FORM CHANGE OF CONTROL AGREEMENT DATED DECEMBER 19, 2007
EXHIBIT 10.21
FORM
CHANGE OF CONTROL AGREEMENT DATED DECEMBER 19, 2007
______________________
____________________________
____________________________
____________________________
Dear
_____________________,
Cameron
International Corporation (the “Company”) considers the establishment and
maintenance of a sound and vital management to be essential for the protection
and enhancement of the best interests of the Company and its
shareholders. The Company recognizes that, as is the case with many
publicly-held corporations, the possibility of a Change of Control1 may
arise and that such possibility, and the uncertainty and questions which it may
raise among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its
shareholders. Accordingly, the Board of Directors of the Company (the
“Board”) has determined that appropriate steps should be taken to assure the
Company of the continuation of your service and to reinforce and encourage the
attention and dedication of members of the Company’s management to their
assigned duties without distraction in circumstances arising from the
possibility of a Change of Control. In particular the Board believes it
important, should the Company or its shareholders receive a proposal for or
notice of a Change of Control, or consider one itself, that you be able to
assess and advise the Company whether such transaction would be or is in the
best interests of the Company and its shareholders, and to take such other
action regarding such transaction as the Board might determine to be appropriate
without being influenced by the uncertainties of your own
situation.
In order to
induce you to remain in the employ of the Company, this letter agreement (the
“Agreement”), prepared pursuant to authority granted by the Board, sets forth
the compensation and severance benefits which the Company agrees will be
provided to you should your employment with the Company be terminated in
connection with a Change of Control under the circumstances described below, as
well as certain other benefits which will be made available to you should you be
employed by the Company on the Effective Date of a Change of
Control.
This Agreement shall
remain in full force and effect for as long as you remain in your current
position with the Company or any other position of equal or higher grade which
has historically made its holder eligible for a Change of Control Agreement;
provided, however, that this Agreement shall terminate and cease to be in full
force and effect upon your giving notice of your intent to terminate your
employment with the Company for any reason other than Good Reason, whether by
retirement, early retirement, or otherwise. This
Agreement supersedes any prior Agreement between you and the Company regarding
the subject matter hereof.
_____________________________
1
Reference is made to Annex I hereto for definitions of certain terms used in
this Agreement, and such definitions are incorporated herein by such reference
with the same effect as if set forth herein. Certain capitalized
terms used in this Agreement in connection with the description of various Plans
are defined in the respective Plans, but if any conflicts with a definition
herein contained, the latter shall prevail.
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1.
Termination
in Connection with a Change of Control.
(a) If there is
a termination of your employment with the Company either by the Company without
Cause or by you for Good Reason during the period between the Effective Date of
a Change of Control and 2 years following the occurrence of the Change of
Control (the “Effective Period”), and if such Effective Date occurs during the
life of this Agreement, you shall be entitled to the following benefits, whether
or not this Agreement has been cancelled prior to the time of your
termination:
(i) all
benefits conferred upon you by the Severance Package, and
(ii) in addition,
all benefits payable under the provisions either of the Company’s employee and
executive Plans in which you are a participant immediately prior to the
Effective Date, or of those plans in existence at the time of your Termination
Date, whichever are more favorable to you, in accordance with the terms and
conditions of such Plans or plans, such benefits to be paid under such Plans or
plans and not under this Agreement.
(b) Notwithstanding
the
above, you shall not be entitled to any such benefits if your termination
results from your death or disability, unless
your death or disability occurs (i) during the Effective Period and (ii), with
respect to the benefits conferred by the Severance Package only, after either it
has been decided that you will be terminated without Cause during the Effective
Period, or you have given notice of termination for Good Reason during the
Effective Period.
(c) You shall not
be required to mitigate the amount of any payment provided for in this Agreement
by seeking other employment, nor shall the amount of any payment provided for in
this Agreement be reduced by any compensation earned by you as the result of
employment by another employer after any Termination
Date.
2. Procedures
for Termination.
(a) If it is
intended that your employment be terminated by you for Good Reason you shall
transmit to the Company written notice setting forth the particulars upon which
you base your determination that Good Reason exists and, only if the stated
basis therefore is capable of being cured, requesting a cure within 10 days.
Failing such a cure, a “final separation” shall then occur, and if such stated
basis is not capable of cure by the Company, “final separation” shall occur
co-extensive with delivery of the notice. For purposes of this
Agreement, a “Termination Date” shall be deemed to have occurred upon the date
of such “final separation".
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(b) If it is
intended that your employment be terminated by the Company without Cause, a
“Termination Date” shall be deemed to have occurred upon the 30th day
following the date of receipt of any notice so stating, or upon the date
specified in the notice, whichever is later. If it is intended that
your employment be terminated by the Company for Cause, if you contest such
termination pursuant to any proceeding initiated pursuant to Section 6 hereof
within 15 days of receipt of such notice, and it is ultimately determined that
cause did not exist, then (anything else in the Agreement to the contrary
notwithstanding) a “Termination Date” shall be deemed to have occurred upon the
final resolution of
such proceeding.
3. LTIP
Benefit
Acceleration. Immediately
upon an applicable Termination Date, all contingent compensation rights issued
to you under the LTIP Plan, which are then (i) held by you, a member of your
Immediate Family, or a partnership or limited liability company whose partners
or shareholders are you and members of your Immediate Family, and (ii)
outstanding, shall become vested, exercisable, distributable and unrestricted
(any contrary provision in the LTIP Plan notwithstanding) whether or not you
continue to be employed by the Company. You shall have the right immediately
upon any written request by you to the Company, to (i) exercise all or any
portion of all your options covered (including, at your sole election, any
associated Tandem SAR) by the LTIP Plan and to have the underlying Shares issued
to you, (ii) have issued to you on a non-forfeitable basis any or all Shares
covered by Restricted Stock Awards held by you under the LTIP Plan, (iii) have
issued to you any or all Performance Shares and/or Performance Units held by you
in the LTIP Plan, (iv) exercise all or any portion of any LTIP Plan Freestanding
SAR held by you, and (v) obtain the full benefit of any other contingent
compensation rights to which you may be entitled under the LTIP Plan, in each
case as though all applicable Performance Targets had been met or achieved at
maximum levels for all Performance Periods (including those extending beyond the
Effective Date) and any and all other LTIP Plan contingencies had been satisfied
in full at the date of the Change of Control and the maximum possible benefits
thereunder had been earned at the date of the Change of
Control.
4. Conditional
Share Purchase Obligation.
(a) If a Change
of Control occurs as a consequence of a tender offer or exchange offer (the
“Tender Offer”), the Company shall, if requested by you, purchase from you
(whether a Termination Date has occurred following the Change of Control) for
cash on any business day selected by you upon not less than ten days’ notice to
the Company, which day shall not be less than ten days following consummation of
the Tender Offer nor more than three years after the Effective Date, up to that
number of Shares which shall be equal to the product of (x) the number of Shares
acquired by you upon exercise or distribution of any benefit under the Bonus
Plan or LTIP Plan prior to consummation of the Tender Offer, multiplied by (y)
the decimal equivalent of (I) the number of Shares accepted for purchase or
exchange in the Tender Offer, divided by (II) the number of Shares timely and
validly tendered pursuant to the Tender Offer. In the event the above obligation
to purchase Shares occurs by reason of a cash tender offer or a combination cash
tender offer and exchange offer, the cash price per share to be paid to you
hereunder shall be equal to the highest price paid in cash pursuant to the
Tender Offer. In the event such obligation occurs by reason of an exchange
offer, the cash price per share to be paid to you hereunder shall be equal to
the closing price, if traded on a stock exchange, or the average bid and asked
prices, if traded in the over-the-counter market, of the security of the person
so exchanged for the Shares (the “Exchange Security”) on the first day on which
the Exchange Security could have been sold by you on such exchange or in the
over-the-counter market, as the case may be, in a regular broker’s transaction
had your Shares been tendered and accepted, multiplied by the number of Exchange
Securities (or fraction thereof) issued in the Tender Offer for each Company
Share; and
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(b) If a Change
of Control occurs pursuant to a Tender Offer and (i) a merger, consolidation,
reorganization, sale, spin-off, or purchase of assets under which all remaining
outstanding Shares will be converted into or become exchangeable for cash, or
for securities (“Merger Security”) issued or to be issued by the Person who made
the Tender Offer (or a subsidiary or affiliate of such Person) is thereafter
proposed to the Company or its shareholders, and (ii) such merger,
consolidation, reorganization or purchase of assets occurs less than three years
after the Effective Date, and (iii) the amounts of cash into which each Share
would be converted if the transaction is effected wholly for cash, or the Merger
Security Value (as defined below) if such transaction is effected wholly for
Merger Securities, or the sum of the cash and the Merger Security Value if the
Transaction is effected partly for cash and partly for Merger Securities, as the
case may be, is less than 95% of the per share price that would have been paid
by the Company for such portion of your Shares had you exercised your option to
require the Company to purchase such Shares under Section 4(a) above, the
Company shall pay you (whether or not a Termination Date has occurred following
a Change of Control), an amount in cash equal to the difference between the
aggregate price you would have received from the number of Shares the Company
would have been required to purchase from you had you exercised such option
under Section 4(a) and the amount of cash and/or the Merger Security Value
received for the same number of Shares in such merger, consolidation,
reorganization or purchase of assets. Such cash payment shall be made to you on
a business day selected by you upon no less than ten-calendar days’ notice to
the Company or its Successor (as hereinafter defined). For purposes of this
Section 4(b), “Merger Security Value” shall mean the closing price, if traded on
a stock exchange, or the average bid and asked prices if traded in the
over-the-counter market, of the Merger Security on the first day on which the
Merger Security could have been sold by you on such exchange or in the
over-the-counter market, as the case may be, in a regular broker’s transaction,
multiplied by the number of Merger Securities (or fraction thereof) for which
each Share was exchangeable or into which each Share was convertible. If no
public market develops for the Merger Security within 30 days from the date of
its issue, however, “Merger Security Value” shall mean the fair market value of
such Merger Security (on a per unit basis in the written opinion of a nationally
recognized investment banking firm acceptable to you) on the effective date of
the merger, consolidation, reorganization or purchase of assets, as the case may
be, multiplied by the number of Merger Securities (or fraction thereof) for
which each Share was exchangeable or into which each Share was
convertible.
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5. Excise
Tax.
(a) Any other
provision of this Agreement to the contrary notwithstanding, if any payment in
the nature of compensation to be paid or provided to you under this Agreement or
otherwise is considered to be a “parachute payment” within the meaning of
Section 280G(b) of the Code, the Company shall pay to you an additional amount
(hereinafter referred to as the “Excise Tax Premium”). The Excise Tax
Premium shall be equal to the excise tax determined under Code Section 4999
attributable to the total amount of payments received by you. The
Excise Tax Premium shall also include any amount attributable to excise tax on
the Excise Tax Premium. The Company shall also pay to you an
additional amount (the “Additional Amount”) such that the net amount received by
you, after paying any applicable Excise Tax Premium and any federal or state
income, excise or other tax on such additional amount, shall be equal to the
amount that you would have received if such Excise Tax Premium were not
applicable. You shall be deemed to pay income taxes at all relevant
times at the highest marginal rate of income taxation in effect in your taxing
jurisdiction. The Additional Amount shall include any amount
attributable to income, excise or other tax on the Additional
Amount.
(b) Not later
than 30 days following any payment in the nature of compensation described
herein, the independent public accountants acting as auditors for the Company on
the date of the transaction constituting the change of control within the
meaning of Code Section 280G (or another accounting firm designated by you)
shall determine whether the sum of the present value of any “parachute payments”
payable under this Agreement or otherwise and the present value of any other
“parachute payments” received by you upon or after any such change of control is
in excess of the amount you can receive without causing you to be subject to an
excise tax with respect to such amount on account of Code Section 4999, and
shall determine the amount of any Excise Tax Premium and Additional Amount
payable to you. The Excise Tax Premium and Additional Amount shall be
paid to you as soon as practicable but in no event later than the time when the
tax payment is due, including by way of withholding, and shall be net of any
amounts required to be withheld for taxes.
(c) For purposes
of this Section, “present value” means the value determined in accordance with
the principles of Section 1274 (b) (2) of the Code under the rules provided in
Treasury Regulations under Section 280G of the
Code.
(d) To the
extent Code Section 280G is amended prior to the termination of this Agreement,
or is replaced by a successor statute, the provisions of this Section 5 shall be
deemed modified without further action of the parties in a manner consistent
with such amendments or successor statutes, as the case may be. In
the event that Code Section 280G or any successor statute is repealed, this
Section 5 shall cease to be effective on the effective date of such
repeal. The parties recognize that Treasury Regulations under Code
Sections 280G and 4999 may affect the amount that may be paid hereunder and
agree that, upon the issuance of any such regulations, this Agreement may be
modified as in good faith may be deemed necessary in light of the provisions of
such regulations to achieve the purposes hereof, and that consent to such
modifications shall not be unreasonably
withheld.
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6. Dispute
Resolution.
(a) This
Agreement
shall be governed in all respects, including as to validity, interpretation and
effect, by the internal laws of the State of Texas without regard to choice of
law principles.
(b) It is
irrevocably agreed that if any dispute arises between us under this Agreement:
(i) exclusive jurisdiction shall be in the lowest Texas state court of general
jurisdiction sitting in Xxxxxx County, Texas, (ii) we are each at the time
present in Texas for the purpose of conferring personal jurisdiction; (iii) any
such action may be brought in such court, and any objection that the Company or
you may now or hereafter have to the venue of such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient
court is waived, and we each agree not to plead or claim the same, (iv) service
of process in any such proceeding or action may be effected by mailing a copy
thereof by registered or certified mail, return receipt requested (or any
substantially similar form of mail), postage prepaid, to such party at the
address provided in Section 11 hereof, and (v) prior to any trial on the
merits, we will submit to court supervised, non-binding
mediation.
(c) Notwithstanding
any
contrary provision of Texas law, the Company shall have the burden of proof with
respect to any of the following: (i) that Cause existed at the time any notice
was given to you under Section 2 (ii) that Good Reason did not exist at the time
notice was given to the Company under Section 2; and (iii) that a Change of
Control has not occurred.
7.
Successors;
Binding Agreement.
(a) In the event
any Successor (as defined below) does not assume this Agreement by operation of
law the Company will seek to have any Successor, by agreement in form and
substance satisfactory to you, expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it. If there has been a Change of Control prior to, or a
Change of Control will result from, any such succession, then failure of the
Company to obtain at your request such agreement prior to or upon the
effectiveness of any such succession (unless assumption occurs as a matter of
law) shall constitute Good Reason for termination by you of your employment and,
upon delivery of a notice of termination by you to the Company, you shall be
entitled to the benefits provided for herein. “Successor” shall mean
any Person that succeeds to, or has the ability to control, the Company’s
business as a whole, directly by merger, consolidation, spin-off or similar
transaction, or indirectly by purchase of the Company’s Voting Securities or
acquisition of all or substantially all of the assets of the
Company.
(b) This
Agreement shall inure to the benefit of and be enforceable by your personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
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8.
Fees
and Expenses. The Company shall pay all legal fees and expenses incurred
by you as a result of your seeking to interpret, obtain, assert or enforce any
right or benefit conferred upon you by this Agreement to the extent you are the
prevailing party.
9.
Notices. Any
and all notices required or permitted to be given hereunder shall be in writing
and shall be deemed to have been given when delivered in person to the persons
specified below or deposited in the United States mail, certified or registered
mail, postage prepaid and addressed as follows:
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If
to the Company:
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Cameron
International Corporation
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0000
Xxxx Xxxx Xxxxx, Xxxxx 0000
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Xxxxxxx,
Xxxxx 00000
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Attention:
Chief Executive Officer
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If
to you:
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___________________________
____________________________
____________________________
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Either
party may change, by the giving of notice in accordance with this Section 9, the
address to which notices are thereafter to be sent.
10. Validity. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
11. Survival. All
obligations undertaken and benefits conferred pursuant to this Agreement shall
survive any termination of your employment and continue until performed in
full.
12. Miscellaneous. No
provision of this Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is agreed to in writing signed by you and the
Company. No waiver by either party hereto at any time of any breach by the other
party hereto of, or of compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The internal laws of
the State of Texas shall govern the validity, interpretation, construction and
performance of this Agreement.
13. Duplicate
Originals. This Agreement has been executed in duplicate
originals, with one to be held by each of the parties hereto.
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If this
Agreement correctly sets forth our understanding with respect to the subject
matter hereof, please sign and return one copy of this Agreement to the
Company.
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Sincerely,
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CAMERON
INTERNATIONAL CORPORATION
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By:
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/s/
Xxxxxxx X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx
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Chairman
and
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Chief
Executive Officer
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Agreed to
as of the _______day of ___________________
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Name:
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Annex
I to Agreement dated ____________
between
Cameron
International Corporation
and
___________________________________
DEFINITION
OF
CERTAIN
TERMS
“Agreement”
means the letter agreement between ___________________________and the
Company dated _______________________.
“Bonus
Plan” means
for each year, the Company’s Management Incentive Compensation Plan or any other
Plan adopted by the Board which provides for the payment of additional
compensation on an annual basis to senior executive officers contingent upon the
Company’s results of operations for that specific year, in either case as such
Plan shall be amended or modified to, but not on or after, any Effective
Date.
“Bylaws”
means
the bylaws of the Company as in effect at the date hereof and as the same shall
be amended or otherwise modified to, but not on or after, any Effective
Date.
“Cause”
means (i) your conviction
by a court of competent jurisdiction, from which conviction no further appeal
can be taken, of a felony-grade crime involving moral turpitude, or (ii) your
willful failure to perform substantially your duties with the Company (other
than a failure due to physical or mental illness) which is materially and
demonstrably injurious to the Company. No act or failure to act
on your part shall be considered “willful” unless done, or omitted to be done,
by you in bad faith and without reasonable belief that your action or omission
was in, or not opposed to, the best interests of the
Company.
“Change
of Control” means
the earliest date at which:
(i) any
Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
20% or more of the combined voting power of the Company’s outstanding Voting
Securities, other than through the purchase of Voting Securities directly from
the Company through a private placement;
or
(ii) individuals
who constitute the Board on the date hereof (the “Incumbent Board”) cease for
any reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company’s shareholders, was approved by a vote of at least
two-thirds of the directors comprising the Incumbent Board shall from and after
such election be deemed to be a member of the Incumbent Board;
or
(iii) a merger
or consolidation involving the Company or its stock or an acquisition by the
Company, directly or indirectly or through one or more subsidiaries, of another
entity or its stock or assets in exchange for the stock of the Company, unless,
immediately following such transaction, 70% or more of the then outstanding
Voting Securities of the surviving or resulting corporation or entity will be
(or is) then beneficially owned, directly or indirectly, by the individuals and
entities who were the beneficial owners of the Company’s outstanding Voting
Securities immediately prior to such transaction (treating, for purposes of
determining whether the 70% continuity test is met, any ownership of the Voting
Securities of the surviving or resulting corporation or entity that results from
a stockholder’s ownership of the stock of, or other ownership interest in, the
corporation or other entity with which the Company is merged or consolidated as
not owned by persons who were beneficial owners of the Company’s outstanding
Voting Securities immediately prior to the transaction;
or
A-1
(iv) any
transaction of the type described in part (iii) above, that would have qualified
as a “Change of Control” but for the fact that the consideration therefore is
part or all cash;
(v)
a tender offer or exchange offer is made and consummated by a
Person other than the Company for the ownership of 20% or more of the Voting
Securities of the Company then outstanding; or
(vi) all or
substantially all of the assets of the Company are sold or transferred to a
Person as to which (A) the Incumbent Board does not have authority (whether by
law or contract) to directly control the use or further disposition of such
assets and (B) the financial results of the Company and such Person are not
consolidated for financial reporting.
Anything else in
this definition to the contrary notwithstanding, no Change of Control shall be
deemed to have occurred by virtue of any transaction which results in you, or a
group of Persons which includes you, acquiring more than 20% of either the
combined voting power of the Company’s outstanding Voting Securities or the
Voting Securities of any other corporation or entity which acquires all or
substantially all of the assets of the Company, whether by way of merger,
consolidation, sale of such assets or otherwise.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Defined
Benefit Plan” means the Company’s Retirement Plan and Supplemental Excess
Defined Benefit Plan, as the same shall be amended or modified prior to, but not
on or after, any Effective Date.
“Defined
Contribution Plan” means the Company’s Retirement Savings Plan and
Supplemental Excess Defined Contribution Plan, as the same shall be amended or
modified prior to, but not on or after, any Effective
Date.
“Disability”
means your continuing full-time absence from your duties with the Company for
180 days or longer as a result of physical or mental
incapacity.
“Effective
Date” means the
earliest date upon which (i) any of the events set forth under the definition of
Change of Control shall have occurred, (ii) the receipt by the Company of a
Schedule 13D stating the intention of any Person to take actions which, if
accomplished, would constitute a Change of Control, (iii) the public
announcement by any Person of its intention to take any such action, in each
case without regard for any contingency or condition which has not been
satisfied on such date, (iv) the agreement by the Company to enter into a
transaction which, if consummated, would result in a Change of Control, or (v)
consideration by the Board of a transaction which, if consummated, would result
in a Change of Control.
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If, however,
an Effective Date occurs but the proposed transaction to which it relates ceases
to be actively considered, the Effective Period will be deemed not to have
commenced for purposes of this Agreement. If an Effective Date occurs
with respect to a proposed transaction which ceased to be actively considered
but for which active consideration is revived, the Effective Date with respect
to the Change of Control that ultimately occurs shall be that date when
consideration was revived and carried through to
consummation.
“Effective
Period” means the period between the Effective Date and 2 years
following the occurrence of the Change of Control.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
“Good
Reason” means any of the following:
(i) except as
a result of your death or Retirement, or following the receipt by you of a
Notice of Termination for Cause or due to Disability, a change in your status,
title(s) or position(s) with the Company, including as an officer of the
Company, which, in your reasonable judgment, does not represent a promotion,
with commensurate adjustment of compensation, from your status, title(s) and
position(s) immediately prior to the Effective Date; or the assignment to you of
any duties or responsibilities which, in your reasonable judgment, are
inconsistent with such status, title(s) or position(s); or the withdrawal from
you of any duties or responsibilities which in your reasonable opinion are
consistent with such status, title(s) or position(s); or any removal of you from
or any failure to reappoint or reelect you to such position(s);
or
(ii)
a reduction by the Company any time after the Effective Date in your
then current base salary; or
(iii) the
failure by the Company to continue in effect any Plan in which you were
participating immediately prior to the Effective Date other than as a result of
the normal expiration or amendment of any such Plan in accordance with its
terms, or the taking of any action, or the failure to act, by the Company which
would adversely affect your continued participation in any such Plan on at least
as favorable a basis to you as is the case immediately prior to the Effective
Date or which would materially reduce your benefits under any of such Plans or
deprive you of any material benefit enjoyed by you immediately prior to the
Effective Date, except as consented to by you; or
(iv) the
relocation of the principal place of your employment to a location 25 miles
further from your principal residence without your express written consent;
or
A-3
(v)
the failure by the Company upon a Change of Control to
obtain the express assumption of this Agreement by any Successor (other than by
operation of law); or
(vi) any
refusal by the Company to continue to allow you to attend to matters or engage
in activities not directly related to the business of the Company which you
attended to or were engaged in immediately prior to the Effective Date and which
do not otherwise violate your obligations hereunder; or
(vii) any
continuing material default by the Company in the performance of its obligations
under this Agreement, whether before or after a Change of Control.
“LTIP
Option” means any option granted under the LTIP
Plan.
“LTIP
Plan” means the
Company’s Long-Term Incentive Plan and/or its Broad Based 2000 Incentive Plan
adopted as such plan may be amended, modified, or replaced, up to, but not on or
after, an Effective Date.
“Market
Value” means, when used with respect to Shares or Voting Securities, the
closing price thereof on the New York Stock Exchange on the date for which the
Market Value is to be determined, or if not listed thereon, on such other
exchange as shall at that time constitute the principal exchange for trading the
Shares or Voting Securities.
“Other
Plans” means any thrift, bonus or incentive, stock option or stock
accumulation pension medical, disability, accident or life insurance plan,
program or policy of the Company which is intended to benefit employees of the
Company similarly situated to you (other than the Bonus Plan, Defined Benefit
Plan, Defined Contribution Plan, LTIP Plan or Purchase
Plan).
“Person”
means any individual, corporation, partnership, group, association or other
“person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act,
other than the Company or any Plans sponsored by the
Company.
“Perquisites”
means individual perquisite benefits received by you immediately prior to the
Effective Date, including, but not limited to, club membership dues and certain
automobile expenses.
“Plans”
means the
Bonus Plan, Defined Benefit Plan, Defined Contribution Plan, LTIP Plan, Purchase
Plan, Compensation Deferral Plan and Other
Plans.
“Purchase
Plan” means the Company’s Employee Stock Purchase Plan adopted as the
same shall be amended or modified prior to, but not on or after, the Effective
Date.
“Retirement”
means
termination of your employment on the “normal retirement date” as set forth in
the Defined Benefit Plan.
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“Severance
Package” means your right to receive, and the Company’s obligation to pay
and/or perform, the following:
(a) on or
within ten days following an applicable Termination Date, the Company shall pay
to you a lump sum, cash amount equal to the sum of (i) three times the highest
annual rate of base salary in effect during the current year or any of the three
years preceding the Termination Date, and (ii) three times the greater of (A)
the target award you would have been eligible to receive under the Bonus Plan in
respect of the current year, regardless of any limitations otherwise applicable
to the Bonus Plan (i.e., the failure to have completed any vesting period or the
current measurement period, or the failure to achieve any performance goal
applicable to all or any portion of the measurement period) or (B) the largest
award earned (whether or not paid) under the Bonus Plan in respect of any of the
three years preceding the Termination Date; and
(b) in
addition to your entitlement to the vested portion of your interest in the
Defined Contribution Plan in accordance with the terms of that plan, the Company
shall pay to you, on or within ten days following the applicable Termination
Date, an amount in cash equal to the unvested portion of the Company’s
contributions to your account, which unvested portion shall be valued as of your
Termination Date at Market Value; and
(c) in
addition to any vested retirement benefits to which you are entitled on the
Termination Date under the Defined Benefit Plan, the Company shall pay to you,
on or within ten days following an applicable Termination Date, an amount in
cash equal to the product of (i) a number equal to your years of life expectancy
beyond age 65 determined in accordance with the actuarial assumptions utilized
under the Defined Benefit Plan immediately prior to the Termination Date, times
(ii) an amount equal to the difference between (A) the annual benefit to which
you would have been entitled under the “single life annuity” method of
distribution under the Defined Benefit Plan if you were fully vested thereunder
(without regard to (I) whether you shall actually have completed the period of
Vesting Service required to qualify for benefits under the Defined Benefit Plan,
(II) any limitation on the amount used in the calculation of the annual benefit
thereunder, (III) any offset thereunder for severance allowances payable
thereunder, or (IV) any amendment to the Defined Benefit Plan made in connection
with a Change of Control and on or prior to the Termination Date, which
amendment adversely affects in any manner the computation of retirement benefits
under such plan) and had accumulated an additional three years of Vesting
Service thereunder, and (B) the annual benefit, if any, to which you would be
entitled under the single life annuity method of distribution under the Defined
Benefit Plan as of the Termination Date; and
(d) an amount
in cash equal to three times the average annual cost incurred by the Company
during the preceding three calendar years as a result of your participation in
all insured and self-insured employee welfare benefit Plans and Perquisites in
which you were entitled to participate immediately prior to the Termination Date
(or such fewer whole calendar years as you have so
participated).
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Anything else in this
Agreement to the contrary notwithstanding, if (i) you are terminated in
connection with a Change of Control, and (ii) you are entitled to the Severance
Package, and (iii) your Termination Date precedes or occurs on the date of the
closing thereof, then unless otherwise agreed to by both parties in writing, all
amounts to which you are or shall become entitled to under this Agreement, which
are calculable as of the closing date, shall be accelerated to, and become
immediately due and payable contemporaneously with such
closing.
“Shares”
means shares of Common Stock, $.01 par value, of the Company as of the date of
this Agreement, as the same shall be subsequently amended, modified or
changed.
“Termination
Date” shall have the meaning given it by Section 2 of the
Agreement.
“Voting
Securities” means, with respect to any corporation or business
enterprise, those securities which under ordinary circumstances are entitled to
vote for the election of directors or others charged with comparable duties
under applicable law.
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