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EXHIBIT 10.50
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XXXX X. XXXXX
EMPLOYMENT CONTINUATION AGREEMENT
MARCH 16, 2000
METROPOLITAN LIFE INSURANCE COMPANY
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EMPLOYMENT CONTINUATION AGREEMENT
THIS AGREEMENT between METROPOLITAN LIFE INSURANCE COMPANY, a
New York corporation (the "Company"), and Xxxx X. Xxxxx (the "Executive"), dated
as of this 16th day of March, 2000.
W I T N E S S E T H :
WHEREAS, the Company has employed the Executive in an officer
position and has determined that the Executive holds a critical position with
the Company;
WHEREAS, the Company believes that, in the event it is
confronted with a situation that could result in a change in ownership or
control of the Company, continuity of management will be essential to its
ability to evaluate and respond to such situation in the best interests of its
policyholders, and if, at the relevant time, it is a stock company, its
shareholders;
WHEREAS, the Company understands that any such situation will
present significant concerns for the Executive with respect to her financial and
job security;
WHEREAS, the Company desires to assure itself of the
Executive's services during the period in which it is confronting such a
situation, and to provide the Executive certain financial assurances to enable
the Executive to perform the responsibilities of her position without undue
distraction and to exercise her judgment without bias due to her personal
circumstances;
WHEREAS, to achieve these objectives, the Company and the
Executive desire to enter into an agreement providing the Company and the
Executive with certain rights and obligations upon the occurrence of a Change of
Control or Potential Change of Control (as each such term is defined in Section
2 hereof);
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is hereby agreed by and between the Company and
the Executive as follows:
1. Operation of Agreement. (a) Term. The initial term of this
Agreement shall commence on the date hereof and continue until the third
anniversary of the date hereof. Thereafter, this Agreement will automatically
renew for successive and
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consecutive additional three year periods following the end of its initial term
and any extended term, unless the Company or the Executive gives the other party
written notice at least 180 days prior to the date the term hereof would
otherwise renew that it or she does not want the term to be so extended;
provided, however, that, the Company may not deliver a notice of nonrenewal
after (i) a Potential Change of Control (as is defined in Section 2(b) hereof)
unless the Board of Directors has adopted a Nullification Resolution (as defined
in Section 2(b) hereof) with respect to such Potential Change of Control or (ii)
a Change of Control (as defined in Section 2(a) hereof). Notwithstanding
anything to the contrary in this Agreement, the term of this Agreement shall in
all events expire (regardless of when the term would otherwise have expired) on
the second anniversary of a Change of Control.
(b) Effective Date. Notwithstanding the provisions of Section
1(a) hereof, this Agreement shall govern the terms and conditions of the
Executive's employment and the benefits and compensation to be provided to the
Executive commencing on the date on which a Potential Change of Control or a
Change of Control occurs (the "Effective Date") and ending on the date the term
of this Agreement otherwise expires, provided that if the Executive is not
employed by the Company on the Effective Date, this Agreement shall be void and
without effect.
2. Definitions. (a) Change of Control. For the purposes of
this Agreement, a "Change of Control" shall be deemed to have occurred if:
(i) any person (within the meaning of Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
including any group (within the meaning of Rule 13d-5(b) under the
Exchange Act)), acquires "beneficial ownership" (within the meaning of
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined
Voting Power (as defined below) of the Company's securities;
(ii) within any 24-month period, the persons who were
directors of the Company at the beginning of such period (the
"Incumbent Directors") shall cease to constitute at least a majority of
the Board of Directors of the Company (the "Board") or the board of
directors of any successor to the Company provided, however, that any
director elected to the Board, or nominated for election, by a majority
of the Incumbent Directors then still in office shall be deemed to be
an Incumbent Director for purposes of this subclause 2(a)(ii);
(iii) the policyholders of the Company, if at the time in
question the Company is a mutual life insurance company, approve a
merger, consolidation, division, sale or other disposition of all or
substantially all of the assets of the
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Company (a "Mutual Event");provided, however, that a Mutual Event shall
not be treated as a Change of Control for purposes of this Agreement if
(x) the Company is the surviving company in any such merger or other
transaction and (y) pursuant to the terms of the agreement governing
the transaction constituting the Mutual Event, the persons who were
directors of the Company immediately prior to such Mutual Event
constitute at least 75% of the members of the Board immediately
following the consummation of such Mutual Event; or
(iv) the stockholders of the Company, if at the time in
question the Company is a stock company, approve a merger,
consolidation, share exchange, division, sale or other disposition of
all or substantially all of the assets of the Company (a "Corporate
Event"), and immediately following the consummation of which the
stockholders of the Company immediately prior to such Corporate Event
do not hold, directly or indirectly, a majority of the Voting Power of
(x) in the case of a merger or consolidation, the surviving or
resulting corporation, (y) in the case of a share exchange, the
acquiring corporation or (z) in the case of a division or a sale or
other disposition of assets, each surviving, resulting or acquiring
corporation which, immediately following the relevant Corporate Event,
holds more than 25% of the consolidated assets of the Company
immediately prior to such Corporate Event; or
(v) any other event occurs which the Board declares to be a
Change of Control.
Notwithstanding the foregoing, a Change of Control shall not be deemed to have
occurred merely as a result of (i) the conversion of the Company from a mutual
life insurance company to a stock company whose shareholders are either (x)
primarily persons who were policyholders of the Company immediately prior to
such transaction and/or a trust holding the shares of the Company for the
benefit of such policyholders or (y) another corporation the shares of which are
held primarily by the persons and/or trust described in subclause (x); (ii) the
Company becoming a direct or indirect subsidiary of a mutual holding company
whose members are primarily persons who were policyholders of the Company
immediately prior to such transaction or (iii) an underwritten offering of the
equity securities of the Company where no Person (including any group (within
the meaning of Rule 13d-5(b) under the Exchange Act)) acquires more than 25% of
the beneficial ownership interests in such securities.
(b) Potential Change of Control. For the purposes of this
Agreement, a Potential Change of Control shall be deemed to have occurred if:
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(i) a Person commences a tender offer, with adequate
financing, which, if consummated, would result in such Person being the
"beneficial ownership" (within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 10% or more of the combined Voting Power of the Company's
securities;
(ii) the Company enters into an agreement the consummation of
which would constitute a Change of Control;
(iii) any person (including any group (within the meaning of
Rule 13d-5(b) under the Exchange Act)) other than the Company attempts,
directly or indirectly, to replace more than 25% of the directors of
the Company; provided, however, that any action taken in support of a
nominee approved by a majority of the members of the Board then in
office shall not be given any effect in determining whether a Potential
Change of Control has occurred;
(iv) certification, pursuant to New York Insurance Law Section
4210(h)(1)(B) (or any successor provision thereto) of an independent
nomination of candidates to replace more than 25% of the members of the
Board; or
(v) any other event occurs which the Board declares to be a
Potential Change of Control.
Notwithstanding the foregoing, if, after a Potential Change of Control and
before a Change of Control, the Board makes a good faith determination that such
Potential Change of Control will not result in a Change of Control, the Board
may nullify the effect of the Potential Change of Control (a "Nullification") by
resolution (a "Nullification Resolution"), in which case the Executive shall
have no further rights and obligations under this Agreement by reason of such
Potential Change of Control; provided, however, that if the Executive shall have
delivered a Notice of Termination (within the meaning of Section 6(f) hereof)
prior to the date of the Nullification Resolution, such Resolution shall not
effect the Executive's rights hereunder. If a Nullification Resolution has been
adopted and the Executive has not delivered a Notice of Termination prior
thereto, the Effective Date for purposes of this Agreement shall be the date, if
any, during the term hereof on which another Potential Change of Control or any
actual Change of Control occurs.
(c) Voting Power. A specified percentage of "Voting Power" of
a company shall mean such number of the Voting Securities as shall enable the
holders thereof to cast such percentage of all the votes which could be cast in
an annual election of directors and "Voting Securities" shall mean all
securities of a company entitling the holders thereof to vote in an annual
election of directors.
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(d) Affiliate. An "Affiliate" shall mean any corporation,
partnership, limited liability company, trust or other entity which directly, or
indirectly through one or more intermediaries, controls, or is controlled by,
the Company.
3. Employment Period. Subject to Section 6 hereof, the Company
agrees to continue the Executive in its employ, and the Executive agrees to
remain in the employ of the Company, for the period (the "Employment Period")
commencing on the Effective Date and ending on the expiration of the term of
this Agreement.
4. Position and Duties. (a) No Reduction in Position. During
the Employment Period, the Executive's position (including titles), authority
and responsibilities shall be at least commensurate with those held, exercised
and assigned immediately prior to the Effective Date. It is understood that, for
purposes of this Agreement, such position, authority and responsibilities shall
not be regarded as not commensurate merely by virtue of the fact that a
successor shall have acquired all or substantially all of the business and/or
assets of the Company as contemplated by Section 12(b) hereof. The Executive's
services shall be performed at the location where the Executive was employed
immediately preceding the Effective Date or at any other office or location not
more than 35 miles from such pre-Effective Date location.
(b) Business Time. During the Employment Period, the Executive
agrees to devote her full attention during normal business hours to the business
and affairs of the Company and to use her best efforts to perform faithfully and
efficiently the responsibilities assigned to her hereunder, to the extent
necessary to discharge such responsibilities, except for (i) time spent in
managing her personal, financial and legal affairs and serving on corporate,
civic or charitable boards or committees, in each case only if and to the extent
not substantially interfering with the performance of such responsibilities, and
(ii) periods of vacation and sick leave to which she is entitled. It is
expressly understood and agreed that the Executive's continuing to serve on any
boards and committees on which she is serving or with which she is otherwise
associated immediately preceding the Effective Date shall not be deemed to
interfere with the performance of the Executive's services to the Company.
5. Compensation. (a) Base Salary. During the Employment
Period, the Executive shall receive a base salary at a monthly rate at least
equal to the monthly salary paid to the Executive by the Company and any
Affiliate immediately prior to the Effective Date. The base salary shall be
reviewed at least once each year after the Effective Date, and may be increased
(but not decreased) at any time and from time to time by action of the Board or
any committee thereof or any individual having authority to take such action in
accordance with the Company's regular practices. The Executive's base salary, as
it may be increased from time to time, shall hereafter be referred to as the
"Base
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Salary". Neither the Base Salary nor any increase in the Base Salary after the
Effective Date shall serve to limit or reduce any other obligation of the
Company hereunder.
(b) Annual Bonus. During the Employment Period, in addition to
the Base Salary, the Executive shall be afforded the opportunity to receive an
annual bonus (the "Annual Bonus Opportunity") in an amount which provides the
Executive with the same bonus opportunity as other executives of the Company of
comparable rank. If any fiscal year commences but does not end during the
Employment Period, Executive shall receive a pro-rated amount in respect of the
Annual Bonus Opportunity for the portion of the fiscal year occurring during the
Employment Period. Any amount payable in respect of the Annual Bonus Opportunity
shall be paid as soon as practicable following the year for which the amount (or
any prorated portion) is earned or awarded, unless electively deferred by the
Executive pursuant to any deferral programs or arrangements that the Company may
make available to the Executive.
(c) Long-term Incentive Compensation Programs. During the
Employment Period, the Executive shall participate in all long-term incentive
compensation programs for key executives at a level that is commensurate with
the level made available from time to time to executives of comparable rank.
(d) Benefit Plans. During the Employment Period, the Executive
(and, to the extent applicable, her dependents) shall be entitled to participate
in or be covered under all pension, retirement, deferred compensation, savings,
medical, dental, health, disability, group life, accidental death and travel
accident insurance plans and programs of the Company and any Affiliate at the
level made available from time to time to other similarly situated officers.
(e) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the policies and procedures of the
Company as in effect from time to time with respect to expenses incurred by
other similarly situated officers.
(f) Vacation and Fringe Benefits. During the Employment
Period, the Executive shall be entitled to paid vacation and fringe benefits at
a level that is commensurate with the paid vacation and fringe benefits
available from time to time to other similarly situated officers.
(g) Indemnification. During and after the Employment Period,
the Company shall indemnify the Executive and hold the Executive harmless from
and against judgments, fines, amounts paid in settlement and reasonable
expenses, including attorneys'
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fees, on the same terms and conditions applicable from time to time with respect
to the indemnification of its other senior officers of comparable rank.
(h) Office and Support Staff. The Executive shall be entitled
to an office with furnishings and other appointments, and to secretarial and
other assistance, at a level that is at least commensurate with the foregoing
provided to other similarly situated officers.
6. Termination. (a) Death, Disability or Retirement. Subject
to the provisions of Section 1 hereof, this Agreement shall terminate
automatically upon the Executive's death, termination due to "Disability" (as
defined below) or voluntary retirement under any of the Company's retirement
plans as in effect from time to time. For purposes of this Agreement,
"Disability" shall mean the Executive's inability to perform the duties of her
position, as determined in accordance with the policies and procedures
applicable with respect to the Company's long-term disability plan, as in effect
immediately prior to the Effective Date; provided, however, that the Executive's
employment may not be terminated for Disability hereunder unless the Executive
has requested that she be considered for, and has qualified to receive,
long-term disability benefits under such plan.
(b) Voluntary Termination. Notwithstanding anything in this
Agreement to the contrary, the Executive may voluntarily terminate employment
for any reason (including early retirement under the terms of any of the
Company's retirement plans as in effect from time to time), upon not less than
60 days' written notice to the Company, provided that any termination by the
Executive pursuant to Section 6(d) hereof on account of Good Reason (as defined
therein) shall not be treated as a voluntary termination under this Section
6(b).
(c) Cause. The Company may terminate the Executive's
employment for Cause. For purposes of this Agreement, "Cause" means (i) the
Executive's conviction or plea of nolo contendere to a felony; (ii) an act of
dishonesty or gross misconduct on the Executive's part which results or is
intended to result in material damage to the Company's business or reputation;
or (iii) repeated material violations by the Executive of her obligations under
Section 4 hereof, which violations are demonstrably willful and deliberate on
the Executive's part.
(d) Good Reason. After the Effective Date, the Executive may
terminate her employment at any time for Good Reason. For purposes of this
Agreement, "Good Reason" means the occurrence of any of the following, without
the express written consent of the Executive, after the Effective Date:
(i) (A) the assignment to the Executive of any duties
inconsistent in any material adverse respect with the Executive's
position, authority or
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responsibilities as contemplated by Section 4(a) hereof, or (B) any
other material adverse change in such position, including titles,
authority or responsibilities;
(ii) any failure by the Company to comply with any of the
provisions of Section 5 hereof, other than an insubstantial or
inadvertent failure remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(iii) requiring the Executive to be based at any office or
location more than 35 miles from the location at which the Executive
performed her duties immediately prior to the Effective Date, except
for travel reasonably required in the performance of the Executive's
responsibilities;
(iv) any failure by the Company to obtain the assumption and
agreement to perform this Agreement by a successor as contemplated by
Section 12(b) hereof; or
(v) any failure to make any payment when due under the terms
of the letter agreement between the Company and the Executive dated as
of February 4, 1998 (the "Offer Letter").
In no event shall the mere occurrence of a Change of Control, absent any further
impact on the Executive, be deemed to constitute Good Reason.
(e) Notice of Termination. Any termination by the Company for
Cause or by the Executive for Good Reason shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 13(e)
hereof. For purposes of this Agreement, a "Notice of Termination" means a
written notice given, (i) in the case of a termination for Cause, within 10
business days of the Company's having actual knowledge of the events giving rise
to such termination or (ii) in the case of a termination for Good Reason, within
120 days of the Executive's having actual knowledge of the events giving rise to
such termination. Any such Notice of Termination shall (i) indicate the specific
termination provision in this Agreement relied upon, (ii) 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, and
(iii) if the termination date is other than the date of receipt of such notice,
specify the termination date of this Agreement (which date shall be not more
than 15 days after the giving of such notice). The failure by the Executive to
set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason shall not waive any right of the
Executive hereunder or preclude the Executive from asserting such fact or
circumstance in enforcing her rights hereunder.
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(f) Date of Termination. For the purpose of this Agreement,
the term "Date of Termination" means (i) in the case of a termination for which
a Notice of Termination is required, the date of receipt of such Notice of
Termination or, if later, the date specified therein, as the case may be, and
(ii) in all other cases, the actual date on which the Executive's employment
terminates during the Employment Period.
7. Obligations of the Company upon Termination. (a) Death or
Disability. If the Executive's employment is terminated during the Employment
Period by reason of the Executive's death or Disability, this Agreement shall
terminate without further obligations to the Executive or the Executive's legal
representatives under this Agreement other than those obligations accrued
hereunder at the Date of Termination, and the Company shall pay to the Executive
(or her beneficiary or estate), at the times determined below (i) the
Executive's full Base Salary through the Date of Termination (the "Earned
Salary"), (ii) any vested amounts or benefits owing to the Executive under or in
accordance with the terms and conditions of the Company's otherwise applicable
employee benefit plans and programs, including any compensation previously
deferred by the Executive (together with any accrued earnings thereon) and not
yet paid by the Company and any accrued vacation pay not yet paid by the Company
(the "Accrued Obligations"), and (iii) any other benefits payable due to the
Executive's death or Disability under the Company's plans, policies or programs
(the "Additional Benefits").
Any Earned Salary shall be paid in cash in a single lump sum
as soon as practicable, but in no event more than 30 days (or at such earlier
date required by law), following the Date of Termination. Accrued Obligations
and Additional Benefits shall be paid in accordance with the terms of the
applicable plan, program or arrangement.
(b) Cause and Voluntary Termination. If, during the Employment
Period, the Executive's employment shall be terminated for Cause or voluntarily
terminated by the Executive (other than on account of Good Reason), the Company
shall pay the Executive (i) the Earned Salary in cash in a single lump sum as
soon as practicable, but in no event more than 30 days, following the Date of
Termination, and (ii) the Accrued Obligations in accordance with the terms of
the applicable plan, program or arrangement.
(c) Termination by the Company other than for Cause and
Termination by the Executive for Good Reason.
(i) Lump Sum Payments. If (x) the Company terminates the
Executive's employment other than for Cause during the Employment
Period or (y) the Executive terminates her employment at any time
during the Employment Period
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for Good Reason, the Company shall pay to the Executive, at the times
determined below, the following amounts:
(A) the Executive's Earned Salary;
(B) a cash amount (the "Severance Amount") equal to three
times the sum of
(1) the Executive's annual rate of Base Salary
as then in effect;
(2) the average of the annual bonuses payable to
the Executive under the Annual Variable
Incentive Plan (or any successor plan
thereto) for the each of the three fiscal
years of the Company (or, if less, the
number of prior fiscal years during which
Executive was an employee of the Company or
an Affiliate) ended immediately prior to the
Effective Date for which an annual bonus
amount had been determined by the Board (or
any committee thereof) prior to the
Effective Date. If the Executive was
employed by the Company for only a portion
of any fiscal year included in the period
for which the average referred to in the
immediately preceding sentence is determined
and the bonus payable for such fiscal year
took into account such partial period of
employment, such bonus for such fiscal year
shall be annualized for purposes of
calculating such average; and
(3) the average of the long-term incentive
compensation amounts payable to the
Executive with respect to each of the last
three performance periods (or, if the
Executive participated in the long-term
compensation program in respect to a lesser
number of such performance periods, such
lesser number) ended prior to the Effective
Date for which the amount payable had been
determined by the Board (or any committee
thereof) prior to the Effective Date;
provided, however, that, the amount
determined under this subclause (3) shall be
reduced (but not below zero) by the
"Determined Value" (as defined below) of any
vested stock options, restricted stock or
similar equity-based award relating to the
Company's common equity on the earlier to
occur of the Executive's Date of Termination
or the date on which a Change of Control
occurs. For
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purposes of this Agreement, Determined Value
shall mean the excess of the "Equity Value"
over the price, if any, payable by the
Executive in respect of such stock option or
other award and Equity Value shall be
determined to be (x) in the case of a Change
of Control occurring by reason of a merger,
recapitalization or similar transaction or
as a result of a tender offer, the value
received by the Company's equity holders in
such transaction or the price paid in such
tender offer (with the value of any non-cash
consideration to be determined in good faith
by the Compensation Committee of the Board
as constituted immediately prior to the
Effective Date) and (y) in the case of any
other Change of Control or where the date as
of which such Determined Value is measured
is the Executive's Date of Termination, the
average of the high and low reported sales
prices of such equity on the principal
securities market on which such equity is
traded on the relevant date; and
(C) the Accrued Obligations.
The Earned Salary and Severance Amount shall be paid in cash in a
single lump sum as soon as practicable, but in no event more than 30
days (or at such earlier date required by law), following the Date of
Termination. Accrued Obligations shall be paid in accordance with the
terms of the applicable plan, program or arrangement.
(ii) Continuation of Benefits. The Executive (and, to the extent
applicable, her dependents) shall be entitled, after the Date of Termination
until the third anniversary of the Date of Termination (the "End Date"), to
continue participation in all of the Company's employee and executive plan
providing medical, dental and long-term disability benefits (collectively, the
"Continuing Benefit Plans"); provided, however, that the participation by the
Executive (and, to the extent applicable, her dependents) in any Continuing
Benefit Plan shall cease on the date, if any, prior to the End Date on which the
Executive becomes eligible for comparable benefits under a similar plan, policy
or program of a subsequent employer ("Prior Date"). The Executive's
participation in the Continuing Benefit Plans will be on the same terms and
conditions that would have applied had the Executive continued to be employed by
the Company through the End Date or the Prior Date. To the extent any such
benefits cannot be provided under the terms of the applicable plan, policy or
program, the Company shall provide a comparable benefit under another plan or
from the Company's general assets.
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(iii) Termination of Employment Within Three Years of Normal Retirement
Date. Notwithstanding anything else to the contrary contained in this Section
7(c), if the Executive's employment with the Company terminates at any time
during the three year period ending on the Executive's normal retirement date,
as determined in accordance with the Company's policies then in effect for the
Company's senior executives (the "Normal Retirement Date"), and the Executive
would be entitled to receive severance benefits under this Section 7(c), then
(i) the multiplier in Section 7(c)(i) shall not be three, but shall be a number
equal to three times (x/1095), where x equals the number of days remaining until
the Executive's Normal Retirement Date, and (ii) the End Date described in
Section 7(c)(ii) shall not be the third anniversary of the Date of Termination,
but shall be the Executive's Normal Retirement Date.
(iv) Offer Letter Deferred Compensation Benefit. In the event that,
during the Employment Period, the Executive terminates her employment hereunder
for Good Reason or the Company terminates the Executive's employment other than
for Cause, the Executive shall be vested in the deferred compensation benefit
described therein and such benefit shall be paid to the Executive at the same
time and on the same basis as though she had continued in the employ of the
Company until the fifth anniversary of her date of hire (regardless of the date
on which her employment terminates). The benefit provided under this Section
7(c)(iv) shall be in lieu of (and not in addition to) the deferred compensation
benefit provided under the Offer Letter.
(d) Discharge of the Company's Obligations. Except as
expressly provided below, the amounts payable to the Executive pursuant to this
Section 7 (whether or not reduced pursuant to Section 7(e) hereof) following
termination of her employment shall be in full and complete satisfaction of the
Executive's rights under this Agreement and any other claims she may have in
respect of her employment by the Company or any of its Affiliates. Such amounts
shall constitute liquidated damages with respect to any and all such rights and
claims and, upon the Executive's receipt of such amounts, the Company shall be
released and discharged from any and all liability to the Executive in
connection with this Agreement or otherwise in connection with the Executive's
employment with the Company and its Affiliates. Notwithstanding anything else in
this Section 7(d) to the contrary, except as provided in Section 7(c), nothing
in this Agreement shall be construed to release, limit, modify or supercede in
any way the Executive's rights in respect of any deferred compensation amount
payable to her under the Offer Letter (as modified by Section 7(c)(iv) hereof).
(e) Limit on Payments by the Company.
(i) Application of Section 7(e) Hereof. In the event
that any amount or benefit paid or distributed to the Executive
pursuant to this Agreement, taken
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together with any amounts or benefits otherwise paid or distributed to
the Executive by the Company or any Affiliate (collectively, the
"Covered Payments"), would be an "excess parachute payment" as defined
in Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), and would thereby subject the Executive to the tax (the
"Excise Tax") imposed under Section 4999 of the Code (or any similar
tax that may hereafter be imposed), the provisions of this Section 7(e)
shall apply to determine the amounts payable to Executive pursuant to
this Agreement.
(ii) Calculation of Benefits. Promptly after delivery of any
Notice of Termination, the Company shall notify the Executive of the
aggregate present value of all termination benefits to which she would
be entitled under this Agreement and any other plan, program or
arrangement as of the projected Date of Termination, together with the
projected maximum payments, determined as of such projected Date of
Termination that could be paid without the Executive being subject to
the Excise Tax.
(iii) Imposition of Payment Cap. If the aggregate value of all
compensation payments or benefits to be paid or provided to the
Executive under this Agreement and any other plan, agreement or
arrangement with the Company exceeds the amount which can be paid to
the Executive without the Executive incurring an Excise Tax, then the
amounts payable to the Executive under this Section 7 shall be reduced
(but not below zero) to the maximum amount which may be paid hereunder
without the Executive becoming subject to such an Excise Tax (such
reduced payments to be referred to as the "Payment Cap"). In the event
that Executive receives reduced payments and benefits hereunder,
Executive shall have the right to designate which of the payments and
benefits otherwise provided for in this Agreement that she will receive
in connection with the application of the Payment Cap.
(iv) Application of Section 280G. For purposes of determining
whether any of the Covered Payments will be subject to the Excise Tax
and the amount of such Excise Tax,
(A) such Covered Payments will be treated as "parachute
payments" within the meaning of Section 280G of the
Code, and all "parachute payments" in excess of the
"base amount" (as defined under Section 280G(b)(3) of
the Code) shall be treated as subject to the Excise
Tax, unless, and except to the extent that, in the
good faith judgment of the Company's independent
certified public accountants appointed prior to the
Effective Date or tax counsel
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selected by such Accountants (the "Accountants"), the
Company has a reasonable basis to conclude that such
Covered Payments (in whole or in part) either do not
constitute "parachute payments" or represent
reasonable compensation for personal services
actually rendered (within the meaning of Section
280G(b)(4)(B) of the Code) in excess of the portion
of the "base amount allocable to such Covered
Payments," or such "parachute payments" are otherwise
not subject to such Excise Tax, and
(B) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the
Accountants in accordance with the principles of
Section 280G of the Code.
(v) Adjustments in Respect of the Payment Cap. If the
Executive receives reduced payments and benefits under this Section
7(e) (or this Section 7(e) is determined not to be applicable to the
Executive because the Accountants conclude that Executive is not
subject to any Excise Tax) and it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding (a
"Final Determination") that, notwithstanding the good faith of the
Executive and the Company in applying the terms of this Agreement, the
aggregate "parachute payments" within the meaning of Section 280G of
the Code paid to the Executive or for her benefit are in an amount that
would result in the Executive being subject an Excise Tax, then the
amount equal to such excess parachute payments shall be deemed for all
purposes to be a loan to the Executive made on the date of receipt of
such excess payments, which the Executive shall have an obligation to
repay to the Company on demand, together with interest on such amount
at the applicable Federal rate (as defined in Section 1274(d) of the
Code) from the date of the payment hereunder to the date of repayment
by the Executive. If this Section 7(e) is not applied to reduce the
Executive's entitlements under this Section 7 because the Accountants
determine that the Executive would not receive a greater net-after tax
benefit by applying this Section 7(e) and it is established pursuant to
a Final Determination that, notwithstanding the good faith of the
Executive and the Company in applying the terms of this Agreement, the
Executive would have received a greater net after tax benefit by
subjecting her payments and benefits hereunder to the Payment Cap, then
the aggregate "parachute payments" paid to the Executive or for her
benefit in excess of the Payment Cap shall be deemed for all purposes a
loan to the Executive made on the date of receipt of such excess
payments, which the Executive shall have an obligation to repay to the
Company on demand, together with interest on such amount at the
applicable Federal rate (as defined in Section 1274(d) of the Code)
from the date of the payment hereunder to the date of repayment by the
Executive.
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If the Executive receives reduced payments and benefits by reason of
this Section 7(e) and it is established pursuant to a Final
Determination that the Executive could have received a greater amount
without exceeding the Payment Cap, then the Company shall promptly
thereafter pay the Executive the aggregate additional amount which
could have been paid without exceeding the Payment Cap, together with
interest on such amount at the applicable Federal rate (as defined in
Section 1274(d) of the Code) from the original payment due date to the
date of actual payment by the Company.
(f) Notwithstanding anything else in this Section 7 to the
contrary, nothing in this Section 7 shall be construed to release the Company
from (or to otherwise waive or modify) the Company's obligation to indemnify the
Executive pursuant to Section 5(g) hereof.
8. Non-exclusivity of Rights. Except as expressly provided
herein, nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plan or program provided by the Company or any Affiliate and for which the
Executive may qualify, nor shall anything herein limit or otherwise prejudice
such rights as the Executive may have under any other agreements with the
Company or any Affiliate, including employment agreements or stock option
agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company or any
Affiliate at or subsequent to the Date of Termination shall be payable in
accordance with such plan or program.
9. No Offset. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be diminished or otherwise affected by any circumstances,
including, but not limited to, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive or others whether
by reason of the subsequent employment of the Executive or otherwise.
10. Legal Fees and Expenses. If the Executive asserts any
claim in any contest (whether initiated by the Executive or by the Company) as
to the validity, enforceability or interpretation of any provision of this
Agreement, the Company shall pay the Executive's legal expenses (or cause such
expenses to be paid) including, but not limited to, her reasonable attorney's
fees, on a quarterly basis, upon presentation of proof of such expenses in a
form acceptable to the Company, provided that the Executive shall reimburse the
Company for such amounts, plus simple interest thereon at the 90-day United
States Treasury Xxxx rate as in effect from time to time, compounded annually,
if
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the Executive shall not prevail, in whole or in part, as to at least one
material issue as to the validity, enforceability or interpretation of any
provision of this Agreement.
11. Company Property. The Agreement to Protect Corporate
Property previously executed by the Executive is incorporated herein and made a
part hereof. The Executive hereby reaffirms her commitments under such
agreement, and again agrees to be bound by each of the covenants contained
therein for the benefit of the Company in consideration of the benefits made
available to her hereby.
12. Successors. (a) This Agreement is personal to the
Executive and, without the prior written consent of the Company, shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place. Without limiting the
generality of the foregoing, if prior to the occurrence of a Change of Control,
the Company is a party to a merger, recapitalization, demutualization,
restructuring, reorganization or similar transaction, as a result of which the
Company becomes a subsidiary of any entity that was a subsidiary of the Company
immediately prior to such transaction, from and after the date of such
transaction the term Company as used in the definition of Change of Control and
Potential Change of Control (but not as used in any other Section hereof, unless
required to effect the intent that a Potential Change of Control or a Change of
Control in respect of such entity shall cause the Effective Date of this
Agreement to occur) shall refer to both the Company and such entity.
13. Miscellaneous. (a) Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
applied without reference to principles of conflict of laws.
(b) Arbitration. Except to the extent provided in Section
11(c) hereof, any dispute or controversy arising under or in connection with
this Agreement shall be resolved by binding arbitration. The arbitration shall
be held in New York City and except to the extent inconsistent with this
Agreement, shall be conducted in accordance with the Expedited Employment
Arbitration Rules of the American Arbitration Association then in effect at the
time of the arbitration (or such other rules as the parties may agree to in
writing), and otherwise in accordance with principles which would be
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applied by a court of law or equity. The arbitrator shall be acceptable to both
the Company and the Executive. If the parties cannot agree on an acceptable
arbitrator, the dispute shall be heard by a panel of three arbitrators, one
appointed by each of the parties and the third appointed by the other two
arbitrators.
(c) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(d) Entire Agreement. This Agreement and, to the extent
provided under Section 7(d), the Offer Letter constitute the entire agreement
between the parties hereto with respect to the matters referred to herein. No
other agreement relating to the terms of the Executive's employment by the
Company, oral or otherwise, shall be binding between the parties unless it is in
writing and signed by the party against whom enforcement is sought. There are no
promises, representations, inducements or statements between the parties other
than those that are expressly contained herein. The Executive acknowledges that
she is entering into this Agreement of her own free will and accord, and with no
duress, that she has read this Agreement and that she understands it and its
legal consequences.
(e) Notices. All notices and other communications hereunder
shall be in writing and shall be given by hand-delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: at the home address of the Executive noted
on the records of the Company
If to the Company: Metropolitan Life Insurance Company
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att.: Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(f) Tax Withholding. The Company shall withhold from any
amounts payable under this Agreement such Federal, state or local taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
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(g) Severability; Reformation. In the event that one or more
of the provisions of this Agreement shall become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
(h) Waiver. Waiver by any party hereto of any breach or
default by the other party of any of the terms of this Agreement shall not
operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived. No waiver of any provision of this
Agreement shall be implied from any course of dealing between the parties hereto
or from any failure by either party hereto to assert its or her rights hereunder
on any occasion or series of occasions.
(i) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(j) Captions. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
IN WITNESS WHEREOF, the Executive has hereunto set her hand
and the Company has caused this Agreement to be executed in its name on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary, all as of the day and year first above written.
METROPOLITAN LIFE INSURANCE COMPANY
/s/ Xxxx X. Xxxxxx
--------------------------
By: Xxxx X. Xxxxxx
Title: Senior Executive Vice-President
and General Counsel
WITNESSED:
------------------------------
EXECUTIVE:
/s/ Xxxx X. Xxxxx
-------------------------
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WITNESSED:
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