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EXHIBIT 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective as of
_________________________, 1996 (the "Effective Date"), by and between ARCADIAN
CORPORATION, a Delaware corporation (the "Company"), and _____________________
("Executive").
W I T N E S S E T H :
WHEREAS, the Company is engaged in the business of producing,
marketing, selling and distributing nitrogen fertilizers and chemicals
("Business");
WHEREAS, Executive is recognized as having experience in the
management and operation of companies that are in the Business;
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of Executive,
notwithstanding the possibility, threat or occurrence of a Change in Control
(as defined in Section 4.7 hereof);
WHEREAS, the Board believes it is imperative (i) to diminish the
inevitable and significant distractions of Executive and dilution of the time
of Executive, by virtue of the personal uncertainties and risks created by a
pending or threatened Change in Control, (ii) to encourage Executive's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change in Control, and (iii) to provide Executive with
compensation arrangements in the event of a Change in Control which provide
Executive with financial security, which are competitive with those of other
corporations, and which ensure that Executive receives the compensation and
benefits intended to be provided to Executive by the Company through this
Agreement and the Company's various employee benefit and compensation plans and
arrangements without regard to any Excise Tax (as defined in Section 4.11(a)
hereof); and
WHEREAS, in order to accomplish the objectives described in the two
immediately preceding recitals, the Board desires to cause the Company to enter
into this Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Executive hereby agree as follows:
ARTICLE I
EMPLOYMENT, REPORTING AND DUTIES
1.1 Employment. On the terms and subject to the conditions of
this Agreement, the Company hereby employs and engages the services of
Executive to serve as, and Executive agrees to diligently and competently serve
as and perform the functions of, _________________________________________ (the
"Office") of the Company for the term and for the compensation and benefits
stated herein.
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1.2 Major Responsibilities; Authority. Executive shall have the
authorities, duties, responsibilities and status (including offices, titles and
reporting requirements) usually associated with the Office of companies having
operations and assets similar in nature and value to the operations and assets
of the Company and at least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time during the 90-day
period immediately preceding the Effective Date, and such other duties as the
Board shall determine and Executive shall accept from time to time.
1.3 Extent of Service. During the Term (as defined in Section
4.1), and excluding any periods of vacation and sick leave to which Executive
is entitled, Executive agrees to devote reasonable time and energies to the
Business consistent with past practice and shall not, during the Term, be
engaged in any business activity which would interfere or prevent Executive
from carrying out his duties under this Agreement; provided, however, that this
Section 1.3 shall not be construed as preventing Executive from investing his
assets in such form or manner as will not require services on the part of
Executive in the operation of the affairs of any company in which such
investments are made.
1.4 Location. Executive shall not be required to move from
Executive's home in Shelby County, Tennessee.
ARTICLE II
COMPENSATION AND RELATED ITEMS
2.1 Compensation.
(a) Base Salary. As compensation and consideration for
the services to be rendered by Executive under this Agreement and for
the performance by Executive of the usual obligations of such
employment, the Company agrees to pay Executive, and Executive agrees
to accept, a base salary ("Base Salary") of $____________ _____ per
annum which shall be paid in accordance with Company's standard
payroll practice. Executive's Base Salary may increase from time to
time, and after any such change, Executive's new level of Base Salary
shall be Executive's Base Salary for purposes of this Agreement until
the effective date of any subsequent change.
(b) Additional Compensation. In addition to the Base
Salary provided for in Section 2.1(a), Executive and/or Executive's
family, as the case may be, shall be entitled to:
(i) participate in, and shall receive all
benefits under:
(A) any and all welfare benefit and
similar employee benefit plans, programs,
arrangements, or policies that are generally made
available by the Company and its affiliates (as
defined in Section 4.11(l)) now or at any time in the
future to other key employees or retired key
employees, including, but not limited to, any
hospitalization, medical, prescription, dental,
disability, salary continuance, individual life
insurance, executive life insurance, group
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life insurance, accidental death insurance, and
travel accident insurance plans, programs,
arrangements, and policies; and
(B) any and all bonus, incentive,
savings, retirement, profit sharing, pension, stock
option, restricted stock, employee stock ownership,
supplemental executive retirement and other employee
benefit plans, programs, arrangements, and policies
that are generally made available by the Company and
its affiliates now or at any time in the future to
officers and other key employees; and
(ii) annual vacations and sick leave in accordance
with the vacation and sick leave policies of the Company and
its affiliates that are now or at any time in the future in
effect with respect to officers and other key employees,
during which time Executive's compensation shall be paid in
full; and
(iii) fringe benefits in accordance with the fringe
benefit policies of the Company and its affiliates that are
now or at any time in the future in effect with respect to
officers and other key employees.
2.2 Expenses. The Company agrees that, during the Term, Executive
shall be allowed reasonable and necessary business expenses in connection with
the performance of his duties hereunder within guidelines established by the
Board as in effect at any time with respect to key employees ("Business
Expenses"), including, but not limited to, reasonable and necessary expenses
for food, travel, lodging, entertainment and other items in the promotion of
the Business within such guidelines. The Company shall promptly reimburse
Executive for all Business Expenses incurred by Executive upon Executive's
presentation to the Company of an itemized account thereof, together with
receipts, vouchers, or other supporting documentation. After termination or
expiration of this Agreement, however such termination or expiration may come
about, Executive shall have ninety (90) days after the date of such termination
or expiration to submit Business Expenses incurred during the Term to the
Company for reimbursement.
2.3 Working Facilities. Executive shall be furnished with offices
of a size and with other furnishings and appointments, administrative staff,
secretarial and other assistants, stenographic help, and such other facilities
and services as are suitable to Executive's position and adequate for the
performance of Executive's duties.
ARTICLE III
EXCULPATION
The Company agrees that Executive will not be liable for any losses,
expenses, costs or damages caused by or resulting from the recommendations,
suggestions, actions, errors, omissions or mistakes of Executive undertaken or
proposed by Executive if Executive acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company. Executive's rights under this Article III shall not be deemed
exclusive of, but shall be cumulative with, any and all other rights
(including, but not limited to, rights of indemnification and advancement of
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expenses) to which Executive may now or at any time in the future be entitled
under applicable law, the Company's certificate of incorporation, the Company's
bylaws, any agreement (including, but not limited to, this Agreement), any vote
of stockholders, any resolution of directors, or otherwise.
ARTICLE IV
TERM AND TERMINATION
4.1 Term. The term of this Agreement shall be for three years
commencing on the Effective Date ("Term"); provided however, that if a Change
in Control occurs within the first twelve (12) months after the Effective Date,
the Term shall be extended to end on the third anniversary of such Change in
Control.
4.2 Termination of Agreement. Except as may otherwise be provided
herein, this Agreement may terminate prior to the end of the Term upon the
occurrence of:
(a) Thirty (30) days after written notice of termination
is given by either party to the other; or
(b) Executive's death or, at the Company's option, upon
Executive's becoming Disabled (as defined in Section 4.9 hereof).
Any notice of termination given by the Company to Executive under Section
4.2(a) above shall specify whether such termination is with or without Cause
(as defined in Section 4.4 hereof). Any notice of termination given by
Executive to the Company under Section 4.2(a) above shall specify whether such
termination is made with or without Good Reason (as defined in Section 4.5
hereof) or Good Reason-Change in Control (as defined in Section 4.6 hereof).
4.3 Obligations of the Company Upon Termination.
(a) Cause; Without Good Reason; and Without Good
Reason-Change in Control. If the Company terminates this Agreement
with Cause pursuant to Section 4.2(a) hereof, or if Executive
terminates this Agreement without Good Reason or without Good
Reason-Change in Control pursuant to Section 4.2(a) hereof, this
Agreement shall terminate without further obligations to Executive,
other than those obligations owing or accrued to, vested in, or earned
by Executive through the date of termination, including, but not
limited to:
(i) to the extent not theretofore paid,
Executive's Base Salary in effect at the time of such
termination through the date of termination; and
(ii) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company, and any accrued vacation pay not yet paid by
the Company; and
(iii) all other amounts or benefits owing or
accrued to, vested in or earned by Executive through the date
of termination under the then existing or applicable
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plans, programs, arrangements, and policies of the Company and
its affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(b) hereof;
such obligations owing or accrued to, vested in, or earned by
Executive through the date of termination, including, but not limited
to, such amounts and benefits specified in clauses (i), (ii), and
(iii) of this sentence, being hereinafter collectively referred to as
the "Accrued Obligations." The aggregate amount of such obligations
owing or accrued to, vested in, or earned by Executive through the
date of termination, including, but not limited to, the Accrued
Obligations, shall be paid by the Company to Executive in accordance
with the plans, programs or agreements under which the Accrued
Obligations were earned.
(b) Good Reason; Without Cause Before a Change in
Control. If Executive terminates this Agreement with Good Reason
pursuant to Section 4.2(a) hereof, or if the Company terminates this
Agreement without Cause before the occurrence of a Change in Control
pursuant to Section 4.2(a) hereof:
(1) the Company shall pay the aggregate of the
following amounts to Executive in one lump sum within thirty
(30) days after the date of such termination or in a manner
and at such later time as specified by Executive, provided
that all such payments must be made no later than the last day
of the twenty-four (24) month period commencing on the date of
such termination (the "24 Month Period"):
(i) to the extent not theretofore paid,
Executive's Base Salary in effect at the time of such
termination (but prior to giving effect to any
reduction therein which precipitated such
termination) through the date of termination; and
(ii) an amount equal to the sum of (A)
two (2) times Executive's Base Salary in effect at
the time of such termination (but prior to giving
effect to any reduction therein which precipitated
such termination), (B) two (2) times the average of
all bonus, profit sharing and other incentive
payments made by the Company to Executive in respect
of the two (2) calendar years immediately preceding
such termination, and (C) the pro-rata share of
Executive's target bonus, profit sharing and other
incentive payments for the calendar year in which
such termination occurred based upon the proportion
that the number of complete months in such calendar
year up to the date of termination bears to the
complete calendar year; and
(iii) in the case of compensation
previously deferred by Executive, all amounts
previously deferred (together with any accrued
interest thereon) and not yet paid by the Company,
and any accrued vacation pay not yet paid by the
Company; and
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(iv) all other amounts or benefits owing
or accrued to, vested in, or earned by Executive
through the date of termination under the then
existing or applicable plans, programs, arrangements,
and policies of the Company and its affiliates,
including, but not limited to, any such plans,
programs, arrangements, or policies described in
Section 2.1(b) hereof; and
(v) any and all other Accrued
Obligations not otherwise described in clause (i),
(ii), (iii) or (iv) of this sentence; and
(2) Executive shall receive the following
additional benefits:
(i) for an eighteen (18) month period
commencing on the date of termination of this
Agreement (the "18 Month Period"), Executive shall
continue to be covered under each of the medical,
dental, life insurance, accident benefit and other
welfare benefit (exclusive of short- and long-term
disability benefit) programs of the Company in effect
and applicable to Executive immediately prior to such
termination, and the Company shall pay the costs
therefor except to the extent that Executive already
pays all or any portion thereof; provided however,
that if Executive obtains any of the welfare benefits
provided for under this sentence from another
employer, the Company's obligation to provide such
welfare benefits should be secondary to that of such
other employer. Executive's coverage under the
Company's medical and dental programs for the 18
Month Period shall be included in the calculation of
the "Period of Coverage" to be provided to Executive
pursuant to Section 4980B(f)(2)(B) of the Internal
Revenue Code of 1986, as amended ("Code"), and
Executive's right to "Continuation Coverage" under
Section 4980B(f)(2) of the Code. The amount of the
"Applicable Premium" to be charged Executive under
Section 4980B(f)(4) for Continuation Coverage shall
never be greater than the monthly amount charged
Executive for medical and dental coverage prior to
the termination of this Agreement; and
(ii) shall be fully vested in any and all
options, restricted stock, stock appreciation rights,
cash equivalent stock appreciation rights, or any
other similar rights based on the fair market value
of or otherwise relating to the Company's common
stock (collectively, "Stock Incentive Rights") which
are outstanding immediately prior to the termination
of this Agreement, and Executive may exercise any
such vested Stock Incentive Rights during the 24
Month Period, notwithstanding any provision otherwise
in any plan or agreement awarding or granting any
Stock Incentive Right to Executive; and
(iii) shall be fully vested in any and all
benefits accrued under any "employee pension benefit
plan," as defined in Section 3(2)(A) of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"), of the Company ("Retirement Plan"); and
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(iv) shall receive credit in the
calculation of the accrued benefit under the
Company's Pension Plan ("Pension Plan") for (A) the
compensation to be paid to Executive in clause (ii)
of paragraph (1) of this Section 4.3(b) and (B)
twenty-four (24) months of service in addition to the
service accrued by Executive through the date that
this Agreement is terminated. If the benefits set
forth in this clause would cause the Pension Plan to
lose its qualification under Section 401(a) of the
Code, then the benefits accrued hereunder shall
accrue to Executive under the Company's Supplemental
Executive Retirement Plan ("SERP"); and
(v) shall receive such individual
outplacement service as is appropriate for
Executive's position for the 24 Month Period.
(c) Good Reason-Change in Control; Without Cause On or
After a Change in Control. If Executive terminates this Agreement
with Good Reason-Change in Control pursuant to Section 4.2(a) hereof,
or if the Company terminates this Agreement without Cause on or after
the occurrence of a Change in Control pursuant to Section 4.2(a)
hereof:
(1) the Company shall pay the aggregate of the
following amounts to Executive in one lump sum within thirty
(30) days after the date of such termination or in a manner
and at such later time as specified by Executive, provided
that all such payments must be made no later than the last day
of the thirty-six (36) month period commencing on the date of
such termination (the "36 Month Period"):
(i) to the extent not theretofore paid,
Executive's Base Salary in effect at the time of such
termination (but prior to giving effect to any
reduction therein which precipitated such
termination) through the date of termination; and
(ii) an amount equal to the sum of (A)
three (3) times Executive's Base Salary in effect at
the time of such termination (but prior to giving
effect to any reduction therein which precipitated
such termination), (B) three (3) times the average of
all bonus, profit sharing and other incentive
payments made by the Company to Executive in respect
of the two (2) calendar years immediately preceding
such termination, and (C) the pro-rata share of
Executive's target bonus, profit sharing and other
incentive payments for the calendar year in which
such termination occurred based upon the proportion
that the number of complete months in such calendar
year up to the date of termination bears to the
complete calendar year; and
(iii) in the case of compensation
previously deferred by Executive, all amounts
previously deferred (together with any accrued
interest thereon) and not yet paid by the Company,
and any accrued vacation pay not yet paid by the
Company; and
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(iv) all other amounts or benefits owing
or accrued to, vested in, or earned by Executive
through the date of termination under the then
existing or applicable plans, programs, arrangements,
and policies of the Company and its affiliates,
including, but not limited to, any such plans,
programs, arrangements, or policies described in
Section 2.1(b) hereof; and
(v) any and all other Accrued
Obligations not otherwise described in clause (i),
(ii), (iii) or (iv) of this sentence; and
(2) Executive shall receive the following
additional benefits:
(i) for the 36 Month Period, Executive
shall continue to be covered under each of the
medical, dental, life insurance, accident benefit and
other welfare benefit (exclusive of short- and
long-term disability benefit) programs of the Company
in effect and applicable to Executive immediately
prior to the time of such termination, and the
Company shall pay the costs therefor except to the
extent that Executive already pays all or any portion
thereof; provided however, that if Executive obtains
any of the welfare benefits provided for under this
sentence from another employer, the Company's
obligation to provide such welfare benefits shall be
secondary to that of such other employer.
Executive's coverage under the Company's medical and
dental programs for the 36 Month Period shall not be
included in the calculation of the "Period of
Coverage" to be provided to Executive pursuant to
Section 4980B(f)(2)(B) of the Code, and Executive's
right to "Continuation Coverage" under Section
4980B(f)(2) of the Code for medical and dental
benefits under the Company's medical and dental
programs shall commence on the first day following
the end of the 36 Month Period. The amount of the
"Applicable Premium" to be charged Executive under
Section 4980B(f)(4) for Continuation Coverage shall
never be greater than the monthly amount charged
Executive for medical and dental coverage during the
36 Month Period; and
(ii) shall be fully vested in any and all
benefits accrued under any Retirement Plan; and
(iii) shall receive credit in the
calculation of the accrued benefit under the Pension
Plan for (A) the compensation to be paid to Executive
in clause (ii) of paragraph (1) of this Section
4.3(c) and (B) thirty-six (36) months of service in
addition to the service accrued by Executive through
the date that this Agreement is terminated. If the
benefits set forth in this clause would cause the
Pension Plan to lose its qualification under Section
401(a) of the Code, then the benefits accrued
hereunder shall accrue to Executive under the SERP,
and if the Executive is not a participant in the
SERP, the actuarial lump sum equivalent of the
benefit described in this clause (iv) shall be paid
in accordance with paragraph (1) of Section 4.2(c);
and
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(iv) shall receive such individual
outplacement service as is appropriate for
Executive's position for the 36 Month Period.
(d) Death. If Executive's employment is terminated under
Section 4.2(b) hereof by reason of Executive's death, the Company
shall pay to Executive's legal representatives the full amount of the
obligations owing or accrued to, vested in, or earned by Executive
through the date of Executive's death, including, but not limited to,
the Accrued Obligations in accordance with the plans, programs, or
agreements under which the Accrued Obligations were earned. Anything
in this Agreement to the contrary notwithstanding, Executive's family
shall be entitled to receive benefits provided by the Company and any
of its affiliates to surviving families under the then existing or
applicable plans, programs, or arrangements and policies of the
Company and its affiliates.
(e) Disability. If Executive's employment is terminated
under Section 4.2(b) hereof by reason of Executive becoming Disabled,
the Company shall pay to Executive or Executive's legal representative
the full amount of the obligations owing or accrued to, vested in, or
earned by Executive through the date of termination, including, but
not limited to, the Accrued Obligations in accordance with the plans,
programs, or agreements under which the Accrued Obligations were
earned.
.
4.4 Cause. As used in this Agreement, the term "Cause" means (i)
willful misconduct by Executive or gross neglect by Executive of his duties as
an employee, officer or director of the Company which continues for more than
thirty (30) days after Executive's receipt of written notice from the Board to
Executive specifically identifying the willful misconduct or gross negligence
of Executive and directing Executive to discontinue the same, (ii) the
commission by Executive of a crime constituting a felony, or (iii) the
commission by Executive of an act, other than an act taken in good faith within
the course and scope of Executive's employment, which is directly detrimental
to the Company and exposes the Company to material liability.
4.5 Good Reason. As used in this Agreement, the term "Good
Reason" means the breach of any material provision of this Agreement by the
Company (including, but in no way limited to, any removal of Executive, without
Cause, from the position of the Office during the Term) which is not cured
within thirty (30) days after written notice from Executive to the Company
specifically identifying such breach; provided, however, that the term "Good
Reason" shall not include any breach of any provision of this Agreement that
occurs after the occurrence of a Change in Control.
4.6 Good Reason-Change in Control.
(a) Except as provided in Section 4.6(b) below, as used
in this Agreement, the term "Good Reason- Change in Control" means
after the occurrence of a Change in Control, a determination by
Executive that any one or more of the following events has occurred:
(i) a material change in the nature of
Executive's Office, including, but not limited to, his
authorities, duties, responsibilities or status (including
offices, titles
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or reporting requirements), from those in effect immediately
prior to the Change in Control; or
(ii) the relocation of Executive's place of
employment to a location in excess of fifty (50) miles from
the place of Executive's employment immediately prior to the
Change in Control, except for required travel on Company
business to an extent substantially equivalent to Executive's
business travel obligations immediately prior to the Change in
Control; or
(iii) any reduction by the Company of Executive's
Base Salary, or a material reduction in his bonus, profit
sharing or other incentive benefits, from those in effect
immediately prior to the Change in Control; or
(iv) the failure by the Company to increase
Executive's Base Salary in a manner consistent (both as to
frequency and percentage increase) with (A) the Company's
practices in effect immediately prior to the Change in Control
with respect to similarly positioned employees or (B) the
Company's practices implemented subsequent to the Change in
Control with respect to similarly positioned employees,
whichever is more favorable to Executive; or
(v) the failure of the Company to continue in
effect Executive's participation in (A) the Company's employee
benefit plans, programs, arrangements and policies, at a level
substantially equivalent in value to and on a basis consistent
with the relative levels of participation of other similarly
positioned employees, as in effect immediately prior to the
Change in Control or (B) the Company's employee benefit plans,
programs, arrangements and policies implemented subsequent to
the Change in Control with respect to similarly positioned
employees, whichever is more favorable to Executive; or
(vi) the failure of the Company to obtain from a
successor (including a successor to a material portion of the
business or assets of the Company) a satisfactory assumption
in writing of the Company's obligations under this Agreement;
or
(vii) the failure of the Company to continue to
provide Executive with office space, related facilities and
support personnel (including, but not limited to,
administrative and secretarial assistance) that are both
commensurate with the Office and Executive's responsibilities
to and position with the Company immediately prior to the
Change in Control and not materially dissimilar to the office
space, related facilities and support personnel provided to
other key executive officers of the Company; or
(viii) the Company notifies Executive of the
Company's intention not to observe or perform one or more of
the obligations of the Company under this Agreement; or
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(ix) the Company breaches any provision of this
Agreement and such breach is not cured within thirty (30) days
after the Company's receipt of notice thereof from Executive.
(b) If, after the occurrence of a Change in Control,
Executive receives a written description from the Company of the
nature of Executive's Office thereafter, stating Executive's
authorities, duties, responsibilities, status, salary, bonus and other
employee benefits, or job location, and Executive accepts such new
authorities, duties, responsibilities, status, salary, bonus and other
employee benefits, or job location ("New Office") with the Company
without determining that the New Office causes a Good Reason-Change in
Control as set forth in Section 4.6(a), then for the remaining Term
the New Office shall be the authorities, duties, responsibilities,
status, salary, bonus and other employee benefits, or job location to
be used by Executive in determining whether a Good Reason-Change in
Control occurs thereafter pursuant to Section 4.6(a).
4.7 Change in Control. As used herein, the term "Change in
Control" shall mean the occurrence with respect to the Company of any of the
following events:
(a) a report on Schedule 13D is filed with the Securities
and Exchange Commission (the "SEC") pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), is the beneficial owner (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 30% or more of the outstanding shares
of common stock of the Company or the combined voting power of the
then outstanding securities of the Company;
(b) a report is filed by the Company disclosing a
response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, Item 1 of Form 8-K promulgated
under the Exchange Act, or any similar reporting requirement hereafter
promulgated by the SEC;
(c) any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any common
stock of the Company (or securities convertible into common stock) for
cash, securities or any other consideration, provided that after
consummation of the offer, the person, entity or group in question is
the beneficial owner (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of 30% or
more of the combined voting power of the then outstanding securities
of the Company (as determined under paragraph (d) of Rule 13d-3
promulgated under the Exchange Act, in the case of rights to acquire
common stock);
(d) the stockholders of the Company shall approve:
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(i) any merger, consolidation, or reorganization
of the Company:
(A) in which the Company is not the
continuing or surviving corporation,
(B) pursuant to which shares of common
stock of the Company would be converted into cash,
securities or other property,
(C) with a corporation which prior to
such merger, consolidation, or reorganization owned
20% or more of the combined voting power of the then
outstanding securities of the Company, or
(D) in which the Company will not
survive as an independent, publicly owned
corporation;
(ii) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of
all or substantially all the assets of the Company, or
(iii) any liquidation or dissolution of the
Company;
(e) the stockholders of the Company shall approve a
merger, consolidation, reorganization, recapitalization, exchange
offer, purchase of assets or other transaction after the consummation
of which any person, entity or group (within the meaning of Section
13(d) or 14(d) of the Exchange Act) would own beneficially in excess
of 30% of the outstanding shares of common stock of the Company or in
excess of 30% of the combined voting power of the then outstanding
securities of the Company;
(f) the Company's common stock ceases to be listed on the
New York Stock Exchange; or
(g) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board
cease for any reason to constitute a majority of the Board, unless the
election or nomination for election by the Company's stockholders of
each new director during any such two-year period was approved by the
vote of two-thirds of the directors then still in office who were
directors at the beginning of such two-year period.
4.8 Executive Group. As used herein, "Executive Group" shall mean
the officers of the Company at the levels of Vice President and above; and each
of such officers shall be deemed members of the Executive Group.
4.9 Disabled. As used herein, "Disabled" shall mean a mental or
physical impairment which, in the reasonable opinion of a qualified doctor
selected by the Company, renders Executive unable to perform with reasonable
diligence the ordinary functions and duties of Executive on a
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full-time basis in accordance with the terms of this Agreement, which inability
continues for a period of not less than 180 consecutive days.
4.10 Return of Materials; Confidential Information. In the event
of any termination of this Agreement, Executive shall promptly deliver to the
Company all lists, books, records, literature, products and any other materials
owned or provided by the Company in connection with Executive's employment
hereunder. Executive shall not at any time during or after the Term hereof use
for himself or others, or divulge to others, any secret or confidential
information, knowledge or data of the Company obtained by Executive as a result
of his employment unless authorized by a majority of the Board.
4.11 Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company or any of its affiliates to or for the benefit of
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (any such payments or distributions
being individually referred to herein as a "Payment," and any two or more of
such payments or distributions being referred to herein as "Payments"), would
be subject to the excise tax imposed by Section 4999 of the Code (such excise
tax, together with any interest thereon, any penalties, additions to tax, or
additional amounts with respect to such excise tax, and any interest in respect
of such penalties, additions to tax or additional amounts, being collectively
referred herein to as the "Excise Tax"), then Executive shall be entitled to
receive and the Company shall make an additional payment or payments
(individually referred to herein as a "Gross-Up Payment," and any two or more
of such additional payments being referred to herein as "Gross-Up Payments") in
an amount such that after payment by Executive of all taxes (as defined in
Section 4.11(k)) imposed upon the Gross-Up Payment, Executive retains an amount
of such Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 4.11(c) through
(i), any determination (individually, a "Determination") required to be made
under this Section 4.11(b), including whether a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall initially be made, at the
Company's expense, by nationally recognized tax counsel mutually acceptable to
the Company and Executive ("Tax Counsel"). Tax Counsel shall provide detailed
supporting legal authorities, calculations, and documentation both to the
Company and Executive within 15 business days of the termination of Executive's
employment, if applicable, or such other time or times as is reasonably
requested by the Company or Executive. If Tax Counsel makes the initial
Determination that no Excise Tax is payable by Executive with respect to a
Payment or Payments, it shall furnish Executive with an opinion reasonably
acceptable to Executive that no Excise Tax will be imposed with respect to any
such Payment or Payments. Executive shall have the right to dispute any
Determination (a "Dispute") within 15 business days after delivery of Tax
Counsel's opinion with respect to such Determination. The Gross-Up Payment, if
any, as determined pursuant to such Determination shall, at the Company's
expense, be paid by the Company to Executive within five business days of
Executive's receipt of such Determination. The existence of a Dispute shall
not in any way affect Executive's right to receive the Gross-Up Payment in
accordance with such Determination. If there is no Dispute, such Determination
shall be binding, final and conclusive upon the Company and
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Executive, subject in all respects, however, to the provisions of Section
4.11(c) through (i) below. As a result of the uncertainty in the application
of Sections 4999 and 280G of the Code, it is possible that Gross-Up Payments
(or portions thereof) which will not have been made by the Company should have
been made ("Underpayment"), and if upon any reasonable written request from
Executive or the Company to Tax Counsel, or upon Tax Counsel's own initiative,
Tax Counsel, at the Company's expense, thereafter determines that Executive is
required to make a payment of any Excise Tax or any additional Excise Tax, as
the case may be, Tax Counsel shall, at the Company's expense, determine the
amount of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to Executive.
(c) The Company shall defend, hold harmless, and
indemnify Executive on a fully grossed-up after tax basis from and against any
and all claims, losses, liabilities, obligations, damages, impositions,
assessments, demands, judgements, settlements, costs and expenses (including
reasonable attorneys', accountants', and experts' fees and expenses) with
respect to any tax liability of Executive resulting from any Final
Determination (as defined in Section 4.11(j)) that any Payment is subject to
the Excise Tax.
(d) If a party hereto receives any written or oral
communication with respect to any question, adjustment, assessment or pending
or threatened audit, examination, investigation or administrative, court or
other proceeding which, if pursued successfully, could result in or give rise
to a claim by Executive against the Company under this Section 4.11(d)
("Claim"), including, but not limited to, a claim for indemnification of
Executive by the Company under Section 4.11(c), then such party shall promptly
notify the other party hereto in writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Executive ("Executive
Claim"), Executive shall take or cause to be taken such action in connection
with contesting such Executive Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as
are reasonably designated by the Company (it being understood and agreed by the
parties hereto that the terms of any such retention shall expressly provide
that the Company shall be solely responsible for the payment of any and all
fees and disbursements of such counsel and any experts) and the execution of
powers of attorney, provided that:
(i) within 30 calendar days after the Company
receives or delivers, as the case may be, the Tax Claim Notice
relating to such Executive Claim (or such earlier date that any
payment of the taxes claimed is due from Executive, but in no event
sooner than five calendar days after the Company receives or delivers
such Tax Claim Notice), the Company shall have notified Executive in
writing ("Election Notice") that the Company does not dispute its
obligations (including, but not limited to, its indemnity obligations)
under this Agreement and that the Company elects to contest, and to
control the defense or prosecution of, such Executive Claim at the
Company's sole risk and sole cost and expense; and
(ii) the Company shall have advanced to Executive
on an interest-free basis, the total amount of the tax claimed in
order for Executive, at the Company's request, to pay or cause to be
paid the tax claimed, file a claim for refund of such tax and, subject
to the provisions of the last sentence of Section 4.11(g), xxx for a
refund of such tax if such
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claim for refund is disallowed by the appropriate taxing authority (it
being understood and agreed by the parties hereto that the Company
shall only be entitled to xxx for a refund and the Company shall not
be entitled to initiate any proceeding in, for example, United States
Tax Court) and shall indemnify and hold Executive harmless, on a fully
grossed-up after tax basis, from any tax imposed with respect to such
advance or with respect to any imputed income with respect to such
advance; and
(iii) the Company shall reimburse Executive for any
and all costs and expenses resulting from any such request by the
Company and shall indemnify and hold Executive harmless, on fully
grossed-up after-tax basis, from any tax imposed as a result of such
reimbursement.
(f) Subject to the provisions of Section 4.11(e) hereof,
the Company shall have the right to defend or prosecute, at the sole cost,
expense and risk of the Company, such Executive Claim by all appropriate
proceedings, which proceedings shall be defended or prosecuted diligently by
the Company to a Final Determination; provided, however, that (i) the Company
shall not, without Executive's prior written consent, enter into any compromise
or settlement of such Executive Claim that would adversely affect Executive,
(ii) any request from the Company to Executive regarding any extension of the
statute of limitations relating to assessment, payment, or collection of taxes
for the taxable year of Executive with respect to which the contested issues
involved in, and amount of, the Executive Claim relate is limited solely to
such contested issues and amount, and (iii) the Company's control of any
contest or proceeding shall be limited to issues with respect to the Executive
Claim and Executive shall be entitled to settle or contest, in his sole and
absolute discretion, any other issue raised by the Internal Revenue Service or
any other taxing authority. So long as the Company is diligently defending or
prosecuting such Executive Claim, Executive shall provide or cause to be
provided to the Company any information reasonably requested by the Company
that relates to such Executive Claim, and shall otherwise cooperate with the
Company and its representatives in good faith in order to contest effectively
such Executive Claim. The Company shall keep Executive informed of all
developments and events relating to any such Executive Claim (including,
without limitation, providing to Executive copies of all written materials
pertaining to any such Executive Claim), and Executive or his authorized
representatives shall be entitled, at Executive's expense, to participate in
all conferences, meetings and proceedings relating to any such Executive Claim.
(g) If, after actual receipt by Executive of an amount of
a tax claimed (pursuant to an Executive Claim) that has been advanced by the
Company pursuant to Section 4.11(e)(ii) hereof, the extent of the liability of
the Company hereunder with respect to such tax claimed has been established by
a Final Determination, Executive shall promptly pay or cause to be paid to the
Company any refund actually received by, or actually credited to, Executive
with respect to such tax (together with any interest paid or credited thereon
by the taxing authority and any recovery of legal fees from such taxing
authority related thereto), except to the extent that any amounts are then due
and payable by the Company to Executive, whether under the provisions of this
Agreement or otherwise. If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 4.11(e)(ii), a determination is
made by the Internal Revenue Service or other appropriate taxing authority that
Executive shall not be entitled to any refund with respect to such tax claimed
and the Company does not notify Executive in writing of its intent to contest
such denial of refund
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prior to the expiration of thirty days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of any Gross-Up
Payments and other payments required to be paid hereunder.
(h) With respect to any Executive Claim, if the Company
fails to deliver an Election Notice to Executive within the period provided in
Section 4.11(e)(i) hereof or, after delivery of such Election Notice, the
Company fails to comply with the provisions of Section 4.11(e)(ii) and (iii)
and (f) hereof, then Executive shall at any time thereafter have the right (but
not the obligation), at his election and in his sole and absolute discretion,
to defend or prosecute, at the sole cost, expense and risk of the Company, such
Executive Claim. Executive shall have full control of such defense or
prosecution and such proceedings, including any settlement or compromise
thereof. If requested by Executive, the Company shall cooperate, and shall
cause its affiliates to cooperate, in good faith with Executive and his
authorized representatives in order to contest effectively such Executive
Claim. The Company may attend, but not participate in or control, any defense,
prosecution, settlement or compromise of any Executive Claim controlled by
Executive pursuant to this Section 4.11(h) and shall bear its own costs and
expenses with respect thereto. In the case of any Executive Claim that is
defended or prosecuted by Executive, Executive shall, from time to time, be
entitled to current payment, on a fully grossed-up after tax basis, from the
Company with respect to costs and expenses incurred by Executive in connection
with such defense or prosecution.
(i) In the case of any Executive Claim that is defended
or prosecuted to a Final Determination pursuant to the terms of this Section
4.11(i), the Company shall pay, on a fully grossed-up after tax basis, to
Executive in immediately available funds the full amount of any taxes arising
or resulting from or incurred in connection with such Executive Claim that have
not theretofore been paid by the Company to Executive, together with the costs
and expenses, on a fully grossed-up after tax basis, incurred in connection
therewith that have not theretofore been paid by the Company to Executive,
within ten calendar days after such Final Determination. In the case of any
Executive Claim not covered by the preceding sentence, the Company shall pay,
on a fully grossed-up after tax basis, to Executive in immediately available
funds the full amount of any taxes arising or resulting from or incurred in
connection with such Executive Claim at least ten calendar days before the date
payment of such taxes is due from Executive, except where payment of such taxes
is sooner required under the provisions of this Section 4.11(i), in which case
payment of such taxes (and payment, on a fully grossed-up after tax basis, of
any costs and expenses required to be paid under this Section 4.11(i) shall be
made within the time and in the manner otherwise provided in this Section
4.11(i).
(j) For purposes of this Agreement, the term "Final
Determination" shall mean (A) a decision, judgment, decree or other order by a
court or other tribunal with appropriate jurisdiction, which has become final
and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.
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(k) For purposes of this Agreement, the terms "tax" and
"taxes" mean any and all taxes of any kind whatsoever (including, but not
limited to, any and all Excise Taxes, income taxes, and employment taxes),
together with any interest thereon, any penalties, additions to tax, or
additional amounts with respect to such taxes and any interest in respect of
such penalties, additions to tax, or additional amounts.
(l) For purposes of this Agreement, the terms "affiliate"
and "affiliates" mean, when used with respect to any entity, individual, or
other person, any other entity, individual, or other person which, directly or
indirectly, through one or more intermediaries controls, or is controlled by,
or is under common control with such entity, individual or person. The term
"control" and derivations thereof when used in the immediately preceding
sentence means the ownership, directly or indirectly, of 50% or more of the
voting securities of an entity or other person or possessing the power to
direct or cause the direction of the management and policies of such entity or
other person, whether through the ownership of voting securities, by contract
or otherwise.
4.12 Legal Fees and Expenses. The Company shall defend, hold
harmless, and indemnify Executive on a fully grossed-up after tax basis from
and against any and all costs and expenses (including reasonable attorneys',
accountants' and experts' fees and expenses) incurred by Executive acting
reasonably from time to time as a result of any contest (regardless of the
outcome) by the Company or others contesting the validity or enforcement of, or
liability under, any term or provision of this Agreement, plus in each case
interest at the applicable federal rate provided for in Section 7872(f)(2)(B)
of the Code.
4.13 Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in any benefit,
bonus, incentive or other plan, program, arrangement or policy provided by the
Company or any of its affiliates (including, but not limited to, any plan,
program, arrangement or policy described in Section 2.1(c) hereof) and for
which Executive and/or Executive's family may qualify, nor shall anything
herein limit or otherwise affect such rights as Executive and/or Executive's
family may have under any other agreements with the Company or any of its
affiliates. Amounts which are vested benefits or which Executive and/or
Executive's family is otherwise entitled to receive under any plan, program,
arrangement, or policy of the Company or any of its affiliates (including, but
not limited to, any plan, program, arrangement or policy described in Section
2.1(c) hereof) at or subsequent to the date of termination of this Agreement
shall be payable in accordance with such plan, program, arrangement or policy.
4.14 Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement.
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ARTICLE V
GENERAL PROVISIONS
5.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
5.2 Assignability. This Agreement is personal to Executive and
without the prior written consent of the Company shall not be assignable by
Executive other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's legal
representatives and heirs. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. The Company shall
require any corporation, entity, individual or other person who is the
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization, or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform, by a
written agreement in form and substance satisfactory to Executive, all of the
obligations of the Company under this Agreement. As used in this Agreement,
the term "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, written agreement, or otherwise.
5.3 Withholding. The Company may 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.
5.4 Entire Agreement; Amendment. This Agreement constitutes the
entire agreement and understanding between Executive and the Company and
supersedes any prior agreements or understandings, whether written or oral,
with respect to the subject matter hereof. Except as may be otherwise provided
herein, this Agreement may not be amended or modified except by subsequent
written agreement executed by both parties hereto.
5.5 Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but all of
which together shall constitute one Agreement.
5.6 Notices. Any notice provided for in this Agreement shall be
deemed delivered upon deposit in the United States mails, registered or
certified mail, addressed to the party to whom directed at the addresses set
forth below or at such other addresses as may be substituted therefor by notice
given hereunder. Notice given by any other means must be in writing and shall
be deemed delivered only upon actual receipt.
If to the Company:
Arcadian Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: President
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If to Executive:
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5.7 Waiver. The waiver of any breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any breach of
the same or any other term or condition of this Agreement.
5.8 Severability. In the event any provision of this Agreement is
found to be unenforceable or invalid, such provision shall be severable from
this Agreement and shall not effect the enforceability or validity of any other
provision of this Agreement.
5.9 Other Severance Benefits. This Agreement replaces and
supplants any and all provisions of and benefits under the Arcadian Corporation
Severance Program for Key Employees.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
ARCADIAN CORPORATION
By:
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Name:
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Title:
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Name:
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