EXHIBIT 10.1
AMENDMENT TO AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amendment, made and effective on the 21st day of May,
2003, by and between XXXXXXX CORPORATION, an Alabama corporation (the
"Company"), and XXXX X. XXXX (the "Executive").
RECITALS:
WHEREAS, the Company and the Executive entered into that
certain Amended and Restated Employment Agreement effective April 1, 2001 (the
"Agreement"), whereby the Executive's employment as President, Chief Executive
Officer and Chairman of the Board of the Company was continued;
WHEREAS, the Board of the Company authorized the Company to
enter into that certain CEO Change-of-Control Employment Agreement (the
"Change-of-Control Employment Agreement") between the Company and Executive,
but the Company and Executive have not executed such agreement;
WHEREAS, the Company and Executive desire to amend the
Agreement as set forth herein to incorporate the material provisions of the
unexecuted Change-of-Control Employment Agreement; and
WHEREAS, the Company and Executive agree that the
Change-of-Control Employment Agreement shall not be executed and that the
Agreement as amended herein shall supersede and replace any and all prior
understandings or arrangements (whether written or oral) regarding the
Change-of-Control Employment Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Executive
agree that the Agreement shall be amended effective on the date of this
Amendment, as follows:
1. Article 3.1 of the Agreement shall be amended to read as
follows:
3.1 Term of Employment. The term ("Term") of the
Executive's employment under this Agreement shall commence on the
Effective Date and shall continue until the earliest to occur of the
following dates (the "Termination Date"): (a) March 31, 2006 or if
later, the third anniversary of the Change of Control (as defined
below); (b) the date of death of the Executive; (c) the Disability
Effective Date (as defined in Article 7.1) in the event of "Total
Disability" of the Executive (as defined in Article 7.4); (d) the
effective date of a termination by the Company, including any
termination by the Company for Cause (as defined in and pursuant to
Articles 3.2 and 3.5); or (e) the effective date of the Executive's
resignation, including but not limited to termination by the Executive
for Good Reason (as defined in and pursuant to Articles 3.3 and 3.5).
2. Article 3.2 of the Agreement shall be amended to read as
follows:
3.2 Termination for Cause: Automatic Termination.
(a) The Company may terminate Executive's
employment for Cause solely in accordance with all of the
substantive and procedural provisions of this Article 3.2.
(b) For purposes of this Agreement, "Cause"
means any one or more of the following:
(i) Executive's conviction of a felony
other than those felonies involving use of an
automobile in violation of any vehicle statute and
excluding any liability which is based on acts of
the Company for which Executive is responsible
solely as a result of his office(s) with the
Company, provided that (A) he was not directly
involved in such acts and either had no prior
knowledge of such intended actions or promptly acted
reasonably and in good faith to attempt to prevent
the acts causing such liability or (B) he did not
have a reasonable basis to believe that a law was
being violated by such acts;
(ii) Final determination (which for
purposes of this paragraph shall mean the exhaustion
of all available remedies and appeals by the
Executive or the Executive's refusal to pursue such
remedies and appeals) in any action the effect of
which is to permanently enjoin Executive from
fulfilling his duties under the Agreement;
(iii) Executive's willful or intentional
material breach of the Agreement;
Provided, however, that for purposes of clauses (i), (ii),
and (iii), Cause shall not include any one or more of the
following:
(A) bad judgment or negligence;
(B) any act or omission believed by Executive
in good faith to have been in or not opposed to the interest
of the Company (without intent of Executive to gain, directly
or indirectly, a profit to which Executive was not legally
entitled);
(C) any act or omission with respect to which a
determination could properly have been made by the Board that
Executive met the applicable standard of conduct for
indemnification or reimbursement under the Company's by-laws,
any applicable indemnification agreement, or applicable law,
in each case in effect at the time of such act or omission;
or
(D) any act or omission with respect to which
the Company gives Executive a Notice of Consideration (as
defined below) more than six months
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after the earliest date on which any member of the Board, not
a party to the act or omission, knew or should have known of
such act or omission; and
further provided that, if a breach of the Agreement involved
an act, or a failure to act, which was done, or omitted to be
done, by Executive in good faith and with a reasonable belief
that Executive's act, or failure to act, was in the best
interests of the Company or was required by applicable law or
administrative regulation, such breach shall not constitute
Cause if, within thirty (30) days after Executive is given
written notice of such breach that specifically refers to
this Article, Executive cures such breach to the fullest
extent that it is curable.
(c) The Company shall strictly observe each of
the following procedures in connection with any termination
of employment for Cause:
(i) The issue of determining whether
Executive's acts or omissions satisfy the definition
of "Cause" herein and, if so, whether to terminate
Executive's employment for Cause shall be raised and
discussed at a meeting of the Board.
(ii) Not less than 30 days prior to the
date of such meeting the Company shall provide
Executive and each member of the Board written
notice (a "Notice of Consideration") of (A) a
detailed description of the acts or omissions
alleged to constitute Cause, (B) the date, time and
location of such meeting of the Board, and (C)
Executive's rights under clause (iii) below.
(iii) Executive shall have the
opportunity to appear before the Board at such
meeting in person and, at Executive's option, with
or without legal counsel, and to present to the
Board a written and/or oral response to the Notice
of Consideration.
(iv) Executive's employment may be
terminated for Cause only if (A) the acts or
omissions specified in the Notice of Consideration
did in fact occur and do constitute Cause as defined
in this Article 3.2, (B) the Board makes a specific
determination to such effect and to the effect that
Executive's employment should be terminated for
Cause and (C) the Company thereafter provides
Executive with a Notice of Termination pursuant to
Article 3.5 which specifies in specific detail the
basis of such termination of employment for Cause
and which Notice shall be based upon one or more of
the acts or omissions set forth in the Notice of
Consideration. The Board's determination specified
in clause (B) of the preceding sentence shall
require the affirmative vote of at least 75% of the
members of the Board.
(d) In the event that the Company terminates
Executive's employment for Cause upon an Imminent Change Date
(as defined below) or on or after a Change of Control (as
defined below) and the issue of whether Executive was
properly terminated for Cause becomes a disputed issue in any
action or proceeding between the Company and Executive, the
Company shall,
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notwithstanding the determination referenced in clause (iv)
of Article 3.2(c), have the burden of establishing by clear
and convincing evidence that the actions or omissions
specified in the Notice of Termination did in fact occur, do
constitute Cause, were the basis for Executive's termination
and that the Company has, in each and every respect,
satisfied the procedural requirements of Article 3.2(c).
(e) For purposes of this Agreement, the
following terms shall have the following meanings:
(i) "Beneficial Owner" has the meaning
specified in Rule 13d-3 of the SEC under the
Exchange Act.
(ii) "Change of Control" means any one
or more of the following:
(A) any person (as such term is used in Rule
13d-5 of the SEC under the Securities Exchange Act of 1934
("Exchange Act") or group (as such term is defined in Section
3(a)(9) and 13(d)(3) of the Exchange Act), other than a
Subsidiary (as defined below), any employee benefit plan (or
any related trust) of the Company or any of its Subsidiaries
or any Excluded Person (as defined below), becomes the
Beneficial Owner (as defined above) of 20% or more of the
common stock of the Company or of Voting Securities (as
defined below) representing 20% or more of the combined
voting power of the Company (such a person or group, a "20%
Owner"), except that (1) no Change of Control shall be deemed
to have occurred solely by reason of such beneficial
ownership by a corporation with respect to which both more
than 70% of the common stock of such corporation and Voting
Securities representing more than 70% of the aggregate voting
power of such corporation are then owned, directly or
indirectly, by the persons who were the direct or indirect
owners of the common stock and Voting Securities of the
Company immediately before such acquisition in substantially
the same proportions as their ownership, immediately before
such acquisition, of the common stock and Voting Securities
of the Company, as the case may be, and such corporation
shall not be deemed a 20% Owner and (2) if any person or
group owns 20% or more but less than 30% of the common stock
of the Company or of the voting power of the Voting
Securities and such person or group has a "No Change of
Control Agreement" with the Company (as defined below), no
Change of Control shall be deemed to have occurred solely by
reason of such ownership for so long as the No Change of
Control Agreement remains in effect and such person or group
is not in violation of the No Change of Control Agreement; or
(B) the Incumbent Directors (as defined below)
(determined using the date of this Amendment as the baseline
date) cease for any reason to constitute at least two-thirds
of the directors of the Company then serving; or
(C) approval by the stockholders of the Company
of a merger, reorganization, consolidation, or similar
transaction, or a plan or agreement for the sale or other
disposition of all or substantially all of the consolidated
assets of the Company or a plan of liquidation of the Company
(any of the foregoing
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transactions, a "Reorganization Transaction") which, based on
information included in the proxy and other written materials
distributed to the Company's stockholders in connection with
the solicitation by the Company of such stockholder approval,
is not expected to qualify as an Exempt Reorganization
Transaction (as defined below); or
(D) the consummation by the Company of a
Reorganization Transaction that for any reason fails to
qualify as an Exempt Reorganization Transaction as of the
date of such consummation, notwithstanding the fact that such
Reorganization Transaction was expected to so qualify as of
the date of such stockholder approval.
A person or group shall be deemed to have a "No Change of
Control Agreement" for so long as the person or all members
of the group have executed a legal, binding and enforceable
agreement with the Company which provides that: (1) such
person or group shall be bound by the agreement for the time
period of not less than five years from its date of
execution; (2) such person or group shall not acquire
beneficial ownership or voting control equal to a percentage
of the common stock of the Company or the voting power of the
Voting Securities which exceeds a percentage specified in the
agreement which percentage shall in all events be less than
30%; (3) such person or group may not designate for election
as directors a number of directors in excess of 30% of the
number of directors on the Board; and (4) such person or
group shall vote the common stock of the Company and Voting
Securities in all matters in the manner directed by the
majority of the Incumbent Directors. If any agreement
described in the preceding sentence is violated by such
person or group or is amended in a fashion such that it no
longer satisfies the requirements of the preceding sentence,
such agreement shall, as of the date of such violation or
amendment, be treated for purposes hereof as no longer
constituting a No Change of Control Agreement.
Notwithstanding the occurrence of any of the foregoing
events, a Change of Control shall not occur with respect to
an Executive if, in advance of such event, the Executive
agrees in writing that such event shall not constitute a
Change of Control.
(iii) "Excluded Person" means any Person
who, along with such Person's Affiliates and
Associates (as such terms are defined in Rule 12b-2
of the General Rules and Regulations under the
Exchange Act), is the Beneficial Owner of 15% or
more of the common stock of the Company or of the
Voting Securities of the Company outstanding as of
the date of this Amendment, provided that such
Person, including such Person's Affiliates and
Associates, does not acquire, after the date of this
Amendment, additional common stock or Voting
Securities of the Company in excess of 1% of the
then outstanding common stock or Voting Securities,
exclusive of (A) common stock or Voting Securities
acquired by such Person and such Person's Affiliates
and Associates as a result of stock dividends, stock
splits, recapitalizations or similar transactions in
which the Company did not receive any consideration
for
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issuing the shares in question or as a result of
repurchases of stock by the Company; (B) common
stock or Voting Securities acquired by such Person
and such Person's Affiliates and Associates as a
result of gifts, devises, bequests and intestate
succession; and (C) common stock or Voting
Securities acquired by such Person and such Person's
Affiliates and Associates as a result of
participation by such Person and such Person's
Affiliates and Associates in any dividend
reinvestment plan, stock option plan or other
similar plan or arrangement of the Company.
(iv) "Exempt Reorganization
Transaction" means a Reorganization Transaction
which results in the Persons who were the direct or
indirect owners of the outstanding common stock and
Voting Securities of the Company immediately before
such Reorganization Transaction becoming,
immediately after the consummation of such
Reorganization Transaction, the direct or indirect
owners of both more than 70% of the then-outstanding
common stock of the Surviving Corporation and Voting
Securities representing more than 70% of the
aggregate voting power of the Surviving Corporation,
in substantially the same respective proportions as
such Persons' ownership of the common stock and
Voting Securities of the Company immediately before
such Reorganization Transaction.
(v) "Incumbent Directors" means, as of
any specified baseline date, individuals then
serving as members of the Board who were members of
the Board as of the date immediately preceding such
baseline date; provided that any
subsequently-appointed or elected member of the
Board whose election, or nomination for election by
stockholders of the Company or the Surviving
Corporation, as applicable, was approved by a vote
or written consent of at least two-thirds of the
directors then comprising the Incumbent Directors
shall also thereafter be considered an Incumbent
Director, unless the initial assumption of office of
such subsequently-elected or appointed director was
in connection with (A) an actual or threatened
election contest, including a consent solicitation,
relating to the election or removal of one or more
members of the Board, (B) a "tender offer" (as such
term is used in Section 14(d) of the Exchange Act),
(C) a proposed Reorganization Transaction, or (D) a
request, nomination or suggestion of any Beneficial
Owner of Voting Securities representing 15% or more
of the aggregate voting power of the Voting
Securities of the Company or the Surviving
Corporation, as applicable (excluding any Beneficial
Owner who is subject to and not in violation of a No
Change of Control Agreement both on the date of any
such request, nomination or suggestion and on the
date of such Director's election or appointment).
(vi) "Imminent Change Date" means any
date on which one or more of the following occurs
(A) a presentation to the Company's stockholders
generally or any of the Company's directors or
executive officers of a proposal or offer which, if
consummated, would be a Change
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of Control, (B) the public announcement (whether by
advertisement, press release, press interview,
public statement, Security and Exchange Commission
("SEC") filing or otherwise) of a proposal or offer
which if consummated would be a Change of Control,
or (C) such proposal or offer remains effective and
unrevoked.
(vii) "Parent Corporation" means a
corporation which owns 50% or more of the common
stock or Voting Securities of any corporation and
any other corporation which owns any corporation
which is in an unbroken chain of corporations each
of which owns successively in an unbroken chain of
corporations which includes the subject corporation.
(viii) "Person" means any individual,
sole proprietorship, partnership, joint venture,
limited liability company, trust, unincorporated
organization, association, corporation, institution,
public benefit corporation, entity or government
instrumentality, division, agency, body or
department.
(ix) "Subsidiary" means with respect to
any Person (A) any corporation of which more than
50% of the Voting Securities are at the time,
directly or indirectly, owned by such Person and (B)
any partnership or limited liability company in
which such Person has a direct or indirect interest
(whether in the form of voting power, participation
in profits or capital contribution) of more than
50%.
(x) "Surviving Corporation" means the
corporation resulting from a Reorganization
Transaction and any Parent Corporation of such
corporation.
(xi) "Voting Securities" of a
corporation means securities of such corporation
that are entitled to vote generally in the election
of directors of such corporation, but not including
any other class of securities of such corporation
that may have voting power by reason of the
occurrence of a contingency which contingency has
not occurred.
3. Article 3.3 of the Agreement shall be amended to read as
follows:
3.3 Good Reason.
(a) During the Term, Executive may terminate
his or her employment for Good Reason in accordance with the
substantive and procedural provisions of this Article. For
purposes of this Agreement, Good Reason means the occurrence
of any one or more of the following actions or omissions
that, unless otherwise specified, occurs during the Term of
the Agreement:
(i) any failure to pay Executive's
Base Salary or annual bonus in violation of Article
4 of the Agreement or any failure to increase
Executive's Base Salary to the extent, if any,
required by Article 4.1;
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(ii) any failure by the Company to
comply with any provision of Articles 2 (including,
but not limited to, failure by the Company or the
Company's shareholders to reelect or reappoint
Executive as President (unless he has previously
voluntarily relinquished such position), Chief
Executive Officer and Chairman of the Board), 4, 5,
6, 8, 9 or 10 of the Agreement;
(iii) any material modification in
Executive's position (including offices, titles,
reporting requirements or responsibilities),
authority, duties or other terms and conditions of
Executive's employment;
(iv) requiring Executive to be based at
any office or location other than the Atlanta,
Georgia metropolitan area;
(v) any material breach of the
Agreement by the Company;
(vi) any termination of employment by
the Company that purports to be for Cause, but is
not in full compliance with all of the substantive
and procedural requirements of this Agreement (any
such purported termination shall be treated as a
termination of employment without Cause for all
purposes of this Agreement);
(vii) the failure at any time of a
successor to the Company or a Parent Corporation of
a successor to the Company explicitly to assume and
agree to be bound by the Agreement; or
(viii) a termination of employment by
Executive for any reason or no reason at any time
during the twenty-four month period commencing
immediately following the date of a Change of
Control.
(b) In the event Executive determines there is
Good Reason to terminate, Executive shall notify the Company
of the events constituting such Good Reason by a Notice of
Termination pursuant to Article 3.5. A delay in the delivery
of such Notice of Termination or a failure by Executive to
include in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason shall not waive
any right of Executive under this Agreement or preclude
Executive from asserting such fact or circumstance in
enforcing rights under this Agreement; provided, that no act
or omission by the Company shall qualify as Good Reason if
Executive's termination of employment occurs more than 12
months after Executive first obtains actual knowledge of such
act or omission.
(c) If the Termination Date occurs on or after
a Change of Control and during any portion of the Term, any
reasonable determination by Executive that any of the events
specified in the definition of Good Reason, has occurred and
constitutes Good Reason shall be conclusive and binding for
all purposes, unless the Company establishes by clear and
convincing evidence that Executive did not have any
reasonable basis for such determination.
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(d) In the event that the Company on or after a
Change of Control conceals any act or omission by the Company
that occurs during the Term and qualifies as Good Reason, any
subsequent termination of employment (whether by the Company
or by Executive and regardless of the circumstances of such
termination) that occurs at any time after such act or
omission shall conclusively be deemed to be a termination of
employment by Executive for Good Reason, notwithstanding any
provision of this Agreement to the contrary.
(e) If Executive has a termination of
employment during the Imminent Change Period (as defined
below) and a Change of Control occurs within six (6) months
of such termination of employment, the provisions of this
Article 3.3 and the other provisions of this Agreement shall
be applied in the same manner and to the same extent as if
the termination of employment had occurred after the date of
a Change of Control. During the Imminent Change Period, if
Executive terminates his employment for reasons that would
constitute Good Reason during the Term, Executive shall
terminate in accordance with the procedures set forth in this
Article 3.3.
(f) "Imminent Change Period" means the period
commencing on the Imminent Change Date and ending on the
earlier to occur of (i) a Change of Control or (ii) the date
the offer or proposal for a Change of Control is no longer
effective or has been revoked.
4. Article 3.5 of the Agreement shall be amended to read as
follows:
3.5 Notice of Termination. Any termination by the
Executive for Good Reason or by the Company for Cause shall be
communicated by Notice of Termination to the Company or the Executive,
as the case may be. For purposes hereof, a "Notice of Termination"
means a written notice given in accordance with Article 26 of the
Agreement which sets forth (a) the specific termination provision in
this Agreement relied upon by the party giving such notice, (b) in
reasonable detail the specific facts and circumstances claimed to
provide a basis for such termination of employment, and (c) if the
Termination Date is other than the date of receipt of such Notice of
Termination, the Termination Date shall be any later date, not more
than 15 days after the giving of such Notice, specified in such
notice; provided, however, that if no Notice of Termination is given,
the Termination Date shall be the last date on which Executive is
employed by the Company.
5. Article 5 of the Agreement shall be amended by designating
the two paragraphs therein as Article 5.1 and adding to Article 5 the following
Articles 5.2 and 5.3 to read as follows:
5.2 Restricted Stock. In addition to the Base Salary and
bonus provided to the Executive pursuant to Article 4, the Board, in
its discretion and during the Term, may grant restricted shares of
common stock of Xxxxxxx Corporation to the Executive. If the
Executive's employment is terminated by reason of death, Total
Disability, by the Company for any reason other than for Cause or by
the Executive for Good Reason, all restrictions on such restricted
shares and any other restricted stock granted to Executive shall
immediately lapse; if the Executive's employment is terminated by the
Company for
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Cause or by the Executive other than for Good Reason, all shares of
restricted common stock granted under this Article 5 or otherwise as
to which the restrictions have not lapsed as of the Termination Date
shall be forfeited to the Company.
5.3 Performance Shares. In addition to the Base Salary
and bonus provided to the Executive pursuant to Article 4, the Board,
in its discretion and during the Term, may grant performance shares to
the Executive. If the Executive's employment is terminated by reason
of death, Total Disability, by the Company for any reason other than
for Cause or by the Executive for Good Reason, the Company shall
immediately pay to the Executive with respect to any performance share
with respect to which the performance period has not ended as of the
date of such termination the award or awards that would be payable to
the Executive upon achieving target performance goals.
6. Article 7 of the Agreement shall be amended to read as
follows:
7.1 Termination on Total Disability. The Company may
only terminate the Executive's employment because of Executive's Total
Disability (as defined below) by giving Executive or his legal
representative, as applicable, (a) written notice in accordance with
Article 26 of the Company's intention to terminate Executive's
employment pursuant to this Article 7.1 and (b) a Certification (as
defined in Article 7.4.) Executive's employment shall terminate
effective on the 30th day (the "Disability Effective Date") after
Executive's receipt of such notice unless, before the Disability
Effective Date, Executive shall have resumed the full-time performance
of Executive's duties.
7.2 Disability Benefits. If the Company terminates
Executive's employment by reason of Executive's Total Disability
during the Term, the Company's sole obligation to Executive under
Articles 2, 4 and 11 (other than Article 11.1) shall be as follows:
(a) to pay Executive, in addition to all vested
rights arising from Executive's employment as specified in
Article 9, a lump-sum cash amount equal to all Accrued
Obligations (as defined in Article 11.2(d)(i)) determined as
of the Termination Date,
(b) to continue Executive's Base Salary for a
period of 180 days following the last day of the Termination
Month (as defined in Article 11.1), and
(c) if the Termination Date is on or after a
Change of Control, to provide Executive disability and other
benefits after the Termination Date that are not less than
the most favorable of such benefits then available under
Executive's Agreement, Plans of the Company to disabled peer
executives of the Company or, if more favorable, those such
benefits provided by the Company at any time during the
12-month period immediately preceding the date of the Change
of Control.
7.3 Other Benefits. The rights of the Executive as
enumerated under this Article 7 upon any said termination of
employment in the event of Total Disability of Executive (which shall
be treated as retirement for purposes of all Company Plans and
benefits) are in addition to any and all other rights and benefits to
which the Executive is
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entitled (or those in which the Executive is otherwise vested or which
the Executive has otherwise earned), under the terms of this Agreement
(including but not limited to those rights described in Articles 5,6,
11 and 12), the aforementioned Employment Agreement dated as of March
31, 1998 (which was subsequently amended effective November 1, 1999
and which has a term through and including March 31, 2001), and/or the
Amended and Restated Executive Deferred Compensation and Buyout Plan
(or its predecessor), which is incorporated herein by reference as set
forth in Article 30.
7.4 Definition of Total Disability. For purposes of this
Agreement, "Total Disability" means any medically determinable
physical or mental impairment that has lasted for a continuous period
of not less than six (6) months and can be expected to be permanent or
of indefinite duration, and that renders Executive unable to perform
the duties required under the Agreement. Such determination shall be
made by written certification ("Certification") of Executive's Total
Disability by a physician jointly selected by the Company and the
Executive; provided that if the Company and Executive cannot reach
agreement on the physician, the Certification shall be by a panel of
physicians consisting of one physician selected by the Company, one
physician selected by the Executive and a third physician jointly
selected by those two physicians.
7. Article 11.2 of the Agreement is amended as follows:
A. The first sentence of Article 11.2(a) is amended to
read as follows:
(a) In addition to the compensation provided for in
Article 11.1, in the event prior to a Change of Control (i) the
Executive's employment is terminated by the Executive for Good Reason
or by the Company for any reason other than for Cause or (ii) the
Board declines to renew this Employment Agreement with the Executive
at the expiration of the Term hereof and upon terms that are no less
favorable to the Executive than those contained in this Agreement, the
Executive (or, in the event of his subsequent death, his designated
beneficiary) shall receive an amount equal to the sum of (A) and (B),
where (A) equals three times the Executive's then current Base Salary
and (B) equals three times that Target Bonus for the year in which the
effective date of said termination or expiration occurs, which Target
Bonus cannot (pursuant to Article 4.2) be less than 70% of the
Executive's then Base Salary.
B. The first sentence of Article 11.2(b) is amended to
read as follows:
(b) In the event the Board has not declined to renew
this Agreement with the Executive at the expiration of the Term hereof
(and upon terms that are no less favorable to the Executive than those
contained in this Agreement) but the Executive has nonetheless
declined to remain with the Company, the Executive (or in the event of
his subsequent death, his designated beneficiary) shall receive
(unless there has been a Change of Control and the Executive is
entitled to severance under Article 11.2(d)) an amount equal to the
Executive's then current Base Salary.
C. New Articles 11.2(d) through 11.2(g) are added to
the Agreement to read as follows:
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11.2(d) If, during the Term (or, if applicable, as provided
in Article 11.2(e) during the Imminent Change Period), the Company
terminates Executive's employment on or after a Change of Control
other than for Cause or Total Disability, or if Executive terminates
employment on or after a Change of Control for Good Reason, the
Company's sole obligations to Executive under Articles 2, 4 and 11
(other than Article 11.1) shall be as follows:
(i) The Company shall pay Executive, in
addition to all vested rights arising from Executive's
employment as specified in Article 9, a lump-sum cash amount
equal to the sum of the following:
(A) the amount of Executive's Base
Salary that is accrued but not yet paid as of the
Termination Date (the "Accrued Base Salary");
(B) the amount of any annual bonus
earned by Executive under Article 4.2 of the
Agreement but not yet paid with respect to the
Company's latest fiscal year ended prior to the
Termination Date (the "Accrued Annual Bonus");
(C) any accrued but unpaid vacation
pay, and any other amounts and benefits which are
then due to be paid or provided to Executive by the
Company, but have not yet been paid or provided (as
applicable) (the sum of (A), (B) and (C) shall be
collectively referred to in this Agreement as the
"Accrued Obligations");
(D) Executive's Pro-rata Annual Bonus
(as defined below) reduced (but not below zero) by
the amount of any annual bonus paid to Executive
with respect to the Company's fiscal year in which
the Termination Date occurs;
(E) all amounts previously deferred
by, or accrued to the benefit of, Executive under
any defined contribution Non-Qualified Plans (as
defined in Article 31.2), whether vested or
unvested, together with any accrued earnings
thereon, to the extent that such amounts and
earnings have not been previously paid by the
Company (whether pursuant to Article 31 or
otherwise);
(F) an amount equal to the number of
years in the Severance Period (as defined below)
times the sum of (1) Base Salary, (2) the greatest
of (I) Target Annual Bonus (as defined below), (II)
Historical Bonus (as defined below) or (III) 140% of
Executive's Base Salary and (3) Employer Defined
Contribution Plan Contribution (as defined below),
each determined as of the Termination Date;
provided, however, that any reduction in Executive's
Base Salary or Target Annual Bonus that would
qualify as Good Reason shall be disregarded for
purposes of this clause; and
(G) to the extent not paid pursuant to
any other clause of this Article 11.2(d)(i), an
amount equal to the sum of the value of the unvested
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portion of Executive's accounts or accrued benefits
under any Non-Qualified Plans or any plan which
meets the qualification requirements of Section
401(a) or 403(a) of the Internal Revenue Code (a
"Qualified Plan") (other than a defined benefit
plan) maintained by the Company as of the
Termination Date and forfeited by Executive by
reason of the termination of employment.
Such lump-sum amount shall be paid no more than thirty (30)
days after the Termination Date.
(ii) The Company shall pay, in lieu of all
previously-accrued benefits under all Non-Qualified Plans
that are defined benefit plans, a lump-sum cash amount equal
to the positive difference, if any, between:
(A) the sum of the Lump-Sum Values (as
defined below) of each Maximum Annuity (as defined
below) that would be payable to Executive under any
defined benefit Plan (whether or not qualified under
Section 401(a)) if Executive had:
(1) become fully vested in
all such previously-unvested benefits,
(2) accrued a number of years
of service (for purposes of determining the
amount of such benefits, entitlement to
early retirement benefits, and all other
purposes of such defined benefit plans)
that is a number of years equal to the
number of years of service actually accrued
(or in the case of the Company's defined
benefit retirement plan and its SERP as
specified in Article 3.4, each year (or
portion thereof) of the Executive's
employment with the Company from January 1,
1998 through the Termination Date shall
count and serve as two (2) years of
employment for the SERP program implemented
by the Company in 2000, which program was
retroactive to January 1, 1998) by
Executive as of the Termination Date
increased by the number of years in the
Severance Period, and
(3) received the lump-sum
severance benefits specified in Article
11.2(d)(i)(D) and (F) as covered
compensation in equal monthly installments
during the Severance Period,
minus
(B) the sum of (1) the Lump-Sum Values
of the Maximum Annuity benefits actually payable to
Executive in the future under each defined benefit
Plan that is qualified under Section 401(a) of the
Code and (2) the aggregate amounts previously paid
to Executive pursuant to Article 31.2.
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Such lump-sum amount shall be paid no more than 30 days after
a Termination Date.
(iii) The Company shall pay all reasonable fees
and costs charged by the outplacement firm selected by
Executive to provide outplacement services to Executive or,
at the election of Executive, shall pay to Executive within
thirty (30) business days of its receipt of notice of
Executive's election an amount equal to the reasonable fees
and expenses such outplacement firm would charge.
(iv) Until a number of years subsequent to the
Termination Date equal to the length of the Severance Period
or such later date as any plan may specify, the Company shall
continue to provide to Executive and Executive's family
welfare benefits (including medical, prescription, dental,
disability, salary continuance, individual life, group life,
accidental death and travel accident insurance plans and
programs but excluding those benefits which are provided
after the Executive's Termination Date pursuant to Article 6
of the Agreement) which are at least as favorable as the most
favorable Plans of the Company applicable to other peer
executives and their families as of the Termination Date, but
which are in no event less favorable than the most favorable
Plans of the Company applicable to other peer executives and
their families during the 12-month period immediately before
the date of the Change of Control. The cost of such welfare
benefits to Executive shall not exceed the cost of such
benefits to Executive immediately before the Termination Date
or, if less, the date of the Change of Control. Executive's
rights under this paragraph shall be in addition to, and not
in lieu of, any post-termination continuation coverage or
conversion rights Executive may have pursuant to applicable
law, including continuation coverage required by Section 4980
of the Code. Notwithstanding any of the above, the welfare
benefits provided under this paragraph shall be secondary to
any similar welfare benefits provided by Executive's
subsequent employer.
(v) During the Severance Period, the Company
shall provide Executive with the office, office privileges
and rights, assistance and all other rights set forth in
Article 8.
11.2(e) If during the Imminent Change Period:
(i) the Company terminates Executive's
employment other than for Cause or Total Disability, or if
Executive terminates employment for Good Reason, and
(ii) a Change of Control occurs within six (6)
months of Executive's Termination Date,
Executive shall receive the benefits provided in Article
11.2(d), (rather than in Article 11.2(a)), as if such
termination of employment occurred as of the date of the
Change of Control reduced by any similar benefits actually
paid to Executive on or after the termination of employment
pursuant to Article 11.2(a).
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11.2(f) If, on or after a Change of Control, Executive's
employment is terminated by reason of Executive's death during the
Term, the Company's sole obligations to Executive under Articles 2, 4
and 11 (other than Article 11.1) shall be as follows:
(i) to pay Executive's estate or Beneficiary,
in addition to all vested rights arising from Executive's
employment as specified in Article 9, a lump-sum cash amount
equal to all Accrued Obligations; and
(ii) to provide Executive's estate or
Beneficiary survivor and other benefits that are not less
than the most favorable survivor and other benefits then
available under Plans of the Company to the estates or the
surviving families of peer executives of the Company or, if
more favorable, those such benefits provided by the Company
at any time during the 12-month period immediately preceding
the date of the Change of Control.
11.2(g). For purposes of this Agreement, the terms specified
below shall have the following meanings:
(i) "Employer Defined Contribution Plan Contribution"
means the product of (A) the maximum amount stated as a percentage of
Executive's Base Salary paid within the three-year period immediately
preceding the date of the Change of Control by the Company for any
12-month period to or for the benefit of Executive as an employer
contribution under the Company's Non-Qualified Plans and Qualified
Plans which are defined contribution plans on behalf of Executive,
multiplied by (B) Executive's Base Salary as of the Termination Date
or, if greater, during the 12-month period immediately preceding the
date of the Change of Control.
(ii) "Historical Bonus" means a percentage of the
Executive's current Base Salary multiplied by the highest percentage
of Base Salary from time to time in effect represented by the
Executive's highest annual bonus on a percentage basis over the
three-year period immediately preceding the date of the Change of
Control.
(iii) "Lump Sum Value" of an annuity payable pursuant to a
defined benefit plan means, as of a specified date, the present value
of such annuity, as determined, as of such date, under generally
accepted actuarial principles using (A) the applicable interest rate,
mortality tables and other methods and assumptions that the Pension
Benefit Guaranty Corporation ("PBGC") would use in determining the
value of an immediate annuity of a terminated plan on the Termination
Date or (B) if such interest rate and mortality assumptions are no
longer published by the PBGC, interest rate and mortality assumptions
determined in a manner as similar as practicable to the manner by
which the PBGC's interest rate and mortality assumptions were
determined immediately prior to the PBGC's cessation of publication of
such assumptions.
(iv) "Maximum Annuity" means, in respect of a defined
benefit plan (whether or not qualified under Section 401 (a) of the
Code), an annuity computed in whatever manner permitted under such
plan (including frequency of annuity payments, attained age upon
commencement of annuity payments, and nature of surviving spouse
benefits, if any) that yields the greatest Lump Sum Value.
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(v) "Pro-rata Annual Bonus" means, in respect of the
Company's fiscal year during which the date of the Change of Control
(in the case of a Pro-rata Annual Bonus payable pursuant to Article
31.3 hereof) or the Termination Date (in the case of a Pro-rata Annual
Bonus payable pursuant to Article 11 hereof), as applicable, occurs,
an amount equal to the product of the greater of Executive's
Historical Bonus or Executive's Target Annual Bonus (determined as of
the date of the Change of Control or Termination Date, as applicable)
multiplied by a fraction, the numerator of which equals the number of
days from and including the first day of such fiscal year through and
including the date of the Change of Control or the Termination Date,
as applicable, and the denominator of which equals 365.
(vi) "Severance Period" means a period equal to three
years.
(vii) "Target Annual Bonus" as of a certain date means the
amount equal to the product of Base Salary determined as of such date
multiplied by the percentage of such Base Salary to which Executive
would have been entitled immediately prior to such date under
Executive's Agreement and any applicable bonus plan for the annual
performance period for which the annual bonus is awarded if the
performance goals established pursuant to such bonus plan were
achieved at the 100% level as of the end of the annual performance
period.
8. Article 13.3 of the Agreement shall be amended by adding the
following at the end of Article 13.3 to read as follows:
The foregoing provisions of this Article 13.3 shall not apply
on or after a termination of employment which occurs within three
years after a Change of Control; provided that during the period
beginning on such Termination Date and ending on the first anniversary
of the Termination Date, Executive shall not, directly or indirectly:
(a) encourage any employee or agent of the
Company to terminate his or her relationship with the
Company;
(b) solicit the employment or engagement as a
consultant or adviser, of any employee or agent of the
Company, or cause or encourage any Person to do any of the
foregoing;
(c) establish (or take preliminary steps to
establish) a business with, or encourage others to establish
(or take preliminary steps to establish) a business with, any
employee or agent of the Company; or
(d) interfere with the relationship of the
Company with, or endeavor to entice away from the Company,
any Person who or which at any time during the period
commencing one year prior to the Termination Date was or is a
material customer or material supplier of, or maintained a
material business relationship with, the Company.
9. Article 14 of the Agreement shall be amended to read as
follows:
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ARTICLE 14. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
14.1 Gross-up for Certain Taxes.
(a) If it is determined (by the reasonable
computation of the Company's independent auditors, which
determinations shall be certified to by such auditors and set
forth in a written certificate ("Company Certificate")
delivered to the Executive) that any benefit received or
deemed received by the Executive from the Company pursuant to
this Agreement or otherwise (collectively, the "Potential
Parachute Payments") is or will become subject to any excise
tax under Section 4999 of the Code or any similar tax payable
under any United States federal, state, local or other law
(such excise tax and all such similar taxes collectively,
"Excise Taxes"), then the Company shall, immediately after
such determination, pay the Executive an amount (the
"Gross-up Payment") equal to the product of
(i) the amount of such excise Taxes
multiplied by
(ii) the Gross-up Multiple (as defined
in Article 14.4).
The Gross-up Payment is intended to compensate the Executive
for the Excise Taxes and any federal, state, local or other
income or excise taxes or other taxes payable by the
Executive with respect to the Gross-up Payment. For all
purposes of this Article 14, Executive shall be deemed to be
subject to the highest effective marginal rate of Taxes.
The Executive or the Company may at any time request
the preparation and delivery to the Executive of a Company
Certificate. The Company shall, in addition to complying with
Article 14.2, cause all determinations and certifications
under the Article to be made as soon as reasonably possible
and in adequate time to permit the Executive to prepare and
file the Executive's individual tax returns on a timely basis.
14.2 Determination by the Executive.
(a) If the Company shall fail to deliver a
Company Certificate to the Executive (and to pay to the
Executive the amount of the Gross-up Payment, if any) within
14 days after receipt from the Executive of a written request
for a Company Certificate, or if at any time following
receipt of a Company Certificate the Executive disputes the
amount of the Gross-up Payment set forth therein, the
Executive may elect to demand the payment of the amount which
the Executive, in accordance with an opinion of counsel to
the Executive ("Executive Counsel Opinion") (as defined in
Article 14.5, below), determines to be the Gross-up Payment.
Any such demand by the Executive shall be made by delivery to
the Company of a written notice which specifies the Gross-up
Payment determined by the Executive and an Executive Counsel
Opinion regarding such Gross-up Payment (such written notice
and opinion collectively, the "Executive's Gross-Up
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Determination"). Within 14 days after delivery of the
Executive's Determination to the Company, the Company shall
either (1) pay the Executive the Gross-up Payment set forth
in the Executive's Gross-up Determination (less the portion
of such amount, if any, previously paid to the Executive by
the Company) or (2) deliver to the Executive a Company
Certificate specifying the Gross-up Payment determined by the
Company's independent auditors, together with an opinion of
the Company's counsel ("Company Counsel Opinion" (as defined
in Article 14.5, below)), and pay the Executive the Gross-up
Payment specified in such Company Certificate. If for any
reason the Company fails to comply with clause (2) of the
preceding sentence, the Gross-up Payment specified in the
Executive's Gross-up Determination shall be final, binding
and controlling for all purposes.
(b) If the Executive does not make a request
for, and the Company does not deliver to the Executive, a
Company Certificate, the Company shall be deemed to have
determined that no Gross-up Payment is due; provided that the
absence of such request by Executive or the Company
Certificate by the Company shall not preclude Executive from
making such request at any future date.
14.3 Additional Gross-up Amounts. If, despite the initial
conclusion of the Company and/or the Executive that certain Payments
are either not subject to Excise Taxes or not to be counted in
determining whether other Payments are subject to Excise Taxes (any
such item, a "Non-Parachute Item"), it is later determined (pursuant
to the subsequently-enacted provisions of the Code, final regulations
or published rulings of the IRS, final judgment of a court of
competent jurisdiction or the Company's independent auditors that any
of the Non-Parachute Items are subject to Excise Taxes, or are to be
counted in determining whether any Payments are subject to Excise
Taxes, with the result that the amount of Excise Taxes payable by the
Executive is greater or the amount of the Excise Taxes due are greater
for any other reason than the amount determined by the Company or the
Executive pursuant to Article 14.1 or 14.2, as applicable, then the
Company shall 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 a determination made pursuant to
Article 14.1
multiplied by
(b) the Gross-up Multiple.
14.4. Gross-up Multiple. The Gross-up Multiple shall equal
a fraction, the numerator of which is one (1.0), and the denominator
of which is one (1.0) minus the sum, expressed as a decimal fraction,
of the effective marginal rates of all federal, state, local and other
income and other taxes and any Excise Taxes applicable to the Gross-up
Payment; provided that, if such sum exceeds 0.8, it shall be deemed
equal to 0.8 for purposes of this computation. (If different effective
marginal rates of tax are applicable to various portions of a Gross-up
Payment, the weighted average of such rates shall be used.)
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14.5 Opinion of Counsel. "Executive Counsel Opinion"
means a legal opinion of nationally recognized executive compensation
counsel that there is a reasonable basis to support a conclusion that
the Gross-up Payment determined by the Executive has been calculated
in accord with this Article and applicable law. "Company Counsel
Opinion" means a legal opinion of nationally recognized executive
compensation counsel that (a) there is a reasonable basis to support a
conclusion that the Gross-up Payment set forth in the Company
Certificate of Company's independent auditors has been calculated in
accord with this Article and applicable law, and (b) there is no
reasonable basis for the calculation of the Gross-up Payment
determined by the Executive.
14.6 Amount Increased or Contested. The Executive shall
notify the Company in writing of any claim by the IRS or other taxing
authority that, if successful, would require the payment by the
Company of a Gross-up Payment. Such notice shall include the nature of
such claim and the date on which such claim is due to be paid. The
Executive shall give such notice as soon as practicable, but no later
than 10 business days, after the Executive first obtains actual
knowledge of such claim; provided, however, that any failure to give
or delay in giving such notice shall affect the Company's obligations
under this Article only if and to the extent that such failure results
in actual prejudice to the Company. The Executive shall not pay such
claim less than 30 days after the Executive gives such notice to the
Company (or, if sooner, the date on which payment of such claim is
due). If the Company notifies the Executive in writing before the
expiration of such period that it desires to contest such claim, the
Executive shall:
(a) give the Company any information that it
reasonably requests relating to such claim,
(b) take such action in connection with
contesting such claim as the Company reasonably requests in
writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
(c) cooperate with the Company in good faith to
contest such claim, and
(d) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax, including related interest and penalties, imposed as a
result of such representation and payment of costs and expenses.
Without limiting the foregoing, the Company shall control all
proceedings in connection with such contest and, at its sole option,
may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such
claim and may, at its sole option, either direct the Executive to pay
the tax claimed and xxx for a refund or contest the claim in any
permissible manner. The Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of
initial jurisdiction and in
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one or more appellate courts, as the Company shall determine;
provided, however, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis and shall
indemnify the Executive, on an after-tax basis, for any Excise Tax or
Taxes, including related interest or penalties, imposed with respect
to such advance; and further provided that any extension of the
statute of limitations relating to payment of Taxes for the taxable
year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. The
Company's control of the contest shall be limited to issues with
respect to which a Gross-up Payment would be payable. The Executive
shall in Executive's discretion be entitled to settle or contest, as
the case may be, any other issue raised by the IRS or other taxing
authority.
14.7 Refunds. If, after the receipt by the Executive of
an amount paid or advanced by the Company pursuant to Article 14.1,
14.3 and/or 14.6, the Executive becomes entitled to receive any refund
with respect to such claim or amount, the Executive shall (subject to
the Company's complying with the requirements of Article 14.6)
promptly pay the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by the Executive of an amount paid or advanced by
the Company pursuant to Article 14.1, 14.3 and/or 14.6, a
determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such determination
before the earlier of (a) the expiration of 30 days after such
determination or (b) the date such determination becomes final and
non-appealable, then such advance shall be forgiven and shall not be
required to be repaid. Any contest of a denial of refund shall be
controlled by Article 14.6.
10. Article 15 of the Agreement shall be amended to read as follows:
15.1 Professional Fees. The Company shall be responsible
for paying all professional fees (including but not limited to
attorneys fees and related costs) incurred by the Executive in
connection with his employment with the Company in an amount not to
exceed $100,000, without approval of the Company; provided, however,
that (a) any such fees charged on behalf of the Executive in
conjunction with or related to any negotiation of this Agreement or
any subsequent or related agreement(s) (or any amendment(s) thereto)
shall also be the responsibility of the Company but shall count
against said $100,000 amount and (b) any such professional fees of the
Executive which the Company would otherwise pay pursuant to its
policies and practices as to senior executives shall remain the
responsibility of the Company but shall not count against said
$100,000 amount.
15.2 Additional Professional Fees-Prior to Change. In the
event that prior to a Change of Control the Executive incurs any
professional fees (including but not limited to attorneys fees and
related costs) in protecting or enforcing his rights under this
Agreement or under any employee benefit plans or programs sponsored by
the Company in which the Executive is a participant, the Company shall
reimburse the Executive for such reasonable professional fees and for
any other reasonable expenses related thereto. Such reimbursement
shall be made within thirty (30) days following final resolution of
the dispute or occurrence giving rise to such fees and expenses.
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15.3 Additional Professional Fees On Or After Change. If
Executive incurs legal fees or other expenses (including expert
witness and accounting fees) on or after the date of a Change of
Control or the Imminent Change Date, in an effort to interpret this
Agreement or to secure, preserve, establish entitlement to, or obtain
benefits under this Agreement (including the fees and other expenses
of Executive's legal counsel in connection with the delivery of an
Executive Counsel Opinion), the Company shall, regardless of the
outcome of such effort, reimburse Executive on a current basis (in
accordance with this Article 15.3 for such fees and expenses, and
shall also pay Executive an additional payment such that, after
payment of all Taxes and Excise Taxes on such amount, there remains a
balance sufficient to pay all such fees and other expenses.
(a) Reimbursement of legal fees and expenses
and gross-up payments shall be made monthly within ten (10)
days after Executive's written submission of a request for
reimbursement together with evidence that such fees and
expenses were incurred.
(b) If Executive does not prevail (after
exhaustion of all available judicial remedies) in respect of
a claim by Executive or by the Company hereunder, and the
Company establishes before a court of competent jurisdiction,
by clear and convincing evidence, that Executive had no
reasonable basis for his claim hereunder, or for his response
to the Company's claim hereunder, or acted in bad faith, no
further reimbursement for legal fees and expenses shall be
due to Executive in respect of such claim and Executive shall
refund any amounts previously reimbursed hereunder with
respect to such claim.
(c) If there is a dispute between the Executive
and the Company as to Executive's rights to reimbursement of
legal or other fees and expenses under this Agreement or the
amount of such reimbursement, any amount of reimbursement
requested by Executive and accompanied by a legal opinion of
a nationally recognized executive compensation counsel that
such amount should be paid under the Agreement shall be
final, binding and controlling on the Company unless and to
the extent the Company establishes otherwise by clear and
convincing evidence.
(d) If the Company does not pay any amount due
to Executive under this Agreement within five business days
after such amount first became due and owing, interest shall
accrue on such amount from the date it became due and owing
until the date of payment at an annual rate equal 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.
15.4. Interest. If the Company does not pay any amount due
to Executive under this Agreement within five business days after such
amount first became due and owing, interest shall accrue on such
amount from the date it became due and owing until the date of payment
at an annual rate equal 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.
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11. Article 30 of the Agreement shall be amended by adding the
following sentence to the end of Article 30 to read as follows.
This Agreement (including the Amended and Restated Executive
Deferred Compensation and Buyout Plan) also supercedes and
replaces any and all prior understandings or arrangements
(whether written or oral) regarding the Change-of-Control
Employment Agreement.
12. A new Article 31 shall be added to the Agreement to read as
follows:
ARTICLE 31. ADDITIONAL OBLIGATIONS UPON A CHANGE OF CONTROL.
31.2 Unfunded Deferred Compensation. Upon a Change of
Control, Executive shall become fully vested in all benefits
previously accrued under any deferred compensation Plan (including any
supplemental executive retirement Plan that is a Non-Qualified Plan
("SERP")) that is not qualified under Section 401(a) of the Code (a
"Non-Qualified Plan"). Within thirty (30) business days after the date
of the Change of Control, the Company shall pay to Executive a
lump-sum cash amount equal to:
(a) the sum of the Lump-Sum Values of all
Maximum Annuities that are payable pursuant to all defined
benefit Non-Qualified Plans, plus
(b) the sum of Executive's account balances
under all defined contribution Non-Qualified Plans;
provided, however, that if, at any time prior to the date of the
Change of Control, Executive delivers to the Company an irrevocable
election to waive Executive's right to receive the payments described
in this Article 31.2 (an "Irrevocable Election"), then (i) Executive
shall not receive the payments described in this Article 31.2, (ii)
Executive's account balances under each defined contribution
Non-Qualified Plan shall continue to be credited with investment
earnings in accordance with the terms of such Non-Qualified Plan
during Executive's period of employment following the date of the
Change of Control, and (iii) at the earlier of (x) the date(s)
provided in each such Non-Qualified Plan and (y) 30 days after
Executive's Termination Date, the Company shall pay, or cause to be
paid, to Executive a lump-sum cash payment equal to the sum of the
Lump-Sum Value(s) of all Maximum Annuities that are payable pursuant
to all defined benefit Non-Qualified Plans and the sum of Executive's
account balances under all defined contribution Non-Qualified Plans.
31.3 Pro-Rata Annual Bonus. Within thirty (30) days after
the date of the Change of Control, the Company shall pay Executive a
lump-sum cash payment equal to the Pro-Rata Annual Bonus determined as
of the date of the Change of Control.
31.4 Equity Incentives. Upon a Change of Control,
Executive shall become fully vested in and may thereafter exercise in
whole or in part all outstanding stock options, stock appreciation
rights, or similar awards and (ii) shall become fully vested in and
receive an immediate transfer of all shares of restricted stock,
deferred stock and similar awards.
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31.5 Performance Shares. If a Change of Control occurs
during any performance period relating to a grant of performance
shares, the Company shall upon the Change of Control pay to the
Executive with respect to each performance share with respect to which
the performance period has not ended as of the date of the Change of
Control the award that would be payable to the Executive upon
achieving maximum performance goals.
13. A new Article 32 shall be added to the Agreement to read as
follows:
ARTICLE 32. MISCELLANEOUS PROVISIONS.
32.1 No Set-Off or Mitigation. Executive's right to
receive when due the payments and other benefits provided for under
this Agreement is absolute, unconditional and not subject to set-off,
counterclaim or legal or equitable defense. Time is of the essence in
the performance by the Company of its obligations under this
Agreement. Any claim which the Company may have against Executive,
whether for a breach of this Agreement or otherwise, shall be brought
in a separate action or proceeding and not as part of any action or
proceeding brought by Executive to enforce any rights against the
Company under this Agreement. Executive shall not have any duty to
mitigate the amounts payable by the Company under this Agreement by
seeking new employment or self-employment following termination.
Except as specifically otherwise provided in this Agreement, all
amounts payable pursuant to this Agreement shall be paid without
reduction regardless of any amounts of salary, compensation or other
amounts which may be paid or payable to Executive as the result of
Executive's employment by another employer or self-employment.
32.2 No Deference. Unless otherwise expressly provided in
this Agreement, no determination pursuant to, or interpretation of,
this Agreement made by the board of directors (or any committee
thereof) of the Company or any Successor Corporation following a
Change of Control or Imminent Change Date shall be entitled to any
presumptive validity or other deference in connection with any
judicial or administrative proceeding relating to or arising under
this Agreement. Prior to a Change of Control or Imminent Change Date,
no inference as to deference should be drawn from this provision.
32.3 Waiver of Certain Other Rights. To the extent that
payments are made to Executive pursuant to Article 11(d)(i), Executive
hereby waives the right to receive severance payments or severance
benefits under any other severance Plan, agreement or Policy of the
Company. To the extent that payments are made to Executive as required
by Article 11(d)(ii), Executive hereby waives the right to receive
payments or benefits under any Non-Qualified Plan of the Company that
have been accrued as of the Termination Date.
32.4 Other Rights. Except as expressly provided in
Article 32.3, this Agreement shall not prevent or limit Executive's
continuing or future participation in any benefit, bonus, incentive or
other Plans provided by the Company and for which Executive may
qualify, nor shall this Agreement limit or otherwise affect such
rights as Executive may have under any other agreements with the
Company. Amounts which are vested benefits or which Executive is
otherwise entitled to receive under any Plan and
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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.
32.5 Successors. This Agreement shall inure to the
benefit of and be binding upon the Company and its successors and
assigns. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company or any
Parent Corporation of any successor (whether direct or indirect) by
purchase, merger, consolidation or otherwise to all or substantially
all of the business assets of the Company, to assume expressly and
agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such
succession had taken place. Any successor to the business or assets of
the Company which assumes or agrees to perform this Agreement by
operation of law, contract, or otherwise shall be jointly and
severally liable with the Company under this Agreement as if such
successor were the Company.
32.6 No Waiver. Executive's failure to insist upon strict
compliance with any provision of this Agreement shall not be deemed a
waiver of such provision or any other provision of this Agreement. A
waiver of any provision of this Agreement shall not be deemed a waiver
of any other provision, and any waiver of any default in any such
provision shall not be deemed a waiver of any later default thereof or
of any other provision.
14. For purposes of this Agreement, the terms specified below
shall have the following meanings:
A. "Plan" means plans, programs or Policies of the
Company.
B. "Policies" means policies, practices or procedures
of the Company.
C. "Taxes" means federal, state, local or other income
or other taxes.
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15. Except as specifically provided herein, this Amendment shall
not be interpreted to amend or modify the Agreement in any way and the Company
and the Executive hereby ratify and affirm all provisions of the Agreement as
of the date hereof.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the day and year first above written.
XXXXXXX CORPORATION EXECUTIVE
By: /s/ Xxxxxx X. Xxxxxx /s/ Xxxx X. Xxxx
---------------------------- -------------------------------
Its: Senior Vice President XXXX X. XXXX
WITNESS:
Attest: /s/ Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxx
------------------------ -------------------------------
Secretary
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