1
Exhibit 10.5(b) Form of Amended and Restated Employment Agreement.
2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of the [ th] day
of [month], 1996 (the "Agreement"), between ASSOCIATES CORPORATION OF NORTH
AMERICA (A Texas Corporation), a corporation existing under laws of the State
of Texas (the "Company"), and [Name of Executive] (the "Executive").
WITNESSETH
WHEREAS, the Company and the Executive have entered into an agreement
relating to the employment of the Executive for a period of three years from
__________________________________________, 1995 (the "Effective Date");
WHEREAS, the Company and the Executive desire to amend and restate the
Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
1.1 Effective on the date of the Agreement, the Executive hereby
agrees to serve, upon the terms and conditions herein contained, as an
executive of the Company, an indirect subsidiary of Ford Motor Company. The
Executive shall have such duties as the Board of Directors of the Company may
determine.
1.2 Unless automatically renewed, the term of employment under
this Agreement shall commence on the Effective Date and, subject to the terms
hereof, shall terminate on the day prior to the third anniversary of such date.
This Agreement shall automatically renew for subsequent sequential one-year
periods unless terminated in writing by either party not later than 60 days
prior to the end of the initial three-year period or any
2
3
subsequent one-year period. Each such one-year renewal period is referred to
as a "Renewal Period." The full three-year period and Renewal Periods are
referred to as the "Employment Term."
1.3 During the Executive's employment hereunder, the Executive
shall devote the Executive's best efforts and substantially all the Executive's
business time and services to the business and affairs of the Company.
2. SALARY
2.1 During the Executive's employment hereunder, the Executive
shall be entitled to receive a base salary at the rate of $[salary] per annum,
payable in accordance with the Company's payroll policy from time to time in
effect.
2.2 The Company may, in its sole discretion, increase the
Executive's per annum base salary.
3. BONUSES
During the Executive's employment hereunder, the Executive shall be
eligible to receive bonuses on the terms specified in any bonus plan applicable
to executives of the Company.
4. TERMINATION
4.1 The employment of the Executive hereunder may be terminated by
the Company by fifteen (15) days' written notice given at any time, with or
without Cause. As used herein, the term "Cause" shall be limited to (a) action
by the Executive involving willful malfeasance, (b) the Executive's
unreasonable neglect or refusal to perform the executive duties assigned to the
Executive under this Agreement, (c) the Executive being convicted of a felony,
(d) the Executive engaging in any activity that is directly or indirectly in
competition with the Company or any affiliate or in any activity that is
inimical to the best
3
4
interests of the Company or any affiliate, or (e) the Executive's violation of
Company policy covering standards of corporate conduct; provided that the
determination of Cause shall be made by the Company's Board of Directors. If
the Company terminates the Executive's employment for Cause, all the Company's
obligations under this Agreement shall thereupon cease and terminate.
4.2. In the event that the Executive's employment is terminated by
the Company other than for Cause or a Change in Control occurs that results in
termination other than for Cause within 12 months of such Change in Control,
including "Constructive Termination," the Executive shall be entitled, in lieu
of any other compensation and benefits provided for herein, (i) to receive a
lump sum in an amount equal to (x) [three/two] times the sum of the Executive's
then current annual base salary and an amount equal to the average of the
amounts paid to the Executive under the Company's Corporate Annual Performance
Plan ("XXXX") during each of the three years immediately preceding the year of
termination, plus (y) a pro rata amount, based on the portion of the current
performance year preceding termination, equal to the average of the amounts
paid to the Executive under both the XXXX and the Company's Long-Term
Performance Plan ("LTPP") during each of the three years immediately preceding
the year of termination; (ii) to be immediately vested in full with respect to
any awards issued under the Company's Long-Term Equity Compensation Plan
("ECP"), subject to Section 8.7 of the ECP, if applicable; and (iii) to
continue to receive, for [three/two] years from the date of termination, at the
Company's expense, life insurance and medical, dental and disability benefits
at least comparable to those provided by the Company to the Executive on the
date of termination of employment, provided that such benefits shall cease if
the Executive obtains other employment with comparable benefits. If a Change
in Control occurs that results in
4
5
termination within 12 months of a Change in Control, including Constructive
Termination, the Executive's accrued benefits under the Company's Excess
Benefit Plan ("EBP") and Supplemental Retirement Income Plan ("SRIP") shall
become 100% vested and the Executive shall also be entitled to receive
distribution of his account balance under the Company's Equity Deferral Plan
("EDP").
4.3 Notwithstanding any other provision, the right of the
Executive to any benefits provided in this Agreement shall cease if the Board
of Directors of the Company determines that the Executive has violated Section
8.3 herein, or has engaged in any activity that is inimical to the best
interests of the Company or any affiliate.
4.4 Notwithstanding any provision herein to the contrary, total
compensation paid to the Executive as a result of a Change in Control pursuant
to this Section 4 shall not exceed 2.99 times the average of the Executive's
Compensation during the five years preceding the termination. "Executive
Compensation" shall have the same meaning as the meaning given to "Annualized
Includable Compensation for Base Period" in Section 280G(d)(1) of the Internal
Revenue Code of 1986, as amended.
4.5 "Change in Control" means any of the following:
(i) Any merger, consolidation or similar combination with
or involving the Company, as of the date of the conclusion of such
event, other than a merger, consolidation or similar combination of
the Company with Ford or any of its affiliates;
(ii) Any transaction or series of transactions that
results in the sale or divestiture of all or substantially all of the
Company's assets, as of the conclusion or such transaction of series
of transactions;
5
6
(iii) Any capital reorganization or series of transactions
that results in Ford and its affiliates owning common stock of the
Company having less than 50% of the combined voting power of
outstanding capital stock of the Company, as of the date of the
conclusion of such reorganization, transaction or series of
transactions; or
(iv) The successful completion of a public offering, or
distribution to the public by dividend or spinoff, that results in
Ford and its affiliates owning common stock of the Company having less
than 50% of the combined voting power of the outstanding capital stock
of the Company.
4.6 Unless consented to in writing by the Executive, "Constructive
Termination" shall occur if any of the following result from a Change in
Control:
(i) The assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including
status, offices, titles and reporting requirement), authority, duties
or responsibilities or any other action which results in a substantial
diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied by the employer
promptly after receipt of notice thereof given by the Executive;
(ii) Any failure to (x) continue to provide the Executive
with the opportunity to participate, on terms substantially comparable
in the aggregate to those in effect immediately prior to the Change in
Control, in substantially the same benefit or compensation plans and
programs, including Company's life, disability, health and retirement
plans in which the Executive was participating immediately prior to
the date of the Change in Control, or their equivalent, or (y) provide
the Executive with all other fringe benefits (or their equivalent)
from time to time in
6
7
effect for the benefit of any executive, management or administrative
group of the Company which customarily includes a person holding the
employment position with Company then held by the Executive; or
(iii) Without the Executive's express written consent, a
substantial reduction, without good business reasons, of the
facilities and perquisites available to the Executive immediately
prior to such reduction.
5. PERMANENT DISABILITY OR DEATH
In the event of the Executive's permanent disability as defined in the
long-term disability plan applicable to employees of the Company on the date
hereof ("Permanent Disability") while employed hereunder during the Employment
Term, the Executive shall receive monthly for a period of six months after the
determination of Permanent Disability an amount equal to the Executive's then
current monthly base salary plus one-twelfth of the average of the amounts paid
to the Executive under the XXXX during each of the three years immediately
preceding the year of Permanent Disability less any amounts received through
any disability or salary continuation plan provided pursuant to Section 7
hereof. In the event of the Executive's death while employed hereunder during
the Employment Term, the Executive's estate or designated beneficiaries shall
receive a lump sum equal to the Executive's then current annual base salary
plus the average of the amounts paid to the Executive under the XXXX during
each of the three years immediately preceding the year of death. In the event
of the Executive's Permanent Disability or death as specified in this Section
5, the employment of the Executive and all obligations of the Company hereunder
(other than the obligation (i) for the compensation specified in this Section
5, and (ii) to pay amounts for which the Company is responsible under
applicable benefit plans, policies and practices in the event of death or
Permanent Disability) shall terminate.
7
8
6. EXPENSES
During the Executive's employment hereunder, the Executive is
authorized to incur reasonable expenses for promoting the business of the
Company, including expenses for travel and similar items, in accordance with
the Company's policy as in effect from time to time. The Company will
reimburse the Executive for all such reasonable expenses as determined by
management in accordance with Company policy upon presentation by the Executive
from time to time of an itemized account of such expenditure.
7. EXECUTIVE BENEFITS
7.1 During the Executive's employment hereunder, the Executive
shall be included in any and all plans providing benefits for (a) the Company's
employees generally and (b) the Company's executives of comparable status. In
furtherance and not in limitation of the foregoing, throughout the Employment
Term, the Company shall provide to the Executive life insurance, medical,
dental, disability and other employee welfare benefits and defined benefit
pension plan benefits which, on an overall basis, shall be no less favorable to
the Executive than those in effect for employees (of comparable pay grade or
status) of the Company from time to time.
7.2 During the Executive's employment hereunder, the Executive
shall remain eligible to participate in all incentive, profit sharing, bonus,
stock option, or other similar or comparable plans applicable to Company
executives of a similar class and station, in accordance with the terms thereof
in effect from time to time.
8. RESTRICTIVE COVENANTS
8.1 The Executive agrees to execute and deliver from time to time
the Company's standard confidentiality, conflict of interest and proprietary
information agreements.
8
9
8.2 The Executive and the Executive's agents will not, during the
12-month period following any termination of employment hereunder, or in
contemplation of termination of employment, induce, entice or solicit any
employee of the Company or its affiliates, to leave employment with the Company
or its affiliates.
8.3 The Executive will not, either directly or indirectly, during
the Employment Term or for a period of two years thereafter, compete with the
Company, in any manner or capacity (e.g., as an advisor, principal, agent,
partner, officer, director, stockholder, employee, member of any association or
otherwise) in any phase of the business which the Company or any of its
subsidiaries conduct business during the term of this Agreement. The
obligations of this covenant not to compete ("Covenant") shall apply to any
geographic area in which the Company and its subsidiaries have engaged in
business during the Employment Term. The Executive agrees and acknowledges
that it would be difficult to fully compensate the Company for the damages
resulting from a breach of this Covenant, and that the Company will, therefore,
be entitled to temporary and permanent injunctive relief in the event of any
actual or threatened breach. Such relief may be granted without the necessity
of proving actual damages, but this provision does not diminish the Company's
right to recover damages in addition to injunctive relief.
9. NOTICE
All notices or communications hereunder shall be in writing, addressed
as follows:
To the Company:
Associates Corporation of North America (A Texas Corporation)
000 Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
9
10
To the Executive:
[Name of Executive]
[Address]
Any notice or communication shall be sent certified or registered mail, return
receipt requested, postage prepaid, addressed as above (or to such other
address as a party may designate in writing from time to time), and the actual
date of receipt, as shown by the receipt therefore, shall determine the time at
which notice was given.
10. SEPARABILITY
If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such provision shall be modified, to the
extent practical, consistent with the intent of the parties, in order to render
it enforceable, but such invalidity or unenforceability shall not affect the
remaining provisions hereof, which shall remain in full force and effect.
11. ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
heirs and representatives of the Executive and the assigns and successors of
the Company. Neither this Agreement nor any rights hereunder shall be
assignable or otherwise subject to hypothecation by the Executive, and any such
attempted assignment or hypothecation shall be void. This Agreement shall be
assignable by the Company in connection with any transfer of all or
substantially all of the Company's business or any transfer of a portion of the
Company's business for which the Executive has responsibility; provided,
however, that the Company shall remain responsible for all the obligations of
the Company set forth herein for the remainder of the initial three year period
of the Employment Term or the remainder of then current Renewal Period, as
applicable.
10
11
12. ENTIRE AGREEMENT; AMENDMENT
This Agreement represents the entire agreement of the parties relating
to its subject matter and shall supersede any and all previous written or oral
employment agreements between the Company or any of its affiliates and the
Executive. This Agreement may be modified or amended only by a writing signed
by both parties hereto.
13. GOVERNING LAW
This Agreement shall be construed, interpreted and governed in
accordance with the laws of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
______________________________________________
[Name of Executive]
ASSOCIATES CORPORATION OF NORTH AMERICA
(A Texas Corporation)
By:___________________________________________
Its:__________________________________________
11
