EXHIBIT 10.1
AMENDED AND RESTATED EXECUTIVE INCOME SECURITY AGREEMENT
AGREEMENT dated as of __________________, by and between Knight
Ridder, a Florida corporation having its principal offices at 00 X. Xxx Xxxxxxxx
Xxxxxx, Xxx Xxxx, Xxxxxxxxxx, 00000 (the "Company"), and _____________ (the
"Executive").
The Company considers the continued services of key executives of the
Company to be in the best interests of the Company and its shareholders.
The Company desires to assure, and has determined that it is
appropriate and in the best interests of the Company and its shareholders to
reinforce and encourage, the continued attention and dedication of key
executives of the Company to their duties of employment without personal
distraction or conflict of interest in circumstances arising from the
possibility or occurrence of a change in control of the Company.
The Compensation Committee of the Board of Directors of the Company
(the "Committee") has authorized the Company to enter into agreements with those
key executives of the Company who are designated by the Committee, such
agreements to set forth the severance compensation which the Company agrees
under certain circumstances to pay such executives.
The Executive is a key executive of the Company and has been designated
by the Committee as an executive to be offered such a severance compensation
agreement with the Company.
In consideration of the premises and the covenants and agreements
contained herein, and other good and valuable consideration, the Company and the
Executive agree as follows:
1. CHANGE IN CONTROL OF THE COMPANY. For purposes of this Agreement,
a "Change in Control of the Company" shall be deemed to have occurred if:
(a) individuals who, as of the date of this Agreement,
constitute the entire Board of Directors of the Company ("Incumbent Directors")
cease for any reason to constitute at least a majority of the Board of Directors
of the Company (the "Board"); PROVIDED, HOWEVER, that any individual becoming a
director subsequent to the date of this Agreement whose election, or nomination
for election by the Company's shareholders, was approved by a vote of at least a
majority of the then Incumbent Directors (other than any such individual whose
initial assumption of office is the result of an actual or threatened election
contest relating to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Company) shall also be an Incumbent Director;
(b) any merger, consolidation or reorganization of the
Company (or, if the capital stock of the Company is affected, any Subsidiary (as
defined below)) or any sale, lease, or other disposition (in one transaction or
a series of transactions contemplated or arranged by any party as a single plan)
of all or substantially all of the assets of the Company (each of the foregoing
being an "Acquisition Transaction") shall have been effected and (A) the
shareholders of the Company immediately prior to such Acquisition Transaction do
not immediately after such Acquisition Transaction beneficially own, directly or
indirectly, shares representing in the aggregate more than 65% of (I) the
then-outstanding common stock of the corporation surviving or resulting from
such merger, consolidation or recapitalization or acquisition of such assets of
the Company, as the case may be (the "Surviving Corporation") (or of its
ultimate parent corporation, if any) and (II) the Combined Voting Power (as
defined below) of the then outstanding Voting Securities (as defined below) of
the Surviving Corporation (or of its ultimate parent corporation, if any); (B)
the Incumbent Directors at the time of the initial approval of such Acquisition
Transaction do not immediately after such Acquisition Transaction constitute a
majority of the Board of Directors of the Surviving Corporation (or of its
ultimate parent corporation, if any); or (C) any Person (including any
corporation resulting from such Acquisition Transaction and any employee benefit
plan (or related trust) of such corporation) beneficially owns, directly or
indirectly, 20% or more of either (i) the then-outstanding shares of common
stock of the corporation resulting from such Acquisition Transaction or (ii) the
Combined Voting Power of all then-outstanding Voting Securities of the Surviving
Corporation except to the extent that such ownership existed prior to the
Acquisition Transaction; or
(c) the shareholders of the Company shall approve any plan
or proposal for the liquidation or dissolution of the Company; or
(d) any Person (as defined below) shall become the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), directly or indirectly,
of securities of the Company representing in the aggregate 20% or more of either
(i) the then outstanding shares of Company Common Stock ("Common Stock"), or
(ii) the Combined Voting Power of all then outstanding Voting Securities of the
Company; PROVIDED, HOWEVER, that notwithstanding the foregoing, a Change in
Control of the Company shall not be deemed to have occurred for purposes of this
clause (d) solely as the result of:
(A) an acquisition of securities by the Company
which, by reducing the number of shares of Common Stock or other
Voting Securities outstanding, increases (I) the proportionate number
of shares of Common Stock beneficially owned by any Person to 20% or
more of the shares of Common Stock then outstanding or (II) the
proportionate voting power represented by the Voting Securities
beneficially owned by any Person to 20% or more of the Combined Voting
Power of all then outstanding Voting Securities; or
(B) an acquisition of securities directly from the
Company, except that this subsection (B) shall not apply to:
(I) any conversion or exercise of a security
that was not acquired directly from the Company; or
(II) any acquisition of securities if the
Incumbent Directors at the time of the initial
approval of such acquisition would not immediately
after (or otherwise as a result of) such acquisition
constitute a majority of the Board;
PROVIDED, HOWEVER, that if any Person referred to in subsections
(A) or (B) of this clause (d) shall thereafter become the
beneficial owner of any additional shares of Company Common Stock
or other Voting Securities of the Company (other than pursuant to
a stock split, stock dividend or similar transaction or an
acquisition exempt under such subsection (B)), then a Change in
Control of the Company shall be deemed to have occurred for
purposes of this clause (d).
(e) Notwithstanding anything contained in this Agreement to
the contrary, if the Executive's employment is terminated prior to a Change in
Control of the Company and the Executive reasonably demonstrates that such
termination (i) was at the request of a Third Party (as defined below) or (ii)
otherwise occurred in connection with or in anticipation of a Change in Control
of the Company, then for all purposes of the Agreement, the date of such Change
in Control of the Company shall mean the date immediately prior to the date of
such termination of the Executive's employment.
(f) For purposes of this Agreement:
(i) "Person" shall mean any individual, entity
(including, without limitation, any corporation, partnership, trust,
joint venture, association or governmental body and any successor to
any such entity) or group (as defined in Sections 13(d)(3) or 14(d)(2)
of the Exchange Act and the rules and regulations thereunder);
PROVIDED, HOWEVER, that Person shall not include the Executive, the
Company, any of its Subsidiaries, any employee benefit plan (or
related trust) of the Company or its Subsidiaries or any entity
organized,
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appointed or established by the Executive, the Company or any of
its Subsidiaries for or pursuant to the terms of any such plan,
or any of their affiliates;
(ii) "Voting Securities" shall mean all securities
of a corporation having the right under ordinary circumstances to
vote in an election of the board of directors of such
corporation; and
(iii) "Combined Voting Power" shall mean the
aggregate votes entitled to be cast generally in the election of
directors of a corporation by holders of then outstanding Voting
Securities of such corporation.
(iv) "Third Party" shall mean a third party who has
indicated an intention, or taken steps reasonably calculated, to
effect a Change in Control of the Company.
2. TERMINATION FOLLOWING CHANGE IN CONTROL OF THE COMPANY.
(a) GENERAL. (If a Change in Control of the Company shall
have occurred while the Executive is an employee of the Company, the Executive
shall be entitled to the compensation provided in Section 3 hereof upon the
subsequent termination of the Executive's employment with the Company at any
time during the Term (as defined below) of this Agreement, whether such
termination is effected by the Executive or by the Company, unless such
termination occurs as a result of (i) the Executive's death, (ii) the
Executive's Disability (as defined below), (iii) the termination by the Company
of the employment of the Executive for Cause (as defined below), or (iv) the
termination by the Executive of his employment other than for Good Reason (as
defined below).
(b) DISABILITY. For purposes of this Agreement, "Disability"
shall mean a physical or mental infirmity which has rendered the Executive
unable to substantially perform his or her duties (such term to include
performance of the Executive's part-time duties if the Executive is employed on
a part-time basis) with the Company for a period of 180 consecutive days, unless
within 30 days after the date a Notice of Termination (as defined below) is
given by the Company after an absence for such period the Executive shall have
returned to the full-time performance of such duties.
(c) RETIREMENT. For purposes of this Agreement, "Retirement"
shall mean termination, whether by the Company or by the Executive, of the
Executive's employment with the Company on or after the Executive's early
retirement date or normal retirement date, as the case may be, under the
Company's retirement policy then generally applicable to its salaried employees
or in accordance with any retirement plan or arrangement with respect to the
Executive established by the Company with the Executive's consent.
(d) CAUSE. For purposes of this Agreement, the Company shall
have "Cause" to terminate the Executive's employment only if the Executive (i)
has willfully engaged in illegal conduct or gross misconduct which is materially
and demonstrably injurious to the Company, (ii) has engaged in fraud,
misappropriation, embezzlement or any other act or acts of dishonesty resulting
or intended to result directly or indirectly in a substantial gain or personal
enrichment to the Executive at the expense of the Company, or (iii) has
willfully and continually failed substantially to perform his or her duties with
the Company (other than a failure resulting from the Executive's incapacity due
to physical or mental illness), which failure has continued for a period of at
least 30 days after a written notice of demand for substantial performance has
been delivered to the Executive specifying in reasonable detail the manner in
which the Executive has failed to substantially perform. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution (x) duly adopted by three-quarters (3/4) of the entire membership of
the Committee, or of the Board, at a meeting called and held for such purpose
after reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Committee or the
Board, as the case may be, and (y) finding that in the good faith opinion of the
Committee or the Board, as the case may be, the Executive was guilty of conduct
described in the first sentence of this Section 2(d) and specifying the
particulars of such conduct in detail. For purposes of this provision, no act or
failure to act, on the part of the Executive, shall be considered "willful"
unless it is done, or omitted to be done, by the Executive in bad faith or
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without reasonable belief that the Executive's action or omission was in the
best interests of the Company. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board, or, for any Executive
other than the Chief Executive Officer of the Company, upon the instructions of
the Chief Executive Officer of the Company, or based upon the advice of counsel
for the Company, shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the Company.
(e) GOOD REASON. For purposes of this Agreement, "Good
Reason" shall mean the occurrence after a Change in Control of the Company of
any of the following without the Executive's express written consent.
(i) The assignment to the Executive by the Company of
duties or responsibilities inconsistent in some material respect with
the Executive's title, position, duties, responsibilities and status
with the Company immediately prior to a Change in Control of the
Company, or a change in the Executive's titles or offices with the
Company from those held by the Executive immediately prior to a Change
in Control of the Company, excluding for these purposes an isolated,
insubstantial and inadvertent action not taken in bad faith and which
is remedied by the Company promptly after receipt of notice thereof
given by the Executive, or any removal of the Executive from or any
failure to reelect or reappoint the Executive to any of such positions
except in connection with the termination of the Executive's
employment as a result of the Executive's death or Disability, by the
Company for Cause or by the Executive other than for Good Reason;
(ii) Any reduction by the Company in the Executive's
base salary as in effect on the date hereof or as such base salary may
be increased from time to time during the Term of this Agreement or
any failure to pay the Executive any compensation or benefits to which
he is entitled within five days of the date due;
(iii) Any failure by the Company either to
continue in effect any benefit plan or arrangement (including, without
limitation, the Company's Employees Stock Purchase Plan, Section
401(k) plan, Retirement Plan for Employees, Retirement Benefit
Restoration Plan, or substitute plans adopted by the Company prior to
a Change in Control of the Company, group life insurance plan and
medical, dental, accident and disability plans) in which the Executive
shall be participating at the time of a Change in Control of the
Company or to provide other plans or arrangements providing the
Executive with substantially similar benefits, or the taking by the
Company of any action which would directly or indirectly materially
adversely affect the Executive's participation in or materially reduce
the Executive's benefits under any such benefit plan or arrangement or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of a Change in Control of the Company.
(iv) Any failure by the Company either to continue in
effect any incentive or compensation plan or arrangement (including,
without limitation, the Company's Incentive Compensation Plan and
Employee Stock Option Plan, or substitute plans adopted by the Company
prior to a Change in Control of the Company) in which the Executive
shall be participating at the time of a Change in Control of the
Company, or to provide other plans or arrangements providing the
Executive with substantially similar benefit levels and/or reward
opportunities, or the taking by the Company of any action which would
directly or indirectly materially adversely affect the Executive's
participation (including the level of the Executive's participation
relative to other participants and the terms of benefit levels and/or
reward opportunities) or materially reduce the Executive's benefits
under any such plan or arrangement;
(v) Any relocation of the Executive's base of
employment to a location more than 20 miles away from the location at
which the Executive performed the Executive's duties of employment
prior to a Change in Control of the Company, except for required
travel by the Executive on business of the Company to an extent
substantially consistent with the Executive's business travel
obligations at the time of a Change in Control of the Company;
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(vi) Any failure by the Company to provide the
Executive with the number of paid vacation days per year to which the
Executive is entitled at the time of a Change in Control of the
Company;
(vii) Any material breach by the Company of any
provision of this Agreement;
(viii) Any failure by the Company to obtain from
any successor to the Company a satisfactory agreement to assume and
perform this Agreement, as contemplated by Section 8(a) hereof;
(ix) The insolvency or the filing (by any party,
including the Company) of a petition for bankruptcy of the Company,
which petition is not dismissed within sixty days; and
(x) Any purported termination of the Executive's
employment by the Company, other than as a result of the Executive's
death, which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 2(f) hereof (and, if
applicable, Section 2(d) hereof).
Any event or condition described in subsections (i) through (x) above which
occurs prior to a Change in Control of the Company but which the Executive
reasonably demonstrates (A) was at the request of a Third Party, or (B)
otherwise arose in connection with, or in anticipation of, a Change in Control
of the Company, shall constitute Good Reason for purposes of this Agreement,
notwithstanding that it occurred prior to the Change in Control of the Company.
(f) NOTICE OF TERMINATION. Any purported termination of the
Executive's employment with the Company other than as a result of the
Executive's death shall be communicated by a Notice of Termination to the
Executive, if such termination is by the Company, or to the Company, if such
termination is by the Executive. For purposes of this Agreement, "Notice of
Termination" shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated. For
purposes of this Agreement, no purported termination of the Executive's
employment with the Company other than as a result of the Executive's death
shall be effective without such a Notice of Termination having been given.
(g) DATE OF TERMINATION. For purposes of this Agreement,
"Date of Termination" shall mean: (i) if the Executive's employment by the
Company is terminated by the Company for Disability, the thirtieth day after the
date on which the Notice of Termination is given, provided that the Executive
shall not have returned to the full-time performance of the Executive's duties
of employment during such 30-day period; (ii) if the Executive's employment by
the Company is terminated by the Executive for Good Reason, such date as shall
be specified in the Notice of Termination (which date shall not be fewer than 20
nor more than 60 days after the date on which the Notice of Termination is
given); or (iii) if the Executive's employment by the Company is terminated for
any other reason, the twentieth day after the date on which the Notice of
Termination is given.
3. COMPENSATION UPON TERMINATION AFTER A CHANGE IN CONTROL OF
THE COMPANY.
(a) If after a Change in Control of the Company the
Executive's employment by the Company shall terminate at any time during the
Term of this Agreement for any reason other than (a) the Executive's death, (b)
the Executive's Disability, (c) the termination by the Company of the
Executive's employment for Cause or (d) the termination by the Executive of his
employment other than for Good Reason, then not later than the fifth business
day following the Date of Termination, the Company shall (subject only to any
applicable payroll and other taxes required to be withheld) pay or cause to be
paid to the Executive a lump sum cash payment (the "Severance Payment") equal to
three times the greater of (i) the sum of the salary and cash bonus payable to
the Executive for the last full calendar year preceding the Severance Payment or
(ii) the sum of the Executive's annualized salary and maximum cash bonus the
Executive could have earned for the then current calendar year.
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(b) THREE YEARS OF LIFE INSURANCE AND HEALTH PLAN COVERAGE.
The coverage described in this subsection (b) shall be provided for a
"Continuation Period" beginning on the Date of Termination and ending on the
earlier of (1) the third anniversary of the Date of Termination or (2) the date
of the Executive's death. During the Continuation Period, the Executive (and,
where applicable, the Executive's dependents) shall be entitled to continue
participation in the group term life insurance plan and in the health care plan
for Executives maintained by the Company as if the Executive were still an
Executive of the Company. The coverage provided under this subsection (b) shall
run concurrently with and shall be offset against any continuation coverage
under Part 6 of Title I of the Employee Retirement Income Security Act of 1974,
as amended. Where applicable, the Executive's compensation for purposes of such
plans shall be deemed to be equal to the Executive's compensation (as defined in
such plans) in effect on the Date of Termination. To the extent that the Company
finds it undesirable to cover the Executive under the group life insurance and
health plans of the Company, the Company shall provide the Executive (at its own
expense) with the same level of coverage under individual policies.
(c) ACCELERATED VESTING. All stock and stock options issued
or granted to the Executive shall vest according to the provisions of the
Xxxxxx-Xxxxxx, Inc. Employee Stock Option Plan.
4. ADDITIONAL PAYMENTS.
(a) In the event that any payment or benefit (within the
meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
(the "Code")), to the Executive or for his or her benefit paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise in connection with, or arising out of, his or her employment (a
"Payment" or "Payments"), would be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive will be entitled to receive from the Company an additional payment
(a "Gross-Up Payment") in an amount such that after payment by the Executive of
all taxes (including any interest or penalties, other than interest and
penalties imposed by reason of the Executive's failure to file timely a tax
return or pay taxes shown due on his or her return), imposed with respect to
such Gross-Up Payment, including any Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(b) An initial determination as to whether a Gross-Up
Payment is required pursuant to this Agreement and the amount of such Gross-Up
Payment shall be made at the Company's expense by an accounting firm selected by
the Company and reasonably acceptable to the Executive which is designated as
one of the five largest accounting firms in the United States (the "Accounting
Firm"). The Accounting Firm shall provide its determination (the
"Determination"), together with detailed supporting calculations and
documentation, to the Company and the Executive within five days of the Date of
Termination if applicable, or such other time as requested by the Company or by
the Executive (provided the Executive reasonably believes that any of the
Payments may be subject to the Excise Tax) and if the Accounting Firm determines
that no Excise Tax is payable by the Executive with respect to a Payment or
Payments, it shall furnish the Executive with an opinion reasonably acceptable
to the Executive that no Excise Tax will be imposed with respect to any such
Payment or Payments. Within ten days of the delivery of the Determination to the
Executive, the Executive shall have the right to dispute the Determination (the
"Dispute"). The Gross-Up Payment, if any, as determined pursuant to this Section
4(b) shall be paid by the Company to the Executive within five days of the
receipt of the Determination. The existence of the Dispute shall not in any way
affect the Executive's right to receive the Gross-Up Payment in accordance with
the Determination. If there is no Dispute, the Determination shall be binding,
final and conclusive upon the Company and the Executive subject to the
application of Section 4(c) below.
(c) As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up Payment (or a
portion thereof) will be paid which should not have been paid (an "Excess
Payment") or a Gross-Up Payment (or a portion thereof) which should have been
paid will not have been paid (an "Underpayment"). An Underpayment shall be
deemed to have occurred (i) upon notice (formal or informal) to the Executive
from any governmental taxing authority that the Executive's tax liability
(whether in respect of the Executive's current taxable year or in respect of any
prior taxable year) may be increased by reason of the imposition of the Excise
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Tax on a Payment or Payments with respect to which the Company has failed to
make a sufficient Gross-Up Payment, (ii) upon a determination by a court, (iii)
by reason of determination by the Company (which shall include the position
taken by the Company, together with its consolidated group, on its federal
income tax return) or (iv) upon the resolution of the Dispute to the Executive's
satisfaction. If an Underpayment occurs, the Executive shall promptly notify the
Company and the Company shall promptly, but in any event, at least five days
prior to the date on which the applicable government taxing authority has
requested payment, pay to the Executive an additional Gross-Up Payment equal to
the amount of the Underpayment plus any interest and penalties (other than
interest and penalties imposed by reason of the Executive's failure to file
timely a tax return or pay taxes shown due on the Executive's return) imposed on
the Underpayment. An Excess Payment shall be deemed to have occurred upon a
Final Determination (as hereinafter defined) that the Excise Tax shall not be
imposed upon a Payment or Payments (or portion thereof) with respect to which
the Executive had previously received a Gross-Up Payment. A Final Determination
shall be deemed to have occurred when the Executive has received from the
applicable government taxing authority a refund of taxes or other reduction in
the Executive's tax liability by reason of the Excise Payment and upon either
(x) the date a determination is made by, or an agreement is entered into with,
the applicable governmental taxing authority which finally and conclusively
binds the Executive and such taxing authority, or in the event that a claim is
brought before a court of competent jurisdiction, the date upon which a final
determination has been made by such court and either all appeals have been taken
and finally resolved or the time for all appeals has expired or (y) the statute
of limitations with respect to the Executive's applicable tax return has
expired. If an Excess Payment is determined to have been made, the amount of the
Excess Payment shall be treated as a loan by the Company to the Executive and
the Executive shall pay to the Company on demand (but not less than 10 days
after the determination of such Excess Payment and written notice has been
delivered to the Executive) the amount of the Excess Payment plus interest at an
annual rate equal to the Applicable Federal Rate provided for in Section 1274(d)
of the Code from the date the Gross-Up Payment (to which the Excess Payment
relates) was paid to the Executive until the date of repayment to the Company.
(d) Notwithstanding anything contained in this Agreement to
the contrary, in the event that, according to the Determination, an Excise Tax
will be imposed on any Payment or Payments, the Company shall pay to the
applicable government taxing authorities as Excise Tax withholding, the amount
of the Excise Tax that the Company has actually withheld from the Payment or
Payments.
5. NO MITIGATION; OBLIGATIONS ABSOLUTE; NO EFFECT ON OTHER RIGHTS
(a) The Executive shall not be required to mitigate the
amount of any payment provided for in Section 3 hereof by seeking other
employment or otherwise; nor shall the amount of any payment or benefits
provided for in Section 3 hereof be reduced by any compensation or benefits
earned by the Executive as the result of employment by another employer, or by
retirement benefits, after the effective date of termination of the Executive's
employment with the Company or otherwise.
(b) The obligations of the Company to make the payments to
the Executive, and to make the arrangements provided for herein shall be
absolute and unconditional and shall not be reduced by any circumstances,
including without limitation any setoff, counterclaim, recoupment, defense or
other right which the Company may have against the Executive or any third party
at any time.
(c) The provisions of this Agreement, and any payment
provided for herein, shall not supersede or in any way limit the rights,
benefits, duties or obligations which the Executive may now or in the future
have under any benefit, incentive or other plan or arrangement of the Company or
any other agreement with the Company. Without limiting the generality of the
foregoing, the Executive's resignation under this Agreement with or without Good
Reason, shall in no way affect the Executive's ability to terminate employment
by reason of the Executive's Retirement or to be eligible to receive benefits
under any retirement or pension plan of the Company and its affiliates,
including without limitation the Company's Investment Savings Plan, the
Company's Retirement Plan for Employees, the Company's Retirement Benefit
Restoration Plan or substitute plans adopted by the Company or its successors,
and any termination which otherwise qualifies as Good Reason shall be treated as
such even if it is also a Retirement.
(d) Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
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6. NOT AN EMPLOYMENT AGREEMENT. This Agreement is not, and
nothing herein shall be deemed to create, a contract of employment between the
Executive and the Company. The Company may terminate the employment of the
Executive by the Company at any time, subject to the terms of any employment
agreement between the Company and the Executive that may then be in effect.
7. TERM OF AGREEMENT. The term of this Agreement (the "Term")
shall commence on the date hereof and shall continue through the third following
December 31st; PROVIDED, HOWEVER, that commencing on the first December 31st
after the date hereof, and on each anniversary of such first December 31st (such
date and each anniversary thereof shall be hereinafter referred to as the
"Renewal Date"), unless previously terminated, the Agreement shall be
automatically extended so as to terminate three years from such Renewal Date,
unless at 60 days prior to the Renewal Date the Company shall give Notice to the
Executive that the Term will not be extended. Notwithstanding any such notice
not to extend the Term, if a Change in Control of the Company shall have
occurred during the original or extended Term of this Agreement, this Agreement
shall continue in effect for a period of not less than 36 months beyond the date
of such Change in Control of the Company.
8. SUCCESSORS; BINDING AGREEMENT; ASSIGNMENT
(a) This Agreement shall be binding upon and shall inure to
the benefit of the Company, its successors and assigns. Neither this Agreement
nor any right or interest hereunder shall be assignable or transferable by the
Company other than to a successor. The Company shall 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, by agreement
in form and substance reasonably satisfactory to the Executive, expressly,
absolutely and unconditionally to assume 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. As used in this Agreement,
"Company" shall mean (i) the Company as hereinbefore defined, and (ii) any
successor to all or substantially all of the Company's business or assets which
executes and delivers an agreement provided for in this Section 8(a) or which
otherwise become bound by all the terms and provisions of this Agreement by
operation of law.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amount would be payable to the Executive
hereunder if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's devisee, legatee or other designee or, if there be
no such designee, to the Executive's estate. Neither this Agreement nor any
right or interest arising hereunder may be assigned or transferred by the
Executive or his or her heirs, beneficiaries or legal representatives. In the
event of the Executive's death or a judicial determination of his or her
incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to the Executive's executor, heirs or other legal
representative.
9. NOTICES. For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered or when mailed
by United States certified or registered mail, return receipt requested, postage
prepaid, addressed to (i) the respective addresses set forth in this Agreement,
provided that all notices to the Company shall be directed to the attention of
the Committee with a copy directed to the Secretary of the Company, or (ii) such
other address for a party as such party may have furnished to the other in
writing in accordance with this Section 9; except that notices of change of
address shall be effective only upon receipt.
10. CONFIDENTIALITY. The Executive shall retain in confidence
any and all confidential information concerning the Company or any of its
Subsidiaries and their respective businesses which is now or hereafter becomes
known to the Executive, except information (i) ascertainable or obtained from
public information, (ii) received by the Executive at any time after the
Executive's employment by the Company shall have terminated from a third party
not employed by or otherwise affiliated with the Company or under an obligation
to the Company to maintain the confidentiality of that information, or (iii)
which is or becomes known to the public by any means other than a breach of this
Section 10.
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11. SUBSIDIARY. For purposes of this Agreement, "Subsidiary"
shall mean any corporation, partnership or other entity, at least 50% of the
outstanding voting power for the election of directors or other management is
then owned, directly or indirectly, by the Company or another Subsidiary of the
Company.
12. MODIFICATION; WAIVER OR DISCHARGE. No provision of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in a writing signed by the Executive and the Company.
No waiver by either party at any time of any breach by the other party of, or of
compliance by the other party with, any condition or provision of this Agreement
to be performed or complied with by such other party shall be deemed a waiver of
any similar or dissimilar provision or condition of this Agreement or any other
breach of or failure to comply with the same condition or provision at the same
time or at any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement.
13. GOVERNING LAW. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Florida without giving effect to its conflict of laws rules.
14. HEADINGS OF NO EFFECT. The Section headings contained in
this Agreement are included solely for convenience of reference and shall not in
any way affect the meaning or interpretation of any of the provisions of this
Agreement.
15. FEES AND EXPENSES. The Company shall pay all legal fees and
related expenses (including the costs of experts, evidence and counsel) incurred
by the Executive as they become due as a result of (i) termination of the
Executive's employment after a Change in Control of the Company (including all
such fees and expenses, if any, incurred in contesting or disputing any such
termination of employment), (ii) the Executive seeking to obtain or enforce any
right or benefit provided by (x) this Agreement (including, but not limited to,
any such fees and expenses incurred in connection with the dispute) or (y) any
other plan or arrangement maintained by the Company under which the Executive is
or may be entitled to receive benefits, and (iii) the Executive's hearing before
the Board as contemplated by the definition of Cause.
16. DISPUTE CONCERNING TERMINATION.
(a) If within 20 days after any Notice of Termination is
given or, if later, prior to the Date of Termination (as determined without
regard to this Section 16(a)), the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is finally resolved,
either by mutual written agreement of the parties or by a final judgment, order
or decree of a court of competent jurisdiction (which is not appealable or with
respect to which the time of appeal therefrom has expired and no appeal has been
perfected); PROVIDED that the Date of Termination shall be extended by a notice
of dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
(b) In the event of any dispute between the Company and the
Executive with respect to the subject matter of this Agreement and the
enforcement of rights hereunder, the Executive may, in his or her sole
discretion by notice to the Company, require such dispute or difference to be
submitted to arbitration. The arbitrator or arbitrators shall be selected by
agreement of the parties or, if they cannot agree on an arbitrator or
arbitrators within 30 days after the Executive has notified the Company of the
submission of the question for settlement by arbitration, then the arbitrator or
arbitrators shall be selected by the American Arbitration Association (the
"AAA") in San Jose, California, upon the application of the Executive. The
determination reached in such arbitration shall be final and binding on both
parties without any right of appeal or further dispute. Execution of the
determination by such arbitrator may be sought in any court of competent
jurisdiction. The arbitrators shall not be bound by judicial formalities and may
abstain from following the strict rules of evidence and shall interpret this
Agreement as an honorable engagement and not merely as a legal obligation.
Unless otherwise agreed by the parties, any such arbitration shall take place in
San Jose, California, and shall be conducted in accordance with the Rules of
AAA. The Company shall pay all costs of the arbitration.
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(c) If a purported termination occurs following a Change in
Control of the Company and during the Term of this Agreement, and such
termination is disputed in accordance with Section 16(a) , the Company shall
continue to pay the Executive the full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited to, salary) and
continue the Executive as a participant in all compensation, benefit and
insurance plans in which the Executive was participating when the notice giving
rise to the dispute was given, until the dispute is finally resolved in
accordance with Section 16(a). Amounts paid under this Section 16(c) are in
addition to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement.
17. SEVERABILITY. If any one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not be affected thereby. To the extent permitted by applicable law, each party
hereto waives any provision of law which renders any provision of this Agreement
invalid, illegal or unenforceable in any respect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
XXXXXX-XXXXXX, INC.
By:
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