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Exhibit 10.5
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Xxxxx X. Xxxxxx
EMPLOYMENT CONTINUATION AGREEMENT
March 10, 2000
Metropolitan Life Insurance Company
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EMPLOYMENT CONTINUATION AGREEMENT
THIS AGREEMENT between METROPOLITAN LIFE INSURANCE COMPANY, a New York
corporation (the "Company"), and Xxxxx X. Xxxxxx (the "Executive"), dated as of
the ___ day of March, 2000.
W I T N E S S E T H :
WHEREAS, an Affiliate (as defined below) of the Company has employed the
Executive in a senior officer position;
WHEREAS, Executive has also become employed in a critical officer position
with the Company;
WHEREAS, the Company believes that, in the event it is confronted with a
situation that could result in a change in ownership or control of the Company,
continuity of management will be essential to its ability to evaluate and
respond to such situation in the best interests of its policyholders, and if, at
the relevant time, it is a stock company, its shareholders;
WHEREAS, the Company understands that any such situation will present
significant concerns for the Executive with respect to his financial and job
security;
WHEREAS, the Company desires to assure itself of the Executive's services
during the period in which it is confronting such a situation, and to provide
the Executive certain financial assurances to enable the Executive to perform
the responsibilities of his position without undue distraction and to exercise
his judgment without bias due to his personal circumstances;
WHEREAS, to achieve these objectives, the Company and the Executive desire
to enter into an agreement providing the Company and the Executive with certain
rights and obligations upon the occurrence of a Change of Control or Potential
Change of Control (as each such term is defined in Section 2 hereof);
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Executive as follows:
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1. Operation of Agreement. (a) Term. The initial term of this Agreement
shall commence on the date hereof and continue until the third anniversary of
the date hereof. Thereafter, this Agreement will automatically renew for
successive and consecutive additional three year periods following the end of
its initial term and any extended term, unless the Company or the Executive
gives the other party written notice at least 180 days prior to the date the
term hereof would otherwise renew that it or he does not want the term to be so
extended; provided, however, that, the Company may not deliver a notice of
nonrenewal after (i) a Potential Change of Control (as is defined in Section
2(b) hereof) unless the Board of Directors has adopted a Nullification
Resolution (as defined in Section 2(b) hereof) with respect to such Potential
Change of Control or (ii) a Change of Control (as defined in Section 2(a)
hereof). Notwithstanding anything to the contrary in this Agreement, the term of
this Agreement shall in all events expire (regardless of when the term would
otherwise have expired) on the second anniversary of a Change of Control.
(b) Effective Date. Notwithstanding the provisions of Section 1(a) hereof,
this Agreement shall govern the terms and conditions of the Executive's
employment and the benefits and compensation to be provided to the Executive
commencing on the date on which a Potential Change of Control or a Change of
Control occurs (the "Effective Date") and ending on the date the term of this
Agreement otherwise expires, provided that if the Executive is not employed by
the Company or an Affiliate on the Effective Date, this Agreement shall be void
and without effect. If then still in effect, the Employment Agreement between
New England Life Insurance Company ("New England Life") and the Executive dated
as of June 16, 1997, as the same may hereafter be amended, restated or extended
at any time or from time to time or any successor agreement thereto (the "Basic
Agreement"), shall be superseded and replaced by this Agreement effective on the
Effective Date, except as otherwise expressly provided herein.
2. Definitions. (a) Change of Control. For the purposes of this Agreement,
a "Change of Control" shall be deemed to have occurred if:
(i) any person (within the meaning of Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
including any group (within the meaning of Rule 13d-5(b) under the
Exchange Act)), acquires "beneficial ownership" (within the meaning of
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined
Voting Power (as defined below) of the Company's securities;
(ii) within any 24-month period, the persons who were directors
of the Company at the beginning of such period (the "Incumbent
Directors") shall cease to constitute at least a majority of the Board
of Directors of the Company (the
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"Board") or the board of directors of any successor to the Company
provided, however, that any director elected to the Board, or nominated
for election, by a majority of the Incumbent Directors then still in
office shall be deemed to be an Incumbent Director for purposes of this
subclause 2(a)(ii);
(iii) the policyholders of the Company, if at the time in
question the Company is a mutual life insurance company, approve a
merger, consolidation, division, sale or other disposition of all or
substantially all of the assets of the Company (a "Mutual Event");
provided, however, that a Mutual Event shall not be treated as a Change
of Control for purposes of this Agreement if (x) the Company is the
surviving company in any such merger or other transaction and (y)
pursuant to the terms of the agreement governing the transaction
constituting the Mutual Event, the persons who were directors of the
Company immediately prior to such Mutual Event constitute at least 75%
of the members of the Board immediately following the consummation of
such Mutual Event; or
(iv) the stockholders of the Company, if at the time in question
the Company is a stock company, approve a merger, consolidation, share
exchange, division, sale or other disposition of all or substantially
all of the assets of the Company (a "Corporate Event"), and immediately
following the consummation of which the stockholders of the Company
immediately prior to such Corporate Event do not hold, directly or
indirectly, a majority of the Voting Power of (x) in the case of a
merger or consolidation, the surviving or resulting corporation, (y) in
the case of a share exchange, the acquiring corporation or (z) in the
case of a division or a sale or other disposition of assets, each
surviving, resulting or acquiring corporation which, immediately
following the relevant Corporate Event, holds more than 25% of the
consolidated assets of the Company immediately prior to such Corporate
Event; or
(v) any other event occurs which the Board declares to be a
Change of Control.
Notwithstanding the foregoing, a Change of Control shall not be deemed to have
occurred merely as a result of (i) the conversion of the Company from a mutual
life insurance company to a stock company whose shareholders are either (x)
primarily persons who were policyholders of the Company immediately prior to
such transaction and/or a trust holding the shares of the Company for the
benefit of such policyholders or (y) another corporation the shares of which are
held primarily by the persons and/or trust described in subclause (x); (ii) the
Company becoming a direct or indirect subsidiary of a mutual holding company
whose members are primarily persons who were policyholders of the Company
immediately prior to such transaction or (iii) an underwritten offering of the
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equity securities of the Company where no Person (including any group (within
the meaning of Rule 13d-5(b) under the Exchange Act)) acquires more than 25% of
the beneficial ownership interests in such securities.
(b) Potential Change of Control. For the purposes of this Agreement, a
Potential Change of Control shall be deemed to have occurred if:
(i) a Person commences a tender offer, with adequate financing,
which, if consummated, would result in such Person being the "beneficial
ownership" (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 10% or
more of the combined Voting Power of the Company's securities;
(ii) the Company enters into an agreement the consummation of
which would constitute a Change of Control;
(iii) any person (including any group (within the meaning of Rule
13d-5(b) under the Exchange Act)) other than the Company attempts,
directly or indirectly, to replace more than 25% of the directors of the
Company; provided, however, that any action taken in support of a
nominee approved by a majority of the members of the Board then in
office shall not be given any effect in determining whether a Potential
Change of Control has occurred;
(iv) certification, pursuant to New York Insurance Law Section
4210(h)(1)(B) (or any successor provision thereto) of an independent
nomination of candidates to replace more than 25% of the members of the
Board; or
(v) any other event occurs which the Board declares to be a
Potential Change of Control.
Notwithstanding the foregoing, if, after a Potential Change of Control and
before a Change of Control, the Board makes a good faith determination that such
Potential Change of Control will not result in a Change of Control, the Board
may nullify the effect of the Potential Change of Control (a "Nullification") by
resolution (a "Nullification Resolution"), in which case the Executive shall
have no further rights and obligations under this Agreement by reason of such
Potential Change of Control; provided, however, that if the Executive shall have
delivered a Notice of Termination (within the meaning of Section 6(f) hereof)
prior to the date of the Nullification Resolution, such Resolution shall not
effect the Executive's rights hereunder. If a Nullification Resolution has been
adopted and the Executive has not delivered a Notice of Termination prior
thereto, the Effective Date for purposes of this Agreement shall be the date, if
any, during the term hereof on
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which another Potential Change of Control or any actual Change of Control
occurs, in which case the Basic Agreement (if still in effect immediately prior
to the occurrence of a Potential Change of Control as to which a Nullification
has been declared by the Board) shall be reinstated upon such Nullification and
thereafter continue in effect in accordance with its terms unless and until
another Potential Change of Control or any actual Change of Control occurs.
(c) Voting Power. A specified percentage of "Voting Power" of a company
shall mean such number of the Voting Securities as shall enable the holders
thereof to cast such percentage of all the votes which could be cast in an
annual election of directors and "Voting Securities" shall mean all securities
of a company entitling the holders thereof to vote in an annual election of
directors.
(d) Affiliate. An "Affiliate" shall mean any corporation, partnership,
limited liability company, trust or other entity which directly, or indirectly
through one or more intermediaries, controls, or is controlled by, the Company.
3. Employment Period. Subject to Section 6 hereof, the Company agrees to
continue the Executive in its employ, and the Executive agrees to remain in the
employ of the Company, for the period (the "Employment Period") commencing on
the Effective Date and ending on the expiration of the term of this Agreement.
4. Position and Duties. (a) No Reduction in Position. During the Employment
Period, the Executive's position (including titles), authority and
responsibilities shall be at least commensurate with those held, exercised and
assigned at the Company and its Affiliates immediately prior to the Effective
Date (including, without limitation, the duties and responsibilities for New
England Life that are described in the Basic Agreement, if the Basic Agreement
is in effect immediately prior to the Effective Date). It is understood that,
for purposes of this Agreement, such position, authority and responsibilities
shall not be regarded as not commensurate merely by virtue of the fact that a
successor shall have acquired all or substantially all of the business and/or
assets of the Company as contemplated by Section 12(b) hereof. The Executive's
services shall be performed at the location where the Executive was employed
immediately preceding the Effective Date or at any other office or location not
more than 35 miles from such pre-Effective Date location.
(b) Business Time. During the Employment Period, the Executive agrees to
devote his full attention during normal business hours to the business and
affairs of the Company and its Affiliates and to use his best efforts to perform
faithfully and efficiently the responsibilities assigned to him hereunder, to
the extent necessary to discharge such responsibilities, except for (i) time
spent in managing his personal, financial
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and legal affairs and serving on corporate, civic or charitable boards or
committees, in each case only if and to the extent not substantially interfering
with the performance of such responsibilities, and (ii) periods of vacation and
sick leave to which he is entitled. It is expressly understood and agreed that
the Executive's continuing to serve on any boards and committees on which he is
serving or with which he is otherwise associated immediately preceding the
Effective Date shall not be deemed to interfere with the performance of the
Executive's services to the Company and its Affiliates.
5. Compensation. (a) Base Salary. During the Employment Period, the
Executive shall receive a base salary at a monthly rate at least equal to the
monthly salary paid to the Executive by the Company or any Affiliate immediately
prior to the Effective Date. The base salary shall be reviewed at least once
each year after the Effective Date, and may be increased (but not decreased) at
any time and from time to time by action of the Board or any committee thereof
or any individual having authority to take such action in accordance with the
Company's regular practices. The Executive's base salary, as it may be increased
from time to time, shall hereafter be referred to as the "Base Salary". Neither
the Base Salary nor any increase in the Base Salary after the Effective Date
shall serve to limit or reduce any other obligation of the Company hereunder.
(b) Annual Bonus. During the Employment Period, in addition to the Base
Salary, the Executive shall be afforded the opportunity to receive an annual
bonus (the "Annual Bonus Opportunity") in an amount which provides the Executive
with the same bonus opportunity as other executives of the Company and its
Affiliates of comparable rank; provided that, if the Basic Agreement is in
effect immediately prior to the Effective Date, the bonus opportunity provided
to the Executive hereunder shall not be less than the bonus opportunity, if any,
afforded to him under the Basic Agreement. If any fiscal year commences but does
not end during the Employment Period, Executive shall receive a pro-rated amount
in respect of the Annual Bonus Opportunity for the portion of the fiscal year
occurring during the Employment Period. Any amount payable in respect of the
Annual Bonus Opportunity shall be paid as soon as practicable following the year
for which the amount (or any prorated portion) is earned or awarded, unless
electively deferred by the Executive pursuant to any deferral programs or
arrangements that the Company may make available to the Executive.
(c) Long-term Incentive Compensation Programs. During the Employment
Period, the Executive shall participate in all long-term incentive compensation
programs for key executives at a level that is commensurate with the level made
available to other executives of the Company and its Affiliates of comparable
rank; provided that, if the Basic Agreement is in effect immediately prior to
the Effective Date, the long term incentive compensation opportunity provided to
the Executive hereunder
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shall not be less than the long-term compensation opportunity, if any, afforded
to him under the Basic Agreement.
(d) Benefit Plans. During the Employment Period, the Executive (and, to the
extent applicable, his dependents) shall be entitled to participate in or be
covered under all pension, retirement, deferred compensation, savings, medical,
dental, health, disability, group life, accidental death and travel accident
insurance plans and programs of the Company and any Affiliate at the level made
available from time to time to other similarly situated officers. Without
limiting the generality of the foregoing, the Executive shall also be entitled
to the individual retirement arrangement set forth in section 4(d)(ii) of the
Basic Agreement, the terms of which, as they are in effect on the date hereof or
as they may be amended from time to time with the consent of the parties prior
to the Effective Date, shall be and hereby are incorporated herein by reference
and expressly made a part hereof.
(e) Expenses. During the Employment Period, the Executive shall be entitled
to receive prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the policies and procedures of the Company as in
effect from time to time with respect to expenses incurred by other similarly
situated officers.
(f) Vacation and Fringe Benefits. During the Employment Period, the
Executive shall be entitled to paid vacation and fringe benefits at a level that
is commensurate with the paid vacation and fringe benefits available from time
to time to other similarly situated officers.
(g) Indemnification. During and after the Employment Period, the Company
shall indemnify the Executive and hold the Executive harmless from and against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees, on the same terms and conditions applicable from time to time
with respect to the indemnification of its other senior officers of comparable
rank.
(h) Office and Support Staff. The Executive shall be entitled to an office
with furnishings and other appointments, and to secretarial and other
assistance, at a level that is at least commensurate with the foregoing provided
to other similarly situated officers.
6. Termination. (a) Death, Disability or Retirement. Subject to the
provisions of Section 1 hereof, this Agreement shall terminate automatically
upon the Executive's death, termination due to "Disability" (as defined below)
or voluntary retirement under any of the Company's retirement plans as in effect
from time to time. For purposes of this Agreement, "Disability" shall mean the
Executive's inability to perform
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the duties of his position, as determined in accordance with the policies and
procedures applicable with respect to the Company's long-term disability plan,
as in effect immediately prior to the Effective Date; provided, however, that
the Executive's employment may not be terminated for Disability hereunder unless
the Executive has requested that he be considered for, and has qualified to
receive, long-term disability benefits under such plan.
(b) Voluntary Termination. Notwithstanding anything in this Agreement to
the contrary, the Executive may voluntarily terminate employment for any reason
(including early retirement under the terms of any of the Company's retirement
plans as in effect from time to time), upon not less than 60 days' written
notice to the Company, provided that any termination by the Executive pursuant
to Section 6(d) hereof on account of Good Reason (as defined therein) shall not
be treated as a voluntary termination under this Section 6(b).
(c) Cause. The Company may terminate the Executive's employment for Cause.
For purposes of this Agreement, "Cause" means (i) the Executive's conviction or
plea of nolo contendere to a felony; (ii) an act of dishonesty or gross
misconduct on the Executive's part which results or is intended to result in
material damage to the Company's business or reputation; or (iii) repeated
material violations by the Executive of his obligations under Section 4 hereof,
which violations are demonstrably willful and deliberate on the Executive's
part.
(d) Good Reason. After the Effective Date, the Executive may terminate his
employment at any time for Good Reason. For purposes of this Agreement, "Good
Reason" means the occurrence of any of the following, without the express
written consent of the Executive, after the Effective Date:
(i) (A) the assignment to the Executive of any duties
inconsistent in any material adverse respect with the Executive's
position, authority or responsibilities as contemplated by Section 4(a)
hereof, or (B) any other material adverse change in such position,
including titles, authority or responsibilities;
(ii) any failure by the Company to comply with any of the
provisions of Section 5 hereof, other than an insubstantial or
inadvertent failure remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(iii) requiring the Executive to be based at any office or
location more than 35 miles from the location at which the Executive
performed his duties immediately prior to the Effective Date, except for
travel reasonably required in the performance of the Executive's
responsibilities; or
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(iv) any failure by the Company to obtain the assumption and
agreement to perform this Agreement by a successor as contemplated by
Section 12(b) hereof.
In no event shall the mere occurrence of a Change of Control, absent any further
impact on the Executive, be deemed to constitute Good Reason.
(e) Notice of Termination. Any termination by the Company for Cause or by
the Executive for Good Reason shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 13(e) hereof. For
purposes of this Agreement, a "Notice of Termination" means a written notice
given, (i) in the case of a termination for Cause, within 10 business days of
the Company's having actual knowledge of the events giving rise to such
termination or (ii) in the case of a termination for Good Reason, within 120
days of the Executive's having actual knowledge of the events giving rise to
such termination. Any such Notice of Termination shall (i) indicate the specific
termination provision in this Agreement relied upon, (ii) set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(iii) if the termination date is other than the date of receipt of such notice,
specify the termination date of this Agreement (which date shall be not more
than 15 days after the giving of such notice). The failure by the Executive to
set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason shall not waive any right of the
Executive hereunder or preclude the Executive from asserting such fact or
circumstance in enforcing his rights hereunder.
(f) Date of Termination. For the purpose of this Agreement, the term "Date
of Termination" means (i) in the case of a termination for which a Notice of
Termination is required, the date of receipt of such Notice of Termination or,
if later, the date specified therein, as the case may be, and (ii) in all other
cases, the actual date on which the Executive's employment terminates during the
Employment Period.
7. Obligations of the Company upon Termination. (a) Death or Disability. If
the Executive's employment is terminated during the Employment Period by reason
of the Executive's death or Disability, this Agreement shall terminate without
further obligations to the Executive or the Executive's legal representatives
under this Agreement other than those obligations accrued hereunder at the Date
of Termination, and the Company shall pay to the Executive (or his beneficiary
or estate), at the times determined below (i) the Executive's full Base Salary
through the Date of Termination (the "Earned Salary"), (ii) any vested amounts
or benefits owing to the Executive under or in accordance with the terms and
conditions of the otherwise applicable employee benefit plans and programs
maintained by the Company or any Affiliate, including, without
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limitation, any compensation previously deferred by the Executive (together with
any accrued earnings thereon) and not yet paid by the Company, any vested
amounts payable in respect of the individual retirement arrangement described in
Section 4(d)(ii) of the Basic Agreement and incorporated herein by reference and
any accrued vacation pay not yet paid by the Company (the "Accrued
Obligations"), and (iii) any other benefits payable due to the Executive's death
or Disability under the plans, policies or programs maintained by the Company or
any Affiliate, including, without limitation, any benefits that are provided to
the Executive or any of his dependents under the terms of the Basic Agreement,
if such Basic Agreement is in effect on the Effective Date (the "Additional
Benefits").
Any Earned Salary shall be paid in cash in a single lump sum as soon as
practicable, but in no event more than 30 days (or at such earlier date required
by law), following the Date of Termination. Accrued Obligations and Additional
Benefits shall be paid in accordance with the terms of the applicable plan,
program or arrangement.
(b) Cause and Voluntary Termination. If, during the Employment Period, the
Executive's employment shall be terminated for Cause or voluntarily terminated
by the Executive (other than on account of Good Reason), the Company shall pay
the Executive (i) the Earned Salary in cash in a single lump sum as soon as
practicable, but in no event more than 30 days, following the Date of
Termination, and (ii) the Accrued Obligations in accordance with the terms of
the applicable plan, program or arrangement.
(c) Termination by the Company other than for Cause and Termination by the
Executive for Good Reason.
(i) Lump Sum Payments. If (x) the Company terminates the Executive's
employment other than for Cause during the Employment Period or (y) the
Executive terminates his employment at any time during the Employment Period
for Good Reason, the Company shall pay to the Executive, at the times
determined below, the following amounts:
(A) the Executive's Earned Salary;
(B) a cash amount (the "Severance Amount") equal to three
times the sum of
(1) the Executive's annual rate of Base Salary as then
in effect;
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(2) the average of the annual bonuses payable to the
Executive under the Annual Variable Incentive Plan
(or any successor plan thereto) or any other
annual incentive compensation plan maintained by
an Affiliate in which the Executive participated
for the each of the three fiscal years of the
Company or, if applicable, such Affiliate (or, if
less, the number of prior fiscal years during
which Executive was an employee of the Company or
each Affiliate) ended immediately prior to the
Effective Date for which an annual bonus amount
had been determined by the Board (or any committee
thereof) prior to the Effective Date. If the
Executive was employed by the Company for only a
portion of any fiscal year included in the period
for which the average referred to in the
immediately preceding sentence is determined and
the bonus payable for such fiscal year took into
account such partial period of employment, such
bonus for such fiscal year shall be annualized for
purposes of calculating such average; and
(3) the average of the long-term incentive
compensation amounts payable to the Executive by
the Company or any Affiliate with respect to each
of the last three performance periods (or, if the
Executive participated in the long-term
compensation program in respect to a lesser number
of such performance periods, such lesser number)
ended prior to the Effective Date for which the
amount payable had been determined by the Board or
any committee thereof (or, if applicable, the
administrator of any plan maintained by such
Affiliate) prior to the Effective Date; provided,
however, that, the amount determined under this
subclause (3) shall be reduced (but not below
zero) by the "Determined Value" (as defined below)
of any vested stock options, restricted stock or
similar equity-based award relating to the
Company's common equity on the earlier to occur of
the Executive's Date of Termination or the date on
which a Change of Control occurs. For purposes of
this Agreement, Determined Value shall mean the
excess of the "Equity Value" over the price, if
any, payable by the Executive in respect of such
stock option or other award and Equity Value shall
be determined to be (x) in the case of a Change of
Control occurring by reason of a merger,
recapitalization
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or similar transaction or as a result of a tender
offer, the value received by the Company's equity
holders in such transaction or the price paid in
such tender offer (with the value of any non-cash
consideration to be determined in good faith by
the Compensation Committee of the Board as
constituted immediately prior to the Effective
Date) and (y) in the case of any other Change of
Control or where the date as of which such
Determined Value is measured is the Executive's
Date of Termination, the average of the high and
low reported sales prices of such equity on the
principal securities market on which such equity
is traded on the relevant date; and
(C) the Accrued Obligations.
The Earned Salary and Severance Amount shall be paid in cash in a
single lump sum as soon as practicable, but in no event more than
30 days (or at such earlier date required by law), following the
Date of Termination. Accrued Obligations shall be paid in
accordance with the terms of the applicable plan, program or
arrangement.
(ii) Continuation of Benefits. The Executive (and, to the extent
applicable, his dependents) shall be entitled, after the Date of
Termination until the third anniversary of the Date of Termination (the
"End Date"), to continue participation in all of the employee and
executive plan providing medical, dental and long-term disability
benefits maintained by the Company or an Affiliate (collectively, the
"Continuing Benefit Plans"); provided, however, that the participation
by the Executive (and, to the extent applicable, his dependents) in any
Continuing Benefit Plan shall cease on the date, if any, prior to the
End Date on which the Executive becomes eligible for comparable benefits
under a similar plan, policy or program of a subsequent employer ("Prior
Date"). The Executive's participation in the Continuing Benefit Plans
will be on the same terms and conditions that would have applied had the
Executive continued to be employed by the Company through the End Date
or the Prior Date. To the extent any such benefits cannot be provided
under the terms of the applicable plan, policy or program, the Company
shall provide a comparable benefit under another plan or from the
Company's general assets.
(iii) Termination of Employment Within Three Years of Normal
Retirement Date. Notwithstanding anything else to the contrary contained
in this Section 7(c), if the Executive's employment with the Company
terminates at any
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time during the three year period ending on the Executive's normal
retirement date, as determined in accordance with the Company's
policies then in effect for the Company's senior executives (the
"Normal Retirement Date"), and the Executive would be entitled to
receive severance benefits under this Section 7(c), then (i) the
multiplier in Section 7(c)(i) shall not be three, but shall be a
number equal to three times (x/1095), where x equals the number of
days remaining until the Executive's Normal Retirement Date, and (ii)
the End Date described in Section 7(c)(ii) shall not be the third
anniversary of the Date of Termination, but shall be the Executive's
Normal Retirement Date.
(d) Discharge of the Company's Obligations. Except as expressly provided in
the last sentence of this Section 7(d) hereof, the amounts payable to the
Executive pursuant to this Section 7 (whether or not reduced pursuant to Section
7(e) hereof) following termination of his employment shall be in full and
complete satisfaction of the Executive's rights under this Agreement and any
other claims he may have in respect of his employment by the Company or any of
its Affiliates. Such amounts shall constitute liquidated damages with respect to
any and all such rights and claims and, upon the Executive's receipt of such
amounts, the Company shall be released and discharged from any and all liability
to the Executive in connection with this Agreement or otherwise in connection
with the Executive's employment with the Company and its Affiliates.
(e) Limit on Payments by the Company.
(i) Application of Section 7(e) Hereof. In the event that any
amount or benefit paid or distributed to the Executive pursuant to this
Agreement, taken together with any amounts or benefits otherwise paid or
distributed to the Executive by the Company or any Affiliate
(collectively, the "Covered Payments"), would be an "excess parachute
payment" as defined in Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and would thereby subject the Executive
to the tax (the "Excise Tax") imposed under Section 4999 of the Code (or
any similar tax that may hereafter be imposed), the provisions of this
Section 7(e) shall apply to determine the amounts payable to Executive
pursuant to this Agreement.
(ii) Calculation of Benefits. Promptly after delivery of any
Notice of Termination, the Company shall notify the Executive of the
aggregate present value of all termination benefits to which he would be
entitled under this Agreement and any other plan, program or arrangement
as of the projected Date of Termination, together with the projected
maximum payments, determined as of such projected Date of Termination
that could be paid without the Executive being subject to the Excise
Tax.
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(iii) Imposition of Payment Cap. If the aggregate value of all
compensation payments or benefits to be paid or provided to the
Executive under this Agreement and any other plan, agreement or
arrangement with the Company or an Affiliate exceeds the amount which
can be paid to the Executive without the Executive incurring an Excise
Tax, then the amounts payable to the Executive under this Section 7
shall be reduced (but not below zero) to the maximum amount which may be
paid hereunder without the Executive becoming subject to such an Excise
Tax (such reduced payments to be referred to as the "Payment Cap"). In
the event that Executive receives reduced payments and benefits
hereunder, Executive shall have the right to designate which of the
payments and benefits otherwise provided for in this Agreement that he
will receive in connection with the application of the Payment Cap.
(iv) Application of Section 280G. For purposes of determining
whether any of the Covered Payments will be subject to the Excise Tax
and the amount of such Excise Tax,
(A) such Covered Payments will be treated as "parachute
payments "within the meaning of Section 280G of the Code,
and all "parachute payments" in excess of the "base
amount" (as defined under Section 280G(b)(3) of the Code)
shall be treated as subject to the Excise Tax, unless, and
except to the extent that, in the good faith judgment of
the Company's independent certified public accountants
appointed prior to the Effective Date or tax counsel
selected by such Accountants (the "Accountants"), the
Company has a reasonable basis to conclude that such
Covered Payments (in whole or in part) either do not
constitute "parachute payments" or represent reasonable
compensation for personal services actually rendered
(within the meaning of Section 280G(b)(4)(B) of the Code)
in excess of the portion of the "base amount allocable to
such Covered Payments," or such "parachute payments" are
other wise not subject to such Excise Tax, and
(B) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Accountants
in accordance with the principles of Section 280G of the
Code.
(v) Adjustments in Respect of the Payment Cap. If the Executive
receives reduced payments and benefits under this Section 7(e) (or this
Section 7(e) is determined not to be applicable to the Executive because
the Accountants conclude that Executive is not subject to any Excise
Tax) and it is established
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pursuant to a final determination of a court or an Internal Revenue
Service proceeding (a "Final Determination") that, notwithstanding the
good faith of the Executive and the Company in applying the terms of
this Agreement, the aggregate "parachute payments" within the meaning of
Section 280G of the Code paid to the Executive or for his benefit are in
an amount that would result in the Executive being subject an Excise
Tax, then the amount equal to such excess parachute payments shall be
deemed for all purposes to be a loan to the Executive made on the date
of receipt of such excess payments, which the Executive shall have an
obligation to repay to the Company on demand, together with interest on
such amount at the applicable Federal rate (as defined in Section
1274(d) of the Code) from the date of the payment hereunder to the date
of repayment by the Executive. If this Section 7(e) is not applied to
reduce the Executive's entitlements under this Section 7 because the
Accountants determine that the Executive would not receive a greater
net-after tax benefit by applying this Section 7(e) and it is
established pursuant to a Final Determination that, notwithstanding the
good faith of the Executive and the Company in applying the terms of
this Agreement, the Executive would have received a greater net after
tax benefit by subjecting his payments and benefits hereunder to the
Payment Cap, then the aggregate "parachute payments" paid to the
Executive or for his benefit in excess of the Payment Cap shall be
deemed for all purposes a loan to the Executive made on the date of
receipt of such excess payments, which the Executive shall have an
obligation to repay to the Company on demand, together with interest on
such amount at the applicable Federal rate (as defined in Section
1274(d) of the Code) from the date of the payment hereunder to the date
of repayment by the Executive. If the Executive receives reduced
payments and benefits by reason of this Section 7(e) and it is
established pursuant to a Final Determination that the Executive could
have received a greater amount without exceeding the Payment Cap, then
the Company shall promptly thereafter pay the Executive the aggregate
additional amount which could have been paid without exceeding the
Payment Cap, together with interest on such amount at the applicable
Federal rate (as defined in Section 1274(d) of the Code) from the
original payment due date to the date of actual payment by the Company.
(f) Notwithstanding anything else in this Section 7 to the contrary,
nothing in this Section 7 shall be construed to release the Company from (or to
otherwise waive or modify) the Company's obligation to indemnify the Executive
pursuant to Section 5(g) hereof.
(g) Basic Agreement Minimum. Notwithstanding anything in this Section 7 to
the contrary, this Agreement is intended to provide the Executive with
termination benefits which are at least as good or better than the comparable
benefits that
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would have been provided to the Executive under the Basic Agreement.
Accordingly, if in any circumstance and for any reason, the Basic Agreement
would have provided the Executive with greater benefits upon any termination of
employment than are provided hereunder upon such termination of employment, the
amount that would have been payable to the Executive under the Basic Agreement
shall be payable under this Agreement (subject only to the limitation set forth
in Section 7(e) hereof) as though the relevant provisions of the Basic Agreement
had been incorporated herein by reference.
8. Non-exclusivity of Rights. Except as expressly provided herein, nothing
in this Agreement shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan or program provided
by the Company or any Affiliate and for which the Executive may qualify, nor
shall anything herein limit or otherwise prejudice such rights as the Executive
may have under any other agreements with the Company or any Affiliate, including
employment agreements or stock option agreements. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan
or program of the Company or any Affiliate at or subsequent to the Date of
Termination shall be payable in accordance with such plan or program.
9. No Offset. The Company's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
diminished or otherwise affected by any circumstances, including, but not
limited to, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others whether by reason of the
subsequent employment of the Executive or otherwise.
10. Legal Fees and Expenses. If the Executive asserts any claim in any
contest (whether initiated by the Executive or by the Company) as to the
validity, enforceability or interpretation of any provision of this Agreement,
the Company shall pay the Executive's legal expenses (or cause such expenses to
be paid) including, but not limited to, his reasonable attorney's fees, on a
quarterly basis, upon presentation of proof of such expenses in a form
acceptable to the Company, provided that the Executive shall reimburse the
Company for such amounts, plus simple interest thereon at the 90-day United
States Treasury Xxxx rate as in effect from time to time, compounded annually,
if the Executive shall not prevail, in whole or in part, as to at least one
material issue as to the validity, enforceability or interpretation of any
provision of this Agreement.
11. Company Property. The Agreement to Protect Corporate Property
previously executed by the Executive is incorporated herein and made a part
hereof. The Executive hereby reaffirms his commitments under such agreement, and
again agrees to be
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bound by each of the covenants contained therein for the benefit of the Company
in consideration of the benefits made available to him hereby.
12. Successors. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors. The Company shall require any successor to all or
substantially all of the business and/or assets of the Company, whether direct
or indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent as the Company would be required to perform if no
such succession had taken place. Without limiting the generality of the
foregoing, if prior to the occurrence of a Change of Control, the Company is a
party to a merger, recapitalization, demutualization, restructuring,
reorganization or similar transaction, as a result of which the Company becomes
a subsidiary of any entity that was a subsidiary of the Company immediately
prior to such transaction, from and after the date of such transaction the term
Company as used in the definition of Change of Control and Potential Change of
Control (but not as used in any other Section hereof, unless required to effect
the intent that a Potential Change of Control or a Change of Control in respect
of such entity shall cause the Effective Date of this Agreement to occur) shall
refer to both the Company and such entity.
13. Miscellaneous. (a) Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, applied
without reference to principles of conflict of laws.
(b) Arbitration. Except to the extent provided in Section 11(c) hereof, any
dispute or controversy arising under or in connection with this Agreement shall
be resolved by binding arbitration. The arbitration shall be held in New York
City and except to the extent inconsistent with this Agreement, shall be
conducted in accordance with the Expedited Employment Arbitration Rules of the
American Arbitration Association then in effect at the time of the arbitration
(or such other rules as the parties may agree to in writing), and otherwise in
accordance with principles which would be applied by a court of law or equity.
The arbitrator shall be acceptable to both the Company and the Executive. If the
parties cannot agree on an acceptable arbitrator, the dispute shall be heard by
a panel of three arbitrators, one appointed by each of the parties and the third
appointed by the other two arbitrators.
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(c) Amendments. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(d) Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the matters referred to herein. No
other agreement relating to the terms of the Executive's employment by the
Company, oral or otherwise, shall be binding between the parties unless it is in
writing and signed by the party against whom enforcement is sought. There are no
promises, representations, inducements or statements between the parties other
than those that are expressly contained herein. The Executive acknowledges that
he is entering into this Agreement of his own free will and accord, and with no
duress, that he has read this Agreement and that he understands it and its legal
consequences.
(e) Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand-delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: at the home address of the Executive noted
on the records of the Company
If to the Company: Metropolitan Life Insurance Company
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att.: Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(f) Tax Withholding. The Company shall withhold from any amounts payable
under this Agreement such Federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(g) Severability; Reformation. In the event that one or more of the
provisions of this Agreement shall become invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.
(h) Waiver. Waiver by any party hereto of any breach or default by the
other party of any of the terms of this Agreement shall not operate as a waiver
of any
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other breach or default, whether similar to or different from the breach or
default waived. No waiver of any provision of this Agreement shall be implied
from any course of dealing between the parties hereto or from any failure by
either party hereto to assert its or his rights hereunder on any occasion or
series of occasions.
(i) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
(j) Captions. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the Company
has caused this Agreement to be executed in its name on its behalf, and its
corporate seal to be hereunto affixed and attested by its Secretary, all as of
the day and year first above written.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxx 3/10/00
_________________________
Title: Executive Vice President 3/10/00
WITNESSED:
/s/ Xxxxx Xxxxxx
______________________
XXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx
__________________________
WITNESSED:
_______________________
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