EXHIBIT 99.1
AMENDED AND RESTATED SEVERANCE AGREEMENT
(NON-CHANGE IN CONTROL)
THIS AMENDED AND RESTATED SEVERANCE AGREEMENT (NON-CHANGE IN CONTROL), dated
as of and effective June 21, 2010, is by and between Con-way Inc. (the
"Employer"), and Xxxxxxx X. Xxxxxxx (the "Executive").
WHEREAS, the Employer and the Executive entered into a Severance Agreement
(Change in Control) dated as of December 18, 2009 which, on the terms and
subject to the conditions contained therein, provides for the Employer to
make available to the Executive certain severance payments and benefits in
connection with a Change in Control (as defined in the CIC Severance
Agreement);
WHEREAS, the Employer and the Executive also entered into a Severance
Agreement (Non-Change in Control) dated as of December 18, 2009 (the
"Original Agreement") to set forth the terms and conditions on which the
Employer agreed to make available to the Executive certain severance payments
and benefits in the event of the Executive's termination of employment in
certain circumstances other than in connection with a Change in Control;
WHEREAS, the Employer and the Executive subsequently entered into Amendment
No. 1 to Severance Agreement (Non-Change in Control) dated as of January 25,
2010 ("Amendment No. 1") in order to amend certain covenants contained in the
Original Agreement;
WHEREAS, the parties have discovered that the Original Agreement contained
unintended language that limited the extent to which qualifying long-term
incentive awards would be subject to partial acceleration or pro-rated
vesting upon a Severance, by providing that only qualifying long-term
incentive awards granted after the date of the Original Agreement would be
subject to partial acceleration or pro-rated vesting;
WHEREAS, the parties now wish to enter into this Amended and Restated
Severance Agreement (Non Change in Control) in order to amend and restate the
provisions of the Original Agreement (as amended by Amendment No. 1) in order
to correctly reflect their understanding that all qualifying long-term
incentive awards would be subject to partial acceleration or pro-rated
vesting upon a Severance;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Employer and the Executive hereby agree as follows:
* The attached Terms and Conditions are incorporated herein and made a
part of this Agreement.
* Subject to the other provisions of this Agreement, if the Executive
incurs a Severance the Executive shall be entitled to receive from the
Employer:
(i) The Severance Payment (the amount of which shall be determined
using a multiple (the "Severance Multiple") of two).
(ii) The Outplacement Services at a cost to the Employer not to exceed
$90,000; and
(iii)The Severance Benefits for a period of 24 months following the
Severance Date (the "Severance Period").
In addition, if the Executive incurs a Severance the Executive's unvested
Qualifying Long-Term Incentive Awards shall vest in accordance with and to
the extent provided in the Vesting Provisions, using a number of months
(the "Number of Months") equal to 24. Nothing in this Agreement shall
modify or otherwise affect the vesting provisions or other terms of any of
Executive's long-term incentive awards which are not Qualifying Long-Term
Incentive Awards.
* Notwithstanding the definition of the term "Severance" in the Terms and
Conditions, for purposes of this Agreement a Severance shall also
include a Termination for Good Reason and (subject to the other
provisions of this Agreement) upon a Termination for Good Reason the
Executive shall be entitled to receive from the Employer all of the
payments and benefits described above.
"Termination for Good Reason" means termination by the Executive of the
Executive's employment
following the occurrence (without the Executive's express written consent)
of the following act by the Employer, unless such act is corrected within
30 days of receipt by the Employer of the Executive's notice of
Termination for Good Reason:
(1)A reduction of twenty percent (20%) or more in the Executive's target
total direct compensation (determined using the midpoint of the
applicable long-term incentive compensation opportunity range), made by
the Employer in anticipation of, or within twenty-four (24) months
after, the sale or other disposition (including by way of a spin-off or
similar transaction) by the Company of one or more of its three
principal operating units. As used herein, "target total direct
compensation" means the Executive's annual base salary, target annual
bonus and target long-term incentive compensation opportunity.
Notwithstanding the definition of "Severance Payment" in the attached
Terms and Conditions, in the event of a Termination for Good Reason based
upon clause (1) above, "Severance Payment" shall mean a payment, in
lieu of any other severance payment or severance benefit pursuant to any
other plan or agreement of the Employer, the Company or any Affiliate to
which the Executive is otherwise entitled, of an amount equal to the
product of (i) the Severance Multiple multiplied by (ii) the sum of (A)
the Executive's annual base salary as in effect immediately prior to the
reduction in target total direct compensation referred to in clause (1)
above and (B) the Executive's Target Bonus for the calendar year
immediately prior to the calendar year in which the Severance occurs.
Except in the case of a Termination for Good Reason, in no event shall a
"Severance" occur if the Executive terminates his or her employment with
the Employer for any reason. The term "Cause" shall not include any actual
or anticipated failure by the Executive to substantially perform the
Executive's duties with the Employer after the issuance by the Executive
of a notice of Termination for Good Reason.
* Any Termination for Good Reason shall be communicated by written notice
from the Executive to the Employer in accordance with Section 7.9 of the
Terms and Conditions. A Notice of Termination for Good Reason shall
indicate the specific provision in the Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for Termination for Good Reason. The notice of
termination shall specify the termination date, which shall not be less
than thirty (30) days nor more than sixty (60) days, respectively, from
the date such notice is given and which (notwithstanding the definition
of "Severance Date" in the Terms and Conditions) shall constitute the
"Severance Date" for purposes of the Agreement. Once the Executive has
specified a date of termination in a notice of termination, the date of
termination may not be changed except by mutual consent of the Employer
and the Executive.
* If the Executive transfers to and becomes an employee of an Affiliate,
the Employer shall assign this Agreement to the Affiliate (as
applicable) which shall become the Employer and shall assume the
obligations of the Employer.
CON-WAY INC. EXECUTIVE
By: ___________________________ By:
Name: Xxxxxxxx X. Xxxxxxx ______________________________
Title: EVP General Counsel & Name: Xxxxxxx X. Xxxxxxx
Secretary
TERMS AND CONDITIONS OF AMENDED AND RESTATED SEVERANCE AGREEMENT (NON-CHANGE
IN CONTROL)
Table of Contents
1. Definitions.................................................1
2. Prior Arrangements; CIC Severance Agreements................5
3. Compensation other than Severance Payment and
Severance Benefits ....................................6
4. Severance Payment and Severance Benefits;
Outplacement Services; Vesting of Qualifying
Long-Term Incentive Awards.............................6
5. Notice of Termination.......................................8
6. Restrictive Covenants.......................................8
7. General Provisions.........................................11
Exhibit A - Waiver and Release of Claims.......................13
Exhibit B - Assignment and Assumption of Agreement.............15
1.DEFINITIONS. As hereinafter used:
"Affiliate" means an affiliate of the Company, as defined in Rule 12b-2
promulgated under Section 12 of the Exchange Act, including any Business
Unit.
"Agreement" means the Amended and Restated Severance Agreement (Non-
Change in Control) to which these Terms and Conditions are attached,
including the Terms and Conditions, which are incorporated by reference
in the Agreement.
"Board" means the Board of Directors of the Company.
"Business Unit" is defined in Section 2 of the EIP.
"Cause" for termination by the Employer of the Executive's employment
(following the applicable procedures set forth in Section 5) means (i)
fraud, misappropriation or embezzlement by the Executive against the
Employer, the Company or any Affiliate, (ii)
the willful and continued failure by the Executive to substantially
perform the Executive's duties with the Employer (other than any such
failure resulting from the Executive's incapacity due to Disability)
after a written demand for substantial performance is delivered to the
Executive by or on behalf of the Employer Board, which demand
specifically identifies the manner in which the Employer Board believes
that the Executive has not substantially performed the Executive's
duties, or (iii) the willful engaging by the Executive in conduct which
is demonstrably and materially injurious to the Employer, the Company or
an Affiliate, monetarily or otherwise. For purposes of clauses (ii) and
(iii) of this definition, no act, or failure to act, on the Executive's
part shall be deemed "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the
Employer, the Company or an Affiliate.
"Change in Control" has the meaning set forth in the CIC Severance
Agreement.
"CIC Severance Agreement" means the Severance Agreement (Change in
Control) dated as of December 18, 2009, as amended, entered into by the
Executive and the Employer.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, supplemented or substituted from time to time.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Company" means Con-way Inc., a corporation organized under the laws of
the State of Delaware, or any successor corporation.
"Disability" means a physical or mental illness or condition causing the
Executive's inability to substantially perform the Executive's duties
with the Employer.
"EIP" means the Company's 2006 Equity and Incentive Plan, as amended
from time to time, or any successor plan.
"Employer" means the entity specified in the first paragraph of the
Agreement or any assignee or successor. The last bullet of the Agreement
provides that, if the Executive transfers to the Company or an
Affiliate, the Agreement will be assigned, resulting in a change in the
Employer. A draft form of assignment and assumption is attached as
Exhibit B.
"Employer Board" means the Board of Directors of the Employer.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and as now or hereafter construed, interpreted and
applied by regulations, rulings and cases.
"Executive" means the individual specified in the first paragraph of the
Agreement.
"Health Benefits" means health maintenance organization, insured or
self-funded medical, dental, vision, prescription drug and behavioral
health benefits.
"Involuntary Termination" means the actual termination of the
Executive's employment by the Employer for any reason other than death,
Disability, Cause or Change in Control. Under no circumstances shall any
alleged constructive termination of the Executive's employment
constitute an Involuntary Termination.
"Number of Months" has the meaning specified in the Agreement.
"Outplacement Services" means professional outplacement services
determined by the Employer to be suitable to the Executive's position.
The maximum amount that the Employer will pay for such services is set
forth in the Agreement. The outplacement services shall be made
available until the earlier of (i) such time as the aggregate cost to
the Employer of the outplacement services reaches the maximum amount
specified in the Agreement, and (ii) the date on which the Executive
obtains another full-time job. The Employer will not pay the Executive
cash in lieu of professional outplacement services.
"Person" means any person, as such term is used in Sections 13(d) and
14(d) of the Exchange Act other than (i) the Company or its Affiliates,
(ii) any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or its Affiliates, and (iii) any corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of the Common
Stock.
"Qualifying Long-Term Incentive Award" means:
(i) a stock option, stock appreciation right ("SAR") or similar award,
or a restricted stock or restricted stock unit ("RSU") award
(whether cash-based or equity-based, and whether payable in cash or
in stock);
(ii) that is outstanding on the Severance Date;
(iii)that has a vesting period that is longer than one year in duration;
and
(iv) that is non-performance-based or, if performance-based, is based
solely on changes in the price of the Company's common stock.
"Severance" means an Involuntary Termination.
"Severance Benefits" means Health Benefits for the Severance Period
substantially similar to those provided to Executive and Executive's
dependents by or on behalf of the Executive's Employer immediately prior
to the Severance Date. To the extent possible, the Health Benefits shall
be provided at the Employer's expense through COBRA, in accordance with
the applicable plans, programs or policies of the Company. For any
portion (if any) of the Severance Period in which the Health Benefits
cannot be provided through COBRA, the Employer shall promptly purchase,
at its own expense and at no cost to the Executive, an individual policy
from an A-rated third party insurer under which Executive and
Executive's dependents shall receive the benefits described above (with
no preexisting condition limitations).
The Health Benefits shall be reduced to the extent benefits of same type
are actually received by or are made available to Executive and
Executive's dependents, as set forth below (and Executive shall promptly
notify Employer or any successor company of any such benefits):
(a)The Health Benefits shall be reduced to the extent benefits of the
same type are actually received by the Executive or the Executive's
dependents following the Executive's termination of employment with
the Employer, with no applicable pre-existing condition exclusions;
or
(b)The Health Benefits shall be reduced to the extent benefits of the
same type are made available to the Executive and Executive's
dependents (whether or not Executive elects to actually receive such
benefits) by a new employer of Executive following the Executive's
termination of employment with the Employer, with no applicable pre-
existing condition exclusions are applicable;
provided, however, for avoidance of doubt, benefits made available to
one or more of Executive and Executive's dependents by the employer of
Executive's spouse shall not reduce the Health Benefits otherwise
available, except to the extent the Executive's spouse elects to receive
such benefits from his or her employer;
The Employer shall reimburse the Executive for the excess, if any, of
the cost to the Executive of Health Benefits over such cost immediately
prior to the Severance.
If the Executive dies, the Employer shall continue to provide the
Executive's dependents with the Health Benefits otherwise receivable on
the same basis as if the Executive had survived.
If any such benefits are treated as deferred compensation subject to
Code section 409A and the Executive is a Specified Employee, the
Executive shall pay the full cost of such benefits for the first six
months after the Severance Date and the Employer shall reimburse the
Executive for such payments as soon as practicable thereafter but not
later than nine (9) months from the date the Executive paid such costs.
"Severance Date" means the date on which an Executive incurs a
Severance, which shall be the date of termination as determined under
Section 5.2.
"Severance Multiple" has the meaning set forth in the Agreement.
"Severance Payment" means a payment, in lieu of any other severance
payment or benefit pursuant to any other plan or agreement of the
Employer, the Company or any Affiliate to which the Executive is
otherwise entitled, of an amount equal to the product of (i) the
Severance Multiple multiplied by (ii) the sum of (A) the Executive's
annual base salary immediately prior to the time of Severance and (B)
the Executive's Target Bonus for the calendar year immediately prior to
the calendar year in which the Severance occurs.
"Severance Period" has the meaning set forth in the Agreement.
"Specified Employee" has the meaning set forth in the Con-way Inc. 2005
Deferred Compensation Plan for Executives and Key Employees, as amended
and restated in December 2008 and as subsequently amended from time to
time.
"Target Bonus" means, for any calendar year, an amount equal to (i) the
Executive's Annual Compensation (as defined in the Company's Executive
Incentive Plan) for that calendar year multiplied by (ii) the
Participation Percentage (as defined in the Executive Incentive Plan)
applicable to executives in the Executive's grade level (i.e., X0, X0,
X0, X0 or E5) for that calendar year, as determined by the Compensation
Committee of the Board. "Target Bonus" shall be determined in the manner
provided in the preceding sentence whether or not the Executive is a
participant in the Executive Incentive Plan during that calendar year,
and shall not be based on the Executive's target bonus under any other
annual incentive plan in which the Executive participates during that
calendar year. If during the calendar year for which the Target Bonus is
determined the Executive has not assigned to an executive grade level of
X0, X0, X0, X0 or E5, the Executive's grade level for purposes of this
definition shall be the grade level between E1 and E5 that the
Compensation Committee of the Board has determined is equivalent to the
Executive's actual grade level.
"Tax Counsel" means reputable outside tax counsel retained by the
Employer and reasonably acceptable to the Executive.
"Taxes" means all federal, state, local and other taxes, to the extent
applicable to all or any part of the Severance Payment and/or Severance
Benefits.
"Terms and Conditions" means these terms and conditions.
"Vesting Provisions" means:
(a)for each stock option, stock appreciation right ("SAR") or similar
award, and for each non-performance based restricted stock or
restricted stock unit ("RSU") award, in each case that is a
Qualifying Long-Term Incentive Award scheduled to vest in
installments over time, all unvested options, SARs or similar units,
shares of restricted stock or RSUs included in such award that are
scheduled to vest on or before the date that is the Number of Months
after the Severance Date shall vest; and
(b)for each stock option, SAR or similar award, and for each non-
performance based restricted stock or RSU award, in each case that is
a Qualifying Long-Term Incentive Award subject to cliff-vesting, a
percentage of the award shall vest, with the percentage determined by
dividing the Number of Months by the total number of months in the
cliff-vesting period.
Example 1: Assume the Number of Months applicable to Executive A is
18. On January 26, 2009 Executive A received a stock option grant
that is scheduled to vest in three equal installments, on January 1,
2010, January 1, 2011 and January 1, 2012, respectively. Executive A
incurs a Severance on December 20, 2009. On the Severance Date the
stock option installments scheduled to vest on January 1, 2010 and
January 1, 2011 would vest but the installment scheduled to vest on
January 1, 2012 (more than 18 months after the Severance Date) would
not vest under the Vesting Provisions.
Example 2: Assume the Number of Months applicable to Executive A is
18. On January 26, 2009 Executive A received a grant of 10,000
restricted stock units with 36 month cliff vesting. Executive A
incurs a Severance on December 20, 2009. On the Severance Date 5,000
restricted stock units (18 months/36 months) would vest under the
Vesting Provisions.
2. PRIOR ARRANGEMENTS; CIC SEVERANCE AGREEMENTS.
2.1The parties agree that all prior employment, separation, severance,
termination, change of control, or similar agreements, arrangements,
or plans (other than the CIC Severance Agreement), whether oral or
written, covering the Executive are terminated and superseded and any
notice periods with respect to such terminations are deemed satisfied
or explicitly waived.
2.2The parties further agree that the CIC Severance Agreement is
intended to provide for severance payments and benefits to be made
available to the Executive (on the terms and subject to the
conditions contained therein) only upon a qualifying severance in
connection with a Change in Control, and that this Agreement is
intended to provide for severance payments and benefits to be made
available to the Executive (on the terms and subject to conditions
contained herein) only in connection with a qualifying severance
occurring other than in connection with a Change in Control. In no
event and under no circumstances shall the Executive be entitled to
receive severance payments and benefits under both the CIC Severance
Agreement and under this Agreement.
3. COMPENSATION OTHER THAN SEVERANCE PAYMENT AND SEVERANCE BENEFITS.
3.1If the Executive shall incur a Severance, the Employer shall pay the
Executive's full salary to the Executive through the Severance Date
at the rate in effect immediately prior to the Severance Date,
together with all compensation and benefits payable to the Executive
through the Severance Date under the terms of the Employer's
compensation and benefit plans, programs or arrangements as in effect
immediately prior to the Severance Date.
3.2If the Executive shall incur a Severance, the Employer shall pay to
the Executive the Executive's normal post termination compensation
and benefits as such payments become due (other than severance
payments under any severance plan as in effect immediately prior to
the Severance). Such post termination compensation and benefits shall
be determined under, and paid in accordance with, the Company's
retirement, insurance and other compensation or benefit plans,
programs and arrangements as in effect immediately prior to the
Severance.
4. SEVERANCE PAYMENT AND SEVERANCE BENEFITS; OUTPLACEMENT SERVICES; VESTING
OF QUALIFYING LONG-TERM INCENTIVE AWARDS.
4.1Subject to the other provisions of this Agreement (including, without
limitation, Section 5 of these Terms and Conditions), if the
Executive incurs a Severance, the Executive shall be entitled to
receive from the Employer the Severance Payment, the Severance
Benefits and the Outplacement Services. In addition, the Executive's
unvested Qualifying Long-Term Incentive Awards shall vest in
accordance with and to the extent provided in the Vesting Provisions.
4.2The Employer shall pay to the Executive the Severance Payment and any
Severance Benefits that are payable in cash, in each case less
amounts withheld for Taxes as required under applicable law, on the
earliest date or dates permitted under Code section 409A, as
determined by Tax Counsel or, in the absence of a determination by
Tax Counsel, on the date that is six (6) months and one (1) day after
the Severance Date (or as soon as practicable thereafter, but in no
event later than ten (10) business days immediately following such
date). The Employer shall use good faith efforts to obtain from Tax
Counsel the determinations contemplated by this Section 4.2. The
Executive shall be liable for the payment of all Taxes. The Employer
shall be entitled to withhold from amounts to be paid to the
Executive hereunder any Taxes which it is from time to time required
to withhold.
4.3The Executive shall not be eligible to receive the Severance Payment,
Severance Benefits or Outplacement Services unless the Executive (or,
in the event of the death of the Executive, the executor, personal
representative or administrator of the Executive's estate) first
executes a written release substantially in the form attached as
Exhibit A hereto on or after the Severance Date and such release
becomes effective prior to the time that the Executive (or the
Executive's estate, as applicable) is to receive all or any part of
the Severance Payment, the Severance Benefits or the Outplacement
Services.
4.4In the event that the Executive or a dependent of the Executive
believes that he or she is not receiving the full amounts to which he
or she is entitled under the Agreement, such person may make a claim
to the Employer Board and the claims procedure set forth in Section
15 of the EIP shall apply with the Employer Board treated as the
Committee. Although claims for amounts under this Agreement are
governed by claims procedures under the EIP that also apply to ERISA-
covered claims, neither this Agreement nor any amounts payable
hereunder are, or are intended to be, governed by ERISA.
4.5Any further dispute or controversy arising under or in connection
with the Agreement which remains after the final decision of the
Employer Board as contemplated by Section 4.4 shall be settled
exclusively by arbitration, conducted before a single neutral
arbitrator in accordance with the American Arbitration Association's
National Rules for Resolution of Employment Disputes as then in
effect. Such arbitration shall be conducted in the metropolitan area
closest to where the Executive lives. Judgment may be entered on the
arbitrator's award in any court having jurisdiction over such
metropolitan area; provided however, that the Executive shall be
entitled to seek specific performance of his/her right to be paid or
to receive benefits hereunder during the pendency of any dispute or
controversy under or in connection with this Agreement. The fees and
expenses of the arbitrator and the arbitration shall be borne by the
Employer.
If, for any legal reason, a controversy arising from or concerning
the interpretation or application of this Agreement cannot be
arbitrated as provided above, the parties agree that any civil action
shall be brought in United States District Court in the metropolitan
area closest to where the Executive lives or, only if there is no
basis for federal jurisdiction, in state court closest to where the
Executive lives. The parties further agree that any such civil action
shall be tried to the court, sitting without a jury. The parties
knowingly and voluntarily waive trial by jury.
Notwithstanding the foregoing, if at the time a dispute or
controversy arises the Executive is working outside of the United
States, and if at such time the Executive maintains a residence in
the United States, the dispute or controversy will be resolved (i) by
arbitration in the metropolitan area closest to the Executive's
residence in the United States or (ii) by litigation in the United
States District Court in the metropolitan area closest to the
Executive's residence in the United States or, only if there is no
basis for federal jurisdiction, in state court closest to the
Executive's residence in the United States. If the Executive does not
maintain a United States residence at such time, the dispute or
controversy will be subject to arbitration in San Mateo, California
or to litigation in the United States District Court for the Northern
District of California (or if such court does not have jurisdiction
or will not accept jurisdiction, in any court of general jurisdiction
in California).
4.6The Employer shall pay to the Executive all legal fees and expenses
incurred by the Executive in seeking in good faith to obtain or
enforce any benefit or right provided by the Agreement. Such payment
shall be made within five (5) business days after delivery of the
Executive's written requests for payment accompanied with such
evidence of fees and expenses incurred as the Employer reasonably may
require. The Employer shall not be obligated to pay legal fees and
expenses incurred by any person other than the Executive or the
Executive's successor in interest hereunder. However, the Employer
shall be obligated to pay legal fees and expenses incurred by the
Executive on behalf of the Executive's dependents and legal fees and
expenses incurred by the estate of the Executive on behalf of the
Executive or the Executive's dependents.
4.7The Employer agrees that, if the Executive incurs a Severance, the
Executive is not required to seek other employment or to attempt in
any way to reduce any amounts payable to the Executive hereunder.
Further, the amount of any payment or benefit provided for in the
Agreement shall not be reduced (except as provided in the definition
of Severance Benefits) by any compensation earned by the Executive as
the result of employment by another employer, by retirement benefits,
by offset against any amount claimed to be owed by the Executive to
the Employer, or otherwise.
5. NOTICE OF TERMINATION.
5.1 Any Involuntary Termination shall be communicated by written notice
from the Employer to the Executive in accordance with Section 7.9,
and shall follow the applicable procedures set forth in this Section
5. A notice of termination for Cause shall include a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Employer Board
at a meeting of the Employer Board which was called and held for the
purpose of considering such termination (after reasonable notice to
the Executive of no less than thirty (30) days and an opportunity for
the Executive, together with the Executive's counsel, to be heard
before the Employer Board and to have no less than thirty (30) days
to substantially cure the acts or omissions that are the basis for
Executive's termination of employment) finding that, in the good
faith opinion of the Employer Board, the Executive was guilty of
conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.
5.2The notice of termination from the Employer shall specify the date of
termination, which shall not be less than ten (10) days from the date
such notice of termination is given. Once the Employer has specified
a date of termination in a notice of termination, the date of
termination may not be changed except by mutual consent of the
Employer and the Executive.
6. RESTRICTIVE COVENANTS.
6.1Confidential Information. The Executive agrees, during the
Executive's employment and at all times thereafter, that he or she
shall not, directly or indirectly, use, make available, sell,
disclose or otherwise communicate to any person, other than in the
course of the Executive's assigned duties and for the benefit of
Employer, either during the period of the Executive's employment or
at any time thereafter, any nonpublic, proprietary or confidential
information, knowledge or data relating to Employer, any of its
subsidiaries, affiliated companies or businesses, which shall have
been obtained by the Executive during the Executive's employment with
the Employer. This Section 6.1 applies to, but is not limited to, the
Employer's, and its parent's, subsidiaries', and affiliates' legal
matters, technical data, systems and programs, financial and planning
data, business development or strategic plans or data, marketing
strategies, software development, product development, pricing,
customer information, trade secrets, personnel information, and other
privileged or confidential business information.
The foregoing shall not apply to information that (i) was known to
the public prior to its disclosure to the Executive; (ii) becomes
known to the public subsequent to disclosure to the Executive through
no wrongful act of the Executive or any representative of the
Executive; or (iii) the Executive is required to disclose by
applicable law, regulation or legal process (provided that the
Executive provides Employer with prior notice of the contemplated
disclosure and reasonably cooperates with the Executive at its
expense in seeking a protective order or other appropriate protection
of such information). Notwithstanding clauses (i) and (ii) of the
preceding sentence, the Executive's obligation to maintain such
disclosed information in confidence shall not terminate where only
portions of the information are in the public domain.
6.2Non-Solicitation. The Executive agrees that during the Executive's
employment and at all times thereafter during the Severance Period,
the Executive will not, directly or indirectly, individually or on
behalf of any other person, firm, corporation or other entity,
knowingly solicit, aid or induce any employee of the Employer to
leave such employment in order to accept employment with or render
services to or with any other person, firm, corporation or other
entity unaffiliated with the Employer or knowingly take any action to
materially assist or aid any other person, firm, corporation or other
entity in identifying or hiring any such employee.
6.3Non-Disparagement. The Executive agrees, during the Executive's
employment and at all times thereafter, not to make, participate in
the making of, or encourage any other person to make, any statements,
written or oral, that criticize or disparage the Employer, the
Company or any Affiliate, or their respective employees, officers,
directors, products or services. The Employer agrees that it shall
use its best reasonable efforts to assure that none of its executive
officers or directors make, participate in the making of, or
encourage any other person to make, any statements, written or oral,
that criticize or disparage the Executive. Notwithstanding the
foregoing, statements made in the course of sworn testimony in
administrative, judicial or arbitral proceedings (including, without
limitation, depositions in connection with such proceedings) shall
not be subject to this requirement.
6.4Reasonableness. In the event the provisions of this Section 6 shall
ever be deemed to exceed the time, scope or geographic limitations
permitted by applicable laws, then such provisions shall be reformed
to the maximum time, scope or geographic limitations, as the case may
be, permitted by applicable laws.
6.5Equitable Relief.
(a)Executive acknowledges that the restrictions contained in this
Section 6 are reasonable and necessary to protect the legitimate
interests of Employer, that the Employer would not have entered
into the Agreement in the absence of such restrictions, and that
any violation of any provision of this Section 6 will result in
irreparable injury to Employer. By entering into the Agreement,
the Executive represents that his or her experience and
capabilities are such that the restrictions contained in this
Section 6 will not prevent the Executive from obtaining employment
or otherwise earning a living at the same general level of economic
benefit as is currently the case. The Executive further represents
and acknowledges that (i) he or she has been advised by Employer to
consult his or her own legal counsel in respect of this Agreement,
and (ii) that he or she has had full opportunity, prior to agreeing
to enter into the Agreement, to review thoroughly this Agreement
with his or her counsel.
(b)Executive agrees that Employer shall be entitled to preliminary
and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings,
profits and other benefits arising from any violation of this
Section 6, which rights shall be cumulative and in addition to any
other rights or remedies to which Employer may be entitled. In the
event that any of the provisions of this Section 6 should ever be
adjudicated to exceed the time, geographic, service, or other
limitations permitted by applicable law in any jurisdiction, then
such provisions shall be deemed reformed in such jurisdiction to
the maximum time, geographic, service, or other limitations
permitted by applicable law.
(c)Executive irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of this Section
6, including without limitation, any action commenced by the
Employer or the Company for preliminary and permanent injunctive
relief or other equitable relief, may be brought in the United
States District Court for the Northern District of California, or
if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in California,
(ii) consents to the non-exclusive jurisdiction of any such court
in any such suit, action or proceeding, and (iii) waives any
objection which Executive may have to the laying of venue of any
such suit, action or proceeding in any such court. Executive also
irrevocably and unconditionally consents to the service of any
process, pleadings, notices or other papers in a manner permitted
by the notice provisions of Section 7.9.
6.6Survival of Provisions. The obligations contained in this Section
shall survive the termination of Executive's employment with Employer
and shall be fully enforceable thereafter.
7. GENERAL PROVISIONS.
7.1Except as otherwise provided herein or by law, no right or interest
of the Executive under the Agreement shall be assignable or
transferable, in whole or in part, either directly or by operation of
law or otherwise, including without limitation by execution, levy,
garnishment, attachment, pledge or in any manner; no attempted
assignment or transfer thereof shall be effective; and no right or
interest of the Executive under the Agreement shall be liable for, or
subject to, any obligation or liability of such Executive. When a
payment is due under the Agreement to an Executive who is unable to
care for his or her affairs, payment may be made directly to the
Executive's legal guardian or personal representative.
7.2If the Employer, the Company or any Affiliate is obligated pursuant
to applicable law or by virtue of being a party to a contract (other
than this Agreement) to pay severance pay, a termination indemnity,
notice pay or the like or if the Employer, the Company or any
Affiliate is obligated by law to provide advance notice of separation
("Notice Period"), then any Severance Payment hereunder shall be
reduced by the amount of any such severance pay, termination
indemnity, notice pay or the like, as applicable, and by the amount
of any compensation received during any Notice Period.
7.3Neither the entering into of this Agreement, nor the payment of any
benefits hereunder shall be construed as giving the Executive, or any
person whomsoever, the right to be retained in the service of the
Employer, and the Executive shall remain subject to discharge to the
same extent as if the Agreement had never been executed.
7.4If any provision of the Agreement shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect
any other provisions hereof, and the Agreement shall be construed and
enforced as if such provisions had not been included.
7.5The Company, the Employer and the Executive intend for the Agreement
to comply with the requirements of Code section 409A such that none
of the payments hereunder will result in compensation to be
includible in the Executive's income pursuant to Code section
409A(a)(1)(A). The Agreement shall be interpreted in a manner
consistent with such intent.
If any provision of the Agreement would cause compensation to be
includible in the Executive's income pursuant to Code section
409A(a)(1)(A), such provision shall be void, and the Employer shall
have the unilateral right to amend the Agreement retroactively for
compliance with Coode section 409A in such a way as to achieve
substantially similar economic results without causing such
inclusion. Any such amendment shall be binding on the Executive.
In the event the Agreement does not comply with the requirements of
Code section 409A, the Executive will be solely responsible for any
adverse tax consequences to the Executive.
7.6The Agreement shall be binding upon and shall inure to the benefit of
and be enforceable by the Employer and its successors and assigns,
and by the Executive and by the personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and legatees of the Executive. If the Executive shall die while any
amount would still be payable to the Executive (other than amounts
which, by their terms, terminate upon the death of the Executive) if
the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms
of the Agreement to the executors, personal representatives or
administrators of the Executive's estate.
7.7The headings and captions herein are provided for reference and
convenience only, shall not be considered part of the Agreement, and
shall not be employed in the construction of the Agreement.
7.8The Agreement shall not be funded. The Executive shall not have any
right to, or interest in, any assets of the Employer which may be
applied by the Employer to the payment of benefits or other rights
under the Agreement.
7.9All notices and all other communications provided for in the
Agreement (i) shall be in writing, (ii) shall be hand delivered, sent
by overnight courier or by United States registered mail, return
receipt requested and postage prepaid, addressed, in the case of the
Employer, to the principal office of the Employer, attention
President, and in the case of the Company, to 0000 Xxxxxx Xxxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000, attention General Counsel, and in the case
of the Executive, to the last known address of the Executive, and
(iii) shall be effective only upon actual receipt.
7.10The Agreement shall be construed and enforced according to the laws
of the State of Delaware (without giving effect to the conflict of
laws principles thereof) to the extent not preempted by federal law,
which shall otherwise control.
***********
EXHIBIT A
WAIVER AND RELEASE OF CLAIMS
In consideration of, and subject to, the payment to be made to me by
____________ (the "Employer") of the "Severance Payment" (in each case as
defined in the Amended and Restated Severance Agreement (Non-Change in
Control), dated as of _________, entered into between me and the Employer
(the "Agreement")), I hereby waive any claims I may have for employment or
re-employment by the Employer or any parent or subsidiary of the Employer
after the date hereof, and I further agree to and do release and forever
discharge the Employer and any parent or subsidiary of the Employer, and
their respective past and present officers, directors, shareholders,
insurers, employees and agents from any and all claims and causes of action,
known or unknown, arising out of or relating to my employment with the
Employer or any parent or subsidiary of the Employer, or the termination
thereof, including, but not limited to, wrongful discharge, breach of
contract, tort, fraud, the Civil Rights Acts, Age Discrimination in
Employment Act as amended by the Older Workers' Benefits Protection Act,
Employee Retirement Income Security Act of 1974, Americans with Disabilities
Act, or any other federal, state or local legislation or common law relating
to employment or discrimination in employment or otherwise; provided however,
that no claim that I may have against the Employer in any capacity other than
as an Employer shall be waived pursuant to this Waiver and Release.
Notwithstanding the foregoing or any other provision hereof, nothing in this
Waiver and Release of Claims shall adversely affect (i) my rights to ongoing
Severance Benefits under the terms of the Agreement; (ii) my rights to
benefits (other than severance payments or benefits) under plans, programs
and arrangements of the Employer or any parent or subsidiary of the Employer;
(iii) my rights to indemnification under any indemnification agreement,
applicable law or the certificates of incorporation or bylaws of the Employer
or any parent or subsidiary of the Employer, (iv) my rights under any
director's and officers' liability insurance policy covering me, (v) my
workers compensation rights, or (vi) my unemployment insurance rights.
I acknowledge that I have signed this Waiver and Release of Claims
voluntarily, knowingly, of my own free will and without reservation or
duress, and that no promises or representations have been made to me by any
person to induce me to do so other than the promise of payment set forth in
the first paragraph above and the Employer's acknowledgment of my rights
reserved under the second paragraph above.
I understand that this release will be deemed to be an application for
benefits under the Agreement and that my entitlement thereto shall be
governed by the terms and conditions of the Agreement and any applicable
plan. I expressly hereby consent to such terms and conditions.
I acknowledge that (i) I am waiving any rights or claims I might have under
the Age Discrimination in Employment Act, as amended by the Older Workers
Benefit Protection Act ("ADEA"); (ii) I have received consideration beyond
that to which I was previously entitled; (iii) I have been given forty-five
(45) days to review and consider this Waiver and Release of Claims (unless I
have signed a written waiver of such review and consideration period); (iv) I
have had the opportunity to consult with an attorney or other advisor of my
choice and have been advised by the Employer to do so if I choose; and (vi) I
have been separately furnished a written schedule of all persons, listed by
job title and age, within the affected decisional unit who were selected and
not selected for the benefits extended by this Agreement, as may be required
by the ADEA. I may revoke this Waiver and Release of Claims seven days or
less after its execution by providing written notice to the Employer.
I acknowledge that it is my intention and the intention of the Employer in
executing this Waiver and Release of Claims that the same shall be effective
as a bar to each and every claim, demand and cause of action hereinabove
specified. In furtherance of this intention, I hereby expressly waive any and
all rights and benefits conferred upon me by the provisions of SECTION 1542
OF THE CALIFORNIA CIVIL CODE, to the extent applicable to me, and expressly I
consent that this Waiver and Release of Claims shall be given full force and
effect according to each and all of its express terms and provisions,
including as well those related to unknown and unsuspected claims, demands
and causes of action, if any, as well as those relating to any other claims,
demands and causes of action hereinabove specified. SECTION 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR."
I acknowledge that I may hereafter discover claims or facts in addition to or
different from those which I now know or believe to exist with respect to the
subject matter of this Waiver and Release of Claims and which, if known or
suspected at the time of executing this Waiver and Release of Claims, may
have materially affected this settlement.
Finally, I acknowledge that I have read this Waiver and Release of Claims and
understand all of its terms.
__________________________________
Signature
__________________________________
Name
__________________________________
Date Signed
***********
EXHIBIT B
Assignment and Assumption of
Amended and Restated Severance Agreement
Between ____________ and
______________,
As of ___________
____________ (the "Old Employer") and ______________ (the "Executive") have
entered into an Amended and Restated Severance Agreement (Non-Change in
Control) dated ______________ (the "Agreement"). The Executive is
transferring employment from the Old Employer to ____________ (the "New
Employer"), effective ________. The last bullet of the Agreement provides
that, if the Executive transfers to the Company or an Affiliate, the Old
Employer shall assign the Agreement to the Company or Affiliate. To order to
carry out the provisions of the last bullet of the Agreement -
1. The Old Employer hereby assigns the Agreement to the New Employer.
2. The New Employer hereby assumes the obligations of the Old Employer
under the Agreement.
3. The assignment and assumption are effective as of the date employment is
transferred.
4. The Executive hereby acknowledges receipt of notice of the assignment
and assumption.
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|THE OLD EMPLOYER |THE NEW EMPLOYER |
| | |
| | |
|By: ___________________________|By: ___________________________|
|Name: |Name: |
|Title: |Title: |
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| | |
|EXECUTIVE | |
| | |
| | |
|______________________________ | |
|Name: | |
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