AMENDED AND RESTATED CHANGE-IN-CONTROL AGREEMENT
AMENDED
AND RESTATED
THIS
AGREEMENT dated as of
02/07/08 (the “Agreement Date”) is
made by and among Tropical Shipping and Construction Company Limited (the
“Company” or “Tropical Shipping”), a Cayman Islands company, and Xxxx Xxxxxxx
(the “Executive”).
Executive
and Xxxxxxxx, Inc., a Florida corporation (“Xxxxxxxx”), have previously entered
into a Change-in-Control Agreement dated December 15, 2004 (the “Prior
Agreement”). Xxxxxxxx assigned its rights and obligations with
respect to the Prior Agreement to Tropical Shipping USA, LLC, a Florida limited
liability company (the “LLC”), and the LLC subsequently assigned its rights and
obligations with respect to the Prior Agreement to the Company. The
Company and Executive desire to amend and restate the Prior Agreement to conform
to the requirements of Section 409A of the Code.
ARTICLE
I
PURPOSES
The Board
has determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued services of the
Executive, despite the possibility or occurrence of a Change in Control of Nicor
Inc. or the Company. The Board believes it is imperative to reduce
the distraction of the Executive that would result from the personal
uncertainties caused by a pending or threatened Change in Control, to encourage
the Executive’s full attention and dedication to the Company, and to provide the
Executive with compensation and benefits arrangements upon a Change in Control
which are competitive with those of similarly situated
corporations. This Agreement is intended to accomplish these
objectives.
ARTICLE
II
CERTAIN
DEFINITIONS
When used
in this Agreement, the terms specified below shall have the following
meanings:
2.1. The
“Agreement Term” shall begin on the Agreement Date and shall continue through
December 31, 2008. As of December 31, 2008, and on each
December 31 thereafter, the Agreement Term shall automatically be extended
for one additional year unless, not later than the preceding June 30,
either party shall have given notice that such party does not wish to extend the
Agreement Term. If a Change in Control shall have occurred during the
Agreement Term (as it may be extended from time to time), the Agreement Term
shall continue for a period ending on the two-year anniversary of the date of
the Change in Control, but if the Termination Date (as defined below) occurs
during that two-year period, then the Agreement Term shall continue until the
end of the Severance Period (as defined below). Unless the
Termination Date occurs during the two-year period after a Change in Control so
that the Agreement Term is extended to include the Severance Period, as provided
in the immediately preceding sentence, the Agreement Term shall not extend
beyond the two-year anniversary of the Change in Control.
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2.2. “Board”
means the board of directors of the Company.
2.3. “Change
in Control” means the occurrence of a “change in the ownership” of Nicor Inc. or
Tropical Shipping, a “change in the effective control” of Nicor Inc. or a
“change in the ownership of a substantial portion of the assets” of Nicor Inc.
or Tropical Shipping, as determined in accordance with this
Section. In determining whether an event shall be considered a
“change in the ownership” of Nicor Inc. or Tropical Shipping, a
“change in the effective control” of Nicor Inc. or a “change in the ownership of
a substantial portion of the assets” of Nicor Inc. or Tropical Shipping, the
following provisions shall apply:
2.3.1 A “change
in the ownership” of Nicor Inc. shall occur on the date on which any one person,
or more than one person acting as a group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (a
“Person”)), acquires ownership of the equity securities of Nicor Inc. that,
together with the equity securities held by such Person, constitutes more than
50% of the total fair market value or total voting power of Nicor Inc., as
determined in accordance with Treas. Reg. §1.409A-3(i)(5)(v). If a
Person is considered either to own more than 50% of the total fair market value
or total voting power of the equity securities of Nicor Inc., or to have
effective control of Nicor Inc. within the meaning of Section 2.3.2, and such
Person acquires additional equity securities of Nicor Inc., the acquisition of
additional equity securities by such Person shall not be considered to cause a
“change in the ownership” of Nicor Inc. In addition, a “change in the
ownership” of Tropical Shipping shall occur on the date on which any one Person
other than Nicor Inc. or a Subsidiary, acquires ownership of the equity
securities of Tropical Shipping that, together with the equity securities held
by such Person, constitutes more than 50% of the total fair market value or
total voting power of Tropical Shipping, as determined in accordance with Treas.
Reg. §1.409A-3(i)(5)(v). If a Person is considered either to own more
than 50% of the total fair market value or total voting power of the equity
securities of Tropical Shipping, and such Person acquires additional equity
securities of Tropical Shipping, the acquisition of additional equity securities
by such Person shall not be considered to cause a “change in the ownership” of
Tropical Shipping.
2.3.2 A “change
in the effective control” of Nicor Inc. shall occur on either of the following
dates:
2.3.2.1
The date
on which any Person, acquires (or has acquired during the 12-month period ending
on the date of the most recent acquisition by such Person) ownership of stock of
Nicor Inc. possessing 30% or more of the total voting power of Nicor Inc.’s
equity securities, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vi). If a Person is considered to possess 30% or more
of the total voting power of Nicor Inc.’s equity securities, and such Person
acquires additional stock of Nicor Inc., the acquisition of additional stock by
such Person shall not be considered to cause a “change in the effective control”
of Nicor Inc.; or
2.3.2.2
The date
on which a majority of the members of the Board of Directors of Nicor Inc. is
replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the members of the Board of
2
2.3.3 A “change
in the ownership of a substantial portion of the assets” of Nicor Inc. shall
occur on the date on which any one Person acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such
Person) assets from Nicor Inc. that have a total gross fair market value equal
to or more than 40% of the total gross fair market value of all of the assets of
Nicor Inc. immediately before such acquisition or acquisitions, as determined in
accordance with Treas. Reg. §1.409A-3(i)(5)(vii). In addition, a
“change in the ownership of a substantial portion of the assets” of Tropical
Shipping shall occur on the date on which any one Person other than Nicor Inc.
or a Subsidiary acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such Person) substantially all of the
assets of Tropical Shipping immediately before such acquisition or acquisitions,
as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vii). A
transfer of assets shall not be treated as a “change in the ownership of a
substantial portion of the assets” when such transfer is made to an entity that
is controlled by the holders of the applicable company’s equity securities, as
determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vii)(B).
2.3.4 Notwithstanding
the foregoing, the following acquisitions shall not constitute a Change in
Control: (i) an acquisition by Nicor Inc. or entity controlled by Nicor Inc., or
(ii) an acquisition by an employee benefit plan (or related trust) sponsored or
maintained by Nicor Inc. or any entity controlled by Nicor Inc. In
addition, the circumstances described in this Section 2.3 shall not constitute a
Change in Control with respect to the Executive unless he is employed at
Tropical Shipping immediately before the events constituting the Change in
Control or Potential Change in Control and then only if the Executive is not
employed by Nicor Inc. or a Subsidiary at any time during the 30-day period
following the events constituting the Change in Control, and further provided
that nothing in this paragraph shall be construed to require the Executive to
accept such employment with Nicor Inc. or a Subsidiary.
2.3.5 For
purposes of this Section 2.3, (i) the terms Tropical Shipping and Nicor Inc.
shall mean, respectively, Tropical Shipping and any Tropical Successor and Nicor
Inc. and any Nicor Successor; (ii) the term “Tropical Successor” shall mean any
corporation, partnership, joint venture or other entity that succeeds to the
interests of Tropical Shipping by means of a merger, consolidation, or other
restructuring that does not constitute a Change in Control; and (iii) the term
“Nicor Successor” shall mean any corporation, partnership, joint venture or
other entity that succeeds to the interests of Nicor Inc. by means of a merger,
consolidation, or other restructuring that does not constitute a Change in
Control.
2.4. “Code”
means the Internal Revenue Code of 1986, as amended.
2.5. “Effective
Date” means the first date during the Agreement Term on which a Change in
Control occurs.
2.6. “Employment
Period” means the period commencing on the Effective Date and ending on the
two-year anniversary of that date.
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2.7. “Incentive
Plan” shall have the meaning set forth in Section 3.2.2.
2.8. “Payment
Date” means the date on which all of the following are complete (i) the
Termination Date, (ii) the execution of the release required pursuant to Section
5.1, and (iii) the expiration of the required revocation period specified in the
release without revocation occurring.
2.9. “Plans”
shall have the meaning set forth in Section 3.2.3.
2.10. A
“Potential Change in Control” shall exist during any period in which the
circumstances described in Sections 2.10.1, 2.10.2, or 2.10.3 exist
(provided, however, that a Potential Change in Control shall cease to exist not
later than the occurrence of a Change in Control):
2.10.1 The
Company, Xxxxxxxx or Nicor Inc. enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control, provided that a
Potential Change in Control described in this Section 2.10.1 shall cease to
exist upon the expiration or other termination of all such
agreements.
2.10.2 Any
person (including the Company, Xxxxxxxx or Nicor Inc.) publicly announces an
intention to take or to consider taking actions the consummation of which would
constitute a Change in Control; provided that a Potential Change in Control
described in this Section 2.10.2 shall cease to exist upon the withdrawal
of such intention, or upon a reasonable determination by the Board or the Board
of Directors of Nicor Inc. that there is no reasonable chance that such actions
would be consummated.
2.10.3 The Board
or the Board of Directors of Nicor Inc. adopts a resolution to the effect that,
for purposes of this Agreement, a Potential Change in Control exists; provided
that a Potential Change in Control described in this Section 2.10.3 shall
cease to exist upon a reasonable determination by the Board or the Board of
Directors of Nicor Inc. that the reasons that gave rise to the resolution
providing for the existence of a Potential Change in Control have expired or no
longer exist.
2.11. “Separation
from Service” means the termination of Executive’s services to the Company and
all Subsidiaries and affiliates, whether voluntarily or involuntarily, other
than by reason of death, in accordance with Treas. Reg.
§1.409A-1(h).
2.12. “Severance
Incentive” means the greater of (i) the target annual incentive under an
Incentive Plan applicable to the Executive for the Performance Period (as such
term is defined in Section 3.2.2) in which the Termination Date occurs, or
(ii) the average of the actual annual incentives paid (or payable, to the
extent not previously paid) to the Executive under the applicable Incentive Plan
for each of the two calendar years preceding the calendar year in which the
Termination Date occurs.
2.13. “Severance
Period” means the period beginning on the Executive’s Termination Date and
ending on the third anniversary thereof; provided, however, that no Severance
Period will occur unless the Executive’s Termination Date occurs under
circumstances described in
4
Section 5.1
(relating to termination by the Executive for Good Reason or by the Company
other than for Cause or Permanent Disability).
2.14. “Subsidiary”
shall mean any corporation, partnership, joint venture or other entity during
any period in which at least a fifty percent interest in such entity is owned,
directly or indirectly, by Nicor Inc. (or a successor to Nicor
Inc.).
2.15. “Termination
Date” means the first day on or after which the Executive has a Separation from
Service.
2.16. “Welfare
Plans” shall have the meaning set forth in Section 3.2.4.
ARTICLE
III
TERMS
OF EMPLOYMENT
3.1. Position
and Duties.
3.1.1 The
Company hereby agrees to cause the Company to continue the Executive’s
employment during the Employment Period and, subject to Article IV of this
Agreement, the Executive agrees to remain in the employ of the Company, subject
to the terms and conditions hereof. During the Employment Period, (i)
the Executive’s position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned to the Executive at any time during the 90-day period
immediately preceding the Effective Date, and (ii) the Executive’s services
shall be performed at the location where the Executive was employed immediately
preceding the Effective Date or any office or location less than 25 miles
from such location.
3.1.2 During
the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and affairs of
the Company, and to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder, to use the Executive’s reasonable best
efforts to perform faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for the
Executive (i) to serve on corporate, civic or charitable boards or
committees, (ii) to deliver lectures, fulfill speaking engagements or teach
at educational institutions and (iii) to manage personal investments, to
the extent that such other activities do not, in the reasonable judgment of the
Board of Directors of the Company, inhibit or prohibit the performance of the
Executive’s duties under this Agreement, or conflict in any material way with
the business of Nicor Inc., the Company or any Subsidiary; provided, however,
that the Executive shall not serve on the board of any business, or hold any
other position with any business, without the consent of the Board of Directors
of the Company.
3.2. Compensation.
3.2.1 Base
Salary. During the Employment Period, the Executive shall
receive an annual base salary (“Annual Base Salary”), which shall be paid at an
annual rate at least equal
5
3.2.2 Annual Incentive. In addition to
Annual Base Salary, the Company shall pay or cause to be paid to the Executive
an incentive award (the “Annual Incentive”) for each Performance Period or
portion thereof which falls within the Employment
Period. “Performance Period” means each period of time designated in
accordance with any annual incentive award arrangement (“Incentive Plan”) which
is based upon performance and approved by the Board or any committee of the
Board, or in the absence of any Incentive Plan or any such designated period of
time, Performance Period shall mean each calendar year. The
Executive’s target and maximum Annual Incentive with respect to any Performance
Period shall not be less than the target and maximum annual incentive award
payable with respect to the Executive under the Company’s annual incentive
program as in effect immediately preceding the Effective Date.
3.2.3 Incentive, Savings and
Retirement Plans. During the Employment Period, the Executive
shall be entitled to participate in all incentive, savings and retirement plans,
practices, policies and programs (including, without limitation, the Nicor Inc.
Stock Deferral Plan) (“Plans”) applicable generally to other senior executives
of the Company, but in no event shall such Plans provide the Executive with
incentive opportunities (measured with respect to long-term and special
incentives, to the extent, if any, that such distinctions are applicable) or
savings and retirement benefits which are less favorable, in the aggregate, than
the greater of (i) those provided by the Company for the Executive under
such Plans as in effect at any time during the 90-day period immediately
preceding the Effective Date, or (ii) those provided generally at any time
after the Effective Date to other senior executives of the Company.
3.2.4 Welfare Benefit
Plans. During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs (“Welfare Plans”) provided by the Company (including, without
limitation, medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident insurance
benefits), but in no event shall such Welfare Plans provide the Executive with
benefits which are less favorable, in the aggregate, than the greater of
(i) those provided by the Company for the Executive under such Welfare
Plans as were in effect at any time during the 90-day period immediately
preceding the Effective Date, or (ii) those provided generally at any time
after the Effective Date to other senior executives of the Company.
6
3.2.5 Other Employee
Benefits. During the Employment Period, the Executive shall be
entitled to other employee benefits and perquisites in accordance with the most
favorable plans, practices, programs and policies of the Company, as in effect
with respect to the Executive at any time during the 90-day period immediately
preceding the Effective Date, or if more favorable, as in effect generally with
respect to other senior executives of the Company.
3.2.6 Expenses. The
Executive shall be entitled to receive prompt reimbursements for all reasonable
expenses incurred by the Executive during the Employment Period in accordance
with the policies, practices and procedures of the Company, as in effect with
respect to the Executive at any time during the 90-day period immediately
preceding the Effective Date, or if more favorable, as in effect generally with
respect to other senior executives of the Company. All such expenses
shall be reimbursed no later than the date six (6) months following the
Termination Date. The amount of expenses reimbursed in one year shall
not affect the amount eligible for reimbursement in any subsequent
year.
3.2.7 Office and Support
Staff. During the Employment Period, the Executive shall be
entitled to an office or offices of a size and with furnishings and other
appointments, and to exclusive personal secretarial and other assistance, as in
effect with respect to the Executive at any time during the 90-day period
immediately preceding the Effective Date, or if more favorable, as provided
generally with respect to other senior executives of the Company.
3.2.8 Paid Time
Off. During the Employment Period, the Executive shall be
entitled to paid time off in accordance with the plans, policies, programs and
practices of the Company as in effect with respect to the Executive at any time
during the 90-day period immediately preceding the Effective Date, or if more
favorable, as provided generally with respect to other senior executives of the
Company.
3.2.9 Subsidiaries. To
the extent that immediately prior to the Effective Date, the Executive has been
on the payroll of, and participated in the incentive or employee benefit plans
of, Nicor Inc. or a Subsidiary, the references to the Company contained in
Sections 3.2.1 through 3.2.8 and the other sections of this Agreement
referring to benefits to which the Executive may be entitled shall be read to
refer to Nicor Inc. or such Subsidiary, as applicable.
ARTICLE
IV
TERMINATION
OF EMPLOYMENT
4.1. Disability.
4.1.1 During
the Agreement Term, the Company may terminate the Executive’s employment upon
the Executive’s Permanent Disability (as defined in Section 4.1.2) by
giving the Executive or his legal representative, as applicable,
(1) written notice in accordance with Section 11.8 of the Company’s
intention to terminate the Executive’s employment pursuant to this section, and
(2) a certification of the Executive’s Permanent Disability by a physician
selected by the Company or its insurers and reasonably acceptable to the
Executive or the Executive’s legal representative. The Executive’s
employment shall terminate effective on the 30th day (the “Permanent Disability
Effective Date”) after the Executive’s receipt of such notice unless, before the
Permanent Disability Effective Date, the Executive shall have resumed the
7
4.1.2 The
Executive shall be considered to have a “Permanent Disability” during any period
in which he has a Disability (as defined below); provided, however, that the
Executive shall not be considered to have “Permanent Disability” until (i) for a
period of 180 consecutive days, the Executive, as a result of a Disability, is
incapable, after reasonable accommodation, of performing his duties under this
Agreement on a full-time basis; (ii) such Disability is reasonably expected to
continue for at least another 90 days; and (iii) at the Executive’s
Termination Date, he is eligible for income replacement benefits under the
Company’s long-term disability plan. The Executive shall be
considered to have a “Disability” during any period in which he has a physical
or mental disability which renders him incapable, after reasonable
accommodation, of performing his duties under this Agreement.
4.2. Death. The
Executive’s employment shall terminate automatically upon the Executive’s death
during the Agreement Term.
4.3. Cause. The
Company may terminate the Executive’s employment during the Employment Period
for Cause. For purposes of this Agreement, “Cause”
means:
4.3.1 the
Executive’s willful commission of acts or omissions which have, have had, or are
likely to have a material adverse effect on the business, operations, financial
condition or reputation of Nicor Inc., the Company or any
Subsidiary;
4.3.2 the
Executive’s conviction (including a plea of guilty or nolo contendere) of a
felony or any crime of fraud, theft, dishonesty or moral turpitude;
or
4.3.3 the
Executive’s material violation of any statutory or common law duty of loyalty to
Nicor Inc., the Company or any Subsidiary.
For
purposes of this Agreement, no act, or failure to act, on the part
of the Executive shall be considered “willful” unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable belief
that the Executive’s action or omission was in the best interests of Nicor Inc.,
the Company or any Subsidiary. Any act, or failure to act, pursuant
to direction provided by the person to whom the Executive reports, or provided
by a resolution duly adopted by the Board, or pursuant to advice of counsel for
the Company, shall be conclusively presumed to be done, or omitted to be done,
by the Executive in good faith and in the best interests of Nicor Inc., the
Company or any Subsidiary.
4.4. Good
Reason. During the Employment Period, the Executive’s
employment may be terminated by the Executive for Good Reason. For
purposes of this Agreement, “Good Reason” means:
4.4.1 a
material diminution in the Executive’s base compensation;
8
4.4.2 a
material diminution in the authority, duties or responsibilities of the
Executive;
4.4.3 a
material change, of not less than 25 miles, in the geographic location at which
the Executive must provide services; or
4.4.4 any other
action or inaction that constitutes a material breach by the Company of this
Agreement;
provided,
however, that the above conditions, as applicable, shall not constitute Good
Reason: (i) unless the Executive gives the Company written notice of such
condition and the Company fails to remedy the condition within 30 days of such
notice; (ii) if the initial existence of the condition is more than 90 days
before the Executive gives the Company such notice; or (iii) if the Executive
has consented in writing to such condition in a document that makes specific
reference to this Section 4.4.
4.5. Without
Cause During a Potential Change in Control. If the Executive’s
employment is terminated by the Company without Cause during a Potential Change
in Control, and such date of termination occurs not more than 180 days
prior to the occurrence of a Change in Control and the Executive establishes by
reasonable evidence that such termination of employment was materially connected
with and in anticipation of the Change in Control, then the Executive shall be
entitled to receive the benefits that would have been provided under
Section 5.1, determined as though:
4.5.1 the
Executive were rehired by the Company immediately prior to the Change in Control
at the salary rate equal to the Executive’s highest salary rate during the
one-year period prior to the date of the Change in Control, and with other
Company compensation and benefit arrangements comparable to those provided to
comparable executives of the Company;
4.5.2 the
Executive’s employment were terminated by the Company without Cause immediately
after the Change in Control; and
4.5.3 this
Agreement were in full force and effect at the time of the Change in Control,
and at the time of the Executive’s deemed termination of
employment.
4.6. Right of
Resignation and Termination. This Agreement does not
constitute a guarantee of continued employment at any time, but instead provides
for certain rights and benefits for the Executive during his employment
following the occurrence of a Change in Control, and in the event his employment
with the Company terminates under the circumstances described
herein. The Company may terminate the employment of the Executive at
any time for any reason, without breach of this Agreement, subject to its
obligations set forth in Article V and elsewhere in this
Agreement. The Executive may resign from the Company for Good Reason,
or for any other reason, without breach of this Agreement, subject to the
Executive’s obligations set forth in this Agreement; provided that, in the event
of a resignation without Good Reason, the Executive shall provide at least four
weeks advance notice of such resignation to the Company.
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ARTICLE
V
OBLIGATIONS
OF THE COMPANY UPON TERMINATION
5.1. If by the
Executive for Good Reason or by the Company Other Than for Cause or Permanent
Disability. If,
during the Employment Period, the Company shall terminate the Executive’s
employment other than for Cause or Permanent Disability, or if the Executive
shall terminate employment for Good Reason, the Company’s obligations to the
Executive shall be as set forth in this Section 5.1. As a
precondition to fulfilling such obligations, the Company shall require the
Executive to execute and deliver within 60 days following his Termination Date a
release prepared by the Company and providing for the Executive’s release of any
and all claims against Nicor Inc., the Company and any Subsidiaries (and those
acting on behalf of them) that may have arisen on or before the date of the
release, which release shall contain such other reasonable and customary terms
as are specified by the Company. Notwithstanding any provisions to
the contrary, no payments shall be made or other benefits arise pursuant to this
Section 5.1 unless and until such binding release is effective. If
such release is not delivered by the Executive within 60 days following the
Executive’s Termination Date, all rights of the Executive with respect to this
Agreement and any benefits hereunder shall be forfeited.
5.1.1 The
Company shall, within five business days of the Payment Date, pay the Executive
a cash payment equal to the sum of the following amounts:
5.1.1.1
to the
extent not previously paid, the Annual Base Salary and any accrued paid time off
through the Termination Date;
5.1.1.2
an amount
equal to the product of (i) the Annual Incentive (as defined in
Section 3.2.2) at target for any Performance Period in which the
Termination Date occurs multiplied by (ii) a fraction, the numerator of
which is the number of days the Executive was actually employed by the Company
during such Performance Period, and the denominator of which is the number
of days in the Performance Period; or, if greater, the amount of any Annual
Incentive otherwise payable to the Executive with respect to a Performance
Period in which the Termination Date occurs, which payment shall be in full
settlement of Annual Incentive amounts due with respect to any such Performance
Period;
5.1.1.3
an amount
equal to the product of (A) three (3) multiplied by
(B) the sum of (i) the Executive’s Annual Base Salary, and
(ii) the Severance Incentive; and
5.1.1.4
an amount
equal to the sum of (A) the balance of the Executive’s accounts forfeited under
the Xxxxxxxx, Inc. Retirement Savings Plan, or any successor plan, if applicable
(“RSP”) as a result of termination of employment, and (B) the sum of (i) the
aggregate maximum matching contributions which the Company would have made on
behalf of the Executive to the RSP for the Severance Period, calculated as if
the amount payable under subsection 5.1.1.3 of this Agreement had been earned
equally over the Severance Period and the Executive had made the maximum
allowable voluntary contributions to the RSP, and (ii) the aggregate additional
profit sharing
10
contributions,
if any, which the Company would have made on behalf of the Executive for the
Severance Period, based on the greater of (a) the target profit sharing
contribution for the year in which the Termination Date occurs, or (b) the
average of the profit sharing contributions credited for the Executive for the
two years prior to the year in which the Termination Date occurs. For
purposes of calculating the amount that would be contributed to the RSP for the
Severance Period under this Section 5.1.1.4(B), the limits contained in the RSP
and Internal Revenue Code Sections 415, 402(g) and 401(a)(17), for the year of
termination shall apply.
5.1.2 For
purposes of each of the Executive’s stock options granted under the Nicor Long
Term Incentive Plan (the “Nicor LTIP”), any successor plan, or otherwise, that
is or becomes exercisable on the Termination Date, the Executive’s Separation
from Service shall be disregarded, and each such option shall continue to be
exercisable as though the Executive’s employment had continued through the last
day on which such option would be exercisable in the absence of such Separation
from Service (such earlier date being referred to herein as the “Applicable
Expiration Date”). This Section 5.1.2 shall be applicable
notwithstanding any term of any plan, arrangement, or agreement providing for
early expiration of the option because of the Executive’s Separation from
Service, except for an amendment adopted in accordance with Section 11.7 of
this Agreement and that by its specific terms amends this
Agreement.
5.1.3 On the
Termination Date (i) the Executive shall become fully vested in, and may
thereupon and until the Applicable Expiration Date of such stock incentive
awards exercise in whole or in part, any and all stock incentive awards granted
to the Executive under the Nicor LTIP, any successor plan or otherwise which
have not become exercisable as of the Termination Date; (ii) all performance
units previously awarded to the Executive shall become vested, and a prorated
calculation of the target value of all such units shall be done as of the
Termination Date and full payment of such prorated target value shall be made by
the Company within 30 days after the Termination Date; and (iii) the
Executive shall become fully vested at the prorated target level in any other
cash incentive awards granted for the performance period in which the
Termination Date occurs under the Nicor LTIP, a successor plan or otherwise
which have not, as of the Termination Date, become fully vested.
5.1.4 All
forfeiture conditions that as of the Termination Date are applicable to any
deferred stock unit, deferred dividends, restricted stock or restricted share
units awarded to the Executive pursuant to the Nicor LTIP, a successor plan or
otherwise shall lapse immediately (to the extent such awards are outstanding
immediately prior to the Termination Date). Notwithstanding the
foregoing, to the extent such awards are subject to performance criteria, a
prorated calculation of the target value of such awards shall be performed and
forfeiture conditions shall lapse only with respect to the portion of such
awards attributable to such prorated value.
5.1.5 For
purposes of the Tropical Long-Term Performance Incentive Plan (the “Tropical
LTIP”), on the Termination Date the Executive shall become fully vested, and a
prorated calculation of the target value shall be done as of the Termination
Date and full payment of such prorated target value shall be made by the Company
within 30 days after the Termination Date.
11
5.1.6 During
the Severance Period (or until such later date as any Welfare Plan of the
Company may specify), the Company shall continue to provide to the Executive and
the Executive’s family welfare benefits (including, without limitation, medical,
prescription, dental, disability, individual life and group life insurance
benefits) which are at least as favorable as those provided under the most
favorable Welfare Plans of the Company applicable (i) with respect to the
Executive and his family during the 90-day period immediately preceding the
Termination Date, or (ii) with respect to other senior executives and their
families during the Severance Period. In determining benefits under
such Welfare Plans, the Executive’s annual compensation attributable to base
salary and incentives for any plan year or calendar year, as applicable, shall
be deemed to be not less than the Executive’s Annual Base Salary and Target
Annual Incentive. The cost of the welfare benefits provided under
this Section 5.1.6 shall not exceed the cost of such benefits to the
Executive immediately before the Termination Date or, if less, the Effective
Date. All such benefit payments shall be made no later than December
31 of the year following the year in which the expense was
incurred. The amount of benefits provided in one year shall not
affect the amounts provided in any subsequent year. Such benefits
shall not be subject to liquidation or exchange for another
benefit. Notwithstanding the foregoing, if the Executive obtains
comparable coverage under any Welfare Plans sponsored by another employer, then
the amount of coverage required to be provided by the Company hereunder shall be
reduced by the amount of coverage provided by such other employer’s Welfare
Plans. The Executive’s rights under this Section shall be in
addition to and not in lieu of any post-termination continuation coverage or
conversion rights the Executive may have pursuant to applicable law, including,
without limitation, continuation coverage required by Section 4980B of the
Code. For purposes of determining eligibility for (but not the time
of commencement of) retiree benefits under any Welfare Plans of the Company, the
Executive shall be considered (i) to have remained employed until the last
day of the Severance Period and to have retired on the last day of such period,
and (ii) to have attained the age the Executive would have attained on the
last day of the Severance Period.
5.1.7 During
the Severance Period, the Company shall, at its sole expense, as incurred, pay
on behalf of Executive all fees and costs charged by a nationally recognized
outplacement firm selected by the Company (subject to approval by the Executive,
which shall not be withheld unreasonably) to provide outplacement
services. The amount of expenses incurred in one year shall not
affect the amounts paid in any subsequent year.
5.2. If by the
Company for Cause. If the Company terminates the
Executive’s employment for Cause during the Employment Period, this
Agreement shall terminate without further obligation by the Company to the
Executive, other than the obligation immediately to pay the Executive in cash
the Executive’s Annual Base Salary through the Termination Date, plus any
accrued paid time off, in each case to the extent not previously
paid.
5.3. If by the
Executive Other Than for Good Reason. If the Executive
terminates employment during the Employment Period other than for Good Reason
(including, but not by way of limitation, voluntary retirement), and other than
for Disability or death, this Agreement shall terminate without further
obligation by the Executive or by the Company, other than the obligation of the
Company immediately to pay the Executive in cash the Executive’s Annual
12
5.4. If by the
Company for
Permanent
Disability. If
the Company terminates the Executive’s employment by reason of the Executive’s
Permanent Disability during the Employment Period, this Agreement shall
terminate without further obligation to the Executive, other than:
5.4.1 the
Company’s obligation immediately to pay the Executive in cash all amounts
specified in Sections 5.1.1.1, and 5.1.1.2, in each case, to the extent unpaid
as of the Termination Date (such amounts collectively, the “Accrued
Obligations”), and
5.4.2 the
Executive’s right after the Permanent Disability Effective Date to receive
disability and other benefits at least equal to the greater of (i) those
provided under the most favorable disability Plans applicable to disabled senior
executives of the Company in effect immediately before the Termination Date, or
(ii) those provided under the most favorable disability Plans of the
Company in effect at any time during the 90-day period immediately before the
Effective Date.
5.5. If upon
Death. If the Executive’s employment is terminated by reason
of the Executive’s death during the Employment Period, this Agreement shall
terminate without further obligation to the Executive’s legal representatives
under this Agreement, other than the obligation immediately to pay the
Executive’s estate or beneficiary in cash all Accrued
Obligations. Notwithstanding anything in this Agreement to the
contrary, the Executive’s family shall be entitled to receive benefits at least
equal to the most favorable benefits provided under Plans of the Company to the
surviving families of senior executives of the Company, but in no event shall
such Plans provide benefits which in each case are less favorable, in the
aggregate, than the most favorable of those provided by the Company to the
Executive under such Plans in effect at any time during the 90-day period
immediately before the Effective Date.
ARTICLE
VI
CERTAIN
ADDITIONAL PAYMENTS BY THE COMPANY
6.1. Gross-up
for Certain Taxes.
6.1.1 If it is
determined by the Company’s independent auditors that any benefit received or
deemed received by the Executive from the Company pursuant to this Agreement or
otherwise, whether or not in connection with a Change in Control (such monetary
or other benefits 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, subject to Sections 6.6 and 6.7, within five business
days after such determination, pay the Executive an amount (the “Gross-up
Payment”) equal to the product of:
(a) the
amount of such Excise Taxes multiplied by
(b) the
Gross-up Multiple (as defined in Section 6.4).
13
The
Gross-up Payment is intended to compensate the Executive for all Excise Taxes
payable by the Executive with respect to the Potential Parachute Payments and
any federal, state, local or other income or other taxes or Excise Taxes payable
by the Executive with respect to the Gross-up Payment.
6.1.2 The
determination of the Company’s independent auditors described in
Section 6.1.1, including the detailed calculations of the amounts of the
Potential Parachute Payments, Excise Taxes and Gross-up Payment and the
assumptions relating thereto, shall be set forth in a written certificate of
such auditors (the “Company Certificate”) delivered to the
Executive. The Executive or the Company may at any time request the
preparation and delivery to the Executive of a Company
Certificate. The Company shall cause the Company Certificate to be
delivered to the Executive as soon as reasonably possible after such
request.
6.1.3 All
determinations by the Company’s auditors under this Section 6.1 shall be made
using reasonable good faith interpretations of the Code, the regulations and
other guidance issued thereunder.
6.2. Determination
by the Executive.
6.2.1 If
(i) the Company shall fail to deliver a Company Certificate to the
Executive within 30 days after its receipt of his written request therefor,
or (ii) at any time after the Executive’s receipt of a Company Certificate,
the Executive disputes either (x) the amount of the Gross-up Payment set
forth therein, or (y) the determination set forth therein to the effect
that no Gross-up Payment is due (whether by reason of Section 6.7 or
otherwise), then the Executive may elect to require the Company to pay a
Gross-up Payment in the amount determined by the Executive as set forth in an
Executive Counsel Opinion (as defined in Section 6.5). 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
(together with the detailed calculations of the amounts of Potential Parachute
Payments, Excise Taxes and Gross-up Payment and the assumptions relating
thereto) and an Executive Counsel Opinion regarding such Gross-up Payment (such
written notice and opinion collectively, the “Executive’s
Determination”). Within 30 days after delivery of an Executive’s
Determination to the Company, the Company shall either (i) pay the
Executive the Gross-up Payment set forth in Executive’s Determination (less the
portion thereof, if any, previously paid to Executive by the Company) or
(ii) deliver to the Executive a Company Certificate and a Company Counsel
Opinion (as defined in Section 6.5), and pay the Executive the Gross-up
Payment specified in such Company Certificate. If for any reason the
Company fails to comply with the preceding sentence, the Gross-up Payment
specified in the Executive’s Determination shall be controlling for all
purposes.
6.2.2 If the
Executive does not request a Company Certificate, and the Company does not
deliver a Company Certificate to the Executive, then (i) the Company shall,
for purposes of Section 6.7, be deemed to have determined that no Gross-up
Payment is due, and (ii) the Executive shall not pay any Excise Taxes in
respect of Potential Parachute Payments, except in accordance with
Sections 6.6.1 or 6.6.4.
14
6.3. Additional
Gross-up Amounts. If for any reason it is later determined
(whether pursuant to the subsequently-enacted provisions of the Code, final
regulations or published rulings of the IRS, a final judgment of a court of
competent jurisdiction, a determination of the Company’s independent auditors
set forth in a Company Certificate or, subject to the last two sentences of
Section 6.2.1, an Executive’s Determination) that the amount of Excise
Taxes payable by the Executive is greater than the amount determined by the
Company or the Executive pursuant to Section 6.1 or 6.2, as applicable,
then the Company shall, subject to Sections 6.6 and 6.7, 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 incurred by the Executive as a result of
having taken a position in accordance with determination made pursuant to
Section 6.1 or 6.2, as applicable,
multiplied
by
(b) the
Gross-up Multiple.
6.4. 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 lesser of (i) the sum, expressed as a decimal
fraction, of the effective marginal tax rates of all federal, state, local and
other income and other taxes and any Excise Taxes applicable to the Gross-up
Payment; or (ii) 0.80, it being intended that the Gross-up Multiple shall
in no event exceed five (5.0). (If different rates of tax are
applicable to various portions of a Gross-up Payment, the weighted average of
such rates shall be used.)
6.5. Opinion
of Counsel. “Executive Counsel Opinion” means an opinion of
nationally-recognized executive compensation counsel to the effect (i) that
the amount of the Gross-up Payment determined by the Executive pursuant to
Section 6.2 is the amount that a court of competent jurisdiction, based on
a final judgment not subject to further appeal, is most likely to decide to have
been calculated in accordance with this Article and applicable law and
(ii) if the Company has previously delivered a Company Certificate to the
Executive, that there is no reasonable basis or no substantial authority for the
calculation of the Gross-up Payment set forth in the Company
Certificate. “Company Counsel Opinion” means an opinion of
nationally-recognized executive compensation counsel to the effect that
(i) the amount of the Gross-up Payment set forth in the Company Certificate
is the amount that a court of competent jurisdiction, based on a final judgment
not subject to further appeal, is most likely to decide to have been calculated
in accordance with this Article and applicable law and (ii) for purposes of
Section 6662 of the Code, the Executive has substantial authority to report
on his federal income tax return the amount of Excise Taxes set forth in the
Company Certificate.
6.6. Amount
Increased or Contested.
6.6.1 The
Executive shall notify the Company in writing (an “Executive’s Notice”) of any
claim by the IRS or other taxing authority (an “IRS Claim”) that, if successful,
would require the payment by the Executive of Excise Taxes in respect of
Potential Parachute
15
6.6.1.1
deliver
to the Executive a Company Certificate to the effect that the IRS Claim has been
reviewed by the Company’s independent auditors and, notwithstanding the IRS
Claim, the amount of Excise Taxes, interest and penalties payable by the
Executive is either zero or an amount less than the amount specified in the IRS
Claim,
6.6.1.2
pay to
the Executive an amount (which shall also be deemed a Gross-up Payment) equal to
the positive difference between (x) the product of the amount of Excise
Taxes, interest and penalties specified in the Company Certificate, if any,
multiplied by the Gross-up Multiple, and (y) the portion of such product,
if any, previously paid to the Executive by the Company, and
6.6.1.3
direct
the Executive pursuant to Section 6.6.4 to contest the balance of the IRS
Claim, then the Executive shall pay only the amount, if any, of Excise Taxes,
interest and penalties specified in the Company Certificate. In no
event shall the Executive pay an IRS Claim earlier than 30 days after having
given an Executive’s Notice to the Company (or, if sooner, the IRS Claim
Deadline).
6.6.2 At any
time after the payment by the Executive of any amount of Excise Taxes or related
interest or penalties in respect of Potential Parachute Payments (whether or not
such amount was based upon a Company Certificate or an Executive’s
Determination), the Company may in its discretion require the Executive to
pursue a claim for a refund (“Refund Claim”) of all or any portion of such
Excise Taxes, interest or penalties as the Company may specify by written notice
to the Executive.
6.6.3 If the
Company notifies the Executive in writing that the Company desires the Executive
to contest an IRS Claim or to pursue a Refund Claim, the Executive
shall:
6.6.3.1
give the
Company all information that it reasonably requests in writing from time to time
relating to such IRS Claim or Refund Claim, as applicable,
6.6.3.2
take such
action in connection with such IRS Claim or Refund Claim (as applicable) as the
Company reasonably requests in writing from time to time, including accepting
legal representation with respect thereto by an attorney selected
16
6.6.3.3
cooperate
with the Company in good faith to contest such IRS Claim or pursue such Refund
Claim, as applicable,
6.6.3.4
permit
the Company to participate in any proceedings relating to such IRS Claim or
Refund Claim, as applicable, and
6.6.3.5
contest
such IRS Claim or prosecute such Refund Claim (as applicable) to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company may from time to time determine in
its discretion.
The
Company shall control all proceedings in connection with such IRS Claim or
Refund Claim (as applicable) and in its discretion may cause the Executive to
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the IRS or other taxing authority in respect of such IRS Claim
or Refund Claim (as applicable); provided that (i) any extension of the
statute of limitations relating to payment of taxes for the taxable year of the
Executive relating to the IRS Claim is limited solely to such IRS Claim,
(ii) the Company’s control of the IRS Claim or Refund Claim (as applicable)
shall be limited to issues with respect to which a Gross-up Payment would be
payable, and (iii) the Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the IRS or other taxing
authority.
6.6.4 The
Company may at any time in its discretion direct the Executive to
(i) contest the IRS Claim in any lawful manner or (ii) pay the amount
specified in an IRS Claim and pursue a Refund Claim; provided, however, that if
the Company directs the Executive to pay an IRS Claim and pursue a Refund Claim,
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 income or other applicable taxes or Excise Tax, and any related interest
or penalties imposed with respect to such advance.
6.6.5 The
Company shall pay directly all legal, accounting and other costs and expenses
(including additional interest and penalties) incurred by the Company or the
Executive in connection with any IRS Claim or Refund Claim, as applicable, and
shall indemnify the Executive, on an after-tax basis, for any income or other
applicable taxes, Excise Tax and related interest and penalties imposed on the
Executive as a result of such payment of costs and expenses.
6.7. Refunds. If, after the
receipt by the Executive of any payment or advance of Excise Taxes advanced by
the Company pursuant to Section 6.6, the Executive receives any refund with
respect to such claim, the Executive shall (subject to the Company’s complying
with the requirements of Section 6.6) 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 advanced by the Company pursuant to Section 6.6, 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
17
6.8. Payments. All
amounts payable to Executive under Section 6.1, 6.3 or 6.6 shall be paid as soon
as practicable after a Change in Control or other event giving rise to any
payment of the Excise Tax by the Executive, but no later than the December 31 of
the year next following the year in which the Executive, or the Company on
behalf of the Executive, remits the Excise Tax.
ARTICLE
VII
EXPENSES
AND INTEREST
7.1. Legal
Fees and Other Expenses.
7.1.1 During
the Employment Period and for a period of ten (10) years following the
Termination Date, if the Executive incurs legal fees or other expenses in an
effort to secure, preserve, establish entitlement to, or obtain benefits under
this Agreement (including, without limitation, the fees and other expenses of
the Executive’s legal counsel in connection with the delivery of the Executive
Counsel opinion referred to in Section 6.5), then the Company shall, regardless
of the outcome of such effort, promptly reimburse the Executive on a current
basis for such fees and expenses following the Executive’s written submission of
a request for reimbursement together with evidence that such fees and expenses
were incurred. All such expenses shall be reimbursed by December 31
of the year following the year in which the expense was incurred. The
amount of expenses reimbursed in one year shall not affect the amount eligible
for reimbursement in any subsequent year.
7.1.2 If the
Executive does not prevail (after exhaustion of all available judicial remedies)
in respect of a claim by the Executive or by the Company hereunder, and the
Company establishes before a court of competent jurisdiction, by clear and
convincing evidence, that the Executive had no reasonable basis for his claim
hereunder, or for his response to the Company’s claim hereunder, and acted in
bad faith, no further reimbursement for legal fees and expenses shall be due to
the Executive in respect of such claim and the Executive shall refund any
amounts previously reimbursed hereunder with respect to such claim.
7.2. Interest. Except for any
required delay under Section 11.16, if the Company does not pay any
amount due to the Executive under this Agreement within three days after such
amount 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 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
VIII
NO
SET-OFF OR MITIGATION
18
8.1. No
Set-off by Company. The Executive’s right to receive when due
the payments and other benefits provided for under this Agreement is absolute,
unconditional and subject to no set-off, counterclaim or legal or equitable
defense. Any claim which the Company may have against the 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 the Executive to enforce any rights against the Company under this
Agreement.
8.2. No
Mitigation. The Executive shall not have any duty to mitigate
the amounts payable by the Company under this Agreement by seeking
new 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 salary,
compensation or other amounts which may be paid or payable to the Executive as
the result of the Executive’s employment by another employer.
ARTICLE
IX
NON-EXCLUSIVITY
OF RIGHTS
9.1. Waiver of
Other Severance Rights. Except as may be otherwise
specifically provided in an amendment of this Section 9.1 adopted in
accordance with Section 11.7 of this Agreement, the Executive’s rights
under Section 5.1 of this Agreement shall be in lieu of any benefits that
may be otherwise payable to or on behalf of the Executive pursuant to the terms
of any severance pay arrangement of Nicor Inc., the Company or any Subsidiary or
any other, similar arrangement of Nicor Inc., the Company or any Subsidiary
providing benefits upon involuntary termination of employment and shall also be
in lieu of any benefits under the Tropical Shipping and Construction Company
Limited Executive/Key Employee Severance Benefits Program (notwithstanding any
provision of that program to the contrary); provided, however, that this
Section 9.1 shall not affect the Executive’s rights to receive any benefits
with respect to a termination of employment that occurs outside of the
Employment Period. To the extent Executive receives severance or
similar payments and/or benefits under any other plan, program, agreement,
policy, practice, or the like of Nicor Inc., the Company or any Subsidiary, or
under the WARN Act or similar state law, the payments and benefits due to
Executive under this Agreement will be correspondingly reduced on a
dollar-for-dollar basis (or vice-versa).
9.2. Other
Rights. Except as provided in Section 9.1, this Agreement
shall not prevent or limit the Executive’s continuing or future participation in
any benefit, bonus, incentive or other plans provided by Nicor Inc., the Company
or any Subsidiary and for which the Executive may qualify, nor shall this
Agreement limit or otherwise affect such rights as the Executive may have under
any other agreements with Nicor Inc., the Company or any
Subsidiary. Amounts which are vested benefits or which the Executive
is otherwise entitled to receive under any plan of Nicor Inc., the Company or
any Subsidiary 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
X
CONFIDENTIALITY
19
10.1. Confidentiality. The
Executive acknowledges that it is the policy of Nicor Inc., the Company and the
Subsidiaries to maintain as secret and confidential all valuable and unique
information and techniques acquired, developed or used by Nicor Inc., the
Company and the Subsidiaries relating to their business, operations, employees
and customers, which gives Nicor Inc., the Company and the Subsidiaries a
competitive advantage in the shipping industry or in the transmission,
distribution, marketing, or sale of natural gas or in the energy services
industry and other businesses in which Nicor Inc., the Company and the
Subsidiaries are engaged (“Confidential Information”). The Executive
recognizes that all such Confidential Information is the sole and exclusive
property of Nicor Inc., the Company and the Subsidiaries, and that disclosure of
Confidential Information would cause damage to Nicor Inc., the Company and the
Subsidiaries. The Executive agrees that, except as required by the duties of his
employment for Nicor Inc., the Company or the Subsidiaries and except in
connection with enforcing the Executive's rights under this Agreement or if
compelled by a court or governmental agency, he will not, without the consent of
the Company, disseminate or otherwise disclose any Confidential Information
obtained during his employment with Nicor Inc., the Company or the Subsidiaries
until such time as such information has been disclosed publicly by Nicor Inc.,
the Company or one of the Subsidiaries, or with its consent, or is otherwise a
matter of public knowledge (unless the Executive has reason to know that such
information became a matter of public knowledge through an unauthorized
disclosure).
10.2. Remedy. The
Executive and the Company specifically agree that, in the event that the
Executive shall breach his obligations under this Article X, Nicor Inc.,
the Company and the Subsidiaries will suffer irreparable injury and shall be
entitled to injunctive relief therefor, and shall not be precluded from pursuing
any and all remedies it may have at law or in equity for breach of such
obligations; provided, however, that such breach shall not in any manner or
degree whatsoever limit, reduce or otherwise affect the obligations of the
Company under this Agreement, and in no event shall an asserted breach of the
Executive's obligations under this Article X constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.
ARTICLE
XI
MISCELLANEOUS
11.1. No
Assignability. This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s legal representatives.
11.2. Successors. Before
or upon the consummation of any Change in Control, the Company shall obtain from
each individual, group or entity, if any, that becomes a successor of the
Company by reason of the Change in Control, the unconditional written agreement
of such individual, group or entity to assume this Agreement and to perform all
of the obligations of the Company hereunder.
11.3. Payments
to Beneficiary. If the Executive dies before receiving amounts
to which the Executive is entitled under this Agreement, such amounts shall be
paid in a lump sum
20
11.4. Nonalienation
of Benefits. Benefits payable under this Agreement shall not
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any
kind, either voluntary or involuntary, before actually being received by the
Executive, and any such attempt to dispose of any right to benefits payable
under this Agreement shall be void.
11.5. Severability. If any one or
more articles, sections or other portions of this Agreement are declared by any
court or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any article, section or other portion
not so declared to be unlawful or invalid. Any article, section or
other portion so declared to be unlawful or invalid shall be construed so as to
effectuate the terms of such article, section or other portion to the fullest
extent possible while remaining lawful and valid.
11.6. Arbitration. Any and all
disputes between the parties hereto arising out of this Agreement (other than
disputes related to Article VI or to an alleged breach of the covenant
contained in Article X) shall be settled by arbitration before an impartial
arbitrator pursuant to the rules and regulations of the American Arbitration
Association (AAA) pertaining to the arbitration of commercial
disputes. Either party may invoke the right to
arbitration. The arbitrator shall be selected by means of the parties
striking alternatively from a panel of seven arbitrators supplied by the Miami
office of AAA. The Arbitrator shall have the authority to interpret
and apply the provisions of this Agreement, consistent with Section 11.10
below. The decision of the arbitrator shall be final and binding upon
the parties. Judgment may be entered on the award in any court of
competent jurisdiction. The arbitrator's fees and expenses shall be
borne by the Company.
11.7. Amendments. This Agreement
shall not be altered, amended or modified except by written instrument executed
by the Company and the Executive.
11.8. Notices. All
notices and other communications under this Agreement shall be in writing and
delivered by hand, by a nationally-recognized commercial delivery service, or by
first-class registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the
Executive:
Xxxx
Xxxxxxx
000
Xxxxxxxxx Xxxx
Xxxx
Xxxxx Xxxxxxx, XX 00000
If to the
Company:
Tropical
Shipping and Construction Company Limited
0 Xxxx
00xx
Xxxxxx
Xxxxxxx
Xxxxx, Xxxxxxx 00000-0000
21
or to
such other address as either party shall have furnished to the other in
writing. Notice and communications shall be effective when actually
received by the addressee.
11.9. Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
11.10. Governing
Law. This Agreement is intended to be interpreted and
construed in accordance with the laws of the State of Florida, without regard to
its choice of law principles.
11.11. Captions. The captions of
this Agreement are not a part of the provisions hereof and shall have no force
or effect.
11.12. Number
and Gender. Wherever from the context it appears appropriate,
each term stated in either the singular or plural shall include the singular and
the plural, and pronouns stated in either the masculine, the feminine or the
neuter gender shall include the masculine, feminine and neuter
genders.
11.13. Tax
Withholding. The Company may withhold from any amounts payable
under this Agreement any federal, state or local taxes that are required to be
withheld pursuant to any applicable law or regulation.
11.14. No
Waiver. A waiver of any provision of this Agreement shall not
be deemed a waiver of any other provision, and any waiver of any default as to
any such provision shall not be deemed a waiver of any later default as to that
or any other provision.
11.15. Entire
Agreement. This Agreement contains the entire understanding of
the Company and the Executive with respect to its subject matter. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement. This Agreement supersedes
the Prior Agreement, which shall no longer be in force or have any
effect.
11.16. Section
409A Compliance.
11.16.1
To the
extent applicable, this Agreement shall be interpreted in accordance with
Internal Revenue Code Section 409A and Department of Treasury regulations and
other interpretive guidance issued thereunder. If the Company
determines that any compensation or benefits payable under this Agreement do not
comply with Code Section 409A and related Department of Treasury guidance, the
Company and Executive agree to amend this Agreement or take such other actions
as the Company deems necessary or appropriate to comply with the requirements of
Code Section 409A while preserving the economic agreement of the
parties.
11.16.2
Notwithstanding
any provision to the contrary in this Agreement, if Executive is deemed at the
time of his separation from service to be a “specified employee” for
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IN
WITNESS WHEREOF, the Executive and the Company have executed this Agreement as
of the date first above written.
/s/
XXXX
XXXXXXX
Xxxx
Xxxxxxx
Tropical
Shipping and Construction Company Limited
By:
/s/ R. XXXX
XXXXXXX
R. Xxxx Xxxxxxx,
Vice President and
Secretary
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