the alleged violations of such agreement or
agreements arise from the Executive's acceptance of employment with and
employment by the Company; and
(c) the Executive as of November 20, 1998 was not in fact
in violation of any provision which is the subject of such a dispute.
ARTICLE 12. POST-TERMINATION OBLIGATIONS
All payments and benefits to the Executive under this Agreement shall
be subject to the Executive's reasonable compliance with the following
provisions during the Term and following the termination of the Executive's
employment:
12.1 Assistance in Litigation. The Executive shall, upon reasonable
notice, furnish such information and assistance to the Company as may reasonably
be required by the Company in connection with any litigation in which it is, or
may become, a party, and which arises out of facts and circumstances known to
the Executive. The Company shall promptly reimburse the Executive for his
out-of-pocket expenses incurred in connection with the fulfillment of his
obligations under this Section 12.1.
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12.2 Confidential Information. The Executive shall not disclose or
reveal to any unauthorized person any trade secret or other confidential
information relating to the Company, its subsidiaries or affiliates, or to any
businesses operated by them, and the Executive confirms that such information
constitutes the exclusive property of the Company; provided, however, that the
foregoing shall not prohibit the Executive from disclosing such information to
the extent necessary or desirable in connection with obtaining financing for the
Company (or furnishing such information under any agreements, documents or
instruments under which such financing may have been obtained) or otherwise
disclosing such information to third parties or governmental agencies in
furtherance of the interests of the Company, or as may be required by law.
12.3 Noncompetition. The Executive shall not: (a) during the
Compensation Continuation Period, without the prior written consent of the
Company, engage, directly or indirectly, as a licensee, owner, manager,
consultant, officer, employee, director, investor or otherwise, in any business
in material competition with the Company; or (b) usurp for his own benefit any
corporate opportunity under consideration by the Company during his employment,
unless the Company shall have finally decided not take advantage of such
corporate opportunity. The restrictions of part (a) of this Section 12.3 shall
not apply to a passive investment by the Executive constituting ownership of
less than five percent (5%) of the equity of any entity engaged in any business
described in part (a) of this Section 12.3. The Executive acknowledges that the
possible restrictions on his activities which may occur as a result of his
performance of his obligations under this Section 12.3 are required for the
reasonable protection of the Company. The foregoing provisions of this Section
12.3 shall not apply on and after a termination of employment which occurs
within three years after a Change of Control; provided that during the period
beginning on such Termination Date and ending on the first anniversary of the
Termination Date, Executive shall not, directly or indirectly:
(a) encourage any employee or agent of the Company to
terminate his or her relationship with the Company;
(b) solicit the employment or engagement as a consultant
or adviser, of any employee or agent of the Company, or cause or
encourage any Person to do any of the foregoing;
(c) establish (or take preliminary steps to establish) a
business with, or encourage others to establish (or take preliminary
steps to establish) a business with, any employee or agent of the
Company; or
(d) interfere with the relationship of the Company with,
or endeavor to entice away from the Company, any Person who or which at
any time during the period commencing one year prior to the Termination
Date was or is a material customer or material supplier of, or
maintained a material business relationship with, the Company.
12.4 Failure to Comply. In the event that the Executive shall fail
to comply with any provision of this ARTICLE 12, and such failure shall continue
for thirty (30) days following delivery of notice thereof by the Company to the
Executive, all rights hereunder of the Executive and any person claiming under
or through him shall thereupon terminate and no person shall be entitled
thereafter to receive any payments or benefits hereunder (except for
indemnification
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rights under the Company's Bylaws, or other documents or policies and under the
Company's director and officer liability insurance policies, and for benefits
under employee benefit plans or programs as provided in Section 6.1 which have
been earned or otherwise fixed or determined to be payable prior to such
termination).
ARTICLE 13. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
13.1 Gross-up for Certain Taxes.
(a) If it is determined (by the reasonable computation of
the Company's independent auditors, which determinations shall be
certified to by such auditors and set forth in a written certificate
("Company Certificate") delivered to the Executive) that any benefit
received or deemed received by the Executive from the Company pursuant
to this Agreement or otherwise (collectively, the "Potential Parachute
Payments") is or will become subject to any excise tax under Section
4999 of the Code or any similar tax payable under any United States
federal, state, local or other law (such excise tax and all such
similar taxes collectively, "Excise Taxes"), then the Company shall,
immediately after such determination, pay the Executive an amount (the
"Gross-up Payment") equal to the product of
(i) the amount of such excise Taxes
multiplied by
(ii) the Gross-up Multiple (as defined in Section 13.4).
The Gross-up Payment is intended to compensate the Executive for the
Excise Taxes and any federal, state, local or other income or excise
taxes or other taxes payable by the Executive with respect to the
Gross-up Payment. For all purposes of this Section 13, Executive shall
be deemed to be subject to the highest effective marginal rate of
Taxes.
The Executive or the Company may at any time request the
preparation and delivery to the Executive of a Company Certificate. The
Company shall, in addition to complying with Section 13.2, cause all
determinations and certifications under the Article to be made as soon
as reasonably possible and in adequate time to permit the Executive to
prepare and file the Executive's individual tax returns on a timely
basis.
(b) Limitation on Gross-Up Payment. Notwithstanding any
other provision of this Article 13, if the aggregate After-Tax Amount
(defined below) of the Potential Parachute Payments and Gross-up
Payment that, but for this Section (b), would be payable to Executive,
does not exceed 120% of the After-Tax Floor Amount (defined below),
then no Gross-up Payment shall be made to Executive and the aggregate
amount of Potential Parachute Payments payable to Executive shall be
reduced (but not below the Floor Amount, defined below) to the largest
amount which would both (i) not cause any Excise Tax to be payable by
Executive and (ii) not cause any Potential Parachute Payments to become
nondeductible by the Company by reason of Section 280G of the Code (or
any successor provision).
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(c) For purposes of this Agreement:
(i) "After-Tax Amount" means the portion of a
specified amount that would remain after payment of all Taxes
paid or payable by Executive in respect of such specified
amount;
(ii) "Floor Amount" means the greatest pre-tax
amount of Potential Parachute Payments that could be paid to
Executive without causing Executive to become liable for any
Excise Taxes in connection therewith; and
(iii) "After-Tax Floor Amount" means the After-Tax
Amount of the Floor Amount.
13.2 Determination by the Executive.
(a) If the Company shall fail to deliver a Company
Certificate to the Executive (and to pay to the Executive the amount of
the Gross-up Payment, if any) within 14 days after receipt from the
Executive of a written request for a Company Certificate, or if at any
time following receipt of a Company Certificate the Executive disputes
the amount of the Gross-up Payment set forth therein, the Executive may
elect to demand the payment of the amount which the Executive, in
accordance with an opinion of counsel to the Executive ("Executive
Counsel Opinion") (as defined in Section 13.5, below), determines to be
the Gross-up Payment. Any such demand by the Executive shall be made by
delivery to the Company of a written notice which specifies the
Gross-up Payment determined by the Executive and an Executive Counsel
Opinion regarding such Gross-up Payment (such written notice and
opinion collectively, the "Executive's Gross-Up Determination"). Within
14 days after delivery of the Executive's Determination to the Company,
the Company shall either (1) pay the Executive the Gross-up Payment set
forth in the Executive's Gross-up Determination (less the portion of
such amount, if any, previously paid to the Executive by the Company)
or (2) deliver to the Executive a Company Certificate specifying the
Gross-up Payment determined by the Company's independent auditors,
together with an opinion of the Company's counsel ("Company Counsel
Opinion" (as defined in Article Section 13.5, below)), and pay the
Executive the Gross-up Payment specified in such Company Certificate.
If for any reason the Company fails to comply with clause (2) of the
preceding sentence, the Gross-up Payment specified in the Executive's
Gross-up Determination shall be final, binding and controlling for all
purposes.
(b) If the Executive does not make a request for, and the
Company does not deliver to the Executive, a Company Certificate, the
Company shall be deemed to have determined that no Gross-up Payment is
due; provided that the absence of such request by Executive or the
Company Certificate by the Company shall not preclude Executive from
making such request at any future date.
13.3 Additional Gross-up Amounts. If, despite the initial
conclusion of the Company and/or the Executive that certain Potential Parachute
Payments are either not subject to Excise Taxes or not to be counted in
determining whether other Potential Parachute Payments are
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subject to Excise Taxes (any such item, a "Non-Parachute Item"), it is later
determined (pursuant to the subsequently-enacted provisions of the Code, final
regulations or published rulings of the IRS, final judgment of a court of
competent jurisdiction or the Company's independent auditors that any of the
Non-Parachute Items are subject to Excise Taxes, or are to be counted in
determining whether any Payments are subject to Excise Taxes, with the result
that the amount of Excise Taxes payable by the Executive is greater or the
amount of the Excise Taxes due are greater than the amount determined by the
Company or the Executive pursuant to Section 13.1 or 13.2, as applicable, then
the Company shall promptly upon request by the Executive pay the Executive an
amount (which shall also be deemed a Gross-up Payment) equal to the product of
(a) the sum of (1) such additional Excise Taxes and (2)
any interest, fines, penalties, expenses or other costs or liability
therefor incurred by the Executive as a result of having taken a
position in accordance with a determination made pursuant to Section
13.1
multiplied by
(b) the Gross-up Multiple.
13.4 Gross-up Multiple. The Gross-up Multiple shall equal a
fraction, the numerator of which is one (1.0), and the denominator of which is
one (1.0) minus the sum, expressed as a decimal fraction, of the effective
marginal rates of all federal, state, local and other income and other taxes and
any Excise Taxes applicable to the Gross-up Payment; provided that, if such sum
exceeds 0.8, it shall be deemed equal to 0.8 for purposes of this computation.
(If different effective marginal rates of tax are applicable to various portions
of a Gross-up Payment, the weighted average of such rates shall be used.)
13.5 Opinion of Counsel. "Executive Counsel Opinion" means a legal
opinion of nationally recognized executive compensation counsel that there is a
reasonable basis to support a conclusion that the Gross-up Payment determined by
the Executive has been calculated in accord with this Article and applicable
law. "Company Counsel Opinion" means a legal opinion of nationally recognized
executive compensation counsel that (a) there is a reasonable basis to support a
conclusion that the Gross-up Payment set forth in the Company Certificate of
Company's independent auditors has been calculated in accord with this Article
and applicable law, and (b) there is no reasonable basis for the calculation of
the Gross-up Payment determined by the Executive.
13.6 Amount Increased or Contested. The Executive shall notify the
Company in writing of any claim by the IRS or other taxing authority that, if
successful, would require the payment by the Company of a Gross-up Payment. Such
notice shall include the nature of such claim and the date on which such claim
is due to be paid. The Executive shall give such notice as soon as practicable,
but no later than 10 business days, after the Executive first obtains actual
knowledge of such claim; provided, however, that any failure to give or delay in
giving such notice shall affect the Company's obligations under this Article
only if and to the extent that such failure results in actual prejudice to the
Company. The Executive shall not pay such claim less than 30 days after the
Executive gives such notice to the Company (or, if sooner, the date on which
payment of such claim is due). If the Company notifies the Executive in writing
before the expiration of such period that it desires to contest such claim, the
Executive shall:
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(a) give the Company any information that it reasonably
requests relating to such claim,
(b) take such action in connection with contesting such
claim as the Company reasonably requests in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Company,
(c) cooperate with the Company in good faith to contest
such claim, and
(d) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax, including related interest
and penalties, imposed as a result of such representation and payment of costs
and expenses. Without limiting the foregoing, the Company shall control all
proceedings in connection with such contest and, at its sole option, may pursue
or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and xxx for a
refund or contest the claim in any permissible manner. The Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and xxx for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify the Executive, on an after-tax basis, for any Excise Tax or Taxes,
including related interest or penalties, imposed with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of Taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. The Company's control of the contest shall be limited to issues with
respect to which a Gross-up Payment would be payable. The Executive shall in
Executive's discretion be entitled to settle or contest, as the case may be, any
other issue raised by the IRS or other taxing authority.
13.7 Refunds. If, after the receipt by the Executive of an amount
paid or advanced by the Company pursuant to Section 13.1, 13.3 and/or 13.6, the
Executive becomes entitled to receive any refund with respect to such claim or
amount, the Executive shall (subject to the Company's complying with the
requirements of Section 13.6) promptly pay the Company the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Executive of an amount paid or advanced
by the Company pursuant to Section 13.1, 13.3 and/or 13.6, a determination is
made that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to
contest such determination before the earlier of (a) the expiration of 30 days
after such determination or (b) the date such determination becomes final and
non-appealable, then such advance shall be forgiven and shall not be required to
be repaid. Any contest of a denial of refund shall be controlled by Section
13.6.
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ARTICLE 14. PROFESSIONAL FEES.
If Executive incurs legal fees or other expenses (including expert
witness and accounting fees), in an effort to interpret this Agreement or to
secure, preserve, establish entitlement to, or obtain benefits under this
Agreement (including the fees and other expenses of Executive's legal counsel in
connection with the delivery of an Executive Counsel Opinion), the Company
shall, regardless of the outcome of such effort (but subject to (b) and (c)
below), reimburse Executive on a current basis (in accordance with this Article
14) for such fees and expenses, and shall also pay Executive an additional
payment such that, after payment of all Taxes and Excise Taxes on such amount,
there remains a balance sufficient to pay all such fees and other expenses.
(a) Reimbursement of legal fees and expenses and gross-up
payments shall be made monthly within ten (10) days after Executive's
written submission of a request for reimbursement together with
evidence that such fees and expenses were incurred.
(b) With respect to any claim made by Executive or the
Company hereunder arising from facts or circumstances occurring prior
to a Change of Control or the Imminent Change Date, if Executive does
not prevail in a material respect (after exhaustion of all judicial
remedies) in respect of such claim, no further reimbursement for legal
fees and expenses shall be due to Executive in respect of such claim
and Executive shall refund any amounts previously reimbursed hereunder
with respect to such claim.
(c) With respect to any claim made by Executive or the
Company hereunder arising from facts or circumstances occurring on or
after a Change of Control or the Imminent Change Date, if Executive
does not prevail (after exhaustion of all available judicial remedies)
in respect of such claim and the Company establishes before a court of
competent jurisdiction, by clear and convincing evidence, that
Executive had no reasonable basis for such claim hereunder, or for his
response to the Company's claim hereunder, or acted in bad faith, no
further reimbursement for legal fees and expenses shall be due to
Executive in respect of such claim and Executive shall refund any
amounts previously reimbursed hereunder with respect to such claim.
(d) With respect to any claim made by Executive or the
Company hereunder arising from facts or circumstances occurring on or
after a Change of Control or the Imminent Change Date, if there is a
dispute between the Executive and the Company as to Executive's rights
to reimbursement of legal or other fees and expenses under this
Agreement or the amount of such reimbursement, any amount of
reimbursement requested by Executive and accompanied by a legal opinion
of a nationally recognized executive compensation counsel that such
amount should be paid under the Agreement shall be final, binding and
controlling on the Company unless and to the extent the Company
establishes otherwise by clear and convincing evidence.
ARTICLE 15. INTEREST
If the Company does not pay any amount due to Executive under this
Agreement within five business days after such amount first became due and
owing, interest shall accrue on such amount from the date it became due and
owing until the date of payment at an annual rate equal
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to 200 basis points above the base commercial lending rate published in The Wall
Street Journal in effect from time to time during the period of such nonpayment.
ARTICLE 16. ADDITIONAL OBLIGATIONS UPON A CHANGE OF CONTROL.
16.1 Unfunded Deferred Compensation. Upon a Change of Control,
Executive shall become fully vested in all benefits previously accrued under any
deferred compensation Plan (including any supplemental executive retirement Plan
that is a Non-Qualified Plan ("SERP")) that is not qualified under Section
401(a) of the Code (a "Non-Qualified Plan"). Within thirty (30) business days
after the date of the Change of Control, the Company shall pay to Executive a
lump-sum cash amount equal to:
(a) the sum of the Lump-Sum Values of all Maximum
Annuities that are payable pursuant to all defined benefit
Non-Qualified Plans, plus
(b) the sum of Executive's account balances under all
defined contribution Non-Qualified Plans;
provided, however, that if, at any time prior to the date of the Change
of Control, Executive delivers to the Company an irrevocable election
to waive Executive's right to receive the payments described in this
Section 16.1 (an "Irrevocable Election"), then (i) Executive shall not
receive the payments described in this Section 16.1, (ii) Executive's
account balances under each defined contribution Non-Qualified Plan
shall continue to be credited with investment earnings in accordance
with the terms of such Non-Qualified Plan during Executive's period of
employment following the date of the Change of Control, and (iii) at
the earlier of (x) the date(s) provided in each such Non-Qualified Plan
and (y) 30 days after Executive's Termination Date, the Company shall
pay, or cause to be paid, to Executive a lump-sum cash payment equal to
the sum of the Lump-Sum Value(s) of all Maximum Annuities that are
payable pursuant to all defined benefit Non-Qualified Plans and the sum
of Executive's account balances under all defined contribution
Non-Qualified Plans.
16.2 Pro-Rata Annual Bonus. Within thirty (30) days after the date
of the Change of Control, the Company shall pay Executive a lump-sum cash
payment equal to the Pro-Rata Annual Bonus determined as of the date of the
Change of Control.
16.3 Equity Incentives. Upon a Change of Control, Executive shall
become fully vested in and may thereafter exercise in whole or in part all
outstanding stock options, stock appreciation rights, or similar awards and (ii)
shall become fully vested in and receive an immediate transfer of all shares of
restricted stock, deferred stock and similar awards.
16.4 Performance Shares. If a Change of Control occurs during any
performance period relating to a grant of performance shares, the Company shall
upon the Change of Control pay to the Executive with respect to each performance
share with respect to which the performance period has not ended as of the date
of the Change of Control the award that would be payable to the Executive upon
achieving maximum performance goals.
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ARTICLE 17. BENEFICIARY
The Executive shall name one or more primary beneficiaries and one or
more contingent beneficiaries, who shall be entitled to receive any amounts
payable following the death of the Executive under this Agreement, which
beneficiary or beneficiaries shall be subject to change from time to time by
Executive giving notice in writing to the Board. A beneficiary may be a trust or
other entity, an individual or the Executive's estate. If the Executive fails to
designate a beneficiary, primary or contingent, then and in such event, such
benefit shall be paid to the surviving spouse of the Executive or, if he shall
leave no surviving spouse, then to the Executive's estate. If a named
beneficiary entitled to receive any death benefit is not living or in existence
at the death of the Executive or dies prior to asserting a written claim for any
such death benefit, then and in any such event, such death benefit shall be paid
to the other primary beneficiary or beneficiaries named by the Executive who
shall be living or in existence, if any, otherwise to the contingent beneficiary
or beneficiaries named by the Executive who shall then be living or in
existence, if any; but if there are no primary or contingent beneficiaries then
living or in existence, such benefit shall be paid to the surviving spouse of
the Executive or, if he shall leave no surviving spouse, then to the Executive's
estate. If a named beneficiary is receiving or is entitled to receive payments
of any such death benefits and dies before receiving all of the payments due
him, any remaining benefits shall be paid to the other primary beneficiary or
beneficiaries named by the Executive who shall then be living or in existence,
if any, otherwise to the contingent beneficiary or beneficiaries named by the
Executive who shall then be living or in existence, if any, but if there are not
primary or contingent beneficiaries then living or in existence, the balance
shall be paid to the estate of the beneficiary who was last receiving the
payments.
ARTICLE 18. INDEMNIFICATION
The Company shall indemnify the Executive during his employment and
thereafter to the maximum extent permitted by applicable law for any and all
liability of the Executive arising out of, or in connection with, his employment
by the Company; provided, that in no event shall such indemnity of the Executive
at any time during the period of his employment by the Company be less than the
maximum indemnity provided by the Company at any time during such period to any
other officer or director under an indemnification insurance policy or the
bylaws or charter of the Company or by agreement.
ARTICLE 19. NO SET-OFF OR MITIGATION
Executive's right to receive when due the payments and other benefits
provided for under this Agreement is absolute, unconditional and not subject to
set-off, counterclaim or legal or equitable defense. Time is of the essence in
the performance by the Company of its obligations under this Agreement. Any
claim which the Company may have against Executive, whether for a breach of this
Agreement or otherwise, shall be brought in a separate action or proceeding and
not as part of any action or proceeding brought by Executive to enforce any
rights against the Company under this Agreement. Executive shall not have any
duty to mitigate the amounts payable by the Company under this Agreement by
seeking new employment or self-employment following termination. Except as
specifically otherwise provided in this Agreement, all amounts payable pursuant
to this Agreement shall be paid without reduction regardless of any amounts of
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salary, compensation or other amounts which may be paid or payable to Executive
as the result of Executive's employment by another employer or self-employment.
ARTICLE 20. NO DEFERENCE
Unless otherwise expressly provided in this Agreement, no determination
pursuant to, or interpretation of, this Agreement made by the board of directors
(or any committee thereof) of the Company or any Successor Corporation following
a Change of Control or Imminent Change Date shall be entitled to any presumptive
validity or other deference in connection with any judicial or administrative
proceeding relating to or arising under this Agreement. Prior to a Change of
Control or Imminent Change Date, no inference as to deference should be drawn
from this provision.
ARTICLE 21. WAIVER OF CERTAIN OTHER RIGHTS
To the extent that payments are made to Executive pursuant to Section
10.3(a)(vi), Executive hereby waives the right to receive severance payments or
severance benefits under any other severance Plan, agreement or Policy of the
Company. To the extent that payments are made to Executive as required by
Section 10.3(b), Executive hereby waives the right to receive payments or
benefits under any Non-Qualified Plan of the Company that have been accrued as
of the Termination Date.
ARTICLE 22. OTHER RIGHTS
Except as expressly provided in Article 21, this Agreement shall not
prevent or limit Executive's continuing or future participation in any benefit,
bonus, incentive or other Plans provided by the Company and for which Executive
may qualify, nor shall this Agreement limit or otherwise affect such rights as
Executive may have under any other agreements with the Company. Amounts which
are vested benefits or which Executive is otherwise entitled to receive under
any Plan and any other payment or benefit required by law at or after the
Termination Date shall be payable in accordance with such Plan or applicable law
except as expressly modified by this Agreement.
ARTICLE 23. SUCCESSORS
This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns. 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 and any Parent
Corporation of any successor (whether direct or indirect) by purchase, merger,
consolidation or otherwise to all or substantially all of the business assets of
the Company, to assume expressly and agree in writing 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. Any successor to the business
or assets of the Company which assumes or agrees to perform this Agreement by
operation of law, contract, or otherwise shall be jointly and severally liable
with the Company under this Agreement as if such successor were the Company.
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ARTICLE 24. NO WAIVER
Executive's failure to insist upon strict compliance with any provision
of this Agreement shall not be deemed a waiver of such provision or any other
provision of this Agreement. A waiver of any provision of this Agreement shall
not be deemed a waiver of any other provision, and any waiver of any default in
any such provision shall not be deemed a waiver of any later default thereof or
of any other provision.
ARTICLE 25. DEFINITIONS
For purposes of this Agreement, the terms specified below shall have
the following meanings:
(a) "Plan" means plans, programs or policies of the Company.
(b) "Taxes" means federal, state, local or other income or other
taxes.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
ARTICLE 26. SEVERABILITY
All agreements and covenants contained herein are severable, and in the
event any of them shall be held to be invalid by a competent court, this
Agreement shall be interpreted as if such invalid agreements or covenants were
not contained herein.
ARTICLE 27. ASSIGNMENT PROHIBITED
This Agreement is personal to each of the parties hereto, and neither
party may assign nor delegate any of his or its rights or obligations hereunder
without first obtaining the written consent of the other party; provided,
however, that nothing in this ARTICLE 27 shall preclude (a) the Executive from
designating a beneficiary to receive any benefit payable under this Agreement
upon his death, (b) the executors, administrators, or other legal
representatives of the Executive or his estate from assigning any rights under
this Agreement to the person or persons entitled thereto or (c) the Company from
assigning this Agreement to any successor of the Company or any parent
corporation of any successor in accordance with the provisions of Article 23.
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ARTICLE 28. NO ATTACHMENT
Except as otherwise provided in this Agreement or required by
applicable law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge or hypothecation or to execution, attachment, levy, or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to effect any such action shall be null, void and of no effect.
ARTICLE 29. HEADINGS
The headings of articles, paragraphs and sections herein are included
solely for convenience of references and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
ARTICLE 30. GOVERNING LAW
The parties intend that this Agreement and the performance hereunder
and all suits and special proceedings hereunder shall be construed in accordance
with and under and pursuant to the laws of the State of Alabama and that in any
action, special proceeding or other proceeding that may be brought arising out
of, in connection with, or by reason of this Agreement, the laws of the State of
Alabama shall be applicable and shall govern to the exclusion of the law or any
other forum, without regard to the jurisdiction in which any action or special
proceeding may be instituted.
ARTICLE 31. BINDING EFFECT
This Agreement shall be binding upon, and inure to the benefit of, the
Executive and his heirs, executors, administrators and legal representatives and
the Company and its permitted successors and assigns.
ARTICLE 32. COUNTERPARTS
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
ARTICLE 33. NOTICES
All notices, requests and other communications to any party under this
Agreement shall be in writing (including telefacsimile transmission or similar
writing) and shall be given to such party at its address or telefacsimile number
set forth below or such other address or telefacsimile number as such party may
hereafter specify for the purpose by notice to the other party:
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(a) If to the Executive:
Xxxxxxxx X. Xxxxxxx
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
(b) If to the Company:
Xxxxxxx Corporation
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: General Counsel
Each such notice, request or other communication shall be effective (i) if given
by mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, or (ii) if given by any other
means, when delivered at the address specified in this ARTICLE 33.
ARTICLE 34. MODIFICATION OF AGREEMENT
No waiver or modification of this Agreement or of any covenant,
condition, or limitation herein contained shall be valid unless in writing and
duly executed by the party to be charged therewith. No evidence of any waiver or
modification shall be offered or received in evidence at any proceeding,
arbitration, or litigation between the parties hereto arising out of or
affecting this Agreement, or the rights or obligations of the parties hereunder,
unless such waiver or modification is in writing, duly executed as aforesaid.
The parties further agree that the provisions of this ARTICLE 34 may not be
waived except as herein set forth.
ARTICLE 35. TAXES
To the extent required by applicable law, the Company shall deduct and
withhold all necessary Taxes required by law to be withheld from any payments
made pursuant to the terms of this Agreement.
ARTICLE 36. RECITALS
The Recitals to this Agreement are incorporated herein and shall
constitute an integral part of this Agreement.
ARTICLE 37. EFFECT OF PRIOR AGREEMENTS
Other than as expressly provided herein, this Agreement supersedes and
replaces any prior employment agreement, understanding or arrangement (whether
written or oral) between the Company and the Executive except for rights and
obligations which have accrued as of the date hereof, which rights and
obligations shall continue in effect. Each of the parties hereto has relied on
his or its own judgment in entering into this Agreement. This Agreement also
supercedes and replaces the Change of Control Employment Agreement except for
rights and
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obligations which have accrued as of the date hereof, which rights
and obligations shall continue in effect.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
EXECUTIVE
/s/
-------------------
Xxxxxxxx X. Xxxxxxx
WITNESS:
------------------
XXXXXXX CORPORATION
By:
-----------------
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