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EXHIBIT 10.2
Form of Change in Control Agreement signed by the following officers of the
Company:
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Xxxxx X. XxXxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxx Xxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxx Xxxxxxx
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CHANGE IN CONTROL AGREEMENT
This CHANGE IN CONTROL AGREEMENT ("Agreement), effective as of October
19, 1995 (the "Effective Date"), by and between Landmark Graphics Corporation,
a Delaware Corporation (the "Company"), and [Name] (the "Executive");
WITNESSETH:
WHEREAS, the Executive is a senior executive of the Company and has
made and/or is expected to make or continue to make major contributions to the
profitability, growth and financial strength of the Company;
WHEREAS, the Company desires to assure itself of both present and
future continuity of management in the event of a Change in Control (as defined
hereafter) and desires to establish certain minimum compensation rights of its
key senior executives, including the Executive, applicable in the event of a
Change in Control;
WHEREAS, the Company wishes to ensure that its senior executives are
not practically disabled from discharging their duties upon a Change in
Control;
WHEREAS, this Agreement is not intended to alter materially the
compensation and benefits which the Executive could reasonably expect to
receive from the Company absent a Change in Control and, accordingly, although
effective and binding as of the date hereof, this Agreement shall become
operative only upon the occurrence of a Change of Control; and
WHEREAS, the Executive is willing to render services to the Company on
the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Operation of Agreement:
a) This Agreement shall be effective and binding as of the
Effective Date, but, anything in this Agreement to the
contrary notwithstanding, this Agreement shall not be
operative unless and until there shall have occurred a Change
in Control. For purposes of this Agreement, a "Change in
Control" shall have occurred if at any time during the Term
(as that term is hereafter defined) any of the following
events shall occur:
i) The Company is merged, consolidated or reorganized
into or with another corporation or other legal
person, and as a result of such merger, consolidation
or reorganization less than a majority of the
combined voting power of the then-outstanding
securities of such corporation or person immediately
after such transaction are held in the aggregate by
the holders of Voting Stock (as that term is
hereinafter defined) of the Company immediately prior
to such transaction;
ii) The Company sells all or substantially all of its
assets to any other corporation or other legal
person, less than a majority of the combined voting
power of the
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CHANGE IN CONTROL AGREEMENT Page 2
then-outstanding Voting Stock of which are held in the
aggregate by the holders of Voting Stock of the Company
immediately prior to such sale;
iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated
pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), disclosing that any person (as the term
"person" is used in Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule l3d-3 or any
successor rule or regulation promulgated under the Exchange
Act) of securities representing 20% or more of the combined
voting power of the then-outstanding securities entitled to
vote generally in the election of directors of the Company
("Voting Stock").
iv) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange
Act disclosing in response to Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) that a
change in control of the Company has or may have occurred or
will or may occur in the future pursuant to any then-existing
contract or transaction; or
v) If during any one (1) year period, individuals who at the
beginning of any such period constitute the Directors of the
Company cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election
by the Company's stockholders, of each Director of the Company
first elected during such period was approved by a vote of at
least two-thirds of the Directors of the Company then still in
office who were Directors of the Company at the beginning of
any such period.
Notwithstanding the foregoing provisions of Section 1(a)(iii) or
1(a)(iv) hereof, a "Change in Control: shall not be deemed to have
occurred for purposes of this Agreement solely because (i) the
Company, (ii) an entity in which the Company directly or indirectly
beneficially owns 50% or more of the voting securities of such entity,
or (iii) any Company-sponsored employee stock ownership plan or any
other employee benefit plan of the Company, either files or becomes
obligated to file a report or a proxy statement under or in response
to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) under the Exchange
Act, disclosing beneficial ownership by it of shares of Voting Stock,
whether in excess of 20% or otherwise, or because the Company reports
that a change in control of the Company has or may have occurred or
will or may occur in the future by reason of such beneficial ownership.
b) Upon occurrence of a Change in Control at any time during the Term,
this Agreement shall become immediately operative.
c) The period during which this Agreement shall be in effect (the "Term")
shall commence as of the date hereof and shall expire as of the later
of (i) the close of business on June 30, 2000 and (ii) the expiration
of the Period of Employment (as that term is hereinafter defined);
provided, however, that (A) commencing on June 30, 1996 and the last
day of each of the Company's Fiscal Years thereafter, the Term of
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CHANGE IN CONTROL AGREEMENT Page 3
this Agreement shall automatically be extended for an
additional year unless, not later than the last day of the
immediately preceding September, the Company or the Executive
shall have given notice that it or he, as the case may be,
does not wish to have the Term extended and (B) subject to
Section 9 hereof, if, prior to a Change in Control, the
Executive ceases for any reason to be an employee of the
Company, thereupon the Term shall be deemed to have expired
and this Agreement shall immediately terminate and be of no
further effect.
2. Employment: Period of Employment:
a) Subject to the terms and conditions of this Agreement, upon
the occurrence of a Change in Control, the Company shall
continue the Executive in its employ and the Executive shall
remain in the employ of the Company for the period set forth
in Section 2(b) hereof (the "Period of Employment"), in the
position and with substantially the same duties and
responsibilities that he had immediately prior to the Change
in Control, or to which the Company and the Executive may
hereafter mutually agree in writing. Throughout the Period of
Employment, the Executive shall devote substantially all of
his time during normal business hours (subject to vacations,
sick leave and other absences in accordance with the policies
of the Company as in effect for senior executives immediately
prior to the Change in Control) to the business and affairs of
the Company, but nothing in this Agreement shall preclude the
Executive from devoting reasonable periods of time during
normal business hours to (i) serving as a director, trustee or
member of or participant in any organization or business so
long as such activity would not constitute Competitive
Activity (as that term is hereafter defined) if conducted by
the Executive after the Executive's Termination Date (as that
term is hereafter defined), (ii) engaging in charitable and
community activities, or (iii) managing his personal
investments.
b) The Period of Employment shall commence on the date of an
occurrence of a Change in Control and, subject only to the
provisions of Section 4 hereof, shall continue until the
earlier of (i) the expiration of the second anniversary of the
occurrence of the Change in Control or (ii) the Executive's
death; provided, however, that commencing on each anniversary
of the Change of Control, the Period of Employment shall
automatically be extended for an additional year unless, not
later than 90 calendar days prior to such anniversary date,
the Company or the Executive shall have given notice that it
or he, as the case may be, does not wish to have the Term
extended.
3. Compensation During Period of Employment:
a) Upon the occurrence of a Change in Control, the Executive
shall receive during the Period of Employment (i) annual base
salary at a rate not less than the Executive's annual fixed or
base compensation payable monthly or otherwise as in effect
for senior executives of the Company immediately prior to the
occurrence of a Change in Control or such higher rate as may
be determined from time to time by the Board of Directors of
the Company (the "Board") or the Compensation Committee
thereof (the "Committee") (which base salary at such rate is
herein referred to as "Base Pay") and (ii) an annual amount
equal to not less than the highest aggregate annual bonus,
incentive or other payments of cash compensation in addition
to the amounts referred to in clause (i) above made or to be
made in or with respect to any calendar year
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CHANGE IN CONTROL AGREEMENT Page 4
during the three calendar years immediately preceding the year
in which the Change in Control occurred pursuant to any bonus,
incentive, profit-sharing, performance, discretionary pay or
similar policy, plan, program or arrangement of the Company or
any successor thereto providing benefits at least as great as
the benefits payable thereunder prior to a Change in Control
("Incentive Pay"); provided, however, that nothing herein
shall preclude a change in the mix between Base Pay and
Incentive Pay so long as the aggregate cash compensation
received by the Executive in any one calendar year is not
reduced in connection therewith or as a result thereof and,
provided further, however, that in no event shall any increase
in the Executive's aggregate cash compensation or any portion
thereof in any way diminish any other obligation of the
Company under this Agreement.
b) For his service pursuant to Section 2(a) hereof, during the
Period of Employment the Executive shall, if and on the same
basis as he participated therein immediately prior to the
Change in Control, be a full participant in, and shall be
entitled to the perquisites, benefits and service credit for
benefits as provided under any and all employee retirement
income and welfare benefit policies, plans, programs or
arrangements in which senior executives of the Company
participate, including without limitation any stock option,
stock purchase, stock appreciation, savings, pension,
supplemental executive retirement or other retirement income
or welfare benefit, deferred compensation, incentive
compensation, group and/or executive life, accident, health,
dental, medical/hospital or other insurance (whether funded by
actual insurance or self-insured by the Company), disability,
salary continuation, expense reimbursement and other employee
benefit policies, plans, programs or arrangements that may now
exist or any equivalent successor policies, plans, programs or
arrangements that may be adopted hereafter by the Company
providing perquisites, benefits and service credit for
benefits at least as great as are payable thereunder prior to
a Change in Control(collectively, "Employee Benefits");
provided, however, that the Executive's rights thereunder
shall be governed by the terms thereof and shall not be
enlarged hereunder or otherwise affected hereby. Subject to
the proviso in the immediately preceding sentence, if and to
the extent such perquisites, benefits or service credit for
benefits are not payable or provided under any such policy,
plan, program or arrangement as a result of the amendment or
termination thereof, then the Company shall itself pay or
provide therefore. Nothing in this Agreement shall preclude
improvement or enhancement of any such Employee Benefits,
provided that no such improvement shall in any way diminish
any other obligation of the Company under this Agreement.
c) The Company has determined that the amounts payable pursuant
to this Section 3 constitute reasonable compensation.
Accordingly, notwithstanding any other provision hereof,
unless such action would be expressly prohibited by applicable
law, if any amount paid or payable pursuant to this Section 3
is subject to the excise tax imposed by Section 4999 of the
lnternal Revenue Code of 1986, as amended (the "Code"), the
Company will pay to the Executive an additional amount in cash
equal to the amount necessary to cause the aggregate
remuneration received by the Executive under this Section 3,
including such additional cash payment (net of all federal,
state and local income taxes and all taxes payable as the
result of the application of Sections 280G and 4999 of the
Code) to be equal to the aggregate remuneration the Executive
would have received under this Section 3, excluding such
additional payment (net of all federal,
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CHANGE IN CONTROL AGREEMENT Page 5
state and local income taxes), as if Sections 280G and 4999 of
the Code (and any successor provisions thereto) had not been
enacted into law.
4. Termination Following a Change in Control:
a) In the event of the occurrence of a Change in Control, this
Agreement may be terminated by the Company during the Period
of Employment only upon the occurrence of one or more of the
following events:
i) If the Executive is unable to perform the essential
functions of his job (with or without reasonable
accommodation) because he has become permanently
disabled within the meaning of, and actually begins
to receive disability benefits pursuant to, the
long-term disability plan in effect for senior
executives or, if applicable, employees of the
Company immediately prior to the Change in Control;
or
ii) For "Cause", which for purposes of this Agreement
shall mean that, prior to any termination pursuant to
Section 4(b) hereof, the Executive shall have
committed:
A) An intentional act of fraud, embezzlement or
theft in connection with his duties or in the
course of his employment with the Company;
B) intentional wrongful damage to property of
the Company;
C) intentional wrongful disclosure of secret
processes or confidential information of the
Company; or
D) intentional wrongful engagement in any
Competitive Activity;
and any such act shall have been materially harmful to the Company.
For purposes of this Agreement, no act, or failure to act, on the
part of the Executive shall be deemed "intentional" if it was due
primarily to an error in judgment or negligence, but shall be deemed
"intentional" only if done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated
for "Cause" hereunder unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the Board then in
office at a meeting of the Board called and held for such purpose
(after reasonable notice to the Executive and an opportunity for the
Executive, together with his counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, the Executive
had committed an act set forth above in this Section 4(a)(ii) and
specifying the particulars thereof in detail. Nothing herein shall
limit the right of the Executive or his beneficiaries to contest the
validity or propriety of any such determination.
b) in the event of the occurrence of a Change in Control, this
Agreement may be terminated by the Executive during the Period
of Employment with the right to benefits as provided in
Section 5 hereof upon the occurrence of one or more of the
following events:
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CHANGE IN CONTROL AGREEMENT Page 6
i) Any termination by the Company of the employment of
the Executive for any reason other than for Cause or
as a result of the death of the Executive or by
reason of the Executive's disability and the actual
receipt of disability benefits in accordance with
Section 4(a)(i) hereof; or
ii) Termination by the Executive of his employment with
the Company within three years after the Change in
Control upon the occurrence of any of the following
events:
A) Failure to elect or reelect the Executive to
the office of the Company which the Executive
held immediately prior to a Change in
Control, or the removal of the Executive as a
Director of the Company (or any successor
thereto), if the Executive shall have been a
Director of the Company immediately prior to
the Change in Control;
B) A significant adverse change in the nature or
scope of the authorities, powers, functions,
responsibilities or duties attached to the
position with the Company which the Executive
held immediately prior to the Change in
Control, a reduction in the aggregate of the
Executive's Base Pay and Incentive Pay
received from the Company, or the termination
of the Executive's rights to any Employee
Benefits to which he was entitled immediately
prior to the Change in Control or a reduction
in scope or value thereof without the prior
written consent of the Executive, any of
which is not remedied within 10 calendar days
after receipt by the Company of written
notice from the Executive of such change,
reduction or termination, as the case may be;
C) A determination by the Executive made in good
faith that, following a Change in Control, as
a result of a change in circumstances
significantly affecting his position,
including without limitation, a change in the
scope of the business or other activities for
which he was responsible immediately prior to
a Change in Control, that he has been
rendered substantially unable to carry out,
has been substantially hindered in the
performance of, or has suffered a substantial
reduction in any of the authorities, powers,
functions, responsibilities or duties
attached to the position held by the
Executive immediately prior to the Change in
Control, which situation is not remedied
within 10 calendar days after written notice
to the Company form the Executive of such
determination;
D) The liquidation, dissolution, merger,
consolidation or reorganization of the
Company or transfer of all or a significant
portion of its business and/or assets, unless
the successor or successors (by liquidation,
merger, consolidation, reorganization or
otherwise) to which all or a significant
portion of its business and/or assets have
been transferred (directly or by operation of
law) shall have assumed all duties and
obligations of the Company under this
Agreement pursuant to Section 11 hereof;
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CHANGE IN CONTROL AGREEMENT Page 7
E) The Company shall relocate its principal
executive offices, or require the Executive
to have his principal location of work
changed to any location which is in excess of
10 miles from the location thereof
immediately prior to the Change of Control or
to travel away from his office in the course
of discharging his responsibilities or duties
hereunder significantly more (in terms of
either consecutive days or aggregate days in
any calendar year) than was required of him
prior to the Change of Control without, in
either case, his prior consent; or
F) Any material breach of this Agreement by the
Company or any successor thereto.
c) A termination by the Company pursuant to Section 4(a) hereof
or by the Executive pursuant to Section 4(b) hereof shall not
affect any rights which the Executive may have pursuant to any
agreement, policy, plan, program or arrangement of the Company
providing Employee Benefits, which rights shall be governed by
the terms thereof. If this Agreement or the employment of the
Executive is terminated under circumstances in which the
Executive is not entitled to any payments under Sections 3 or
5 hereof, the Executive shall have no further obligation or
liability to the Company hereunder with respect to his prior
or any future employment by the Company.
5. Severance Compensation:
a) If, following the occurrence of a Change in Control, the
Company shall terminate the Executive's employment during the
Period of Employment other than pursuant to Section 4(a)
hereof, or if the Executive shall terminate his employment
pursuant to Section 4(b) hereof, the Company shall pay to the
Executive the amount specified in Section 5(a)(i) hereof
within five business days after the date (the "Termination
Date") that the Executive's employment is terminated (the
effective date of which shall be the date of termination, or
such other date that may be specified by the Executive if the
termination is pursuant to Section 4(b) hereof):
i) In lieu of any further payments to the Executive for
periods subsequent to the Termination Date, but
without affecting the rights of the Executive
referred to in Section 5(b) hereof, a lump sum
payment (the "Severance Payment") in an amount equal
to the present value (using a discount rate required
to be utilized for purposes of computations under
Section 280G of the Code or any successor provision
thereto, or if no such rate is so required to be
used, a rate equal to the then-applicable interest
rate prescribed by the Pension Benefit Guarantee
Corporation for benefit valuations in connection with
non-multiemployer pension plan terminations assuming
the immediate commencement of benefit payments (the
"Discount Rate")) of the sum of (A) the aggregate
Base Pay (at the highest rate in effect during the
Term prior to the Termination Date) for each
remaining year or fraction of the Period of
Employment which the Executive would have received
had such termination or breach not occurred, plus (B)
the aggregate Incentive Pay (based upon the greatest
amount of Incentive Pay paid or payable to the
Executive for any year during the Term but prior to
the year in which the Termination Date occurs), which
the Executive would have received pursuant to this
Agreement during the
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CHANGE IN CONTROL AGREEMENT Page 8
remainder of the Period of Employment had his
employment continued for the remainder of the Period
of Employment; provided, however, that in no event
will the "present value" (as determined under Section
280G of the Code or any successor provision thereto)
of the amount otherwise payable hereunder, when added
to the "present value" (as determined under Section
280G of the Code or any successor provision thereto)
of any other "parachute payments" (as that term is
defined in Section 280G of the Code or any successor
provision thereto) from the Company, exceed an amount
(the "299% Amount") equal to 299% of the Executive's
"base amount" (as that term is defined in Section
280G of the Code (without regard to Section
280G(b)(2)(A)(ii) thereof) or any successor provision
thereto) and if the amount otherwise payable
hereunder would exceed the 299% Amount, the Severance
Payment shall be reduced to the extent necessary so
that the aggregate present value determined in the
previous clause does not exceed the 299% Amount.
ii) The determination of whether any amount otherwise
payable under Section 5(a)(i) causes the 299% Amount
to be exceeded shall be made, if requested by the
Executive or the Company, by tax counsel selected by
the Company and acceptable to the Executive. The
costs of obtaining such determination shall be borne
by the Company. The fact that the Executive shall
have his right to the Severance Payment reduced as a
result of the existence of the limitations contained
in this Section 5(a) shall not limit or otherwise
affect any rights of the Executive to any Employee
Benefit, or other right arising other than pursuant
to this Agreement. Without limiting the generality of
the foregoing, upon the Executive's termination of
employment as provided in this Section 5, the Company
shall pay over to him all vested benefits to which he
is entitled under and in accordance with the terms of
the Company's employee savings, stock ownership,
supplemental executive retirement and similar Plans
in the event such payments are not otherwise made in
accordance with the terms of such plans.
iii) Except to the extent that the payments or benefits
pursuant to this Section 5(a)(iii) would result in a
reduction of the amount of the Severance Payment
because they would exceed the 299% Amount, (A) for
the remainder of the Period of Employment the Company
shall arrange to provide the Executive with Employee
Benefits substantially similar to those which the
Executive was receiving or entitled to receive
immediately prior to the Termination Date (and if and
to the extent that such benefits shall not or cannot
be paid or provided under any policy, plan, program
or arrangement of the Company solely due to the fact
that the Executive is no longer an officer or
employee of the Company, then the Company shall
itself pay or provide for the payment to the
Executive, his dependents and beneficiaries, such
Employee Benefits) and (B) without limiting the
generality of the foregoing, the remainder of the
Period of Employment shall be considered service with
the Company for the purpose of service credits under
the Company's retirement income, supplemental
executive retirement and other benefit plans of the
Company applicable to the Executive or his
beneficiaries immediately prior to the Termination
Date. Without otherwise limiting the purposes or
effect of Section 6 hereof, Employee Benefits payable
to the Executive pursuant to this Section 5(a)(iii)
by reason of
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CHANGE IN CONTROL AGREEMENT Page 9
any "welfare benefit plan" of the Company (as the
term "welfare benefit plan" is defined in Section
3(1) of the Employee Retirement Income Security Act
of 1974, as amended) shall be reduced to the extent
comparable welfare benefits are actually received by
the Executive from another employer during such
period following the Executive's Termination Date
until the expiration of the Period of Employment.
iv) Notwithstanding any provision of the Section 5(a) to
the contrary, in the event the benefits intended to
be provided to the Executive pursuant to Section
5(a)(iii) hereof are required to be reduced in whole
or in part because the value of such Employee
Benefits, when added to the amount of the Severance
Payment under Section 5(a)(i), would exceed 299%
Amount, the Executive shall have the option to elect
to receive, in lieu of all or a portion of the
Severance Payment provided in Section 5(a)(i) hereof,
one or more Employee Benefits, provided that (A)
prior to the receipt of any payment under Section
5(a)(i) hereof, the Executive Benefit or Employee
Benefits so elected to be received, and (B) in no
event shall the "aggregate present value of the
payments in the nature of compensation" (as that
phrase is used in Section 280G of the Code) received
by the Executive as a result of the receipt of such
Employee Benefits, when added to the remaining
portion of the Severance Payment, if any, to be
received by the Executive, exceed the 299% Amount.
v) In addition to all other compensation due to the
Executive, the following shall occur immediately
following the occurrence of a Change in Control:
A) all Company stock options held by the
Executive prior to a Change in Control shall
be exercisable, regardless of whether or not
the vesting conditions set forth in the
relevant stock option agreements have been
satisfied in full;
B) all restrictions on any restricted Company
stock granted to the Executive prior to a
Change in Control shall be removed and the
stock shall be freely transferable,
regardless of whether the conditions set
forth in the relevant restricted stock
agreements have been satisfied in full.
C) the Executive shall have an immediate right
to receive all performance shares granted
prior to a Change in Control, and such
performance shares shall be freely
transferable without restrictions, regardless
of whether or not specific performance goals
set forth in the relevant performance share
agreements shall have been attained.
D) all performance units granted to the
Executive prior to a Change in Control shall
be immediately payable in cash or Common
Stock, at the Executive's sole option,
regardless of whether or not the relevant
performance cycle has been completed, and
regardless of whether any other terms and
conditions of the performance unit agreement
shall have been satisfied in full.
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CHANGE IN CONTROL AGREEMENT Page 10
b) Upon written notice given by the Executive to the Company
prior to the receipt of any payment pursuant to Section 5(a)
hereof, the Executive, at his sole option, without reduction
to reflect the present value of such amounts as aforesaid, may
elect to have all or any of the Severance Payment payable
pursuant to Section 5(a)(i) hereof paid to him on a quarterly
or monthly basis during the remainder of the Period of
Employment.
c) There shall be no right of set-off or counterclaim in respect
of any claim, debt or obligation against any payment to or
benefit for the Executive provided for in this Agreement.
d) Without limiting the rights of the Executive at law or in
equity, if the Company fails to make any payment required to
be made hereunder on a timely basis, the Company shall pay
interest on the amount thereof at an annualized rate of
interest equal to the then-applicable Discount Rate or, if
lesser, the highest rate allowed by applicable usury laws.
6. No Mitigation Obligation: The Company hereby acknowledges that it will
be difficult, and may be impossible, for the Executive to find
reasonably comparable employment following the Termination Date and
that the noncompetition covenant contained in Section 7 hereof will
further limit the employment opportunities for the Executive. In
addition, the Company acknowledges that its severance pay plans
applicable in general to its salaried employees do not provide for
mitigation, offset or reduction of any severance payment received
thereunder. Accordingly, the parties hereto expressly agree that the
payment of the severance compensationby the Company to the Executive
in accordance with the terms of this Agreement will be liquidated
damages, and that the Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other
employment or otherwise, nor shall any profits, income, earnings or
other benefits from any source whatsoever create any mitigation,
offset, reduction or any other obligation on the part of the Executive
hereunder or otherwise, except as expressly provided in Section
5(a)(iii) hereof.
7. Competitive Activity: During a period ending one year following the
Termination Date, if the Executive shall have received or shall be
receiving benefits under Section 5(a) hereof, the Executive shall not,
without the prior written consent by the Company, directly or
indirectly engage in the business of developing products competitive
with the proprietary business of the Company within the United States
of America and any other geographical area served by the Company
during the twelve (12) month period immediately preceding termination
of employment nor will the Executive engage, within this geographical
area, in the design, development, distribution, manufacture, assembly
or sale of a product or service in competition with any product or
service currently marketed or planned by the Company, the plans,
designs or specifications of which have been revealed to the
Executive. The Executive acknowledges that these limited prohibitions
are reasonable as to time, geographical area and scope of activities
to be restrained and that the limited prohibitions do not impose a
greater restraint than is necessary to protect the Company's goodwill,
proprietary information and other business interests. "Competitive
Activity" shall not include (i) the mere ownership of securities in
any such enterprise and exercise of rights appurtenant thereto or (ii)
participation in management of any such enterprise or business
operation thereof other than in connection with the competitive
operation of such enterprise.
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8. Legal Fees and Expenses:
a) It is the intent of the Company that the Executive not be
required to incur the expenses associated with the enforcement
of his rights under this Agreement by litigation or other
legal action because the cost and expense thereof would
substantially detract from the benefits intended to be
extended to the Executive hereunder. Accordingly, if it should
appear to the Executive that the Company has failed to comply
with any of its obligations under this Agreement or in the
event that the Company or any other person takes any action to
declare this Agreement void or unenforceable, or institutes
any litigation designed to deny, or to recover from, the
Executive the benefits intended to be provided to the
Executive hereunder, the Company irrevocably authorizes the
Executive from time to time to retain counsel of his choice,
at the expense of the Company as hereafter provided, to
represent the Executive in connection with the initiation or
defense of any litigation or other legal action, whether by or
against the Company or any Director, officer, stockholder or
other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company
irrevocably consents to the Executive's entering into an
attorney-client relationship with such counsel (other than
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.), and in that connection the
Company and the Executive agree that a confidential
relationship shall exist between the Executive and such
counsel. The Company shall pay or cause to be paid and shall
be solely responsible for any and all attorneys' and related
fees and expenses incurred by the Executive as a result of the
Company's failure to perform this Agreement or any provision
thereof or as a result of the Company or any person contesting
the validity or enforceability of this Agreement or any
provision thereof as aforesaid.
b) In order to ensure the benefits intended to be provided to the
Executive under Section 8(a) hereof, the Company has
established an irrevocable standby Letter of Credit in favor
of the Executive and each other person who is named an
Executive under similar agreements, drawn on a bank selected
by the Company (the "Letter of Credit") which provides for a
credit amount of $250,000 being made available to the
Executive against presentation at any time and from time to
time of his clean sight drafts, accompanied by statements of
his counsel for fees and expenses, in an aggregate amount not
to exceed $250,000, unless a larger amount is previously
authorized by two of the Chairman, President, Chief Executive
Officer, General Counsel, Chief Financial Officer and Vice
Presidents of the Company, provided that no such person may
act in two separate capacities or authorize a larger amount
for himself.
9. Employment Rights: Nothing expressed or implied in this Agreement
shall create any right or duty on the part of the Company or the
Executive to have the Executive remain in the employment of the
Company prior to any Change in Control; provided, however, that any
termination of employment of the Executive or removal of the Executive
as an Officer of the Company following the commencement of any
discussion with a third person that ultimately results in a Change in
Control shall be deemed to be a termination or removal of the
Executive after a Change in Control for purposes of this Agreement.
10. Withholding of Taxes: The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes
as shall be required pursuant to any law or government regulation or
ruling.
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CHANGE IN CONTROL AGREEMENT Page 12
11. Successors and Binding Agreement:
a) The Company shall require any 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, by agreement in form and
substance satisfactory to the Executive, expressly to assume
and agree to perform this Agreement in the same manner and to
the same extent the Company would be required to perform if no
such succession had taken place. This Agreement shall be
binding upon and inure to the benefit of the Company and any
successor to the Company, including without limitation any
persons acquiring directly or indirectly all or substantially
all of the business and/or assets of the Company whether by
purchase, merger, consolidation, reorganization or otherwise
(and such successor shall thereafter be deemed the "Company"
for the purposes of this Agreement), but shall not otherwise
be assignable, transferable or delegable by the Company.
b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees and/or legatees.
c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other,
assign, transfer or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in Section
11(a) hereof Without limiting the generality of the foregoing,
the Executive's right to receive payments hereunder shall not
be assignable, transferable or delegable, whether by pledge,
creation of a security interest or otherwise, other than by a
transfer by his will or by the laws of descent and
distribution and, in the event of any attempted assignment or
transfer contrary to this Section 11(c), the Company shall
have no liability to pay any amount so attempted to be
assigned, transferred or delegated.
d) The Company and the Executive recognize that each Party will
have no adequate remedy at law for breach by the other of any
of the agreements contained herein and, in the event of any
such breach, the Company and the Executive hereby agree and
consent that the other shall be entitled to a decree of
specific performance, mandamus or other appropriate remedy to
enforce performance of this Agreement.
12. Notice: For all purposes of this Agreement, all communications
provided for herein shall be in writing and shall be deemed to have
been duly given when delivered or five business days after having been
mailed by United States registered or certified mail, return receipt
requested, postage prepaid, addressed to the Company (to the attention
of the Secretary of the Company) at its principal executive office and
to the Executive at his principal residence, or to such other address
as any party may have furnished to the other in writing and in
accordance herewith, except that notices of change of address shall be
effective only upon receipt
13. Governing Law: The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the
State of Delaware, without giving effect to the principles of conflict
of laws of such State.
14. Validity: If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of
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CHANGE IN CONTROL AGREEMENT Page 13
this Agreement and the application of such provision to any other
person or circumstances shall not be affected, and the provision so
held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid and legal.
15. Miscellaneous: No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed
to in writing signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party
hereto or compliance with any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or
otherwise, expressed or implied with respect to the subject matter
hereof have been made by either party which are not set forth
expressly in this Agreement.
16. Prior Agreements: This Agreement is voluntarily entered into and
supersedes and takes the place of any prior change in control,
severance or employment agreements between the parties hereto. The
parties hereto expressly agree and hereby declare that any and all
prior change in control, severance or employment agreements between
the parties are terminated and of no force or effect.
17. Counterparts: This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
LANDMARK GRAPHICS CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxx
General Counsel and Corporate Secretary
EXECUTIVE:
--------------------------------------------
[Name]
