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EXHIBIT 10.32
AMENDED AND RESTATED
TERMINATION AND CHANGE OF CONTROL AGREEMENT
This Amended and Restated Termination and Change of Control Agreement
("Agreement") is entered into as of September 15, 2000 between Xxxxxx X. Xxxxxx
("the Executive") and GC Companies, Inc. ("GCC"), and amends and replaces in its
entirety the Termination and Change of Control Agreement dated as of September
1, 1999 between the Executive and GCC.
1. The Executive is employed "at-will" as GCC's Vice President and General
Counsel, and the Executive or GCC may terminate the Executive's employment at
any time, with or without notice, for any reason. Notwithstanding this at-will
employment, GCC wishes to provide some protection to the Executive if the
Executive's employment is terminated or if the Executive resigns under certain
circumstances.
2. a. While the Executive is employed at-will, if GCC terminates the
Executive's employment other than for cause or other than due to total
disability or death, GCC agrees to provide the Executive with a termination
package consisting of (i) an amount equivalent to one and one-half times the
Executive's then-current, annual base salary, less required withholding, which
amount would be paid in an 18 month period in regular, monthly installments
following such termination; (ii) continuation of the medical and dental
insurance coverage in which the Executive participates at the time of such
termination (or as such coverage may be changed from time-to-time for employees
generally) for 18 months or until the Executive starts full-time employment,
whichever is sooner; (iii) professional out placement services for up to 18
months following such termination; and (iv) all of the Executive's GCC stock
options shall be fully vested upon such termination or resignation and shall
remain exercisable in accordance with their original terms as if such
termination or resignation had not occurred. The Executive will be responsible
for paying the portion of monthly premiums for the medical and dental insurance
coverage at the same rate paid by active employees, and the Executive authorizes
GCC to deduct such amounts from the payments it makes to the Executive.
b. The Executive shall receive the termination package set forth in
paragraph 2.a. if the Executive's services are terminated by a successor to GCC
other than for cause or other than due to total disability or death within 18
months of a change of control of GCC, or if the Executive resigns within 18
months of a change of control because the Executive reasonably determines in
good faith that the Executive is not permitted to continue in a position
comparable in duties and responsibilities to that which the Executive held
before a change of control, or if the Executive is required to relocate outside
of the Boston, Massachusetts area.
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c. A termination or resignation under either of paragraphs 2a. or 2b.
will be a "Termination Event".
d. Notwithstanding the payment obligations set forth in paragraphs 2.a.
and 2.b., if the Executive is engaged in employment (including contract
employment or self-employment) of any kind or if the Executive receives
severance pay from a third party during the period beginning six months after a
Termination Event, GCC's payments to the Executive will be reduced dollar-for-
dollar by the amount the Executive earns through such employment or receives as
such severance pay.
3. In addition to the forgoing:
a. The Executive shall be paid as additional compensation a retention
payment equal to one times the Executive's then applicable annual base salary on
each of October 31, 2000 and October 31, 2001. Ten twelfths ( 10/12) of the
retention payment due October 31, 2000 is deemed earned as of August 31, 2000,
and one twelfth (1/12) of such retention payment is deemed earned on each of
September 30, 2000 and October 31, 2000. One twelfth (1/12) of the retention
payment due October 31, 2001 is deemed earned on last day of each month
commencing November 30, 2000 through October 31, 2001, and will be payable to
the extent then earned and unpaid in the event of a Termination Event.
b. When the Company accepts commitments to amend or restructure its
domestic financing arrangements or otherwise restructures its domestic financing
arrangements at any time prior to a Termination Event or within three months
after a Termination Event, the Executive shall receive an incentive payment
equal to one times the Executive's then applicable annual base salary. Such
incentive payment shall be paid in two installments as follows: two thirds on
the Company's acceptance of such commitments or restructuring, and one third six
months thereafter. Such incentive payments are deemed earned following the
acceptance of such commitments or restructuring. Restructuring includes, without
limitation the confirmation of a plan of reorganization.
c. In addition to the retention payments described in subparagraph (a)
and the payments described in subparagraph b, the Executive shall be paid as
additional compensation an incentive payment of one times the Executive's then
applicable annual base salary if the Company consummates a Major Transaction.
Such incentive payment shall be paid in two installments as follows: two thirds
on consummation of a Major Transaction and one third six months thereafter. A
restructuring may include a Major Transaction, in which case the payments under
both paragraphs b and c will be earned.
d. The Executive shall be paid as additional compensation a bonus
payment equal to 40% of the Executive's then applicable annual base salary on
each of October 31, 2000 and October 31, 2001. Ten twelfths ( 10/12) of the
bonus payment due October 31, 2000 is deemed earned as of August 31, 2000, and
one twelfth (1/12) of such bonus payment is deemed earned on each of September
30, 2000 and October 31, 2000. One twelfth (1/12) of the bonus payment due
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October 31, 2001 is deemed earned on last day of each month commencing November
30, 2000 through October 31, 2001.
e. The payments provided for in subparagraphs a, b, c, and d above,
shall be made, provided that the Executive does not voluntarily terminate
employment with the Company prior to the required payment dates set forth
therein. However, notwithstanding the previous sentence, the dates for payment
set forth in subparagraphs a, b, c and d shall accelerate and the payments shall
become fully due and payable upon:
i. termination of the Executive's employment other than for
cause; or
ii. resignation by the Executive if the Executive reasonably
determines in good faith that the Executive is not permitted to continue in a
position comparable in duties and responsibilities to that which the Executive
held before a Major Transaction, or if the Executive is required to relocate
outside of the Boston, Massachusetts area.
In addition, the dates for payment set forth in subparagraphs
b and c shall accelerate and the payments shall become fully due and payable
upon the death or total disability of the Executive. The dates for payments
under subparagraph b shall accelerate and shall be made six months following a
change of control if neither of the present Chairman or President of the Company
remain as a senior officer of the Company after such change of control.
4. a. The Executive shall be credited with 2 years of service credit under GCC's
Supplemental Executive Retirement Plan for each year of benefit service credited
under the GCC Retirement Plan commencing with 1999 through fiscal year 2003 that
the Executive remains employed by the Company.
b. In lieu of the Executive's payments under the GCC Supplemental Executive
Retirement Plan ( the " SERP") GCC shall pay to the Executive on or before
September 15 of each fiscal year commencing with the 2000 fiscal year an amount
equivalent to the present value of the benefits payable thereunder upon the
Executive's retirement from GCC on or after age 62.
5. For purposes hereof:
"Change of control" means:
(i) the sale of all or substantially all of the stock or assets of
General Cinema Theatres, Inc. or any entity that owns or controls GCC's domestic
theater exhibition business to an entity other than GCC or an entity wholly
owned or controlled by GCC;
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(ii) the sale of all or substantially all of the stock or assets of
General Cinema International, Inc. or any entity that owns or controls GCC's
international theater exhibition business to an entity other than GCC or an
entity wholly owned or controlled by GCC;
(iii) the sale of all or substantially all of the stock or assets of
GCC Investments, Inc. or any entity that owns or controls GCC's investment
business to an entity other than GCC or an entity wholly owned or controlled by
GCC, or any restructuring of GCC's investment business resulting in a change in
responsibilities or duties required to be provided by the Executive with respect
to such business substantially less than those responsibilities and duties
provided prior to such restructuring, as reasonably determined by the Executive
in good faith; or
(iv) any person, entity or group having greater voting power in the
election of GCC's directors than the Xxxxx Family Group (as defined in GCC's
proxy statement from time to time) or an entity wholly owned or controlled by
the Xxxxx Family Group.
"For cause" means: in GCC's reasonable judgment, a material breach of duty by
the Executive in the course of employment involving fraud, acts of dishonesty,
or moral turpitude, repeated insubordination, failure to devote full working
time and best efforts to the performance of duties, or conviction of a felony or
other criminal offense.
"Major Transaction" means:
(i) the sale of all or substantially all of the stock or
assets of General Cinema Theatres, Inc. ("GCT") or any entity that owns or
controls GCC's domestic theater exhibition business to an entity other than GCC
or an entity wholly owned or controlled by GCC;
(ii) the sale of all or substantially all of the stock or
assets of General Cinema International, Inc. ("GCI") or any entity that owns or
controls GCC's international theater exhibition business to an entity other than
GCC or an entity wholly owned or controlled by GCC;
(iii) the sale of all or substantially all of the stock or
assets of GCC Investments, Inc. ("GCCI") or any entity that owns or controls
GCC's investment business to an entity other than GCC or an entity wholly owned
or controlled by GCC;
(iv) a reorganization, spin off, split up, merger,
consolidation or joint venture involving GCC, GCT, GCI or GCCI or any
substantial portion of any of their assets or subsidiaries or an acquisition of
any substantial assets or controlling interest in an entity or entities from a
third party;
(v) a placement of equity securities for GCC, GCT, GCI or
GCCI; or
(vi) any other transaction determined by the GCC's President
to be of significant importance to the overall business of GCC or any of its
subsidiaries.
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"Total disability" means: in GCC's reasonable judgment, the Executive is unable
to perform duties for (i) 45 consecutive business days or (ii) a total of 90
business days during any nine month period.
6. The unenforceability of any provision of this Agreement shall not affect the
enforceability of any other provision of this Agreement. This Agreement contains
the entire agreement between the parties and supersedes all prior agreements and
understandings, oral or written, with respect to the termination of the
Executive's at-will employment and the subject matter of the Agreement. This
Agreement may not be changed orally. It may be changed only by written agreement
signed by the party against whom any waiver, change amendment, modification or
discharge is sought.
7. Payment by GCC of the payments set forth herein shall constitute full
satisfaction of GCC's obligations to the Executive, if any, (including the right
to any severance payments) which arise from or relate in any way to the
termination of the Executive's employment. However, nothing in this Agreement is
intended to limit any earned, vested benefits (other than any entitlement to
severance pay) that the Executive may have under the applicable provisions of
any benefit plan in which the Executive is participating at the time of the
Executive's termination of employment or resignation, or any earned but unpaid
salary or bonus.
8. The validity, performance and enforceability of this Agreement will be
determined and governed by the laws of the Commonwealth of Massachusetts without
regard to its conflict of laws principles.
GC Companies, Inc. The Executive
By:___________________ _____________________
Xxxxxx X. Xxxxx Xxxxxx X. Xxxxxx
President and Chief Operating Officer
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DRAFT
MODIFICATION TO
AMENDED AND RESTATED
TERMINATION AND CHANGE OF CONTROL AGREEMENT
This is a Modification to the Amended and Restated Termination and Change of
Control Agreement ("Agreement") entered into as of September 15, 2000 between
Xxxxxx X. Xxxxxx ("the Executive") and GC Companies, Inc. ("GCC").
On October 11, 2000, GCC and a number of its domestic subsidiaries filed
petitions for relief under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court in Delaware (the "Court"). A Motion
requesting that the Agreement be assumed was submitted by GCC to the Court for
approval. Based upon discussions with the Official Committee of Unsecured
Creditors ( the "Committee"), GCC and the Executive now desire to modify the
Agreement in certain respects so that the Agreement, as modified herein shall be
submitted to the Court for approval and assumed by GCC.
Now therefore, the parties agree:
1. Sections 3a and 3b of the Agreement are hereby deleted and replaced with the
following:
"a. The Executive shall earn a retention payment equal to one times the
Executive's then applicable annual base salary (the "Base Salary") on
the Confirmation Date of a Plan. The retention payment shall be paid to
the Executive in an amount equal 2/3 of the Base Salary on the
Confirmation Date of a Plan, and an amount equal to 1/3 of the Base
Salary on October 31, 2001, unless the Confirmation Date occurs after
October 31, 2001, in which case the retention payment equal to one
times the Base Salary shall be payable in full to the Executive on the
Confirmation Date of a Plan.
b. The Executive shall be eligible to earn an incentive payment of up
to one times the Base Salary as follows: If the Effective Date of a
Plan occurs on or before November 15, 2001, the Executive shall earn an
incentive payment equal to one time the Base Salary. If the Effective
Date of a Plan occurs after November 15, 2001, the Executive shall earn
an incentive payment equal to 50% of the Base Salary. The incentive
payment shall be paid in an amount equal to 1/3 of the Executive's Base
Salary on the date of filing of a Plan with the Court, and the
remaining amount of the incentive payment shall be paid on the
Effective Date of a Plan. If the Effective Date occurs before November
15, 2001, the remaining amount shall be 2/3 of the Base Salary such
that the total incentive payment shall equal 100% of the Base Salary.
If the Effective Date occurs after November 15,
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2001, the remaining amount shall be 1/6 of the Base Salary, such that
the total incentive payment shall equal 50% of the Base Salary."
2. For purposes hereof:
"Confirmation Date" means the date that the Court enters an order confirming the
Plan.
"Debtor" means GCC and its subsidiaries who are parties to proceedings pending
in the United States Bankruptcy Court for the District of Delaware under Index
Numbers 00-3897 through 00-3927.
"Effective Date" means the date that the Plan is effective following the
Confirmation Date.
"Plan" means a plan of reorganization for the Debtor the confirmation of which
does not invoke section 1129(b)(2)(B) of the Bankruptcy Code.
3. GCC shall provide the Executive with an irrevocable letter of credit in the
amount of 50% of the Executive's base salary, which letter of credit shall be
drawable by the Executive upon any failure of GCC to pay any portion of the
severance payments due to the Executive following termination of the Executive's
employment with GCC.
4. Except as modified hereby, the Agreement shall remain in full force and
effect and unmodified, and upon approval by the Court this modification shall be
effective, and the Agreement, as modified, assumed by the Debtor.
IN WITNESS WHEREOF, the parties have executed this modification as of January ,
2001.
GC Companies, Inc. The Executive
By:___________________ _____________________
Xxxxxx X. Xxxxxx
