Contract
Exhibit
4.20
EXECUTION
COPY
EMPLOYMENT
AGREEMENT (this “Agreement”) dated as of 1 April 2010, between DHT HOLDINGS,
INC., a corporation incorporated under the laws of the Republic of the Xxxxxxxx
Islands (“Employer”), and XXXXXX DAY, an individual (“Executive”).
WHEREAS
Employer desires to employ Executive as its acting Chief Executive Officer;
and
WHEREAS
Executive is willing to serve in the employ of Employer for the period and upon
the other terms and conditions of this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, the parties hereto agree
as follows:
ARTICLE
I
Employment
SECTION
1.01. Effectiveness. This Agreement shall become
effective on and from 1 April 2010.
SECTION
1.02. Term. The term of Executive’s employment
under this Agreement (the “Term”) shall commence
on 1 April 2010 (the “Commencement Date”),
and, unless earlier terminated pursuant to the provisions of Article III, shall
continue for a fixed term of nine months, upon expiry of which it shall
terminate.
SECTION
1.03. Position. During the Term, Employer shall
employ Executive, and Executive shall serve, as acting Chief Executive Officer,
reporting to the Board of Directors of Employer (the “Board”). Executive
shall have the duties, responsibilities and authority as are typical for such
position at companies of comparable size to Employer and within Employer’s
industry, including general executive authority over Employer’s affairs arising
in the ordinary course of business, and shall perform the other services and
duties commensurate with her position as determined from time to time by the
Board.
SECTION
1.04. Time and Effort. During the Term, Executive
shall serve Employer faithfully and use her full business
efforts. Executive shall perform all duties required of her as acting
Chief Executive Officer. During the Term, Executive shall not,
directly or indirectly, engage in any employment or other activity that, in the
sole discretion of the Board, is competitive with or adverse to the business,
practice or affairs of Employer or any of its affiliates, whether or not such
activity is pursued for profit or other advantage, or that would conflict or
interfere with the rendition of Executive’s services or duties, provided that
Executive may serve on civic or charitable boards or committees and serve as a
non-employee member of a board of directors of a corporation as to which the
Board has given its consent. Executive shall resign from or terminate
all positions, relationships and activities that would be inconsistent with the
foregoing. The Board hereby consents to Executive serving on the
board of directors of TBS International Ltd.
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SECTION
1.05. Location and Travel. Notwithstanding the
foregoing, Executive is expected to be physically present at Employer’s offices
in St. Helier, Jersey, Channel Islands when making any material decision
regarding or affecting Employer or its business or affairs. Executive
acknowledges and agrees that her duties and responsibilities to Employer will
require her to travel worldwide from time to time, including to Employer’s
offices in the Channel Islands. Furthermore, any material activity on
the part of the Executive associated with any ship sale, whether by way of
meeting, phone call, e-mail or otherwise shall be undertaken from the Employer’s
offices in St. Helier, Jersey, Channel Islands.
ARTICLE
II
Compensation
SECTION
2.01. Salary. As compensation for
all services rendered by Executive to Employer and all its affiliates in any
capacity and for all other obligations of Executive hereunder, Employer shall
pay Executive a salary (“Salary”) during the Term at the monthly rate of
$45,000, payable monthly to a bank account specified by Executive.
SECTION
2.02. Board and
Meeting Fees. In addition to Salary under Section 2.01 above,
Executive shall remain entitled to receive a Board fee of $47,500 per annum, and
a meeting fee of $1,250 in respect of each Board meeting at which she attends,
each for so long as she remains on the Board during the Term.
SECTION
2.03. Annual Bonus, Equity Awards and
Benefits. During the Term, Executive shall not be eligible to
receive any annual cash bonus, any awards of equity interests in Employer and
shall not be entitled to receive, and Employer shall have no obligation to
provide, any employee benefits (including health, welfare, disability, pension,
retirement and death benefits), fringe benefits or perquisites, except as
otherwise set forth herein.
SECTION
2.04. Vacation. During the Term, Executive shall be
entitled to 19 days of paid vacation from Employer (in addition to normal public
holidays in her normal place of residence).
SECTION
2.05. Business Expenses. Employer shall reimburse
Executive for all necessary and reasonable “out-of-pocket” business expenses
incurred by Executive in the performance of Executive’s duties hereunder, provided that
Executive furnishes to Employer adequate records and other documentary evidence
required to substantiate such expenditures and otherwise complies with any
travel and expense reimbursement policy established by the Board from time to
time, but air travel shall be business class when available. To the
extent the expenses in this Section 2.05 are taxable to Executive, the Company
shall provide a gross-up to Executive such that Executive has no after-tax
cost.
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SECTION
2.06. Establishment Costs. During the Term, the
Company shall reimburse Executive for all pre-approved costs of an office
established by her in Fairfield County, Connecticut, including, but not limited
to, purchase or lease of office equipment, and to the extent any such amounts
are taxable to the Executive, the Company shall provide a gross-up to Executive
such that Executive has no after-tax costs.
SECTION
2.07. Withholdings. Employer and its affiliates may
withhold or deduct from any amounts payable under this Agreement such taxes,
fees, contributions and other amounts as may be required to be withheld or
deducted pursuant to any applicable law or regulation.
ARTICLE
III
Termination
SECTION
3.01. General; Exclusive Rights. Executive’s
employment with Employer may be terminated by Employer without Cause upon
written notice and payment in a lump sum with such notice in the amount of
Executive’s basic salary (in accordance with Section 2.01 only) for the balance
of any unexpired period of the Term, or summarily for
Cause. Following termination of Executive’s employment, at any time
and for any reason, Executive shall have no further rights to any compensation,
payments or any other benefits under this Agreement or any other contract, plan,
policy or arrangement with Employer or its affiliates, except as set forth in
this Article III, and save for the right, if she remains on the Board, to
receive a Board fee of $47,500 per annum, and a meeting fee of $1,250 in respect
of each Board meeting at which she attends, each for so long as she remains on
the Board and in accordance with the provisions of the agreement(s) or
resolution(s) by which she is entitled to such benefits. Executive
shall also retain all rights to indemnification and directors and officers
insurance coverage and her rights as to any equity.
SECTION
3.02. Accrued Rights.
(a) Upon
the termination of Executive’s employment with Employer, at any time and for any
reason, Executive shall be entitled to receive when it otherwise would have been
paid (a) Salary earned through the date of termination that remains unpaid as of
such date and (b) reimbursement of any unreimbursed business expenses
incurred by Executive prior to the date of termination to the extent such
expenses are reimbursable under Section 2.05 and accrued but unused
vacation (all such amounts, the “Accrued
Rights”).
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(b) For
purposes of this Agreement, the term “Cause” shall mean
(i) Executive’s continuing failure to attempt in good faith to perform
those duties that Executive is required or expected to perform pursuant to this
Agreement after receipt of written notice of such failure by the Company,
(ii) Executive’s dishonesty or breach of any fiduciary duty to Employer in
the performance of Executive’s duties hereunder, (iii) Executive’s
conviction of, or a plea of guilty or nolo contendere to, a misdemeanor
involving moral turpitude, fraud, dishonesty, theft, unethical business conduct
or conduct that impairs the reputation of Employer or any of its affiliates or
any felony under the laws of the United States of America (“USA”) (or the
equivalent thereof in any jurisdiction), (iv) Executive’s gross negligence
or willful misconduct in connection with Executive’s duties hereunder or any act
or omission (other than good faith business decisions) that is materially
injurious to the financial condition or business reputation of Employer or any
of its affiliates or (v) Executive’s material breach of the provisions of
Article IV of this Agreement.
SECTION
3.03. Termination upon Death or
Disability. (a) Executive’s employment with
Employer shall terminate immediately upon Executive’s death or Disability (as
defined below). In the event Executive’s employment terminates due to
death or Disability, then Employer shall, within thirty (30) days of such
termination, pay to Executive (or her personal representatives, as the case may
be) a lump sum equivalent to Executive’s basic salary (in accordance with
Section 2.01 only) for any unexpired period of the Term.
(b) For
purposes of this Agreement, the term “Disability” shall
mean the inability of Executive, due to illness, accident or any other physical
or mental incapacity, to perform Executive’s duties in a normal manner for a
period of 90 days (whether or not consecutive) during the
Term. The Board shall determine, on the basis of the facts then
available, whether and when the Disability of Executive has
occurred. Such determination shall take into consideration the expert
medical opinion of a physician mutually agreeable to Employer and Executive
based upon such physician’s examination of Executive. Executive
agrees to make herself available for such examination upon the reasonable
request of Employer.
SECTION
3.04. Termination by Executive. Executive may
terminate her employment hereunder during the Term without Good Reason upon
ninety (90) days prior written notice. Executive may terminate her
employment hereunder during the Term with Good Reason upon sixty (60) days prior
written notice (which notice shall specify the event with specificity) provided
that if for Good Reason, the Good Reason event (as defined below) is not cured
within such sixty (60) day period. Any notice for Good Reason shall
be given within ninety (90) days of the occurrence of the event and any
termination shall occur with one hundred eighty (180) days of the occurrence of
such event. “Good Reason” shall mean the occurrence of any of the
following events or circumstances (without the prior written consent of
Executive): (A) a material reduction by Employer of Executive’s
authority or a material change in Executive’s functions, duties or
responsibilities, (B) a reduction in Executive’s Salary, (C) a requirement that
Executive report to anyone other than the Board, (D) a requirement that
Executive relocate her residence (it being understood that the requirements set
forth in Section 1.05 do not constitute a requirement to relocate) or (E) a
breach by Employer of any material obligation of Employer under this
Agreement. A termination for Good Reason shall be treated as if it
was a termination without Cause.
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SECTION
3.05. Change of Control. (a) In the
event that Employer terminates Executive’s employment during the Term (other
than for Cause) or Executive terminates her employment for Good Reason following
a Change of Control (or in contemplation thereof after a written agreement with
regard to such Change of Control has occured), Executive shall be entitled to
receive, on the sixtieth (60th) day following the later of the effective date of
termination of Executive’s employment and the Change of Control, a payment equal
to the value on the date of the Change of Control of 50,000 shares of common
stock in Employer, provided that Executive shall not be entitled to any such
payment unless Executive has provided, within sixty (60) days of such event, an
irrevocable waiver and general release of claims (other than Executive’s rights
under this Article III and any rights to indemnification, directors and officers
insurance, equity and without any ancillary provision not related to release of
claims) in favor of Employer, its affiliates, and their respective directors,
officers, employees, agents and representatives in form and substance reasonably
acceptable to Employer; provided, further, that Executive shall forfeit any
entitlement to receive such shares in the event that Executive breaches any of
her obligations under Article IV.
(b) For
purposes of this Agreement, the term
(i) “Change of Control”
shall mean the occurrence of any of the following events so long as such event
also satisfies the requirements under U.S. Treasury Regulation
1.409A-3(i)(5):
(A) the
consummation of (1) a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving (x) Employer or (y) any entity in
which Employer, directly or indirectly, possesses 50% or more of the total
combined voting power of all classes of its stock, but in the case of this
clause (y) only if Employer Voting Securities (as defined below) are issued or
issuable in connection with such transaction (each of the transactions referred
to in this clause (1) being hereinafter referred to as a “Reorganization”) or
(2) the sale or other disposition of all or substantially all the assets of
Employer to an entity that is not an affiliate (a “Sale”) if such Reorganization
or Sale requires the approval of Employer’s stockholders under the law of
Employer’s jurisdiction of organization (whether such approval is required for
such Reorganization or Sale or for the issuance of securities of Employer in
such Reorganization or Sale), unless, immediately following such Reorganization
or Sale, (I) all or substantially all the individuals and entities who were
the “beneficial owners” (as such term is defined in Rule 13d-3 under the
Exchange Act of the USA (or a successor rule thereto)) of the Shares or other
securities eligible to vote for the election of the Board (collectively, the
“Employer Voting Securities”) outstanding immediately prior to the consummation
of such Reorganization or Sale beneficially own, directly or indirectly, more
than 50% of the combined voting power of the then outstanding voting securities
of the entity resulting from such Reorganization or Sale (including, without
limitation, an entity that as a result of such transaction owns Employer or all
or substantially all Employer’s assets either directly or through one or more
subsidiaries) (the “Continuing Entity”) in substantially the same proportions as
their ownership, immediately prior to the consummation of such Reorganization or
Sale, of the outstanding Employer Voting Securities (excluding any outstanding
voting securities of the Continuing Entity that such beneficial owners hold
immediately following the consummation of the Reorganization or Sale as a result
of their ownership prior to such consummation of voting securities of any entity
involved in or forming part of such Reorganization or Sale other than Employer
and its affiliates) and (II) no Person beneficially owns, directly or
indirectly, 30% or more of the combined voting power of the then outstanding
voting securities of the Continuing Entity immediately following the
consummation of such Reorganization or Sale;
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(B) the
stockholders of Employer approve a plan of complete liquidation or dissolution
of Employer; or
(C) any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange
Act of the USA, respectively) (other than Employer or an affiliate) becomes the
beneficial owner, directly or indirectly, of securities of Employer representing
50% or more of the then outstanding Employer Voting Securities; provided that for
purposes of this subparagraph (C), any acquisition directly from Employer shall
not constitute a Change of Control.
ARTICLE
IV
Executive
Covenants
SECTION
4.01. Employer’s Interests. Executive acknowledges
that Employer has expended substantial amounts of time, money and effort to
develop business strategies, substantial customer and supplier relationships,
goodwill, business and trade secrets, confidential information and intellectual
property and to build an efficient organization and that Employer has a
legitimate business interest and right in protecting those assets as well as any
similar assets that Employer may develop or obtain following the Commencement
Date. Executive acknowledges and agrees that the restrictions imposed
upon Executive under this Agreement are reasonable and necessary for the
protection of such assets and that the restrictions set forth in this Agreement
will not prevent Executive from earning an adequate and reasonable livelihood
and supporting her dependants without violating any provision of this
Agreement. Executive further acknowledges that Employer would not
have agreed to enter into this Agreement without Executive’s agreeing to enter
into, and to honor the provisions and covenants of, this Article
IV. Therefore, Executive agrees that, in consideration of Employer’s
entering into this Agreement and Employer’s obligations hereunder and other good
and valuable consideration, the receipt of which is hereby acknowledged by
Executive, Executive shall be bound by, and agrees to honor and comply with, the
provisions and covenants contained in this Article IV following the Commencement
Date.
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SECTION
4.02. Scope of Covenants. For purposes of this
Article IV, the term “Employer” includes Employer’s affiliates, and its and
their predecessors, successors and assigns.
SECTION
4.03. Non-Disclosure of Confidential Information.
(a) Executive
acknowledges that, in the performance of her duties as an employee of Employer,
Executive may be given access to Confidential Information (as defined
below). Executive agrees that all Confidential Information has been,
is and will be the sole property of Employer and that Executive has no right,
title or interest therein. Executive shall not, directly or
indirectly, disclose or cause or permit to be disclosed to any person, or
utilize or cause or permit to be utilized, by any person, any Confidential
Information acquired pursuant to Executive’s employment with Employer (whether
acquired prior to or subsequent to the execution of this Agreement or the
Commencement Date) or otherwise, except that Executive may (i) utilize and
disclose Confidential Information as required or desirable in the discharge of
Executive’s duties as an employee of Employer in good faith, subject to any
restriction, limitation or condition placed on such use or disclosure by
Employer, and (ii) disclose Confidential Information to the extent required
by applicable law or as ordered by a court of competent
jurisdiction.
(b) For
purposes of this Agreement, “Confidential
Information” shall mean trade secrets and confidential or proprietary
information, knowledge or data that is or will be used, developed, obtained or
owned by Employer relating to the business, operations, products or services of
Employer or of any customer, supplier, employee or independent contractor
thereof, including products, services, fees, pricing, designs, marketing plans,
strategies, analyses, forecasts, formulas, drawings, photographs, reports,
records, computer software (whether or not owned by, or designed for, Employer),
operating systems, applications, program listings, flow charts, manuals,
documentation, data, databases, specifications, technology, inventions,
developments, methods, improvements, techniques, devices, products, know-how,
processes, financial data, customer or supplier lists, contact persons, cost
information, regulatory matters, employee information, accounting and business
methods, trade secrets, copyrightable works and information with respect to any
supplier, customer, employee or independent contractor of Employer, in each case
whether patentable or unpatentable, whether or not reduced to writing or other
tangible medium of expression and whether or not reduced to practice, and all
similar and related information in any form; provided, however, that
Confidential Information shall not include information that is generally known
to the public other than as a result of disclosure by Executive in breach of
this Agreement or in breach of any similar covenant made by Executive or any
other duty of confidentiality.
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SECTION
4.04. Non-Disparagement. After the date hereof, Executive shall
not, whether in writing or orally, criticize or disparage Employer, its business
or any of its current or former directors, officers, employees, agents or
representatives or any affiliates, directors, officers, employees or
representatives or any of its affiliates, directors, officers or employees of
any of the foregoing, and the officers and directors of the Company, directly or
indirectly, shall not in writing or orally criticize or disparage
Executive. The foregoing shall not apply to good faith critical
assessments of employees to Employer during the Term, statements and actions by
Executive in her capacity as a director of the Company, truthful responses to
legal process or governmental inquiry, actions to enforce rights under this
agreement, rebuttal of statements made by the other party or persons protected
under this Section or normal competitive-type statements. This
provision shall be of no further force or effect two (2) years after the end of
the Term.
SECTION
4.05. Non-Interference. For the Restricted Period (as defined
below) Executive shall not (A) directly or indirectly, without the prior written
consent of the Board interfere with or damage (or attempt to interfere with or
damage) any relationship between Employer or any of its affiliates and their
respective employees, customers, clients, vendors or suppliers (or any person
that Employer or any of its affiliates have approached or have made significant
plans to approach as a prospective employee, customer, client, vendor or
supplier) or any governmental authority or any agent or representative thereof
or (B) assist any person in any way to do, or attempt to do, any of the
foregoing.
For
purposes of this Agreement, the term “Restricted Period”
shall mean a period commencing on the date of the Commencement Date and
terminating three months from the date Executive ceases to be an employee of
Employer for any reason. The Restricted Period shall be deemed
automatically extended by any period in which Executive is in violation of this
Section 4.05.
SECTION
4.06. Records. All memoranda, books, records, documents,
papers, plans, information, letters, computer software and hardware, electronic
records and other data relating to Confidential Information, whether prepared by
Executive or otherwise, in Executive’s possession shall be and remain the
exclusive property of Employer, and Executive shall not directly or indirectly
assert any interest or property rights therein. Upon termination of
employment with Employer for any reason, and upon the request of Employer at any
time, Executive will immediately deliver to Employer all such memoranda, books,
records, documents, papers, plans, information, letters, computer software and
hardware, electronic records and other data, and all copies thereof or
therefrom, and Executive will not retain, or cause or permit to be retained, any
copies or other embodiments of such materials. The foregoing shall
not apply to Executive’s rolodex or other address books.
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SECTION
4.07. Specific Performance. Executive agrees that any breach by
Executive of any of the provisions of this Article IV shall cause
irreparable harm to Employer that could not be adequately compensated by
monetary damages and that, in the event of such a breach, Executive shall waive
the defense in any action for injunctive relief that a remedy at law would be
adequate, and Employer shall be entitled to enforce the terms and provisions of
this Article IV without the necessity of proving actual damages or posting
any bond or providing prior notice.
SECTION
4.08. Executive Representations and Warranties. Executive represents and warrants to
Employer that the execution and delivery of this Agreement by Executive and the
performance by Executive of Executive’s duties hereunder shall not constitute a
breach of, or otherwise contravene, or conflict with the terms of any contract,
agreement, arrangement, policy or understanding to which Executive is a party or
otherwise bound.
SECTION
4.09. Cooperation. Following the
termination of Executive’s employment, Executive shall provide reasonable
assistance to and cooperation with Employer in connection with any suit, action
or proceeding (or any appeal therefrom) relating to matters that occurred during
the period of Executive’s employment with Employer. Employer shall
reimburse Executive for any reasonable expenses incurred by Executive in
connection with the provision of such assistance and
cooperation.
ARTICLE
V
Miscellaneous
SECTION
5.01. Assignment. This Agreement is personal to
Executive and shall not be assignable by Executive. The parties agree
that any attempt by Executive to delegate Executive’s duties hereunder shall be
null and void. Executive shall have no claim against Employer if this
Agreement is terminated by reason of the liquidation of Employer for the purpose
of reconstruction or amalgamation and Executive is offered employment with any
concern or undertaking resulting from such reconstruction or amalgamation on
terms which are materially the same as the terms of this
Agreement. For the avoidance of doubt, nothing herein shall prejudice
Executive’s rights pursuant to Section 3.05 or any right to indemnification or
directors or officers liability insurance.
SECTION
5.02. Successors. This Agreement shall be binding
upon and shall inure to the benefit of the successors and permitted assigns of
Employer and the personal and legal representatives, executors, administrators,
successors, distributees, devisees and legatees of
Executive. Executive acknowledges and agrees that all Executive’s
covenants and obligations to Employer, as well as the rights of Employer under
this Agreement, shall run in favor of and will be enforceable by Employer, its
affiliates and their successors and permitted assigns.
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SECTION
5.03. Entire Agreement. This Agreement contains the
entire understanding of Executive, on the one hand, and Employer and its
affiliates, on the other hand, with respect to the subject matter hereof, and
all oral or written agreements or representations, express or implied, with
respect to the subject matter hereof are set forth in this
Agreement.
SECTION
5.04. Amendment. This Agreement may not be altered,
modified or amended except by written instrument signed by the parties
hereto.
SECTION
5.05. Notice. All notices, requests, demands and
other communications required or permitted to be given under the terms of this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered by hand or overnight courier, return receipt requested, postage
prepaid, addressed to the other party as set forth below:
|
If
to Employer:
|
DHT
Holdings Inc.
00
Xxx Xxxxxx
Xx.
Xxxxxx, Xxxxxx XX00XX
Channel
Islands
Attn:
Board of Directors
|
|
If
to Executive:
|
Xxxxxx
Day
At
the last address on the records of the
Company
|
The
parties may change the address to which notices under this Agreement shall be
sent by providing written notice to the other in the manner specified
above.
SECTION
5.06. Governing Law; Jurisdiction. This Agreement
shall be governed by and interpreted in accordance with English law, and the
parties hereby submit to the jurisdiction of the courts of England and
Wales.
SECTION
5.07. Severability. If any term, provision,
covenant or condition of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable in any jurisdiction,
then such provision, covenant or condition shall, as to such jurisdiction, be
modified or restricted to the extent necessary to make such provision valid,
binding and enforceable, or, if such provision cannot be modified or restricted,
then such provision shall, as to such jurisdiction, be deemed to be excised from
this Agreement and any such invalidity, illegality or unenforceability with
respect to such provision shall not invalidate or render unenforceable such
provision in any other jurisdiction, and the remainder of the provisions hereof
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
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SECTION
5.08. Survival. Subject to Section 1.01, the rights
and obligations of Employer and Executive under the provisions of this
Agreement, including Articles IV and V of this Agreement, shall survive and
remain binding and enforceable, notwithstanding any termination of Executive’s
employment with Employer for any reason, to the extent necessary to preserve the
intended benefits of such provisions.
SECTION 5.09. No
Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
of such party’s rights or deprive such party of the right thereafter to insist
upon strict adherence to that term or any other term of this
Agreement.
SECTION
5.10. Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION
5.11. Construction. (a) The headings in
this Agreement are for convenience only, are not a part of this Agreement and
shall not affect the construction of the provisions of this
Agreement.
(b) For
purposes of this Agreement, the words “include” and “including”, and variations
thereof, shall not be deemed to be terms of limitation but rather will be deemed
to be followed by the words “without limitation”.
(c) For
purposes of this Agreement, the term “person” means any individual, partnership,
company, corporation or other entity of any kind.
(d) For
purposes of this Agreement, the term “affiliate”, with respect to any person,
means any other person that controls, is controlled by or is under common
control with such person.
SECTION
5.12. Code Section 409A Compliance.
(a) The
intent of the parties is that payments and benefits under this Agreement comply
with, or be exempt from, Xxxxxxx 000X xx xxx Xxxxxx Xxxxxx Internal Revenue Code
of 1986, as amended (the “Code”) and the regulations and guidance promulgated
thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum
extent permitted, this Agreement shall be interpreted to be in compliance
therewith. If Executive notifies the Company (with specificity as to
the reason therefor) that Executive believes that any provision of this
Agreement (or of any award of compensation, including equity compensation or
benefits) would cause Executive to incur any additional tax or interest under
Code Section 409A and the Company concurs with such belief or the Company
independently makes such determination, the Company shall, after consulting with
Executive, reform such provision to try to comply with Code Section 409A through
good faith modifications to the minimum extent reasonably appropriate to conform
with Code Section 409A. To the extent that any provision hereof is
modified in order to comply with Code Section 409A, such modification shall be
made in good faith and shall, to the maximum extent reasonably possible,
maintain the original intent and economic benefit to Executive and the Company
of the applicable provision without violating the provisions of Code Section
409A.
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(b) A
termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the payment of any amounts or
benefits upon or following a termination of employment that are considered
“nonqualified deferred compensation” under Code Section 409A unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.” If Executive is deemed on the date of
termination to be a “specified employee” within the meaning of that term under
Code Section 409A(a)(2)(B), then with regard to any payment that is considered
non-qualified deferred compensation under Code Section 409A payable on account
of a “separation from service,” such payment or benefit shall be made or
provided at the date which is the earlier of (A) the expiration of the six
(6)-month period measured from the date of such “separation from service” of
Executive, and (B) the date of Executive’s death (the “Delay
Period”). Upon the expiration of the Delay Period, all payments and
benefits delayed pursuant to this Section 5.12 (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to Executive in a lump sum with interest at
the prime rate as published in The Wall Street
Journal on the first business day following the end of the Delay Period,
and any remaining payments and benefits due under this Agreement shall be paid
or provided in accordance with the normal payment dates specified for them
herein.
(c) With
regard to any provision herein that provides for reimbursement of costs and
expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the
right to reimbursement or in-kind benefits shall not be subject to liquidation
or exchange for another benefit, (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits, provided during any taxable year shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year, provided that the foregoing clause (ii)
shall not be violated without regard to expenses reimbursed under any
arrangement covered by Internal Revenue Code Section 105(b) solely because such
expenses are subject to a limit related to the period the arrangement is in
effect and (iii) such payments shall be made on or before the last day of
Executive’s taxable year following the taxable year in which the expense
occurred. Any tax gross-up payment as provided herein shall be made
in any event no later than the end of the calendar year immediately following
the calendar year in which Executive remits the related taxes, and any
reimbursement of expenses incurred due to a tax audit or litigation shall be
made no later than the end of the calendar year immediately following the
calendar year in which the taxes that are the subject of the audit or litigation
are remitted to the taxing authority, or, if no taxes are to be remitted, the
end of the calendar year following the calendar year in which the audit or
litigation is completed.
12
(d) For
purposes of Code Section 409A, Executive’s right to receive any installment
payments pursuant to this Agreement shall be treated as a right to receive a
series of separate and distinct payments. Whenever a payment under
this Agreement specifies a payment period with reference to a number of days
(e.g., “payment
shall be made within thirty (30) days following the date of termination”), the
actual date of payment within the specified period shall be within the sole
discretion of the Company.]
SECTION 5.13. No
Duty to Mitigate Executive
shall have no duty to mitigate any amounts due hereunder and no amounts earned
from any other employment or providing services to any other person or entity
shall be set off against any amounts due hereunder.
SECTION
5.14. Legal Fees. The Company shall promptly pay or
reimburse the reasonable legal fees incurred by Executive in connection with
this Agreement and, to the extent taxable pay an additional amount so Executive
has no after-tax cost. Such amount shall be paid within thirty (30)
days of submission of documentation of such expenses, which submission shall be
made within ninety (90) days of the execution of this
Agreement.
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.
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