EXHIBIT 10.17
SEVERANCE AGREEMENT
THIS AGREEMENT, dated as of May 9, 1997, is made by and between Nobel
Insurance Limited, a Bermuda corporation ("Nobel"), Nobel Service Corporation, a
Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxxx (the "Executive").
WHEREAS, the Company and Nobel consider it essential to their best
interests and the best interests of Nobel's stockholders to xxxxxx the continued
employment of key Company management personnel; and
WHEREAS, the Board of Directors of the Company and the Board of
Directors of Nobel (together, the "Boards") recognize that, as is the case with
many publicly held corporations like Nobel, the possibility of a Change in
Control (as defined in the last Section hereof) exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and of Nobel and its stockholders; and
WHEREAS, the Boards have determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Nobel, the Company and the Executive hereby agree as
follows:
1. DEFINED TERMS. The definitions of capitalized terms used in this
Agreement are provided in the last Section hereof.
2. TERM OF AGREEMENT. The Term of this Agreement shall commence on the
date hereof and shall continue in effect through the second anniversary of its
commencement date; provided, however, that if, without the prior occurrence of a
Change in Control of Nobel, Nobel shall
cease to own the majority of the outstanding shares of the Company's common
stock, the Agreement shall terminate on the date of such cessation; and further
provided, however, that if a Change in Control shall have occurred during the
Term, this Agreement shall continue in effect for a period of not less than
twenty-four (24) months beyond the month in which such Change in Control
occurred (or, if later, twenty-four (24) months beyond the consummation of the
transaction the approval of which by Nobel's stockholders constitutes a Change
in Control under Section 15(G)(III) or (IV) hereof).
3. COMPANY'S COVENANTS SUMMARIZED. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company and Nobel agree, under the
conditions described herein, to pay the Executive the Severance Payments and the
other payments and benefits described herein. Except as provided in Section 9.1
hereof, no amount or benefit shall be payable under this Agreement unless there
shall have been (or, under the terms of the second sentence of Section 6.1
hereof, there shall be deemed to have been) a termination of the Executive's
employment with the Company following a Change in Control and during the Term.
This Agreement shall not be construed as creating an express or implied contract
of employment and, except as otherwise agreed in writing between the Executive
and the Company, the Executive shall not have any right to be retained in the
employ of the Company.
4. THE EXECUTIVE'S COVENANTS. The Executive agrees that, subject to
the terms and conditions of this Agreement, in the event of a Potential Change
in Control during the Term, the Executive will remain in the employ of the
Company until the earliest of (i) a date which is six (6) months from the date
of such Potential Change of Control, (ii) the date of a Change in Control, (iii)
the date of termination by the Executive of the Executive's employment for Good
Reason or by reason of death, Disability or Retirement, or (iv) the termination
by the Company of the Executive's employment for any reason.
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5. COMPENSATION OTHER THAN SEVERANCE PAYMENTS.
5.1 Following a Change in Control and during the Term, during any
period that the Executive fails to perform the Executive's full-time duties with
the Company as a result of incapacity due to physical or mental illness, the
Company (and/or Nobel) shall pay the Executive's full salary to the Executive at
the rate in effect at the commencement of any such period, together with all
compensation and benefits payable to the Executive under the terms of any
compensation or benefit plan, program or arrangement maintained by the Company
or Nobel during such period, until the Executive's employment is terminated by
the Company for Disability.
5.2 If the Executive's employment shall be terminated for any reason
following a Change in Control and during the Term, the Company (and/or Nobel)
shall pay the Executive's full salary to the Executive through the Date of
Termination at the rate in effect at the time the Notice of Termination is
given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of the Company's (and Nobel's)
compensation and benefit plans, programs or arrangements.
5.3 If the Executive's employment shall be terminated for any reason
following a Change in Control and during the Term, the Company (and/or Nobel)
shall pay to the Executive the Executive's normal post-termination compensation
and benefits as such payments become due. Such post-termination compensation and
benefits shall be determined under, and paid in accordance with, the Company's
(and Nobel's) retirement, insurance and other compensation or benefit plans,
programs and arrangements as in effect immediately prior to the Change in
Control or, to the extent more favorable to the Executive, as in effect
immediately prior to the Date of Termination.
6. SEVERANCE PAYMENTS.
6.1 Subject to Section 6.2 hereof, the Company or Nobel shall pay the
Executive the payments described in this Section 6.1 (the "Severance Payments")
upon the termination of the Executive's employment following a Change in Control
and during the Term, in addition to any payments and benefits to which the
Executive is entitled under Section 5 hereof, unless such termination is (i) by
the Company for Cause, (ii) by reason of death, Disabili
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ty, or (iii) by the Executive without Good Reason. For purposes of this
Agreement, the Executive's employment shall be deemed to have been terminated
following a Change in Control by the Company without Cause or by the Executive
with Good Reason, if (i) the Executive's employment is terminated by the Company
without Cause prior to a Change in Control (which actually occurs during the
Term of this Agreement) and such termination was at the request or direction of
a Person who has entered into an agreement with the Company the consummation of
which would constitute a Change in Control, (ii) the Executive terminates his
employment with Good Reason prior to a Change in Control (which actually occurs
during the Term of this Agreement) and the circumstance or event which
constitutes Good Reason occurs at the request or direction of such Person, or
(iii) the Executive's employment is terminated by the Company without Cause
prior to a Change in Control and the Executive reasonably demonstrates that such
termination is otherwise in connection with or in anticipation of a Change in
Control which actually occurs during the term of this Agreement. For purposes of
any determination regarding the applicability of the immediately preceding
sentence, any position taken by the Executive shall be presumed to be correct
unless the Company establishes to the Committee by clear and convincing evidence
that such position is not correct. In lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu of any
severance benefit otherwise payable to the Executive (whether under any
employment agreement, severance plan or otherwise), the Company or Nobel shall
pay to the Executive a lump sum severance payment, in cash, equal to three times
the higher of the Executive's annual base salary in effect immediately prior to
the occurrence of the event or circumstance upon which the Notice of Termination
is based and the Executive's annual base salary in effect immediately prior to
the Change in Control.
The multiple of "three" used in calculating the lump sum severance payment
under the immediately preceding paragraph shall be subject to reduction as
follows:
The "three" shall stand for a deemed severance period of three years, which
shall be reduced for any period of the Executive's employment by the
Company which follows a Change in Control up to and including the Date of
Termination hereunder (even if the Date of Termination is an extended Date
of
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Termination pursuant to Section 7.3 hereof). For example, if the Executive
terminates his employment for Good Reason and his Date of Termination is
364 days after the Change in Control, the multiple of "three" will be
reduced to a multiple of "two and 1/365".
6.2 (A) Notwithstanding any other provisions of this Agreement, in
the event that any payment or benefit received or to be received by the
Executive in connection with a Change in Control or the termination of the
Executive's employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with Nobel, the Company, any Person
whose actions result in a Change in Control or any Person affiliated with
Nobel, the Company or such Person) (all such payments and benefits, including
the Severance Payments, being hereinafter called "Total Payments") would not
be deductible (in whole or part), by Nobel, the Company, an affiliate or
Person making such payment or providing such benefit as a result of section
280G of the Code, then, to the extent necessary to make such portion of the
Total Payments deductible (and after taking into account any reduction in the
Total Payments provided by reason of section 280G of the Code in such other
plan, arrangement or agreement), the Severance Payments shall be reduced (if
necessary, to zero).
(B) For purposes of this limitation, (i) no portion of the Total
Payments the receipt or enjoyment of which the Executive shall have effectively
waived in writing at such time and in such manner that such portion does not
constitute a "payment" within the meaning of section 280G(b) of the Code shall
be taken into account, (ii) no portion of the Total Payments shall be taken into
account which, in the opinion of tax counsel ("Tax Counsel") reasonably
acceptable to the Executive and selected by the accounting firm which was,
immediately prior to the Change in Control, the Company's or Nobel's independent
auditor (the "Auditor"), does not constitute a "parachute payment" within the
meaning of section 280G(b)(2) of the Code, including by reason of section
280G(b)(4)(A) of the Code, (iii) the Severance Payments shall be reduced only to
the extent necessary so that the Total Payments (other than those referred to in
clauses (i) or (ii)) in their entirety constitute reasonable compensation for
services actually rendered within the meaning of section 280G(b)(4)(B) of the
Code or are otherwise not subject to disallowance as deductions by
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reason of section 280G of the Code, in the opinion of Tax Counsel, and (iv) the
value of any noncash benefit or any deferred payment or benefit included in the
Total Payments shall be determined by the Auditor in accordance with the
principles of sections 280G(d)(3) and (4) of the Code.
(C) If it is established pursuant to a final determination of a
court or an Internal Revenue Service proceeding that, notwithstanding the good
faith of the Executive, Nobel and the Company in applying the terms of this
Section 6.2, the aggregate "parachute payments" paid to or for the Executive's
benefit are in an amount that would result in any portion of such "parachute
payments" not being deductible by reason of section 280G of the Code, then the
Executive shall have an obligation to pay the Company (or Nobel, whichever is
the lender) upon demand an amount equal to the lesser of the Severance Payments
or the sum of (i) the excess of the aggregate "parachute payments" paid to or
for the Executive's benefit over the aggregate "parachute payments" that could
have been paid to or for the Executive's benefit without any portion of such
"parachute payments" not being deductible by reason of section 280G of the Code;
and (ii) interest on the amount set forth in clause (i) of this sentence at the
rate provided in section 1274(b)(2)(B) of the Code from the date of the
Executive's receipt of such excess until the date of such payment.
6.3 The payments provided in Section 6.1 hereof shall be made not
later than the fifth day following the Date of Termination; provided, however,
that if the amounts of such payments, and the limitation on such payments set
forth in Section 6.2 hereof, cannot be finally determined on or before such day,
Nobel or the Company shall pay to the Executive on such day an estimate, as
determined in good faith by Nobel or the Company, as the case may be, of the
minimum amount of such payments to which the Executive is clearly entitled and
shall pay the remainder of such payments (together with interest on the unpaid
remainder (or on all such payments to the extent Nobel and the Company fail to
make such payments when due) at 120` of the rate provided in section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but
in no event later than the thirtieth (30th) day after the Date of Termination.
In the event that the amount of the estimated payments exceeds the amount
subsequently determined to have been
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due, such excess shall constitute a loan by Nobel (or the Company, as the case
may be) to the Executive, payable on the fifth (5th) business day after demand
by the Company (together with interest at 120% of the rate provided in section
1274(b)(2)(B) of the Code). At the time that payments are made under this
Section, Nobel (or the Company, as the case may be) shall provide the Executive
with a written statement setting forth the manner in which such payments were
calculated and the basis for such calculations including, without limitation,
any opinions or other advice Nobel (or the Company, as the case may be) has
received from Tax Counsel, the Auditor or other advisors or consultants (and any
such opinions or advice which are in writing shall be attached to the
statement).
6.4 The Company or Nobel also shall pay to the Executive all legal
fees and expenses incurred by the Executive in disputing in good faith any issue
hereunder relating to the termination of the Executive's employment, in seeking
in good faith to obtain or enforce any benefit or right provided by this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or
benefit provided hereunder; provided, however, that such payment shall be made
only if the Executive shall ultimately prevail on one or more of the substantive
issues involved in the controversy. Such payments shall be made within five (5)
business days after delivery of the Executive's written requests for payment
accompanied with such evidence of fees and expenses incurred (and the ultimate
disposition of the controversy) as the Company reasonably may require.
6.5 Any obligation to pay, or to provide a benefit for, the Executive
under the provisions of this Agreement which is stated to be the obligation of
either Nobel or the Company shall be the joint and several obligation of both
Nobel and the Company.
7. TERMINATION PROCEDURES AND COMPENSATION DURING DISPUTE.
7.1 NOTICE OF TERMINATION. After a Change in Control and during the
Term, any purported termination of the Executive's employment (other than by
reason of death) shall be communicated by written Notice of Termination from the
Executive or the Company to both of the other parties hereto in accordance with
Section 10 here
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of. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted by the affirmative vote
of not less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board which was called and held for the purpose of considering
such termination (after reasonable notice to the Executive and an opportunity
for the Executive, together with the Executive's counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive was
guilty of conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.
7.2 DATE OF TERMINATION. "Date of Termination," with respect to any
purported termination of the Executive's employment after a Change in Control
and during the Term, shall mean (i) if the Executive's employment is terminated
for Disability, thirty (30) days after Notice of Termination is given (provided
that the Executive shall not have returned to the full-time performance of the
Executive's duties during such thirty (30) day period), and (ii) if the
Executive's employment is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a termination by the Company,
shall not be less than thirty (30) days (except in the case of a termination for
Cause) and, in the case of a termination by the Executive, shall not be less
than fifteen (15) days nor more than sixty (60) days, respectively, from the
date such Notice of Termination is given).
7.3 DISPUTE CONCERNING TERMINATION. If within fifteen (15) days after
any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other parties that a dispute
exists concerning the termination, the Date of Termination shall be extended
until the date on which the dispute is finally resolved, either by mutual
written agreement of the parties or by a final judgment, order or decree of an
arbitrator or a court of competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom
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has expired and no appeal has been perfected); provided, however, that the Date
of Termination shall be extended by a notice of dispute given by the Executive
only if such notice is given in good faith and the Executive pursues the
resolution of such dispute with reasonable diligence.
7.4 COMPENSATION DURING DISPUTE. If a purported termination occurs
following a Change in Control and during the Term and the Date of Termination is
extended in accordance with Section 7.3 hereof, Nobel or the Company shall
continue to pay the Executive the full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited to, salary) and
continue the Executive as a participant in all compensation, benefit and
insurance plans in which the Executive was participating when the notice giving
rise to the dispute was given, until the Date of Termination, as determined in
accordance with Section 7.3 hereof. Amounts paid under this Section 7.4 are in
addition to all other amounts due under this Agreement (other than those due
under Section 5.2 hereof) and shall not be offset against or reduce any other
amounts due under this Agreement.
8. NO MITIGATION. Nobel and the Company agrees that, if the
Executive's employment with the Company terminates during the Term, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by Nobel or the Company pursuant to
Section 6 hereof or Section 7.4 hereof. Further, the amount of any payment or
benefit provided for in this Agreement shall not be reduced by any compensation
earned by the Executive as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be owed by the
Executive to Nobel or the Company, or otherwise.
9. SUCCESSORS; BINDING AGREEMENT.
9.1 In addition to any obligations imposed by law upon any successor
to Nobel or the Company, Nobel and the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of either corporation to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that such corporation would be required to perform it if no such
succession had taken place.
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Failure of Nobel or the Company to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from Nobel or the Company in the
same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's employment for Good
Reason after a Change in Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall
die while any amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of the Executive)
if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators of the Executive's
estate.
10. NOTICES. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's signature on the final
page hereof and, if to Nobel or the Company, to the respective address set forth
below, or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notice of change of address shall be
effective only upon actual receipt:
To Nobel:
Nobel Insurance Limited
000 Xxxxx Xxx Xxxx
Xxxxxxxx, Xxxxxxx HMAX
Attention: President
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To the Company:
Nobel Service Corporation
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Attention: President
11. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officers of Nobel and the
Company as may be specifically designated by the respective Boards. No waiver by
any party hereto at any time of any breach by any other party hereto of, or of
any lack of compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. This
Agreement supersedes any other agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof which have been
made by either party. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of Texas. All
references to sections of the Exchange Act or the Code shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law and any additional withholding to which the
Executive has agreed. The obligations of Nobel, the Company and the Executive
under this Agreement which by their nature may require either partial or total
performance after the expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such expiration.
12. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
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14. SETTLEMENT OF DISPUTES: ARBITRATION.
14.1 All claims by the Executive for benefits under this Agreement
shall be directed to and determined by the Committee and shall be in writing.
Any denial by the Committee of a claim for benefits under this Agreement shall
be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Committee shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Committee a decision of the Committee within sixty (60) days after
notification by the Committee that the Executive's claim has been denied.
14.2 Any further dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Dallas, Texas in accordance with the rules of the American Arbitration
Association then in effect; provided, however, that the evidentiary standards
set forth in this Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. Notwithstanding any
provision of this Agreement to the contrary, the Executive shall be entitled to
seek specific performance of the Executive's right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.
15. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings indicated below:
(A) "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.
(B) "Auditor" shall have the meaning set forth in Section 6.2 hereof.
(C) "Base Amount" shall have the meaning set forth in section
280G(b)(3) of the Code.
(D) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
under the Exchange Act.
(E) "Boards" shall mean the Board of Directors of the Company and the
Board of Directors of Nobel.
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(F) "Cause" for termination by the Company of the Executive's
employment shall mean (i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other than any
such failure resulting from the Executive's incapacity due to physical or mental
illness or any such actual or anticipated failure after the issuance of a Notice
of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof)
after a written demand for substantial performance is delivered to the Executive
by the Board of Directors of the Company, which demand specifically identifies
the manner in which the Board believes that the Executive has not substantially
performed the Executive's duties, or (ii) the willful engaging by the Executive
in conduct which is demonstrably and materially injurious to Nobel, the Company
or their subsidiaries, monetarily or otherwise. For purposes of clauses (i) and
(ii) of this definition, (x) no act, or failure to act, on the Executive's part
shall be deemed "willful" unless done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that the Executive's act, or
failure to act, was in the best interest of Nobel and the Company and (y) in the
event of a dispute concerning the application of this provision, no claim by the
Company that Cause exists shall be given effect unless the Company establishes
to the Committee by clear and convincing evidence that Cause exists.
(G) A "Change in Control" shall mean a change in control of Nobel,
which shall be deemed to have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(I) any Person is or becomes the Beneficial Owner, directly
or indirectly, of securities of Nobel (not including in the securities
beneficially owned by such Person any securities acquired directly
from Nobel or its affiliates) representing 25% or more of the combined
voting power of Nobel's then outstanding securities, excluding any
Person who becomes such a Beneficial Owner in connection with a
transaction described in clause (i) of paragraph (III) below; or
(II) the following individuals cease for any reason to
constitute a majority of the number of directors then serving on the
Board of Directors of Nobel: individuals who, on the
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date hereof, constitute such Board and any new director (other than a
director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of Nobel)
whose appointment or election by the Board of Directors of Nobel or
nomination for election by Nobel's stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors of
Nobel then still in office who either were directors on the date
hereof or whose appointment, election or nomination for election was
previously so approved or recommended; or
(III) the stockholders of Nobel approve a merger or
consolidation of Nobel with any other corporation or the issuance of
voting securities of Nobel in connection with a merger or
consolidation of Nobel (or any direct or indirect subsidiary of Nobel)
pursuant to applicable stock exchange requirements, other than (i) a
merger or consolidation which would result in the voting securities of
Nobel outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent
thereof), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of Nobel
or any subsidiary of Nobel, at least 75% of the combined voting power
of the securities of Nobel or such surviving entity or any parent
thereof outstanding immediately after such merger or consolidation, or
(ii) a merger or consolidation effected to implement a
recapitalization of Nobel (or similar transaction) in which no Person
is or becomes the Beneficial Owner, directly or indirectly, of
securities of Nobel (not including in the securities Beneficially
Owned by such Person any securities acquired directly from Nobel or
its Affiliates other than in connection with the acquisition by Nobel
or its Affiliates of a business) representing 25% or more of the
combined voting power of Nobel's then outstanding securities; or
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(IV) the stockholders of Nobel approve a plan of complete
liquidation or dissolution of Nobel or an agreement for the sale or
disposition by Nobel of all or substantially all of Nobel's assets,
other than a sale or disposition by Nobel of all or substantially all
of Nobel's assets to an entity, at least 75% of the combined voting
power of the voting securities of which are owned by stockholders of
Nobel in substantially the same proportions as their ownership of
Nobel immediately prior to such sale.
(H) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(I) "Committee" shall mean (i) the individuals (not fewer than three
in number) who, on the date six months before a Change in Control, constitute
the Compensation Committee of the Board of Directors of Nobel, plus (ii) in the
event that fewer than three individuals are available from the group specified
in clause (i) above for any reason, such individuals as may be appointed by the
individual or individuals so available (including for this purpose any
individual or individuals previously so appointed under this clause (ii));
provided, however, that the maximum number of individuals constituting the
Committee shall not exceed five.
(J) "Company" shall mean Nobel Service Corporation and shall include
any successor to its business and/or assets which assumes and agrees to perform
this Agreement by operation of law, or otherwise.
(K) "Date of Termination" shall have the meaning set forth in Section
7.2 hereof.
(L) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the Company
for a period of six (6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within thirty (30) days
after such Notice of Termination is given, the Executive shall not have returned
to the full-time performance of the Executive's duties.
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(M) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(N) "Executive" shall mean the individual named in the first paragraph
of this Agreement.
(O) "Good Reason" for termination by the Executive of the Executive's
employment shall mean the occurrence (without the Executive's express prior
written consent) after any Change in Control, or prior to a Change in Control
under the circumstances described in clause (ii) of the second sentence of
Section 6.1 hereof (treating all references in paragraphs (I) through (VII)
below to a "Change in Control" as references to a "Potential Change in
Control"), of any one of the following acts by Nobel or the Company, or failures
by Nobel or the Company to act, unless, in the case of any act or failure to act
described in paragraph (I), (V), (VI) or (VII) below, such act or failure to act
is corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(I) the assignment to the Executive of any duties
inconsistent with the Executive's status as an executive officer of
the Company or a substantial adverse alteration in the nature or
status of the Executive's responsibilities from those in effect
immediately prior to the Change in Control (other than any such
alteration primarily attributable to the fact that Nobel may no longer
be a public company);
(II) a reduction by the Company in the Executive's annual
base salary as in effect on the date hereof or as the same may be
increased from time to time;
(III) the relocation of the Executive's principal place of
employment to a location more than fifty (50) miles from the
Executive's principal place of employment immediately prior to the
Change in Control or the Company's requiring the Executive to be based
anywhere other than such principal place of employment (or permitted
relocation thereof) except for required travel on the Company's
business to an extent substantially consistent with the Executive's
present business travel obligations;
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(IV) the failure by Nobel or the Company to pay to the
Executive any portion of the Executive's current compensation, or to
pay to the Executive any portion of an installment of deferred
compensation under any deferred compensation program of Nobel or the
Company, within seven (7) days of the date such compensation is due;
(V) the failure by Nobel or the Company to continue in
effect any compensation plan in which the Executive participates
immediately prior to the Change in Control which is material to the
Executive's total compensation or any substitute plans adopted prior
to the Change in Control, unless an equitable arrangement (embodied in
an ongoing substitute or alternative plan) has been made with respect
to such plan, or the failure by the Company to continue the
Executive's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in
terms of the amount or timing of payment of benefits provided and the
level of the Executive's participation relative to other participants,
as existed immediately prior to the Change in Control;
(VI) the failure by Nobel or the Company to continue to
provide the Executive with benefits substantially similar to those
enjoyed by the Executive under any of the pension, savings, life
insurance, medical, health and accident, or disability plans of Nobel
or the Company in which the Executive was participating immediately
prior to the Change in Control, the taking of any action by the
Company which would directly or indirectly materially reduce any of
such benefits or deprive the Executive of any material fringe benefit
enjoyed by the Executive at the time of the Change in Control, or the
failure by the Company to provide the Executive with the number of
paid vacation days to which the Executive is entitled on the basis of
years of service with the Company in accordance with the Company's
normal vacation policy in effect at the time of the Change in Control;
or
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(VII) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1 hereof; for purposes of
this Agreement, no such purported termination shall be effective.
The Executive's right to terminate the Executive's employment for Good
Reason shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
For purposes of any determination regarding the existence of Good
Reason, any claim by the Executive that Good Reason exists shall be presumed to
be correct unless Nobel or the Company establishes to the Committee by clear and
convincing evidence that Good Reason does not exist.
(P) "Nobel" shall mean Nobel Insurance Limited and, except in
determining under Section 15(E) hereof whether or not any Change in Control has
occurred, shall include any successor to its business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
(Q) "Notice of Termination" shall have the meaning set forth in
Section 7.1 hereof.
(R) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) Nobel, the Company or any of their
subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of Nobel, the Company or any of their Affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(S) "Potential Change in Control" shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have occurred:
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(I) Nobel or the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in
Control;
(II) Nobel, the Company or any Person publicly announces an
intention to take or to consider taking actions which, if consummated,
would constitute a Change in Control;
(III) any Person becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing fifteen percent
(15%) or more of either the then outstanding shares of common stock of
the Company or the combined voting power of the Company's then
outstanding securities (not including in the securities beneficially
owned by such Person any securities acquired directly from the Company
or its affiliates); or
(IV) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has
occurred.
(T) "Retirement" shall be deemed the reason for the termination by the
Company or the Executive of the Executive's employment if such employment is
terminated in accordance with the Company's retirement policy, not including
early retirement, generally applicable to its salaried employees, as in effect
immediately prior to the Change in Control, or in accordance with any retirement
arrangement established with the Executive's prior written consent with respect
to the Executive.
(U) "Severance Payments" shall mean those payments so described in
Section 6.1 hereof.
(V) "Tax Counsel" shall have the meaning set forth in Section 6.2
hereof.
(W) "Term" shall mean the period of time described in Section 2 hereof
(including any extension,
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continuation or termination described therein).
(X) "Total Payments" shall mean those payments so described in Section
6.2 hereof.
NOBEL INSURANCE LIMITED
By: /s/ Xxxxxx X. X'Xxxxx
--------------------------------
Xxxxxx X. X'Xxxxx
Chairman of
Compensation Committee
NOBEL SERVICE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
Vice President, Secretary
and General Counsel
` /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxx
Address:
Xxxxxx X. Xxxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxx, XX 00000
(Please print carefully)
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