EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT By and Between INTEGRYS ENERGY GROUP, INC. And As Amended and Restated Effective January 1, 2009
Exhibit 10.1
EXECUTIVE
EMPLOYMENT
By
and Between
And
___________________________
As
Amended and Restated Effective January 1, 2009
Table of
Contents
| Section |
Page
|
||
| 1. | Definitions |
2
|
|
| (a) | Act |
2
|
|
|
|
(b) |
Affiliate and
Associate
|
2
|
| (c) | Beneficial Owner |
3
|
|
| (d) | Cause |
4
|
|
| (e) | Change in Control of the Company |
5
|
|
| (f) | Code |
6
|
|
| (g) | Continuing Director |
6
|
|
| (h) | Covered Termination |
6
|
|
| (i) | Employment Period |
6
|
|
| (j) | Good Reason |
7
|
|
| (k) | Normal Retirement Date |
8
|
|
| (l) | Person |
8
|
|
|
|
(m) | Separation from Service |
8
|
| (n) | Termination of Employment |
9
|
|
|
|
(o) | Termination Date |
10
|
| 2. | Termination or Cancellation Prior to Change in Control |
13
|
|
| 3. | Employment Period |
14
|
|
| 4. | Duties |
14
|
|
| 5. | Compensation |
15
|
|
| 6. | Annual Compensation Adjustments |
18
|
|
|
7.
|
Termination For Cause or Without Good Reason |
18
|
|
| 8. | Termination Giving Rise to a Termination Payment |
18
|
|
| 9. | Payments Upon Termination |
20
|
|
|
|
(a) | Accrued Benefits |
20
|
| (b) | Termination Payment |
21
|
|
| 10. | Death |
27
|
|
| 11. | Retirement |
27
|
|
| 12. | Termination for Disability |
28
|
|
| 13. | Termination Notice and Procedure |
28
|
|
| 14. | Further Obligations of the Executive |
29
|
|
| (a) | Competition |
29
|
|
| (b) | Confidentiality |
30
|
|
| 15. | Expenses and Xxxxxxxx |
00
|
|
| 00. | Payment Obligations Absolute |
31
|
|
| 17. | Successors |
31
|
|
| 18. | Severability |
33
|
|
| 19. | Amendment |
33
|
|
| 20. | Withholding |
33
|
|
| 21. | Certain Rules of Construction |
33
|
|
| 22. | Governing Law; Resolution of Disputes |
34
|
|
| 23. | Notice |
34
|
|
|
24.
|
No Waiver |
00
|
|
-x-
| 00. | Xxxxxxxx |
00
|
|
00.
|
Code Section 409A Compliance |
35
|
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EXECUTIVE EMPLOYMENT AND
SEVERANCE AGREEMENT
THIS AGREEMENT,
made and entered into as of the _____ day of _______________, 2008, by and
between Integrys Energy Group, Inc., a Wisconsin corporation (hereinafter
referred to as the “Company”), and ____________________ (hereinafter referred to
as “Executive”).
W I T N E S S E T
H
WHEREAS, the
Executive and the Company are parties to a Key Executive Employment and
Severance Agreement that was originally effective as of May 2,
1997;
WHEREAS, the
Executive is employed by the Company and/or a subsidiary of the Company (the
“Employer”) in a key executive capacity and the Executive’s services are
valuable to the conduct of the business of the Company;
WHEREAS, the
Executive possesses intimate knowledge of the business and affairs of the
Company and has acquired certain confidential information and data with respect
to the Company;
WHEREAS, the
Company desires to insure, insofar as possible, that it will continue to have
the benefit of the Executive’s services and to protect its confidential
information and goodwill;
WHEREAS, the
Company recognizes that circumstances may arise in which a change in control of
the Company occurs, through acquisition or otherwise, thereby causing current
uncertainty about the Executive’s future employment with the Employer without
regard to the Executive’s competence or past contributions, which uncertainty
may result in the loss of valuable services of the Executive to the detriment of
the Company and its shareholders, even if such a change in control never does in
fact occur, and the Company and the Executive wish to
provide reasonable
security to the Executive against changes in the Executive’s relationship with
the Company in the event of certain changes in control;
WHEREAS, the
Company and the Executive are desirous that any proposal for a change in control
or acquisition of the Company will be considered by the Executive objectively
and with reference only to the best interests of the Company and its
shareholders;
WHEREAS, the
Executive will be in a better position to consider the Company’s best interests
if the Executive is afforded reasonable security, as provided in this Agreement,
against altered conditions of employment which could result from any such change
in control or acquisition; and
WHEREAS, it is
desirable to amend and restate the Key Executive Employment and Severance
Agreement between the Executive and the Company;
NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and agreements
hereinafter set forth, the parties hereto mutually covenant and agree as
follows, which shall replace the Key Executive Employment and Severance
Agreement presently in effect between the Executive and the
Company:
1. Definitions.
(a) Act. For
purposes of this Agreement, the term “Act” means the Securities Exchange Act of
1934, as amended.
(b) Affiliate and
Associate. An
“Affiliate” of, or a person “affiliated” with, a specified person, is a person
that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person specified and the
term “Associate” used to indicate a relationship with any person, means (1) any
corporation or organization (other than the registrant or a majority-owned
subsidiary of the registrant) of which
-2-
such person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10
percent or more of any class of equity securities, (2) any trust or other estate
in which such person has a substantial beneficial interest or as to which such
person serves as trustee or in a similar fiduciary capacity, and (3) any
relative or spouse of such person, or any relative of such spouse, who has the
same home as such person or who is a director or officer of the registrant or
any of its parents or subsidiaries.
(c) Beneficial
Owner. For
purposes of this Agreement, a Person shall be deemed to be the “Beneficial
Owner” of any securities:
(i) which
such Person or any of such Person’s Affiliates or Associates has the right to
acquire (whether such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own, (A)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person’s Affiliates or Associates until such
tendered securities are accepted for purchase or (B) securities issuable upon
exercise of any rights agreement that the Company may have in effect at a time
before the issuance of such securities;
(ii) which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has “beneficial ownership” of
(as determined pursuant to Rule 13d-3 of the General Rules and Regulations under
the Act), including pursuant to any agreement,
-3-
arrangement or
understanding; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own, any
security under this subparagraph (ii) as a result of an agreement, arrangement
or understanding to vote such security if the agreement, arrangement or
understanding: (A) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations under the Act and
(B) is not also then reportable on a Schedule 13D under the Act (or any
comparable or successor report); or
(iii) which
are beneficially owned, directly or indirectly, by any other Person with which
such Person or any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in Subsection 1(c) (ii)
above) or disposing of any voting securities of the Company.
(d) Cause. “Cause”
for termination by the Company of the Executive’s employment in connection with
a Change of Control of the Company shall, for purposes of this Agreement, be
limited to: (i) the engaging by the Executive in intentional conduct
not taken in good faith which has caused demonstrable and serious financial
injury to the Company, as evidenced by a determination in a binding and final
judgment, order or decree of a court or administrative agency of competent
jurisdiction, in effect after exhaustion or lapse of all rights of appeal, in an
action, suit or proceeding, whether civil, criminal, administrative or
investigative; (ii) conviction of a felony (as evidenced by binding and final
judgment, order or decree of a court of competent jurisdiction, in effect after
exhaustion of all rights of appeal) which substantially impairs the Executive’s
ability to perform his duties or responsibilities; or (iii) continuing willful
-4-
and unreasonable
refusal by the Executive to perform the Executive’s duties or responsibilities
(unless significantly changed without the Executive’s consent).
(e) 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:
(i) any
Person (other than any employee benefit plan of the Company or of any subsidiary
of the Company, any Person organized, appointed or established pursuant to the
terms of any such benefit plan or any trustee, administrator or fiduciary of
such a plan) is or becomes the Beneficial Owner of securities of the Company
representing at least 30% of the combined voting power of the Company’s then
outstanding securities;
(ii) one-half
or more of the members of the Board are not Continuing Directors;
(iii) there
shall be consummated any merger, consolidation, or reorganization of the Company
with any other corporation as a result of which less than 50% of the outstanding
voting securities of the surviving or resulting entity are owned by the former
shareholders of the Company other than a shareholder who is an Affiliate or
Associate of any party to such consolidation or merger;
(iv) there
shall be consummated any merger of the Company or share exchange involving the
Company in which the Company is not the continuing or surviving corporation
other than a merger of the Company in which each of the holders of the Company’s
Common Stock immediately prior to the merger have
-5-
the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger;
(v) there
shall be consummated any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company to a Person which is not a wholly owned subsidiary
of the Company; or
(vi) the
shareholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company.
(f) Code. For
purposes of this Agreement, the term “Code” means the Internal Revenue Code of
1986, including any amendments thereto or successor tax codes
thereof.
(g) Continuing
Director. For
purposes of this Agreement, the term “Continuing Director” means (i) any member
of the Board of Directors of the Company who was a member of such Board on the
date of this Agreement, (ii) any successor of a Continuing Director who is
recommended to succeed a Continuing Director by a majority of the Continuing
Directors then on such Board and (iii) additional directors elected by a
majority of the Continuing Directors then on such Board.
(h) Covered
Termination. Except
as provided in Section 2(b) hereof, for purposes of this Agreement, the term
“Covered Termination” means any Termination of Employment where the Termination
Date is any date on or after the date on which a Change in Control of the
Company has occurred and prior to the end of the Employment Period.
(i) Employment
Period. For
purposes of this Agreement, the term “Employment Period” means a period
commencing on the date of a Change in Control of the
-6-
Company, and ending
at 11:59 p.m. Central Time on the earlier of the third anniversary of such date
or the Executive’s Normal Retirement Date.
(j) Good
Reason. For
purposes of this Agreement, the Executive shall have a “Good Reason” for
termination of employment in connection with a Change in Control of the Company
in the event of:
(i) any
breach of this Agreement by the Company, including specifically any breach by
the Company of its agreements contained in Sections 4, 5 or 6
hereof;
(ii) the
removal of the Executive from, or any failure to reelect or reappoint the
Executive to, any of the positions held with the Company or the Employer on the
date of the Change in Control of the Company or any other positions with the
Company or the Employer to which the Executive shall thereafter be elected,
appointed or assigned, except in the event that such removal or failure to
reelect or reappoint relates to the termination by the Company of the
Executive’s employment for Cause or by reason of disability pursuant to Section
12 hereof;
(iii) a
good faith determination by the Executive that there has been a significant
adverse change, without the Executive’s written consent, in the Executive’s
working conditions or status with the Company or the Employer from such working
conditions or status in effect during the 180-day period immediately prior to
the Change in Control of the Company, including but not limited to (A) a
significant change in the nature or scope of the Executive’s authority, powers,
functions, duties or responsibilities, or (B) a significant reduction in the
level of
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support services,
staff, secretarial and other assistance, office space and accoutrements;
or
(iv) failure
by the Company to obtain the agreement referred to in Section 17(a) hereof as
provided therein.
(k) Normal Retirement
Date. For
purposes of this Agreement, the term “Normal Retirement Date” means the earlier
of (i) “Normal Retirement Date” as defined in Part A of the Wisconsin
Public Service Corporation Retirement Plan, or any successor plan, as in effect
on the date of the Change in Control of the Company or (ii) such earlier
retirement date chosen by the Executive prior to the commencement of the
Employment Period.
(l) Person. For
purposes of this Agreement, the term “Person” shall mean any individual, firm,
partnership, corporation or other entity, including any successor (by merger or
otherwise) of such entity, or a group of any of the foregoing acting in
concert.
(m) Separation from
Service. For
purposes of this Agreement, the term “Separation from Service” means the date on
which the Executive has a Termination of Employment or if later, separates from
service (within the meaning of Code Section 409A) from the Company and each
other corporation, trade or business that, with the Company, constitutes a
controlled group of corporations or group of trades or businesses under common
control within the meaning of Code Sections 414(b) or (c). For this
purpose, Code Sections 414(b) and (c) shall be applied by substituting “at least
50 percent” for “at least 80 percent” each place it
appears. Specifically, if Executive continues to
provide services to the Company or an affiliate in a capacity other than as an
employee, such shift in status is not automatically a Separation from
Service.
-8-
(n) Termination of
Employment. For
purposes of this Agreement, the Executive’s “Termination of Employment” shall
occur when the Company and Executive reasonably anticipate that no
further services will be performed by the Executive for the Company after a
certain date or that the level of bona fide services the Executive will perform
after such date as an employee of the Company will permanently decrease to no
more than 20% of the average level of bona fide services performed by the
Executive (whether as an employee or independent contractor) for the Company
over the immediately preceding 36-month period (or such lesser period of
services). For purposes of this definition, the term Company includes
each other corporation, trade or business that, with the Company, constitutes a
controlled group of corporations or group of trades or businesses under common
control within the meaning of Code Sections 414(b) or (c). For this
purpose, Code Sections 414(b) and (c) shall be applied by substituting “at least
50 percent” for “at least 80 percent” each place it appears. An
Executive is not considered to have a Termination of Employment if the Executive
is absent from active employment due to military leave, sick leave or other bona
fide leave of absence if the period of such leave does not exceed the greater of
(i) six months, or (ii) the period during which the Executive’s right to
reemployment by the Company or controlled group member is provided either by
statute or by contract; provided that if the leave of absence is due to a
medically determinable physical or mental impairment that can be expected to
result in death or last for a continuous period of not less than six months,
where such impairment causes the Executive to be unable to perform the duties of
his or her position of employment or any substantially similar position of
employment, the leave may be extended for up to 29 months without causing a
Termination of Employment. Further, for purposes of determining
whether the Executive has incurred a Termination of Employment, if the Executive
is not actively at work during the period
-9-
that there exists a
dispute pursuant to Section 1(o)(v)(B) or (C), the Executive shall be considered
to be on a bona fide leave of absence for which his right to reemployment is
guaranteed during
the period that begins on the date on which the Executive last performs active
services and ends on the Termination Date that ultimately is established
pursuant to Section 1(o)(v)(B) or (C).
(o) Termination
Date. For
purposes of this Agreement, except as otherwise provided in Section 2(b),
Section 10(b) and Section 17(a) hereof, the term “Termination Date” means (i) if
the Executive’s employment is terminated by the Executive’s death, the date of
death; (ii) if the Executive’s employment is terminated by reason of voluntary
early retirement, as agreed in writing by the Company and the Executive, the
date of such early retirement which is set forth in such written agreement;
(iii) if the Executive’s employment is terminated for purposes of this Agreement
by reason of disability pursuant to Section 12 hereof, the earlier of thirty
days after the Notice of Termination is given or one day prior to the end of the
Employment Period; (iv) if the Executive’s employment is terminated by the
Executive voluntarily (other than for Good Reason), the date the Notice of
Termination is given; and (v) if the Executive’s employment is terminated by the
Company (other than by reason of disability pursuant to Section 12 hereof) or by
the Executive for Good Reason, the earlier of thirty days after the Notice of
Termination is given or one day prior to the end of the Employment
Period. Notwithstanding the foregoing,
(A) If
termination is for Cause pursuant to Section 1(d)(iii) of this Agreement and if
the Executive has cured the conduct constituting such Cause as described by the
Company in its Notice of Termination within such thirty day or shorter period,
then the
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Executive’s
employment hereunder shall continue as if the Company had not delivered its
Notice of Termination.
(B) If
the Company (or the Employer) shall give a Notice of Termination for Cause or by
reason of disability and the Executive in good faith notifies the Company
that a
dispute exists concerning the termination within the fifteen day period
following receipt thereof, then the Executive may elect to continue his
employment during such dispute, and the Termination Date shall be determined
under this paragraph. If the Executive so elects and it is thereafter
determined that Cause or disability (as the case may be) did exist, the
Termination Date shall be the earlier of (1) the date on which the dispute is
finally determined, either (x) by mutual written agreement of the parties or (y)
in accordance with Section 22 hereof, (2) the date of the Executive’s death, or
(3) one day prior to the end of the Employment Period. If the
Executive so elects and it is thereafter determined that Cause or disability (as
the case may be) did not exist, then the employment of the Executive hereunder
shall continue after such determination as if the Company (of the Employer) had
not delivered its Notice of Termination and there shall be no Termination Date
arising out of such Notice. In either case, this Agreement continues,
until the Termination Date, if any, as if the Company (or the Employer) had not
delivered the Notice of Termination except that, if it is finally determined
that the Company (or the Employer) properly terminated the Executive for the
reason asserted in the Notice of Termination, the Executive shall in no case be
entitled to a Termination Payment (as hereinafter defined) arising out of events
occurring after the Company delivered its Notice of Termination.
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(C) If
the Executive shall in good faith give a Notice of Termination for Good Reason
and the Company (or the Employer) notifies the Executive that a dispute exists
concerning the termination within the fifteen day period following receipt
thereof, then the Executive may elect to continue his employment during such
dispute and the Termination Date shall be determined under this
paragraph. If the Executive so elects and it is
thereafter determined that Good Reason did exist, the Termination Date shall be
the earliest of (1) the date on which the dispute is finally determined, either
(x) by mutual written agreement of the parties or (y) in accordance with Section
22 hereof, (2) the date of the Executive’s death or (3) one day prior to the end
of the Employment Period. If the Executive so elects and it is
thereafter determined that Good Reason did not exist, then the employment of the
Executive hereunder shall continue after such determination as if the Executive
had not delivered the Notice of Termination asserting Good Reason and there
shall be no Termination Date arising out of such Notice. In either
case, this Agreement continues, until the Termination Date, if any, as if the
Executive had not delivered the Notice of Termination except that, if it is
finally determined that Good Reason did exist, the Executive shall in no case be
denied the benefits described in Sections 8(b) and 9 hereof (including a
Termination Payment) based on events occurring after the Executive delivered his
Notice of Termination.
(D) Except
as provided in Paragraph (B) and (C) above, if the party receiving the Notice of
Termination notifies the other party that a dispute exists concerning the
termination within the appropriate period following receipt thereof and it is
finally determined that the reason asserted in such Notice of Termination did
not exist, then (1) if such Notice was delivered by the Executive, the Executive
will be deemed to have
-12-
voluntarily
terminated his employment and the Termination Date shall be the earlier of the
date fifteen days after the Notice of Termination is given or one day prior to
the end of the Employment Period and (2) if delivered by the Company, the
Company will be deemed to have terminated the Executive other than by reason of
death, disability or Cause.
2. Termination or Cancellation Prior to Change
in Control.
(a) Subject
to Subsection 2(b) hereof, the Company (and the Employer) and the Executive
shall each retain the right to terminate the employment of the Executive or
terminate and cancel this Agreement at any time prior to a Change in Control of
the Company. Subject to Subsection 2(b) hereof, in the event the
Executive’s employment is terminated by the Company (or the Employer) prior to a
Change in Control of the Company, this Agreement shall be terminated and
cancelled and of no further force and effect, and any and all rights and
obligations of the parties hereunder shall cease. In the event the
Executive’s employment is terminated by the Executive prior to a Change in
Control of the Company, except for obligations of the Executive in Section 14(b)
hereof which shall survive such termination, this Agreement shall be terminated
and cancelled and of no further force and effect and any and all rights and
obligations of the parties except those in Section 14 shall cease.
(b) Anything
in this Agreement to the contrary notwithstanding, if a Change in Control of the
Company shall occur and if the Executive’s employment with the Company or a
subsidiary of the Company shall have been terminated by the Company or the
Employer (other than a termination due to the Executive’s death or as a result
of the Executive’s disability) or if this Agreement shall have been otherwise
terminated and cancelled by the Company during the period of 180 days prior to
the date on which the Change in Control of the Company shall occur,
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then for all
purposes of this Agreement such termination of employment shall be deemed a
“Covered Termination” (and the Executive’s Termination Date shall be the date of
such termination of employment) and any such termination and cancellation of
this Agreement unless effected in the manner specified in Section 19 hereof,
shall be null and void unless it shall be reasonably demonstrated by the Company
that such termination of employment or termination and cancellation of
this Agreement (i) shall not have been at the request of a third party who had
taken steps reasonably calculated to effect a Change in Control of the Company
or (ii) shall not otherwise have arisen in connection with or in anticipation of
a Change in Control of the Company.
3. Employment
Period. If a
Change in Control of the Company occurs when the Executive is employed by the
Company or a subsidiary of the Company, the Company will, or will cause the
Employer to, continue thereafter to employ the Executive during the Employment
Period, and the Executive will remain in the employ of the Employer in
accordance with and subject to the terms and provisions of this
Agreement. Any termination of the Executive’s employment during the
Employment Period, whether by the Company or the Employer, shall be deemed a
termination by the Company for purposes of this Agreement.
4. Duties. During
the Employment Period, the Executive shall, in the same capacities and positions
held by the Executive at the time of the Change in Control of the Company or in
such other capacities and positions as may be agreed to by the Company and the
Executive in writing, devote the Executive’s best efforts and all of the
Executive’s business time, attention and skill to the business and affairs of
the Employer, as such business and affairs now exist and as they may hereafter
be conducted. The services which are to be performed by the Executive
hereunder are to be rendered in the same metropolitan area in which the
Executive
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was employed during
the 180-day period prior to the time of such Change in Control of the Company,
or in such other place or places as shall be mutually agreed upon in writing by
the Executive and the Company from time to time. Without the
Executive’s consent the Executive shall not be required to be absent from such
metropolitan area more than 45 days in any fiscal year of the
Company.
5. Compensation. During
the Employment Period, the Executive shall be compensated as
follows:
(a) The
Executive shall receive, at reasonable intervals (but not less often than
monthly) and in accordance with such standard policies as may be in effect
immediately prior to the Change in Control of the Company, an annual base salary
in cash equivalent of not less than the Executive’s highest annual base salary
as in effect during the 180-day period immediately prior to the Change in
Control of the Company, subject to any deferral election then in effect and
subject to adjustment as hereinafter provided.
(b) The
Executive shall receive fringe benefits at least equal in value to those
provided for the Executive at any time during the 180-day period immediately
prior to the Change in Control of the Company or, if more favorable to the
Executive, those provided generally at any time during the Employment Period to
executives of the Company (or the Employer) of comparable status and position to
the Executive. The Executive shall be reimbursed, at such intervals
and in accordance with such standard policies that are most favorable to the
Executive in effect at any time during the 180-day period immediately prior to
the Change in Control of the Company or, if more favorable to the Executive,
those provided generally at any time during the Employment Period to executives
of the Company (or the Employer) of comparable status and position to the
Executive, for any and all monies advanced
-15-
in connection with
the Executive’s employment for reasonable and necessary expenses incurred by the
Executive on behalf of the Company, including travel expenses.
(c) The
Executive shall be included, to the extent eligible thereunder (which
eligibility shall not be conditioned on the Executive’s salary grade or on any
other requirement which excludes persons of comparable status to the Executive
unless such exclusion was in effect for such
plan or an equivalent plan immediately prior to the Change in Control of the
Company), in any and all plans providing benefits for the Employer’s salaried
employees in general, including but not limited to retirement, savings, group
life insurance, hospitalization, medical, dental, profit sharing and stock bonus
plans; provided, that, in no event
shall the aggregate level of benefits under such plans in which the Executive is
included be less than the aggregate level of benefits under plans of the Company
of the type referred to in this Section 5(c) in which the Executive was
participating at any time during the 180-day period immediately prior to the
Change in Control of the Company.
(d) The
Executive shall annually be entitled to not less than the amount of paid
vacation and not fewer than the number of paid holidays to which the Executive
was entitled annually at any time during the 180-day period immediately prior to
the Change in Control of the Company or such greater amount of paid vacation and
number of paid holidays as may be made available annually to other executives of
the Company (or the Employer) of comparable status and position to the
Executive.
(e) The
Executive shall be included in all plans providing additional benefits to
executives of the Company of comparable status and position to the Executive,
including but not limited to deferred compensation, split-dollar life insurance,
supplemental retirement, pension restoration, stock option, stock appreciation,
stock bonus and similar or comparable
-16-
plans; provided, that, in no event
shall the aggregate level of benefits under such plans be less than the
aggregate level of benefits under plans of the Company of the type referred to
in this Section 5(e) in which the Executive was participating at any time during
the 180-day period immediately prior to the Change in Control of the Company;
and provided,
further, that
the Company’s
obligation to include the Executive in bonus or incentive compensation plans
shall be determined by Subsection 5(f) hereof.
(f) To
assure that the Executive will have an opportunity to earn incentive
compensation after a Change in Control of the Company, the Executive shall be
included in any bonus plan of the Company or the Employer which shall satisfy
the standards described below (such plan, the “Bonus Plan”) if the Executive was
participating in a bonus plan or plans of the Company or the Employer in effect
at any time during the 180-day period immediately prior to the Change in Control
of the Company. Bonuses under any such Bonus Plan shall be payable
with respect to achieving such financial or other goals reasonably related to
the business of the Company or the Employer as the Company or the Employer shall
establish (the “Goals”), all of which Goals shall be attainable, prior to the
end of the Employment Period, with approximately the same degree of probability
as the goals under any bonus plan or plans of the Company or the Employer as in
effect at any time during the 180-day period immediately prior to the Change in
Control of the Company (whether one or more, the “Prior Bonus Plan”) and in view
of the Company’s or the Employer’s existing and projected financial and business
circumstances applicable at the time. The amount of the bonus (the
“Bonus Amount”) that the Executive is eligible to earn under any such Bonus Plan
shall be no less than the amount of the Executive’s target award provided in
such Prior Bonus Plan, and in the event the Goals are not achieved such that the
entire target award is not payable, any such Bonus Plan shall provide for a
payment of a
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Bonus Amount equal
to a portion of the target award reasonably related to that portion of the Goals
which were achieved. Payment of the Bonus Amount shall not be
affected by any circumstance occurring subsequent to the end of the Employment
Period, including termination of the Executive’s employment.
6. Annual Compensation
Adjustments. During
the Employment Period, the Board of Directors of the Company or the Employer (or
an appropriate committee thereof) will consider and appraise, at least annually,
the contributions of the Executive to the Company, and in accordance with the
Company’s or the Employer’s practice prior to the Change in Control of the
Company, due consideration shall be given to the upward adjustment of the
Executive’s base compensation rate, at least annually, (i) commensurate
with increases generally given to other executives of the Company or the
Employer of comparable status and position to the Executive, and (ii) as
the scope of the Company’s or the Employer’s operations or the Executive’s
duties expand.
7. Termination For Cause or
Without Good Reason. If
there is a Covered Termination for Cause or due to the Executive’s voluntarily
terminating his employment other than for Good Reason (any such terminations to
be subject to the procedures set forth in Section 13 hereof), then the Executive
shall be entitled to receive only Accrued Benefits pursuant to Section 9(a)
hereof.
8. Termination Giving Rise to a
Termination Payment. (a) If
there is a Covered Termination by the Executive for Good Reason, or by the
Company other than by reason of (i) death, (ii) disability pursuant to Section
12 hereof, or (iii) Cause (any such terminations to be subject to the procedures
set forth in Section 13 hereof), then the Executive shall be entitled to
receive, and the Company shall promptly pay, Accrued Benefits and, in lieu
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of further base
salary for periods following the Termination Date, as liquidated damages and
additional severance pay and in consideration of the covenant of the Executive
set forth in Section 14(a) hereof, the Termination Payment pursuant to Section
9(b) hereof.
(b) If
there is a Covered Termination and the Executive is entitled to Accrued Benefits
and the Termination Payment, then the Executive shall be entitled to the
following additional benefits:
(i) The
Executive shall receive, at the expense of the Company, outplacement services,
on an individualized basis at a level of service commensurate with the
Executive’s status with the Company immediately prior to the Change in Control
of the Company (or, if higher, immediately prior to the termination of the
Executive’s employment), provided by a nationally recognized executive placement
firm selected by the Company; provided that the availability of outplacement
services shall not extend beyond December 31 of the second calendar year
following the calendar year in which occurs the Executive’s Separation from
Service; and provided further, that the cost to the Company of such services
shall not exceed 15% of the Executive’s annual base salary in effect immediately
prior to the Change in Control of the Company.
(ii) Until
the earlier of the end of the Employment Period or such time as the Executive
has obtained new employment and is covered by benefits which in the aggregate
are at least equal in value to the following benefits, the Executive shall
continue to be covered, at the expense of the Company, by the most favorable
life insurance, hospitalization, medical and dental coverage, provided to the
Executive and his family during the 180-day period immediately prior to the
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Change in Control
of the Company or, if more favorable to the Executive, the coverage in effect
generally at any time thereafter for executives of the Company (or the Employer)
of comparable status and position to the Executive and their families, subject
to the following:
(A) If
applicable, following the end of the COBRA continuation period, if such
hospitalization, medical or dental coverage is provided under a health plan that
is subject to Section 105(h) of the Code, benefits payable under such health
plan shall comply with the requirements of Treasury regulation section
1.409A-3(i)(1)(iv)(A) and (B) and, if necessary, the Company shall amend such
health plan to comply therewith.
(B) To
the extent required in order to comply with Section 409A of the Code, during the
first six months following the Executive’s Separation from Service, the
Executive shall pay the Company for any life insurance coverage that provides
benefits under a group term life insurance policy. Promptly following
the end of such six month period, the Company shall make a cash payment to the
Executive equal to the aggregate premiums paid by the Executive for such
coverage, and thereafter such coverage shall be provided at the expense of the
Company for the remainder of the period.
9. Payments Upon
Termination.
(a) Accrued
Benefits. For
purposes of this Agreement, the Executive’s “Accrued Benefits” shall include the
following amounts, payable as described herein: (i) all base salary for the time
period ending with the Termination Date; (ii) reimbursement for any and all
monies advanced in connection with the Executive’s employment for reasonable and
necessary expenses incurred by the Executive on behalf of the Company for the
time period ending with the Termination Date; (iii) any and all other cash
earned through the Termination Date and
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deferred at the
election of the Executive or pursuant to any deferred compensation plan then in
effect; (iv) any bonus or incentive compensation otherwise payable to the
Executive with respect to the year in which
termination occurs, or for any prior year or incentive period to the extent that
such bonus or incentive compensation is otherwise payable to the Executive but
has not been previously paid, under any bonus or incentive compensation plan or
plans in which the Executive is a participant; and (v) all other payments and
benefits to which the Executive (or in the event of the Executive’s death, the
Executive’s surviving spouse or other beneficiary) may be entitled as
compensatory fringe benefits or under the terms of any benefit plan of the
Company, other than severance payments under the Company’s (or the Employer’s)
severance policies or practices, in the form most favorable to the Executive
which were in effect at any time during the 180-day period immediately prior to
the Change in Control of the Company or during the Employment
Period. Payment of Accrued Benefits shall be made promptly in
accordance with the Company’s prevailing practice with respect to Subsections
(i) and (ii) or, with respect to Subsections (iii), (iv) and (v), pursuant to
the terms of the benefit plan or practice establishing such
benefits. Termination of the Executive’s employment does not affect
deferral or distribution elections that the Executive may have in place with
respect to the payment of any of the Accrued Benefits that are subject to Code
Section 409A, and payment of such amounts will be made pursuant to the terms of
the benefit plan or practice under which the deferral election was
made.
(b) Termination
Payment.
(i) Subject
to the limits set forth in Subsection 9(b)(ii) hereof, the Termination Payment
shall be an amount equal to (A) the Executive’s annual base salary, at the
highest rate as in effect at any time during the 180-day period immediately
prior to the Change in Control of the Company, as adjusted upward, from time to
time, pursuant to Section 6 hereof, plus (B) the amount of the average annual
bonus award (determined on an annualized basis for
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any bonus award
paid for a period of less than one year and excluding any year for which the
Executive did not participate in any bonus plan) paid to the Executive with
respect to the three complete fiscal
years preceding the Termination Date (the aggregate amount set forth in (A) and
(B) hereof shall hereafter be referred to as “Annual Cash Compensation”), times
(C) the lesser of (1) 2.99 and (2) the number of years or fractional portion
thereof remaining in the Employment Period determined as of the Termination
Date. Long-term incentive awards are not considered for this
purpose. The Termination Payment shall be paid to the Executive in
cash equivalent on the last business day of the seventh month following the
month in which occurs the Executive’s Separation from Service (or as soon as
practicable after, but in no event later than 2½ months following the scheduled
payment date in the case of an Executive who is deemed to have a Covered
Termination pursuant to Section 2(b)). Such lump sum payment shall
not be reduced by any present value or similar factor, and the Executive shall
not be required to mitigate the amount of the Termination Payment by securing
other employment or otherwise, nor will such Termination Payment be reduced by
reason of the Executive securing other employment or for any other
reason. The Termination Payment shall be in lieu of, and acceptance
by the Executive of the Termination Payment shall constitute the Executive’s
release of any rights of Executive to, any other severance payments under any
Company (or Employer) severance policy, practice or agreement; provided that if
the Executive has received severance payments under any other Company (or
Employer) severance policy, practice or agreement prior to the date of the
Termination Payment hereunder, the Termination Payment will be reduced by the
amount of the severance payment received by the Executive under such other
policy, practice or agreement. The Company shall bear up to $10,000
in the aggregate of fees and expenses of consultants
-22-
and/or legal or
accounting advisors engaged by the Executive to advise the Executive as to
matters relating to the computation of benefits due and payable under this
Subsection 9(b).
(ii) (A) Notwithstanding
any other provision of this Agreement, if any portion of the Termination Payment
or any other payment under this Agreement, or under any other agreement with or
plan of the Company or its affiliates (in its aggregate, “Total Payments”),
would constitute an “excess parachute payment” that is subject to the tax (the
“Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the “Code”), or any successor provision, the Company shall pay to the
Executive an additional amount (the “Gross-Up Payment”) such that the sum of (i)
the net amount retained by the Executive after deduction of any Excise Tax and
any interest charges or penalties in respect of the imposition of such Excise
Tax (but not any federal, state or local income tax or employment tax) on the
Total Payments plus (ii) any federal, state and local income tax, employment tax
and Excise Tax upon the payment provided for by this Subsection 9(b)(ii), shall
be equal to the Total Payments. For purposes of determining the
amount of the Gross-Up Payment, the Executive shall be deemed to pay federal
income taxes and employment taxes at the highest marginal rate of federal income
and employment taxation in the calendar year in which the Gross-Up Payment is to
be made and state and local income taxes at the highest marginal rates of
taxation in the state and locality of the Executive’s domicile for income tax
purposes on the date the Gross-Up Payment is made, net of the maximum reduction
in federal income taxes that may be obtained from deduction of such state and
local taxes.
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(B) For
purposes of this Agreement, the terms “excess parachute payment” and “parachute
payments” shall have the meanings assigned to them in Section 280G of the Code
(or any successor provision) and such “parachute payments” shall be valued as
provided therein. Present value shall be calculated in accordance
with Section 280G(d)(4) of the Code (or any successor
provision). Within forty (40) days following the delivery of the
Notice of Termination or notice by the Company to the Executive of its belief
that there is a payment or benefit due the Executive which will result in an
excess parachute payment as defined in Section 280G of the Code (or any
successor provision), or in case the Executive is deemed to have incurred a
Covered Termination pursuant to Section 2(b), within forty (40) days of the date
of the Change in Control of the Company, the Executive and the Company, at the
Company’s expense, shall obtain the opinion (which need not be unqualified) of
nationally recognized tax counsel (“National Tax Counsel”) selected by the
Company’s independent auditors and acceptable to the Executive in his sole
discretion (which may be regular outside counsel to the Company), which opinion
sets forth (1) the amount of the Base Period Income, (2) the amount and present
value of Total Payments and (3) the amount and present value of any excess
parachute payments. The term “Base Period Income” means an amount
equal to the Executive’s “annualized includible compensation for the base
period” as defined in Section 280G(d)(1) of the Code (or any successor
provision). For purposes of such opinion, the value of any noncash
benefits or any deferred payment or benefit shall be determined by the Company’s
independent auditors in accordance with the principles of Section 280G(d)(3) and
(4) of the Code (or any successor provisions), which determination shall be
evidenced in a certificate of such auditors addressed to the
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Company and the
Executive. The opinion of National Tax Counsel shall be dated as of
the Termination Date and addressed to the Company and the Executive and shall be
binding upon the Company and the Executive. If such National Tax
Counsel so requests in connection with the opinion required by this Subsection
9(b)(ii), the Executive and the Company shall obtain, at the Company’s expense,
and the National Tax Counsel may rely on in
providing the opinion, the advice of a firm of recognized executive compensation
consultants as to the reasonableness of any item of compensation to be received
by the Executive. The Company shall pay (or cause to be paid) or
distribute (or cause to distribute) to or for the benefit of Executive the
amount of any Gross-Up Payment provided under this Subsection 9(b)(ii); such
payment or distribution shall be made on the last business day of the seventh
month following the month in which occurs the Executive’s Separation from
Service (or, in case the Executive is deemed to have a Covered Termination
pursuant to Section 2(b), as soon as practicable but in no event more than two
and one-half (2 1/2 ) months following the scheduled payment date).
(C) In
the event that upon any audit by the Internal Revenue Service, or by a state or
local taxing authority, of the Total Payments or Gross-Up Payment, a change is
finally determined to be required in the amount of Excise Tax paid by Executive,
appropriate adjustments shall be made under this Agreement such that the net
amount which is payable to the Executive after taking into account the
provisions of Section 4999 of the Code shall reflect the intent of the parties
as expressed in this Subsection 9(b)(ii), in the manner determined by the
National Tax Counsel. If the Executive is determined to owe
additional Excise Tax, the Company shall reimburse the Executive for the
additional Excise Tax and any interest charges or penalties incurred by the
Executive in respect of
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the imposition of
such additional Excise Tax, and for any federal, state or local income tax or
employment tax or further Excise Tax incurred by Executive with respect to any
reimbursement under this provision. Such reimbursement shall be made
as soon as practicable after the date on which the Executive pays the tax and
provides notice to the Company of the
payment of tax, but no later than the end of the Executive’s taxable year
following the taxable year in which the taxes are remitted.
(D) If
legislation is enacted or if regulations or rulings are promulgated that would
require the Company’s shareholders to approve this Agreement, prior to a Change
in Control of the Company, due solely to the provision contained in this
Subsection 9(b)(ii), then
(1) from
and after such time as shareholder approval would be required, until shareholder
approval is obtained as required by such legislation, Subsection 9(b)(ii) shall
be of no force and effect;
(2) the
Company and the Executive shall use their best efforts to consider and agree in
writing upon an amendment to this Subsection 9(b)(ii) such that, as amended,
this Subsection 9(b)(ii) would provide the Executive with the benefits intended
to be afforded to the Executive by Subsection 9(b)(ii) without requiring
shareholder approval; and
(3) at
the reasonable request of the Executive, the Company shall seek shareholder
approval of this Agreement at the next annual meeting of shareholders of the
Company.
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10. Death. (a) Except
as provided in Section 10(b) hereof, in the event of a Covered Termination due
to the Executive’s death, the Executive’s estate, heirs and beneficiaries shall
receive all the Executive’s Accrued Benefits through the Termination
Date.
(b) In
the event the Executive dies after a Notice of Termination is given (i) by
the Company or (ii) by the Executive for Good Reason, the Executive’s estate,
heirs and beneficiaries shall be entitled to the benefits described in Section
10(a) hereof and, subject to the
provisions of this
Agreement, to such Termination Payment as the Executive would have been entitled
to had the Executive lived; provided that the distribution will be made as soon
as practicable (and within 90 days following) the Executive’s death and the
requirement that payment be deferred until the last business day of the seventh
month following the month in which occurs the Executive’s Separation from
Service will not apply. For purposes of this Subsection 10(b), the
Termination Date shall be the earlier of thirty days following the giving of the
Notice of Termination, subject to extension pursuant to Section 1(o) hereof, or
one day prior to the end of the Employment Period.
11. Retirement. If,
during the Employment Period, the Executive and the Company shall execute an
agreement providing for the early retirement of the Executive from the Company,
or the Executive shall otherwise give notice that he is voluntarily choosing to
retire early from the Company, the Executive shall receive Accrued Benefits
through the Termination Date; provided, that if the
Executive’s employment is terminated by the Executive for Good Reason or by the
Company other than by reason of death, disability or Cause and the Executive
also, in connection with such termination, elects voluntary early retirement,
the Executive shall also be entitled to receive a Termination Payment pursuant
to Section 8(a) hereof.
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12. Termination for
Disability. If,
during the Employment Period, as a result of the Executive’s disability due to
physical or mental illness or injury (regardless of whether such illness or
injury is job-related), the Executive shall have been absent from the
Executive’s duties hereunder on a full-time basis for a period of six
consecutive months and, within thirty days after the Company notifies the
Executive in writing that it intends to terminate the Executive’s employment
(which notice shall not constitute the Notice of Termination contemplated
below), the Executive shall not have returned to the performance of the
Executive’s duties hereunder on a full-time basis,
the Company may terminate the Executive’s employment for purposes of this
Agreement pursuant to a Notice of Termination given in accordance with Section
13 hereof. If the Executive’s employment is terminated on account of
the Executive’s disability in accordance with this Section, the Executive shall
receive Accrued Benefits in accordance with Section 9(a) hereof and shall remain
eligible for all benefits provided by any long term disability programs of the
Company in effect at the time of such termination.
13. Termination Notice and
Procedure. Any
Covered Termination by the Company or the Executive (other than a termination of
the Executive’s employment that is a Covered Termination by virtue of Section
2(b) hereof) shall be communicated by written Notice of Termination to the
Executive, if such Notice is given by the Company, and to the Company, if such
Notice is given by the Executive, all in accordance with the following
procedures and those set forth in Section 23 hereof:
(a) If
such termination is for disability, Cause or Good Reason, the Notice of
Termination shall indicate in reasonable detail the facts and circumstances
alleged to provide a basis for such termination.
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(b) Any
Notice of Termination by the Company shall have been approved, prior to the
giving thereof to the Executive, by a resolution duly adopted by a majority of
the directors of the Company (or any successor corporation) then in
office.
(c) If
the Notice is given by the Executive for Good Reason, the Executive may cease
performing his duties hereunder on or after the date fifteen days after the
delivery of Notice of Termination and shall in any event cease employment on the
Termination Date. If the Notice is given by the Company, then the
Executive may cease performing his duties hereunder on the date of receipt of
the Notice of Termination, subject to the Executive’s rights
hereunder.
(d) The
Executive shall have thirty days, or such longer period as the Company may
determine to be appropriate, to cure any conduct or act, if curable, alleged to
provide grounds for termination of the Executive’s employment for Cause under
this Agreement pursuant to Subsection 1(d) (iii) hereof.
(e) The
recipient of any Notice of Termination shall personally deliver or mail in
accordance with Section 23 hereof written notice of any dispute relating to such
Notice of Termination to the party giving such Notice within fifteen days after
receipt thereof; provided, however, that if the Executive’s conduct or act
alleged to provide grounds for termination by the Company for Cause is curable,
then such period shall be thirty days. After the expiration of such
period, the contents of the Notice of Termination shall become final and not
subject to dispute.
14. Further Obligations of the
Executive.
(a) Competition. The
Executive agrees that, in the event of any Covered Termination where the
Executive is entitled to Accrued Benefits and the Termination Payment, the
Executive shall not, for a period expiring one year after the Termination Date,
without the prior written approval of the Company’s Board of Directors,
participate in the management of,
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be employed by or
own any business enterprise at a location within the United States that engages
in substantial competition with the Company or its subsidiaries, where the
operating revenues of the Company from activities in competition with such
entity amount to 10% or more of the total operating net revenues of the Company
for its most recently completed fiscal year; provided, however, that nothing in
this Section 14(a) shall prohibit the Executive from owning stock or other
securities of a competitor amounting to less than five percent of the
outstanding capital stock of such competitor.
(b) Confidentiality. During
and following the Executive’s employment by the Company, the Executive shall
hold in confidence and not directly or indirectly disclose or use or copy or
make lists of any confidential information or proprietary data of the Company
(including that of the Employer), except to the extent authorized in writing by
the Board of Directors of the Company or required by any court or administrative
agency, other than to an employee of the Company or a person to whom disclosure
is reasonably necessary or appropriate in connection with the performance by the
Executive of duties as an executive of the Company. Confidential
information shall not include any information known generally to the public or
any information of a type not otherwise considered confidential by persons
engaged in the same business or a business similar to that of the
Company. All records, files, documents and materials, or copies
thereof, relating to the business of the Company which the Executive shall
prepare, or use, or come into contact with, shall be and remain the sole
property of the Company and shall be promptly returned to the Company upon
termination of employment with the Company.
15. Expenses and
Interest. If,
after a Change in Control of the Company, (i) a dispute arises with respect to
the enforcement of the Executive’s rights under this Agreement or (ii) any legal
or arbitration proceeding shall be brought to enforce or interpret any provision
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contained herein or
to recover damages for breach hereof, in either case so long as the Executive is
not acting in bad faith, the Executive shall recover from the Company any
reasonable attorneys’ fees and necessary costs and disbursements incurred as a
result of such dispute, legal or arbitration proceeding (“Expenses”), and
prejudgment interest on any money judgment or arbitration award obtained by the
Executive calculated at the rate of interest announced by US Bank Milwaukee,
National Association, Milwaukee, Wisconsin, from time to time as its prime or
base lending rate from the date that payments to him should have been made under
this Agreement. Within ten days after the
Executive’s written request therefore (but in no event later than the end of the
calendar year following the calendar year in which such Expense is incurred),
the Company shall reimburse the Executive, or such other person or entity as the
Executive may designate in writing to the Company, the Executive’s reasonable
Expenses.
16. Payment Obligations
Absolute. The
Company’s obligation during and after the Employment Period to pay the Executive
the amounts and to make the benefit and other arrangements provided herein shall
be absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any setoff, counterclaim, recoupment, defense or
other right which the Company may have against him or anyone
else. Except as provided in Section 15 of this Agreement, all amounts
payable by the Company hereunder shall be paid without notice or
demand. Each and every payment made hereunder by the Company shall be
final, and the Company will not seek to recover all or any part of such payment
from the Executive, or from whomsoever may be entitled thereto, for any reason
whatsoever.
17. Successors. (a) If
the Company sells, assigns or transfers all or substantially all of its business
and assets to any Person or if the Company merges into or consolidates or
otherwise combines (where the Company does not survive such combination)
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with any Person
(any such event, a “Sale of Business”), then the Company shall assign all of its
right, title and interest in this Agreement as of the date of such event to such
Person, and the Company shall cause such Person, by written agreement in form
and substance reasonably satisfactory to the Executive, to expressly assume and
agree to perform from and after the date of such assignment all of the terms,
conditions and provisions imposed by this Agreement upon the
Company. Failure of the Company to obtain such agreement prior to the
effective date of such Sale of Business shall be a breach of this Agreement
constituting “Good Reason” hereunder, except that for purposes of implementing the
foregoing the date upon which such Sale of Business becomes effective shall be
deemed the Termination Date. In case of such assignment by the
Company and of assumption and agreement by such Person, as used in this
Agreement, “Company” shall thereafter mean such Person which executes and
delivers the agreement provided for in this Section 17 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law, and this Agreement shall inure to the benefit of, and be enforceable by,
such Person. The Executive shall, in his discretion, be entitled to
proceed against any or all of such Persons, any Person which theretofore was
such a successor to the Company (as defined in the first paragraph of this
Agreement) and the Company (as so defined) in any action to enforce any rights
of the Executive hereunder. Except as provided in this Subsection,
this Agreement shall not be assignable by the Company. This Agreement
shall not be terminated by the voluntary or involuntary dissolution of the
Company.
(b) This
Agreement and all rights of the Executive shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, executors,
administrators, heirs and beneficiaries. All amounts payable to the
Executive under Sections 7, 8, 9, 10, 11, 12 and 15 hereof if the Executive had
lived shall be paid, in the event of the
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Executive’s death,
to the Executive’s estate, heirs and representatives; provided, however, that
the foregoing shall not be construed to modify any terms of any benefit plan of
the Company, as such terms are in effect on the date of the Change in Control of
the Company, that expressly govern benefits under such plan in the event of the
Executive’s death.
18. Severability. The
provisions of this Agreement shall be regarded as divisible, and if any of said
provisions or any part hereof are declared invalid or unenforceable by a court
of competent
jurisdiction, the validity and enforceability of the remainder of such
provisions or parts hereof and the applicability thereof shall not be affected
thereby.
19. Amendment. This
Agreement may not be amended or modified at any time except by written
instrument executed by the Company and the Executive.
20. Withholding. The
Company shall be entitled to withhold from amounts to be paid to the Executive
hereunder any federal, state or local withholding or other taxes or charges
which it is from time to time required to withhold; provided, that the amount so
withheld shall not exceed the minimum amount required to be withheld by
law. In addition, if prior to the date of payment of the Termination
Payment hereunder, the Federal Insurance Contributions Act (FICA) tax imposed
under Sections 3101, 3121(a) and 3121(v)(2), where applicable, becomes due, the
Company may provide for an immediate payment of the amount needed to pay the
Executive’s portion of such tax (plus an amount equal to the taxes that will be
due on such amount) and the Executive’s Termination Payment shall be reduced
accordingly. The Company shall be entitled to rely on an opinion of
nationally recognized tax counsel if any question as to the amount or
requirement of any such withholding shall arise.
21. Certain Rules of
Construction. No
party shall be considered as being responsible for the drafting of this
Agreement for the purpose of applying any rule construing
-33-
ambiguities against
the drafter or otherwise. No draft of this Agreement shall be taken
into account in construing this Agreement. Any provision of this
Agreement which requires an agreement in writing shall be deemed to require that
the writing in question be signed by the Executive and an authorized
representative of the Company.
22. Governing Law; Resolution of
Disputes. This
Agreement and the rights and obligations hereunder shall be governed by and
construed in accordance with the laws of the State of
Wisconsin. Any dispute arising out of this Agreement shall, at the
Executive’s election, be determined by arbitration under the rules of the
American Arbitration Association then in effect (in which case both parties
shall be bound by the arbitration award) or by litigation. Whether
the dispute is to be settled by arbitration or litigation, the venue for the
arbitration or litigation shall be Green Bay, Wisconsin or, at the Executive’s
election, if the Executive is not residing or working in the Green Bay,
Wisconsin metropolitan area, in the judicial district encompassing the city in
which the Executive resides; provided, that, if the
Executive is not then residing in the United States, the election of the
Executive with respect to such venue shall be either Green Bay, Wisconsin or in
the judicial district encompassing that city in the United States among the
thirty cities having the largest population (as determined by the most recent
United States Census data available at the Termination Date) which is closest to
the Executive’s residence. The parties consent to personal
jurisdiction in each trial court in the selected venue having subject matter
jurisdiction notwithstanding their residence or situs, and each party
irrevocably consents to service of process in the manner provided hereunder for
the giving of notices.
23. Notice. Notices
given pursuant to this Agreement shall be in writing and, except as otherwise
provided by Section 13(d) hereof, shall be deemed given when actually
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received by the
Executive or actually received by the Company’s Secretary or any officer of the
Company other than the Executive. If mailed, such notices shall be
mailed by United States registered or certified mail, return receipt requested,
addressee only, postage prepaid, if to the Company, to Integrys Energy Group,
Inc., Attention: Secretary (or President, if the Executive is the Secretary),
000 Xxxxx Xxxxx Xxxxxx, P.O. Box 19001, Xxxxx Xxx, Xxxxxxxxx 00000, or if to the
Executive, at the
address set forth below the Executive’s signature to this Agreement, or to such
other address as the party to be notified shall have theretofore given to the
other party in writing.
24. No Waiver. No
waiver by either party at any time of any breach by the other party of, or
compliance with, any condition or provision of this Agreement to be performed by
the other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same time or any prior or subsequent time.
25. Headings. The
headings herein contained are for reference only and shall not affect the
meaning or interpretation of any provision of this Agreement.
26. Code Section 409A
Compliance. The
Company and the Executive agree that to the extent Code Section 409A applies to
this Agreement, the Agreement shall be interpreted and administered in
accordance with the requirements of Code Section 409A so that there will not be
a plan failure under Code Section 409A(a)(1), and all amounts payable hereunder
shall be distributed only in compliance with the requirements of Code Section
409A, including by way of example and without limitation, Code Section
409A(2)(A)(i), which prohibits the distribution of certain compensation subject
to Code Section 409A to a “specified employee” of a publicly traded company, in
the case of a distribution that occurs by reason of the employee’s separation of
service other than death, from occurring any earlier than six months
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after the date of
such separation of service. The Executive acknowledges that to avoid
an additional tax on payments that may be payable or benefits that may be
provided under this Agreement and that constitute deferred compensation that is
not exempt from Section 409A of the Code, the Executive must make a reasonable,
good faith effort to collect any payment or benefit to which the Executive
believes the Executive is entitled hereunder no later than 90 days after the
latest date upon which the payment could have been made or benefit provided
under this Agreement, and if not paid or provided, must take further enforcement
measures within 180 days after such latest date.
IN WITNESS WHEREOF,
the parties have executed this Agreement as of the day and year first above
written.
By:
Title:
Attest:
Title:
EXECUTIVE:
By:
Title:
EXECUTIVE
ADDRESS:
________________________________________
________________________________________
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