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EXHIBIT 10.26
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TERMINATION AND CHANGE OF CONTROL AGREEMENT
This Termination and Change of Control Agreement ("Agreement") is entered into
as of September 1, 1999 between G. Xxxx Xxxxxxx ("the Executive") and GC
Companies, Inc. ("GCC").
1. The Executive is employed "at-will" as GCC's Vice President and Chief
Financial Officer, and the Executive or GCC may terminate the Executive's
employment at any time, with or without notice, for any reason. Notwithstanding
this at-will employment, GCC wishes to provide some protection to the Executive
if her employment is terminated or if she resigns under certain circumstances.
2. a. While the Executive is employed at-will, if GCC terminates the Executive's
employment other than "for cause" or other than due to "total disability" or
death, GCC agrees to provide the Executive with a termination package consisting
of (i) an amount equivalent to one and one-half times her then-current, annual
base salary, less required withholding, which amount would be paid in an 18
month period in regular, monthly installments following such termination;(ii)
continuation of the medical and dental insurance coverage in which she
participates at the time of such termination (or as such coverage may be changed
from time-to-time for employees generally) for 18 months or until she starts
full-time employment, whichever is sooner; (iii) professional out placement
services for up to 18 months following such termination; and (iv) all of the
Executive's GCC stock options shall be fully vested upon such termination or
resignation and shall remain exercisable in accordance with their original terms
as if such termination or resignation had not occurred. The Executive will be
responsible for paying her portion of monthly premiums for the medical and
dental insurance coverage at the same rate paid by active employees, and the
Executive authorizes GCC to deduct such amounts from the payments it makes to
her.
b. If the Executive's services are terminated by a successor to GCC
other than "for cause" or other than due to "total disability" or death within
18 months of a change of control of GCC, as a change of control is defined in
paragraph 3.c., or if the Executive resigns her employment within 18 months of
such a change of control because the Executive reasonably determines in good
faith that she is not permitted to continue in a position comparable in duties
and responsibilities to that which she held before such a change of control, or
if she is required to relocate outside of the Boston, Massachusetts area, the
Executive shall receive the termination package set forth in paragraph 2.a.
c. Notwithstanding the payment obligations set forth in paragraphs
2.a. and 2.b., if the Executive is engaged in employment (including contract
employment or self-employment) of any kind or if the Executive receives
severance pay of any kind during the period beginning six
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months after a covered termination or resignation, GCC's payments to the
Executive will be reduced dollar-for-dollar by the amount the Executive earns
through such employment or receives as severance pay.
3. For the purposes of determining the Executive's eligibility for the
termination package set forth in this Agreement:
a. "For cause" means, in GCC's reasonable judgment, a material breach
of duty by the Executive in the course of employment involving fraud, acts of
dishonesty, or moral turpitude, repeated insubordination, failure to devote full
working time and best efforts to the performance of duties, or conviction of a
felony or other criminal offense.
b. "Total disability" means that, in GCC's reasonable judgment, the
Executive is unable to perform duties for (i) 45 consecutive business days or
(ii) a total of 90 business days during any nine month period.
c. "Change of control" means
(i) the sale of all or substantially all of the stock or assets of
General Cinema Theatres, Inc. or any entity that owns or controls GCC's domestic
theater exhibition business to an entity other than GCC or an entity wholly
owned or controlled by GCC;
(ii) the sale of all or substantially all of the stock or assets of
General Cinema International, Inc. or any entity that owns or controls GCC's
international theater exhibition business to an entity other than GCC or an
entity wholly owned or controlled by GCC;
(iii) the sale of all or substantially all of the stock or assets of
GCC Investments, Inc. or any entity that owns or controls GCC's investment
business to an entity other than GCC or an entity wholly owned or controlled by
GCC, or any restructuring of GCC's investment business resulting in a change in
responsibilities or duties required to be provided by the Executive with respect
to such business substantially less than those responsibilities and duties
provided prior to such restructuring, as reasonably determined by the Executive
in good faith; or
(iv) any person, entity or group having greater voting power in the
election of GCC's directors than the Xxxxx Family Group ( as defined in GCC's
proxy statement from time to time) or an entity wholly owned or controlled by
the Xxxxx Family Group.
4. Payment by GCC of the termination package set forth in paragraph 2
constitutes full satisfaction of GCC's obligations to the Executive, if any,
(including the right to any severance payments) which arise from or relate in
any way to the termination of the Executive's employment. However, nothing in
this Agreement is intended to limit any earned, vested benefits (other than any
entitlement to severance pay) that the Executive may have under the applicable
provisions of any benefit plan in which the Executive is participating at the
time of her termination of employment or resignation, or any earned but unpaid
salary or bonus due to the Executive.
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5. In addition to the forgoing:
a. The Executive shall be paid as additional compensation a retention
payment equal to one times her annual base salary on October 31, 2000 provided
she does not voluntarily terminate her employment with the Company prior to that
date. If the Company consummates a Major Transaction (as defined below) after
October 31, 2000, the Executive shall receive an incentive payment equal to one
times her annual base salary. Such incentive payment shall be paid in three
equal installments as follows: one third on consummation of a Major Transaction,
one third nine months thereafter and one third eighteen months thereafter.
b. In lieu of the retention payment described in subparagraph (a), the
Executive shall be paid as additional compensation an incentive payment of two
times her annual base salary if the Company consummates a Major Transaction (as
defined below) on or before October 31, 2000. Such incentive payment shall be
paid in three equal installments as follows: one third on consummation of a
Major Transaction, and one third nine months thereafter and one third eighteen
months thereafter.
c. The Executive shall be credited with 2 years of service credit under
GCC's Supplemental Executive Retirement Plan for each fiscal year commencing
with 1999 through fiscal year 2003 that the Executive remains employed by the
Company.
d. For purposes hereof, "Major Transaction" means:
(i) the sale of all or substantially all of the stock or
assets of General Cinema Theatres, Inc. ("GCT") or any entity that owns or
controls GCC's domestic theater exhibition business to an entity other than GCC
or an entity wholly owned or controlled by GCC;
(ii) the sale of all or substantially all of the stock or
assets of General Cinema International, Inc.("GCI") or any entity that owns or
controls GCC's international theater exhibition business to an entity other than
GCC or an entity wholly owned or controlled by GCC;
(iii) the sale of all or substantially all of the stock or
assets of GCC Investments, Inc.("GCCI") or any entity that owns or controls
GCC's investment business to an entity other than GCC or an entity wholly owned
or controlled by GCC;
(iv) a reorganization, spin off, split up, merger,
consolidation or joint venture involving GCC, GCT, GCI or GCCI or any
substantial portion of any of their assets or subsidiaries or an acquisition of
any substantial assets or controlling interest in an entity or entities from a
third party ;
(v) a placement of equity or debt securities for GCC, GCT, GCI
or GCCI; or
(vi) any other transaction determined by the GCC's President
to be of significant importance to the overall business of GCC or any of its
subsidiaries.
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6. The unenforceability of any provision of this Agreement shall not affect the
enforceability of any other provision of this Agreement. This Agreement contains
the entire agreement between the parties and supersedes all prior agreements and
understandings, oral or written, with respect to the termination of the
Executive's at-will employment and the subject matter of the Agreement. This
Agreement may not be changed orally. It may be changed only by written agreement
signed by the party against whom any waiver, change amendment, modification or
discharge is sought.
7. The validity, performance and enforceability of this Agreement will be
determined and governed by the laws of the Commonwealth of Massachusetts without
regard to its conflict of laws principles.
GC Companies, Inc. The Executive
By:___________________ _____________________
Xxxxxx X. Xxxxx G. Xxxx Xxxxxxx
President and Chief Operating Officer
