AMENDMENT OF ANGELICA CORPORATION EMPLOYMENT AGREEMENT Stephen M. O’Hara
Exhibit 10.39
AMENDMENT
OF
XXXXXXXX
CORPORATION
Xxxxxxx
X. X’Xxxx
This
Amendment of the Xxxxxxxx Corporation Employment Agreement with Xxxxxxx X.
X’Xxxx (the “Agreement”) has been entered into this 17th day of December, 2007,
by and between Xxxxxxxx Corporation, a Missouri corporation (the “Company”), and
Xxxxxxx X. X’Xxxx, an individual (the “Executive”).
WHEREAS, the Company and the
Executive previously entered into that certain agreement dated as of September
15, 2003, regarding the employment relationship between the Company and the
Executive (the “Original Agreement”); and
WHEREAS, the Company and the
Executive desire to amend the Original Agreement as of the date hereof to
conform to the provisions of the regulations under Section 409A of the Internal
Revenue Code;
NOW THEREFORE, in
consideration of the mutual promises herein contained, the Company and the
Executive hereby amends the Original Agreement as follows:
1. Section
1.1(l) is amended to read in its entirety as follows:
1.1(l)
“Date of Termination”
has the meaning set forth in Section 3.8 of this Agreement. In
all cases, a “Date of Termination” shall only occur upon separation from service
from the Company and all of its affiliates, as defined in Treasury regulations
under Section 409A of the Code (generally, separation from the 50% controlled
group that includes the Company).
2. Section
2.4(h) is amended to add the following sentence to the end of said
Section:
Expense
reimbursements described in this Section 2.4(h) will be made no later than the
end of the calendar year following the calendar year in which the expenses are
incurred.
3. Sections
4.1(a) is amended to read in its entirety as follows:
4.1(a)
Accrued Obligations.
Within thirty (30) days after the Date of Termination, the Company shall
pay to the Executive the sum of (i) the Executive’s Annual Base Salary through
the Date of Termination, and (ii) any accrued vacation pay; in each case to the
extent not previously paid (the “Accrued Obligations”). In addition,
Executive shall be entitled to
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the
benefits, if any, under any benefit plan, program or arrangement in which the
Executive is a participant, in the time and manner provided under the applicable
plan, program or arrangement.
4. Section
4.1 (b) is amended to read in its entirety as follows:
4.1(b)
Severance
Payment. Within thirty (30) days after the Date of Termination, the
Company shall pay to the Executive as severance pay in a lump sum, in cash, an
amount equal to two (2) times the Executive’s then-current Annual Base
Salary.
5. Section
4.1 (c) is amended to read in its entirety as follows:
4.1(c)
Medical and Health Benefit
Continuation. For each year that the Executive is employed by the Company
prior to termination of his employment, the Executive will be entitled after
termination to a cash payment by the Company to the Executive to enable the
Executive to purchase two (2) years (up to a maximum of ten (10) years in the
aggregate) of medical and health benefits continuation coverage for the
Executive and the Executive’s eligible family members who are receiving such
coverage on the Date of Termination at least equal to those which would have
been provided to them in accordance with the plans, programs, practices and
policies described in Section 2.4(g) if the Executive’s employment had not been
terminated; provided, however, that if the Executive becomes reemployed with
another employer and is eligible to receive medical or health benefits under
another employer-provided plan, the medical and health benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility. The Company shall, on a monthly
basis commencing in the month immediately subsequent to the month in which the
Date of Termination occurs and ending with the last month for which the
Executive is entitled to the continuation of such medical and health benefits,
pay to the Executive an amount equal to the COBRA premium applicable to such
coverage plus a tax gross-up amount and shall remit the net after-tax amount to
the medical plan on the Executive’s behalf.
6. Section
4.1(d) is amended to add the following sentence to the end of said
Section:
Any such
amounts or benefits shall be payable in the time and manner provided under the
applicable plan, program or arrangement.
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7. Section
4.2 is amended to read in its entirety as follows:
4.2 Benefits Upon Termination without
Cause or for Good Reason in Connection with a Change in
Control. If (a) a Change in Control (as defined in Section
1.1(g)) occurs during the Employment Period and within two (2) years after the
Change in Control Date (as defined in Section 1.1(h)) (i) the Company shall
terminate the Executive’s employment without Cause, or (ii) the Executive shall
terminate employment with the Company for Good Reason, or, alternatively, (b) if
one of the above-described terminations of employment occurs within the
six-month period prior to the earlier of (i) a change of control that qualified
under Code Section 409A (a “409A Change in Control”) or (ii) the execution of a
definitive agreement or contract that eventually results in a 409A Change in
Control, then the Executive shall become entitled upon the date of the 409A
Change in Control to receive the payment of the benefits as provided below as of
either (y) the Date of Termination, in the case where the sequence of the
requisite events is as set forth in subsection (a) above or (z) the date of the
409A Change in Control, in the case where the sequence of the requisite events
occurred as set forth in subsection (b) above (the relevant date for purposes of
entitlement to the benefits as set forth in this Section 4.2 is hereinafter
referred to as the “Entitlement Date”).
For
purposes of this Agreement, a “409A Change in Control” shall
mean: (i) the acquisition by one person, or more than one person
acting as a group, of ownership of stock of the Company that, together with
stock held by such person or group, constitutes more than 50% of the total fair
market value or total voting power of the stock of the Company; (ii) the
acquisition by one person, or more than one person acting as a group, of
ownership of stock of the Company, that together with stock of the Company
acquired during the twelve-month period ending on the date of the most recent
acquisition by such person or group, constitutes 30% or more of the total voting
power of the stock of the Company; (iii) a majority of the members of the
Company’s board of directors is replaced during any twelve-month period by
directors whose appointment or election is not endorsed by a majority of the
members of the Company’s board of directors before the date of the appointment
or election; (iv) one person, or more than one person acting as a group,
acquires (or has acquired during the twelve-month period ending on the date of
the most recent acquisition by such person or group) assets from the Company
that have a total gross fair market value (determined without regard to any
liabilities associated with such assets) equal to or more than 40% of the total
gross fair market value of all of the assets of the Company immediately before
such acquisition or acquisitions. Persons will not be considered to
be acting as a group solely because they purchase or own stock of the same
corporation at the same time, or as a result of the same public
offering. However, persons will be considered to be acting as a group
if they are owners of a corporation that enters into a merger, consolidation,
purchase or acquisition of stock, or similar business transaction with the
Company. This definition of 409A Change in Control shall be
interpreted in accordance with, and in a manner that
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will
bring the definition into compliance with, the regulations under Code Section
409A.
8. Section
4.2(d) is amended to read in its entirety as follows:
4.2(d)
Medical and Health Benefit
Continuation. For each year that the Executive is employed by the Company
prior to termination of his employment, the Executive will be entitled to a cash
payment by the Company to the Executive to enable the Executive to purchase two
(2) years (up to a maximum of ten (10) years in the aggregate) of medical and
health benefits continuation coverage for the Executive and the Executive’s
eligible family members who are receiving such coverage on the Date of
Termination at least equal to those which would have been provided to them in
accordance with the plans, programs, practices and policies described in Section
2.4(g) if the Executive’s employment had not been terminated; provided, however,
that if the Executive becomes reemployed with another employer and is eligible
to receive medical or health benefits under another employer-provided plan, the
medical and health benefits described herein shall be secondary to those
provided under such other plan during such applicable period of
eligibility. The Company shall, on a monthly basis commencing in the
month immediately subsequent to the month in which the Entitlement Date occurs
and ending with the last month for which the Executive is entitled to the
continuation of such medical and health benefits, pay to the Executive an amount
equal to the COBRA premium applicable to such coverage plus a tax gross-up
amount and shall remit the net after-tax amount to the medical plan on the
Executive’s behalf. In no event shall benefits under this Section
4.2(d) be provided for any period such benefits are provided under Section
4.1(c).
9. Section
4.2(e) is amended to add the following to the end of said Section:
Any such
amounts or benefits shall be payable in the time and manner provided under the
applicable plan, program or arrangement.
10. Section
4.2(f) is amended to add the following new paragraph to the end of said
Section:
Any
Gross-Up Payment required under this Section 4.2(f) shall be made on the first
day of the month in which the Executive is required to remit such taxes to the
required taxing authority. In no event will any such Gross-Up Payment
be paid to Executive later than the end of the Executive’s taxable year
following the Executive’s taxable year in which the related taxes are remitted
to the required taxing authority.
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11.
Section 4.3 is amended to add the following to the end of the last sentence of
said Section:
, in the
time and manner provided in each such plan, policy or arrangement.
12.
Section 4.4 is amended to add the following to the end of the last sentence of
said Section:
, in the
time and manner provided in each such plan, policy or arrangement.
13.
Section 4.7 is amended to read in its entirety as follows:
4.7 Full Settlement. The
parties agree that the Company’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder are intended
to be in full settlement of all claims that the Executive may have against the
Company with respect to the termination of the Executive’s employment with the
Company and the Executive shall be required to execute and deliver an agreement
to this effect prior to receipt of any payments under this
Agreement. If such agreement is not signed and delivered to the
Company within sixty (60) days of Executive’s Date of Termination, the Company’s
obligation to make the payments provided for in this Agreement shall
terminate. The payments to be made by the Company or any other
obligation that the Company is required to perform pursuant to this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and, except as provided
in Sections 4.1(c) and 4.2(d), such amounts shall not be reduced whether or not
the Executive obtains other employment. The Company agrees to pay
promptly as incurred, to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive regarding the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Code Section 7872(f)(2)(A). Any such
payment shall be made not later than the end of the calendar year following the
calendar year in which the Executive incurred such expense.
14. Section
4.8 is amended to read in its entirety as follows:
4.8 Resolution of Disputes. If
there shall be any dispute between the Company and the Executive (i) as to
whether any termination of the Executive’s employment was for Cause, or (ii) as
to whether any termination of the
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Executive’s
employment for Good Reason was made in good faith, then, unless and until
there is a final, non-appealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not
made in good faith, the Company shall pay all amounts, and provide all
benefits, to the Executive and/or the Executive’s family or other
beneficiaries, as the case may be, that the Company would be required to
pay or provide pursuant to Section 4.1 or 4.2 as though such termination
was without Cause or for Good Reason, as the case may be; provided,
however, that the Company shall not be required to pay any disputed
amounts pursuant to this Section 4.8 except upon receipt, within sixty
(60) days of the date such dispute arises, of an undertaking by or on
behalf of the Executive to repay all such amounts to which the Executive
is ultimately adjudged by such court not to be
entitled.
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15.
A new Section 4.9 is added to the Agreement as follows:
4.9 Specified Employee Six Month
Deferral. Notwithstanding anything to the contrary in this
Section 4, if the Executive is a “Specified Employee” on the Date of
Termination, the Executive may not receive a payment of “nonqualified deferred
compensation” for which the “payment event” is “separation from service,” as
defined in Code Section 409A and the regulations thereunder, until at least six
(6) months after a Date of Termination. Any payment of nonqualified
deferred compensation otherwise due in such six (6) month period shall be
suspended and become payable at the end of such six (6) month
period.
A
“Specified Employee” means a specified employee as defined in Treas. Reg.
§1.409A-1(i) (generally, officers earning more than $140,000 per year, as
indexed for inflation, who are among the fifty (50) highest paid
employees).
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IN WITNESS WHEREOF, the
Executive and, the Company, pursuant to the authorization from its Board, have
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
“Executive”
/s/ Xxxxxxx X.
X’Xxxx
XXXXXXX
X. X’XXXX
“Company”
XXXXXXXX
CORPORATION
By /s/ Xxxxxx X.
Xxxxxxxxx
Name:
____________________________________
Title:
_____________________________________
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