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Exhibit 10(cc)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective as of the 5th
day of September, 1996 (the "Effective Date"), by and between ARCADIAN
CORPORATION, a Delaware corporation (the "Company"), and Xxxx X. Xxxxxxx
("Executive").
W I T N E S S E T H :
WHEREAS, the Company is engaged in the business of producing, marketing,
selling and distributing nitrogen fertilizers and chemicals ("Business");
WHEREAS, Executive is recognized as having experience in the management
and operation of companies that are in the Business;
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of Executive,
notwithstanding the possibility, threat or occurrence of a Change in Control
(as defined in Section 4.7 hereof);
WHEREAS, the Board believes it is imperative (i) to diminish the
inevitable and significant distractions of Executive and dilution of the time
of Executive, by virtue of the personal uncertainties and risks created by a
pending or threatened Change in Control, (ii) to encourage Executive's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change in Control, and (iii) to provide Executive with
compensation arrangements in the event of a Change in Control which provide
Executive with financial security, which are competitive with those of other
corporations, and which ensure that Executive receives the compensation and
benefits intended to be provided to Executive by the Company through this
Agreement and the Company's various employee benefit and compensation plans and
arrangements without regard to any Excise Tax (as defined in Section 4.11(a)
hereof); and
WHEREAS, in order to accomplish the objectives described in the two
immediately preceding recitals, the Board desires to cause the Company to enter
into this Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Executive hereby agree as follows:
ARTICLE I
EMPLOYMENT, REPORTING AND DUTIES
I.1 Employment. On the terms and subject to the conditions of this
Agreement, the Company hereby employs and engages the services of Executive to
serve as, and Executive agrees
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to diligently and competently serve as and perform the functions of,
Senior Vice Presidet, Marketing (the "Office") of the Company for the term and
for the compensation and benefits stated herein.
I.2 Major Responsibilities; Authority. Executive shall have the
authorities, duties, responsibilities and status (including offices, titles and
reporting requirements) usually associated with the Office of companies having
operations and assets similar in nature and value to the operations and assets
of the Company and at least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time during the 90-day
period immediately preceding the Effective Date, and such other duties as the
Board shall determine and Executive shall accept from time to time.
I.3 Extent of Service. During the Term (as defined in Section 4.1), and
excluding any periods of vacation and sick leave to which Executive is
entitled, Executive agrees to devote reasonable time and energies to the
Business consistent with past practice and shall not, during the Term, be
engaged in any business activity which would interfere or prevent Executive
from carrying out his duties under this Agreement; provided, however, that this
Section 1.3 shall not be construed as preventing Executive from investing his
assets in such form or manner as will not require services on the part of
Executive in the operation of the affairs of any company in which such
investments are made.
I.4 Location. Executive shall not be required to move from Executive's
home in Shelby County, Tennessee.
ARTICLE II
COMPENSATION AND RELATED ITEMS
II.1 Compensation.
(a) Base Salary. As compensation and consideration for the services
to be rendered by Executive under this Agreement and for the performance
by Executive of the usual obligations of such employment, the Company
agrees to pay Executive, and Executive agrees to accept, a base salary
("Base Salary") of $261,600 per annum which shall be paid in accordance
with Company's standard payroll practice. Executive's Base Salary may
increase from time to time, and after any such change, Executive's new
level of Base Salary shall be Executive's Base Salary for purposes of
this Agreement until the effective date of any subsequent change.
(b) Additional Compensation. In addition to the Base Salary
provided for in Section 2.1(a), Executive and/or Executive's family, as
the case may be, shall be entitled to:
(i) participate in, and shall receive all benefits under:
(A) any and all welfare benefit and similar employee
benefit plans, programs, arrangements, or policies that are
generally made available by the Company and its affiliates
(as defined in Section 4.11(l)) now or at any time
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in the future to other key employees or retired key employees, including,
but not limited to, any hospitalization, medical, prescription, dental,
disability, salary continuance, individual life insurance, executive life
insurance, group life insurance, accidental death insurance, and travel
accident insurance plans, programs, arrangements, and policies; and
(B) any and all bonus, incentive, savings, retirement,
profit sharing, pension, stock option, restricted stock,
employee stock ownership, supplemental executive retirement
and other employee benefit plans, programs, arrangements, and
policies that are generally made available by the Company and
its affiliates now or at any time in the future to officers
and other key employees; additionally, when Executive is
eligible for and elects retirement, pension benefit
calculations shall be calculated so as to provide a benefit
based on Executive's actual credited years and months of
service with the Company plus a benefit calculated equivalent
to an added five years of credited service. If the benefits
set forth in this clause would cause the Pension Plan to lose
its qualification under Section 401(a) of the Code, then the
benefits accrued hereunder shall accrue to Executive under
the Company's Supplemental Executive Retirement Plan
("SERP"); and
(ii) annual vacations and sick leave in accordance with the
vacation and sick leave policies of the Company and its affiliates
that are now or at any time in the future in effect with respect to
officers and other key employees, during which time Executive's
compensation shall be paid in full; and
(iii) fringe benefits in accordance with the fringe benefit
policies of the Company and its affiliates that are now or at any
time in the future in effect with respect to officers and other key
employees.
II.2 Expenses. The Company agrees that, during the Term, Executive shall
be allowed reasonable and necessary business expenses in connection with the
performance of his duties hereunder within guidelines established by the Board
as in effect at any time with respect to key employees ("Business Expenses"),
including, but not limited to, reasonable and necessary expenses for food,
travel, lodging, entertainment and other items in the promotion of the Business
within such guidelines. The Company shall promptly reimburse Executive for all
Business Expenses incurred by Executive upon Executive's presentation to the
Company of an itemized account thereof, together with receipts, vouchers, or
other supporting documentation. After termination or expiration of this
Agreement, however such termination or expiration may come about, Executive
shall have ninety (90) days after the date of such termination or expiration to
submit Business Expenses incurred during the Term to the Company for
reimbursement.
II.3 Working Facilities. Executive shall be furnished with offices of a
size and with other furnishings and appointments, administrative staff,
secretarial and other assistants, stenographic help, and such other facilities
and services as are suitable to Executive's position and adequate for the
performance of Executive's duties.
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ARTICLE III
EXCULPATION
The Company agrees that Executive will not be liable for any losses,
expenses, costs or damages caused by or resulting from the recommendations,
suggestions, actions, errors, omissions or mistakes of Executive undertaken or
proposed by Executive if Executive acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company. Executive's rights under this Article III shall not be deemed
exclusive of, but shall be cumulative with, any and all other rights
(including, but not limited to, rights of indemnification and advancement of
expenses) to which Executive may now or at any time in the future be entitled
under applicable law, the Company's certificate of incorporation, the Company's
bylaws, any agreement (including, but not limited to, this Agreement), any vote
of stockholders, any resolution of directors, or otherwise.
ARTICLE IV
TERM AND TERMINATION
IV.1 Term. The term of this Agreement shall be for three years commencing
on the Effective Date ("Term"); provided, however, that if a Change in Control
occurs within the first twelve (12) months after the Effective Date, the Term
shall be extended to end on the third anniversary of such Change in Control.
IV.2 Termination of Agreement. Except as may otherwise be provided
herein, this Agreement may terminate prior to the end of the Term upon the
occurrence of:
(a) Thirty (30) days after written notice of termination is given by
either party to the other; or
(b) Executive's death or, at the Company's option, upon Executive's
becoming Disabled (as defined in Section 4.9 hereof).
Any notice of termination given by the Company to Executive under Section
4.2(a) above shall specify whether such termination is with or without Cause
(as defined in Section 4.4 hereof). Any notice of termination given by
Executive to the Company under Section 4.2(a) above shall specify whether such
termination is made with or without Good Reason (as defined in Section 4.5
hereof) or Good Reason-Change in Control (as defined in Section 4.6 hereof).
IV.3 Obligations of the Company Upon Termination.
(a) Cause; Without Good Reason; and Without Good Reason-Change in
Control. If the Company terminates this Agreement with Cause pursuant to
Section 4.2(a) hereof, or if Executive terminates this Agreement without
Good Reason or without Good Reason-Change in Control pursuant to Section
4.2(a) hereof, this Agreement shall terminate without further obligations
to Executive, other than those obligations owing or accrued to, vested
in, or earned by Executive through the date of termination, including,
but not limited to:
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(i) to the extent not theretofore paid, Executive's Base
Salary in effect at the time of such termination through the date
of termination; and
(ii) in the case of compensation previously deferred by
Executive, all amounts previously deferred (together with any
accrued interest thereon) and not yet paid by the Company, and any
accrued vacation pay not yet paid by the Company; and
(iii) all other amounts or benefits owing or accrued to,
vested in or earned by Executive through the date of termination
under the then existing or applicable plans, programs,
arrangements, and policies of the Company and its affiliates,
including, but not limited to, any such plans, programs,
arrangements, or policies described in Section 2.1(b) hereof;
such obligations owing or accrued to, vested in, or earned by Executive
through the date of termination, including, but not limited to, such
amounts and benefits specified in clauses (i), (ii), and (iii) of this
sentence, being hereinafter collectively referred to as the "Accrued
Obligations." The aggregate amount of such obligations owing or accrued
to, vested in, or earned by Executive through the date of termination,
including, but not limited to, the Accrued Obligations, shall be paid by
the Company to Executive in accordance with the plans, programs or
agreements under which the Accrued Obligations were earned.
(b) Good Reason; Without Cause Before a Change in Control. If
Executive terminates this Agreement with Good Reason pursuant to Section
4.2(a) hereof, or if the Company terminates this Agreement without Cause
before the occurrence of a Change in Control pursuant to Section 4.2(a)
hereof:
(1) the Company shall pay the aggregate of the following
amounts to Executive in one lump sum within thirty (30) days after
the date of such termination or in a manner and at such later time
as specified by Executive, provided that all such payments must be
made no later than the last day of the twenty-four (24) month
period commencing on the date of such termination (the "24 Month
Period"):
(i) to the extent not theretofore paid, Executive's Base
Salary in effect at the time of such termination (but prior
to giving effect to any reduction therein which precipitated
such termination) through the date of termination; and
(ii) an amount equal to the sum of (A) two (2) times
Executive's Base Salary in effect at the time of such
termination (but prior to giving effect to any reduction
therein which precipitated such termination), (B) two (2)
times the average of all bonuses, profit sharing and other
incentive payments made by the Company to all other
executives of the Company who are the same grade level as the
Executive and who have executed an employment agreement
similar in nature and benefits to this Agreement in respect
of the
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two (2) calendar years immediately preceding such
termination, or in the event there are no other executives at
the same grade level as the Executive upon the date of
termination or there are no other such executives who are in
the employ of the Company on the date of Executive's
termination, payment amount shall be the same as such other
executives who were at the same grade level as Executive on
the effective date of this Agreement had they remained in the
employ of the Company until the date of Executive's
termination, except that, when Executive has a full calandar
year of participation in any such bonus, profit sharing or
other incentive plan or arrangement, Executive's actual award
or compensation shall be used in the average calculation
herein for that period of full calandar year participation,
and (C) the pro-rata share of Executive's target bonus,
profit sharing and other incentive payments for the calendar
year in which such termination occurred based upon the
proportion that the number of complete months in such
calendar year up to the date of termination bears to the
complete calendar year; and
(iii) in the case of compensation previously deferred by
Executive, all amounts previously deferred (together with any
accrued interest thereon) and not yet paid by the Company,
and any accrued vacation pay not yet paid by the Company; and
(iv) all other amounts or benefits owing or accrued to,
vested in, or earned by Executive through the date of
termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(b) hereof; and
(v) any and all other Accrued Obligations not otherwise
described in clause (i), (ii), (iii) or (iv) of this
sentence; and
(2) Executive shall receive the following additional benefits:
(i) for an eighteen (18) month period commencing on the
date of termination of this Agreement (the "18 Month
Period"), Executive shall continue to be covered under each
of the medical, dental, life insurance, accident benefit and
other welfare benefit (exclusive of short- and long-term
disability benefit) programs of the Company in effect and
applicable to Executive immediately prior to such
termination, and the Company shall pay the costs therefor
except to the extent that Executive already pays all or any
portion thereof; provided, however, that if Executive obtains
any of the welfare benefits provided for under this sentence
from another employer, the Company's obligation to provide
such welfare benefits should be secondary to that of such
other employer. Executive's coverage under the Company's
medical and dental programs for the 18 Month Period shall be
included in the
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calculation of the "Period of Coverage" to be provided
to Executive pursuant to Section 4980B(f)(2)(B) of the
Internal Revenue Code of 1986, as amended ("Code"), and
Executive's right to "Continuation Coverage" under Section
4980B(f)(2) of the Code. The amount of the "Applicable
Premium" to be charged Executive under Section 4980B(f)(4)
for Continuation Coverage shall never be greater than the
monthly amount charged Executive for medical and dental
coverage prior to the termination of this Agreement; and
(ii) shall be fully vested in any and all options,
restricted stock, stock appreciation rights, cash equivalent
stock appreciation rights, or any other similar rights based
on the fair market value of or otherwise relating to the
Company's common stock (collectively, "Stock Incentive
Rights") which are outstanding immediately prior to the
termination of this Agreement, and Executive may exercise any
such vested Stock Incentive Rights during the 24 Month
Period, notwithstanding any provision otherwise in any plan
or agreement awarding or granting any Stock Incentive Right
to Executive; and
(iii) shall be fully vested in any and all benefits
accrued under any "employee pension benefit plan," as defined
in Section 3(2)(A) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), of the Company
("Retirement Plan"); and
(iv) shall receive credit in the calculation of the
accrued benefit under the Company's Pension Plan ("Pension
Plan") for (A) the compensation to be paid to Executive in
clause (ii) of paragraph (1) of this Section 4.3(b) and (B)
twenty-four (24) months of service in addition to the service
accrued by Executive through the date that this Agreement is
terminated plus a benefit calculated equivilant to an added
five (5) years of credited service as provided in Section
2.1(b)(i)(B). In calculating the accrued benefit under the
Pension Plan, if actual months of employment are less than
sixty (60) months, then the average of the actual months of
credited service shall be used to determine final average
earnings as defined in the Pension Plan. If the benefits set
forth in this clause would cause the Pension Plan to lose its
qualification under Section 401(a) of the Code, then the
benefits accrued hereunder shall accrue to Executive under
the Company's Supplemental Executive Retirement Plan
("SERP"); and
(v) shall receive such individual outplacement service
as is appropriate for Executive's position for the 24 Month
Period.
(c) Good Reason-Change in Control; Without Cause On or After a
Change in Control. If Executive terminates this Agreement with Good
Reason-Change in Control pursuant to Section 4.2(a) hereof, or if the
Company terminates this Agreement without Cause on or after the
occurrence of a Change in Control pursuant to Section 4.2(a) hereof:
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(1) the Company shall pay the aggregate of the following
amounts to Executive in one lump sum within thirty (30) days after
the date of such termination or in a manner and at such later time
as specified by Executive, provided that all such payments must be
made no later than the last day of the thirty-six (36) month period
commencing on the date of such termination (the "36 Month Period"):
(i) to the extent not theretofore paid, Executive's Base
Salary in effect at the time of such termination (but prior
to giving effect to any reduction therein which precipitated
such termination) through the date of termination; and
(ii) an amount equal to the sum of (A) three (3) times
Executive's Base Salary in effect at the time of such
termination (but prior to giving effect to any reduction
therein which precipitated such termination), (B) three (3)
times the average of all bonuses, profit sharing and other
incentive payments made by the Company to all other
executives of the Company who are the same grade level as the
Executive and who have executed an employment agreement
similar in nature and benefits to this Agreement in respect
of the two (2) calendar years immediately preceding such
termination, or in the event there are not other executives
at the same grade level as the Executive upon the date of
termination or there are no other such executives who are in
the employ of the Company on the date of Executive's
termination, payment amount shall be the same as such other
executives who were at the same grade level as Executive on
the effective date of this Agreement had they remained in the
employ of the Company until the date of Executive's
termination, except that, when Executive has a full calandar
year of participation in any such bonus, profit sharing or
other incentive plan or arrangement, Executive's actual award
or compensation shall be used in the calculation herein for
that period of full calandar year participation, and (C) the
pro-rata share of Executive's target bonus, profit sharing
and other incentive payments for the calendar year in which
such termination occurred based upon the proportion that the
number of complete months in such calendar year up to the
date of termination bears to the complete calendar year; and
(iii) in the case of compensation previously deferred by
Executive, all amounts previously deferred (together with any
accrued interest thereon) and not yet paid by the Company,
and any accrued vacation pay not yet paid by the Company; and
(iv) all other amounts or benefits owing or accrued to,
vested in, or earned by Executive through the date of
termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(b) hereof; and
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(v) any and all other Accrued Obligations not otherwise
described in clause (i), (ii), (iii) or (iv) of this
sentence; and
(2) Executive shall receive the following additional benefits:
(i) for the 36 Month Period, Executive shall continue
to be covered under each of the medical, dental, life
insurance, accident benefit and other welfare benefit
(exclusive of short- and long-term disability benefit)
programs of the Company in effect and applicable to Executive
immediately prior to the time of such termination, and the
Company shall pay the costs therefor except to the extent
that Executive already pays all or any portion thereof;
provided, however, that if Executive obtains any of the
welfare benefits provided for under this sentence from
another employer, the Company's obligation to provide such
welfare benefits shall be secondary to that of such other
employer. Executive's coverage under the Company's medical
and dental programs for the 36 Month Period shall not be
included in the calculation of the "Period of Coverage" to be
provided to Executive pursuant to Section 4980B(f)(2)(B) of
the Code, and Executive's right to "Continuation Coverage"
under Section 4980B(f)(2) of the Code for medical and dental
benefits under the Company's medical and dental programs
shall commence on the first day following the end of the 36
Month Period. The amount of the "Applicable Premium" to be
charged Executive under Section 4980B(f)(4) for Continuation
Coverage shall never be greater than the monthly amount
charged Executive for medical and dental coverage during the
36 Month Period; and
(ii) shall be fully vested in any and all benefits
accrued under any Retirement Plan; and
(iii) shall receive credit in the calculation of the
accrued benefit under the Pension Plan for (A) the
compensation to be paid to Executive in clause (ii) of
paragraph (1) of this Section 4.3(c) and (B) thirty-six (36)
months of service in addition to the service accrued by
Executive through the date that this Agreement is terminated
plus a benefit calculated equivilant to an added five (5)
years of credited service as provided in Section
2.1(b)(i)(B). In calculating the accrued benefit under the
Pension Plan, if actual months of employment are less than
sixty (60) months, then the average of the actual months of
credited service shall be used to determine final average
earnings as defined in the Pension Plan. If the benefits set
forth in this clause would cause the Pension Plan to lose its
qualification under Section 401(a) of the Code, then the
benefits accrued hereunder shall accrue to Executive under
the SERP, and if the Executive is not a participant in the
SERP, the actuarial lump sum equivalent of the benefit
described in this clause (iv) shall be paid in accordance
with paragraph (1) of Section 4.2(c); and
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(iv) shall receive such individual outplacement service
as is appropriate for Executive's position for the 36 Month
Period.
(d) Death. If Executive's employment is terminated under Section
4.2(b) hereof by reason of Executive's death, the Company shall pay to
Executive's legal representatives the full amount of the obligations
owing or accrued to, vested in, or earned by Executive through the date
of Executive's death, including, but not limited to, the Accrued
Obligations in accordance with the plans, programs, or agreements under
which the Accrued Obligations were earned. Anything in this Agreement to
the contrary notwithstanding, Executive's family shall be entitled to
receive benefits provided by the Company and any of its affiliates to
surviving families under the then existing or applicable plans, programs,
or arrangements and policies of the Company and its affiliates.
(e) Disability. If Executive's employment is terminated under
Section 4.2(b) hereof by reason of Executive becoming Disabled, the
Company shall pay to Executive or Executive's legal representative the
full amount of the obligations owing or accrued to, vested in, or earned
by Executive through the date of termination, including, but not limited
to, the Accrued Obligations in accordance with the plans, programs, or
agreements under which the Accrued Obligations were earned.
IV.4 Cause. As used in this Agreement, the term "Cause" means (i) willful
misconduct by Executive or gross neglect by Executive of his duties as an
employee, officer or director of the Company which continues for more than
thirty (30) days after Executive's receipt of written notice from the Board to
Executive specifically identifying the willful misconduct or gross negligence
of Executive and directing Executive to discontinue the same, (ii) the
commission by Executive of a crime constituting a felony, or (iii) the
commission by Executive of an act, other than an act taken in good faith within
the course and scope of Executive's employment, which is directly detrimental
to the Company and exposes the Company to material liability.
IV.5 Good Reason. As used in this Agreement, the term "Good Reason" means
the breach of any material provision of this Agreement by the Company
(including, but in no way limited to, any removal of Executive, without Cause,
from the position of the Office during the Term) which is not cured within
thirty (30) days after written notice from Executive to the Company
specifically identifying such breach; provided, however, that the term "Good
Reason" shall not include any breach of any provision of this Agreement that
occurs after the occurrence of a Change in Control.
IV.6 Good Reason-Change in Control.
(a) Except as provided in Section 4.6(b) below, as used in this
Agreement, the term "Good Reason-Change in Control" means after the
occurrence of a Change in Control, a determination by Executive that any
one or more of the following events has occurred:
(i) a material change in the nature of Executive's Office,
including, but not limited to, his authorities, duties,
responsibilities or status (including offices,
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titles or reporting requirements), from those in effect
immediately prior to the Change in Control; or
(ii) the relocation of Executive's place of employment to a
location in excess of fifty (50) miles from the place of
Executive's employment immediately prior to the Change in Control,
except for required travel on Company business to an extent
substantially equivalent to Executive's business travel obligations
immediately prior to the Change in Control; or
(iii) any reduction by the Company of Executive's Base Salary,
or a material reduction in his bonus, profit sharing or other
incentive benefits, from those in effect immediately prior to the
Change in Control; or
(iv) the failure by the Company to increase Executive's Base
Salary in a manner consistent (both as to frequency and percentage
increase) with (A) the Company's practices in effect immediately
prior to the Change in Control with respect to similarly positioned
employees or (B) the Company's practices implemented subsequent to
the Change in Control with respect to similarly positioned
employees, whichever is more favorable to Executive; or
(v) the failure of the Company to continue in effect
Executive's participation in (A) the Company's employee benefit
plans, programs, arrangements and policies, at a level
substantially equivalent in value to and on a basis consistent with
the relative levels of participation of other similarly positioned
employees, as in effect immediately prior to the Change in Control
or (B) the Company's employee benefit plans, programs, arrangements
and policies implemented subsequent to the Change in Control with
respect to similarly positioned employees, whichever is more
favorable to Executive; or
(vi) the failure of the Company to obtain from a successor
(including a successor to a material portion of the business or
assets of the Company) a satisfactory assumption in writing of the
Company's obligations under this Agreement; or
(vii) the failure of the Company to continue to provide
Executive with office space, related facilities and support
personnel (including, but not limited to, administrative and
secretarial assistance) that are both commensurate with the Office
and Executive's responsibilities to and position with the Company
immediately prior to the Change in Control and not materially
dissimilar to the office space, related facilities and support
personnel provided to other key executive officers of the Company;
or
(viii) the Company notifies Executive of the Company's
intention not to observe or perform one or more of the obligations
of the Company under this Agreement; or
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(ix) the Company breaches any provision of this Agreement and
such breach is not cured within thirty (30) days after the
Company's receipt of notice thereof from Executive.
(b) If, after the occurrence of a Change in Control, Executive
receives a written description from the Company of the nature of
Executive's Office thereafter, stating Executive's authorities, duties,
responsibilities, status, salary, bonus and other employee benefits, or
job location, and Executive accepts such new authorities, duties,
responsibilities, status, salary, bonus and other employee benefits, or
job location ("New Office") with the Company without determining that the
New Office causes a Good Reason-Change in Control as set forth in Section
4.6(a), then for the remaining Term the New Office shall be the
authorities, duties, responsibilities, status, salary, bonus and other
employee benefits, or job location to be used by Executive in determining
whether a Good Reason-Change in Control occurs thereafter pursuant to
Section 4.6(a).
IV.7 Change in Control. As used herein, the term "Change in Control"
shall mean the occurrence with respect to the Company of any of the following
events:
(a) a report on Schedule 13D is filed with the Securities and
Exchange Commission (the "SEC") pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company (or
one of its subsidiaries) or any employee benefit plan sponsored by the
Company (or one of its subsidiaries), is the beneficial owner (as such
term is defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of 30% or more of the outstanding shares of
common stock of the Company or the combined voting power of the then
outstanding securities of the Company;
(b) a report is filed by the Company disclosing a response to either
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act, Item 1 of Form 8-K promulgated under the Exchange Act, or
any similar reporting requirement hereafter promulgated by the SEC;
(c) any person, entity or group (within the meaning of Section 13(d)
or 14(d) of the Exchange Act), other than the Company (or one of its
subsidiaries) or any employee benefit plan sponsored by the Company (or
one of its subsidiaries), shall purchase securities pursuant to a tender
offer or exchange offer to acquire any common stock of the Company (or
securities convertible into common stock) for cash, securities or any
other consideration, provided that after consummation of the offer, the
person, entity or group in question is the beneficial owner (as such term
is defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of 30% or more of the combined voting power of the then
outstanding securities of the Company (as determined under paragraph (d)
of Rule 13d-3 promulgated under the Exchange Act, in the case of rights
to acquire common stock);
(d) the stockholders of the Company shall approve:
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(i) any merger, consolidation, or reorganization of the Company:
(A) in which the Company is not the continuing or
surviving corporation,
(B) pursuant to which shares of common stock of the
Company would be converted into cash, securities or other
property,
(C) with a corporation which prior to such merger,
consolidation, or reorganization owned 20% or more of the
combined voting power of the then outstanding securities of
the Company, or
(D) in which the Company will not survive as an
independent, publicly owned corporation;
(ii) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all the assets of the Company, or
(iii) any liquidation or dissolution of the Company;
(e) the stockholders of the Company shall approve a merger,
consolidation, reorganization, recapitalization, exchange offer, purchase
of assets or other transaction after the consummation of which any
person, entity or group (within the meaning of Section 13(d) or 14(d) of
the Exchange Act) would own beneficially in excess of 30% of the
outstanding shares of common stock of the Company or in excess of 30% of
the combined voting power of the then outstanding securities of the
Company;
(f) the Company's common stock ceases to be listed on the New York
Stock Exchange; or
(g) during any period of two consecutive years, the individuals who
at the beginning of such period constituted the Board cease for any
reason to constitute a majority of the Board, unless the election or
nomination for election by the Company's stockholders of each new
director during any such two-year period was approved by the vote of
two-thirds of the directors then still in office who were directors at
the beginning of such two-year period.
IV.8 Executive Group. As used herein, "Executive Group" shall mean the
officers of the Company at the levels of Vice President and above; and each of
such officers shall be deemed members of the Executive Group.
IV.9 Disabled. As used herein, "Disabled" shall mean a mental or physical
impairment which, in the reasonable opinion of a qualified doctor selected by
the Company, renders Executive unable to perform with reasonable diligence the
ordinary functions and duties of Executive on a
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full-time basis in accordance with the terms of this Agreement, which
inability continues for a period of not less than 180 consecutive days.
IV.10 Return of Materials; Confidential Information. In the event of any
termination of this Agreement, Executive shall promptly deliver to the Company
all lists, books, records, literature, products and any other materials owned
or provided by the Company in connection with Executive's employment hereunder.
Executive shall not at any time during or after the Term hereof use for himself
or others, or divulge to others, any secret or confidential information,
knowledge or data of the Company obtained by Executive as a result of his
employment unless authorized by a majority of the Board.
IV.11 Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the Company or
any of its affiliates to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (any such payments or distributions being individually referred to
herein as a "Payment," and any two or more of such payments or distributions
being referred to herein as "Payments"), would be subject to the excise tax
imposed by Section 4999 of the Code (such excise tax, together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such excise tax, and any interest in respect of such penalties,
additions to tax or additional amounts, being collectively referred herein to
as the "Excise Tax"), then Executive shall be entitled to receive and the
Company shall make an additional payment or payments (individually referred to
herein as a "Gross-Up Payment," and any two or more of such additional payments
being referred to herein as "Gross-Up Payments") in an amount such that after
payment by Executive of all taxes (as defined in Section 4.11(k)) imposed upon
the Gross-Up Payment, Executive retains an amount of such Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 4.11(c) through (i), any
determination (individually, a "Determination") required to be made under this
Section 4.11(b), including whether a Gross-Up Payment is required and the
amount of such Gross-Up Payment, shall initially be made, at the Company's
expense, by nationally recognized tax counsel mutually acceptable to the
Company and Executive ("Tax Counsel"). Tax Counsel shall provide detailed
supporting legal authorities, calculations, and documentation both to the
Company and Executive within 15 business days of the termination of Executive's
employment, if applicable, or such other time or times as is reasonably
requested by the Company or Executive. If Tax Counsel makes the initial
Determination that no Excise Tax is payable by Executive with respect to a
Payment or Payments, it shall furnish Executive with an opinion reasonably
acceptable to Executive that no Excise Tax will be imposed with respect to any
such Payment or Payments. Executive shall have the right to dispute any
Determination (a "Dispute") within 15 business days after delivery of Tax
Counsel's opinion with respect to such Determination. The Gross-Up Payment, if
any, as determined pursuant to such Determination shall, at the Company's
expense, be paid by the Company to Executive within five business days of
Executive's receipt of such Determination. The existence of a Dispute shall
not in any way affect Executive's right to receive the Gross-Up Payment in
accordance with such Determination. If there is no Dispute, such Determination
shall be binding, final and conclusive upon the Company and
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Executive, subject in all respects, however, to the provisions of Section
4.11(c) through (i) below. As a result of the uncertainty in the application
of Sections 4999 and 280G of the Code, it is possible that Gross-Up Payments
(or portions thereof) which will not have been made by the Company should have
been made ("Underpayment"), and if upon any reasonable written request from
Executive or the Company to Tax Counsel, or upon Tax Counsel's own initiative,
Tax Counsel, at the Company's expense, thereafter determines that Executive is
required to make a payment of any Excise Tax or any additional Excise Tax, as
the case may be, Tax Counsel shall, at the Company's expense, determine the
amount of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to Executive.
(c) The Company shall defend, hold harmless, and indemnify Executive on a
fully grossed-up after tax basis from and against any and all claims, losses,
liabilities, obligations, damages, impositions, assessments, demands,
judgements, settlements, costs and expenses (including reasonable attorneys',
accountants', and experts' fees and expenses) with respect to any tax liability
of Executive resulting from any Final Determination (as defined in Section
4.11(j)) that any Payment is subject to the Excise Tax.
(d) If a party hereto receives any written or oral communication with
respect to any question, adjustment, assessment or pending or threatened audit,
examination, investigation or administrative, court or other proceeding which,
if pursued successfully, could result in or give rise to a claim by Executive
against the Company under this Section 4.11(d) ("Claim"), including, but not
limited to, a claim for indemnification of Executive by the Company under
Section 4.11(c), then such party shall promptly notify the other party hereto
in writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Executive ("Executive Claim"),
Executive shall take or cause to be taken such action in connection with
contesting such Executive Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as
are reasonably designated by the Company (it being understood and agreed by the
parties hereto that the terms of any such retention shall expressly provide
that the Company shall be solely responsible for the payment of any and all
fees and disbursements of such counsel and any experts) and the execution of
powers of attorney, provided that:
(i) within 30 calendar days after the Company receives or delivers,
as the case may be, the Tax Claim Notice relating to such Executive Claim
(or such earlier date that any payment of the taxes claimed is due from
Executive, but in no event sooner than five calendar days after the
Company receives or delivers such Tax Claim Notice), the Company shall
have notified Executive in writing ("Election Notice") that the Company
does not dispute its obligations (including, but not limited to, its
indemnity obligations) under this Agreement and that the Company elects
to contest, and to control the defense or prosecution of, such Executive
Claim at the Company's sole risk and sole cost and expense; and
(ii) the Company shall have advanced to Executive on an
interest-free basis, the total amount of the tax claimed in order for
Executive, at the Company's request, to pay or cause to be paid the tax
claimed, file a claim for refund of such tax and, subject to
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the provisions of the last sentence of Section 4.11(g), xxx for a
refund of such tax if such claim for refund is disallowed by the
appropriate taxing authority (it being understood and agreed by the
parties hereto that the Company shall only be entitled to xxx for a
refund and the Company shall not be entitled to initiate any proceeding
in, for example, United States Tax Court) and shall indemnify and hold
Executive harmless, on a fully grossed-up after tax basis, from any tax
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and
(iii) the Company shall reimburse Executive for any and all costs
and expenses resulting from any such request by the Company and shall
indemnify and hold Executive harmless, on fully grossed-up after-tax
basis, from any tax imposed as a result of such reimbursement.
(f) Subject to the provisions of Section 4.11(e) hereof, the Company shall
have the right to defend or prosecute, at the sole cost, expense and risk of
the Company, such Executive Claim by all appropriate proceedings, which
proceedings shall be defended or prosecuted diligently by the Company to a
Final Determination; provided, however, that (i) the Company shall not, without
Executive's prior written consent, enter into any compromise or settlement of
such Executive Claim that would adversely affect Executive, (ii) any request
from the Company to Executive regarding any extension of the statute of
limitations relating to assessment, payment, or collection of taxes for the
taxable year of Executive with respect to which the contested issues involved
in, and amount of, the Executive Claim relate is limited solely to such
contested issues and amount, and (iii) the Company's control of any contest or
proceeding shall be limited to issues with respect to the Executive Claim and
Executive shall be entitled to settle or contest, in his sole and absolute
discretion, any other issue raised by the Internal Revenue Service or any other
taxing authority. So long as the Company is diligently defending or
prosecuting such Executive Claim, Executive shall provide or cause to be
provided to the Company any information reasonably requested by the Company
that relates to such Executive Claim, and shall otherwise cooperate with the
Company and its representatives in good faith in order to contest effectively
such Executive Claim. The Company shall keep Executive informed of all
developments and events relating to any such Executive Claim (including,
without limitation, providing to Executive copies of all written materials
pertaining to any such Executive Claim), and Executive or his authorized
representatives shall be entitled, at Executive's expense, to participate in
all conferences, meetings and proceedings relating to any such Executive Claim.
(g) If, after actual receipt by Executive of an amount of a tax claimed
(pursuant to an Executive Claim) that has been advanced by the Company pursuant
to Section 4.11(e)(ii) hereof, the extent of the liability of the Company
hereunder with respect to such tax claimed has been established by a Final
Determination, Executive shall promptly pay or cause to be paid to the Company
any refund actually received by, or actually credited to, Executive with
respect to such tax (together with any interest paid or credited thereon by the
taxing authority and any recovery of legal fees from such taxing authority
related thereto), except to the extent that any amounts are then due and
payable by the Company to Executive, whether under the provisions of this
Agreement or otherwise. If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 4.11(e)(ii), a determination is
made by the Internal Revenue Service or other appropriate
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taxing authority that Executive shall not be entitled to any refund with
respect to such tax claimed and the Company does not notify Executive in
writing of its intent to contest such denial of refund prior to the expiration
of thirty days after such determination, then such advance shall be forgiven
and shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of any Gross-Up Payments and other
payments required to be paid hereunder.
(h) With respect to any Executive Claim, if the Company fails to deliver
an Election Notice to Executive within the period provided in Section
4.11(e)(i) hereof or, after delivery of such Election Notice, the Company fails
to comply with the provisions of Section 4.11(e)(ii) and (iii) and (f) hereof,
then Executive shall at any time thereafter have the right (but not the
obligation), at his election and in his sole and absolute discretion, to defend
or prosecute, at the sole cost, expense and risk of the Company, such Executive
Claim. Executive shall have full control of such defense or prosecution and
such proceedings, including any settlement or compromise thereof. If requested
by Executive, the Company shall cooperate, and shall cause its affiliates to
cooperate, in good faith with Executive and his authorized representatives in
order to contest effectively such Executive Claim. The Company may attend, but
not participate in or control, any defense, prosecution, settlement or
compromise of any Executive Claim controlled by Executive pursuant to this
Section 4.11(h) and shall bear its own costs and expenses with respect thereto.
In the case of any Executive Claim that is defended or prosecuted by Executive,
Executive shall, from time to time, be entitled to current payment, on a fully
grossed-up after tax basis, from the Company with respect to costs and expenses
incurred by Executive in connection with such defense or prosecution.
(i) In the case of any Executive Claim that is defended or prosecuted to a
Final Determination pursuant to the terms of this Section 4.11(i), the Company
shall pay, on a fully grossed-up after tax basis, to Executive in immediately
available funds the full amount of any taxes arising or resulting from or
incurred in connection with such Executive Claim that have not theretofore been
paid by the Company to Executive, together with the costs and expenses, on a
fully grossed-up after tax basis, incurred in connection therewith that have
not theretofore been paid by the Company to Executive, within ten calendar days
after such Final Determination. In the case of any Executive Claim not covered
by the preceding sentence, the Company shall pay, on a fully grossed-up after
tax basis, to Executive in immediately available funds the full amount of any
taxes arising or resulting from or incurred in connection with such Executive
Claim at least ten calendar days before the date payment of such taxes is due
from Executive, except where payment of such taxes is sooner required under the
provisions of this Section 4.11(i), in which case payment of such taxes (and
payment, on a fully grossed-up after tax basis, of any costs and expenses
required to be paid under this Section 4.11(i) shall be made within the time
and in the manner otherwise provided in this Section 4.11(i).
(j) For purposes of this Agreement, the term "Final Determination" shall
mean (A) a decision, judgment, decree or other order by a court or other
tribunal with appropriate jurisdiction, which has become final and
non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.
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(k) For purposes of this Agreement, the terms "tax" and "taxes" mean any
and all taxes of any kind whatsoever (including, but not limited to, any and
all Excise Taxes, income taxes, and employment taxes), together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such taxes and any interest in respect of such penalties, additions
to tax, or additional amounts.
(l) For purposes of this Agreement, the terms "affiliate" and "affiliates"
mean, when used with respect to any entity, individual, or other person, any
other entity, individual, or other person which, directly or indirectly,
through one or more intermediaries controls, or is controlled by, or is under
common control with such entity, individual or person. The term "control" and
derivations thereof when used in the immediately preceding sentence means the
ownership, directly or indirectly, of 50% or more of the voting securities of
an entity or other person or possessing the power to direct or cause the
direction of the management and policies of such entity or other person,
whether through the ownership of voting securities, by contract or otherwise.
IV.12 Legal Fees and Expenses. The Company shall defend, hold harmless,
and indemnify Executive on a fully grossed-up after tax basis from and against
any and all costs and expenses (including reasonable attorneys', accountants'
and experts' fees and expenses) incurred by Executive acting reasonably from
time to time as a result of any contest (regardless of the outcome) by the
Company or others contesting the validity or enforcement of, or liability
under, any term or provision of this Agreement, plus in each case interest at
the applicable federal rate provided for in Section 7872(f)(2)(B) of the Code.
IV.13 Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit Executive's continuing or future participation in any benefit, bonus,
incentive or other plan, program, arrangement or policy provided by the Company
or any of its affiliates (including, but not limited to, any plan, program,
arrangement or policy described in Section 2.1(c) hereof) and for which
Executive and/or Executive's family may qualify, nor shall anything herein
limit or otherwise affect such rights as Executive and/or Executive's family
may have under any other agreements with the Company or any of its affiliates.
Amounts which are vested benefits or which Executive and/or Executive's family
is otherwise entitled to receive under any plan, program, arrangement, or
policy of the Company or any of its affiliates (including, but not limited to,
any plan, program, arrangement or policy described in Section 2.1(c) hereof) at
or subsequent to the date of termination of this Agreement shall be payable in
accordance with such plan, program, arrangement or policy.
IV.14 Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against
Executive or others. In no event shall Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to Executive under any of the provisions of this Agreement.
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ARTICLE V
GENERAL PROVISIONS
V.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
V.2 Assignability. This Agreement is personal to Executive and without
the prior written consent of the Company shall not be assignable by Executive
other than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by Executive's legal
representatives and heirs. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. The Company shall
require any corporation, entity, individual or other person who is the
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization, or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform, by a
written agreement in form and substance satisfactory to Executive, all of the
obligations of the Company under this Agreement. As used in this Agreement,
the term "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, written agreement, or otherwise.
V.3 Withholding. The Company may 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.
V.4 Entire Agreement; Amendment. This Agreement constitutes the entire
agreement and understanding between Executive and the Company and supersedes
any prior agreements or understandings, whether written or oral, with respect
to the subject matter hereof. Except as may be otherwise provided herein, this
Agreement may not be amended or modified except by subsequent written agreement
executed by both parties hereto.
V.5 Multiple Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which
together shall constitute one Agreement.
V.6 Notices. Any notice provided for in this Agreement shall be deemed
delivered upon deposit in the United States mails, registered or certified
mail, addressed to the party to whom directed at the addresses set forth below
or at such other addresses as may be substituted therefor by notice given
hereunder. Notice given by any other means must be in writing and shall be
deemed delivered only upon actual receipt.
If to the Company:
Arcadian Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: President
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If to Executive:
Xxxx X. Xxxxxxx
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
V.7 Waiver. The waiver of any breach of any term or condition of this
Agreement shall not be deemed to constitute the waiver of any breach of the
same or any other term or condition of this Agreement.
V.8 Severability. In the event any provision of this Agreement is found
to be unenforceable or invalid, such provision shall be severable from this
Agreement and shall not effect the enforceability or validity of any other
provision of this Agreement.
V.9 Other Severance Benefits. This Agreement replaces and supplants any
and all provisions of and benefits under the Arcadian Corporation Severance
Program for Key Employees.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
ARCADIAN CORPORATION
By: /s/ X.X. XXXXXXXX
______________________________________________
Name: X. X. Xxxxxxxx
Title: President and Chief Executive Officer
/s/ XXXX X. XXXXXXX
__________________________________________________
Name: Xxxx X. Xxxxxxx
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