EXHIBIT 99.1
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CHANGE IN CONTROL PROTECTION AGREEMENT
This Change in Control Protection Agreement, dated as of
______________ (this "AGREEMENT"), between The Penn Traffic Company (the
"COMPANY") and ______________ (the "KEY EMPLOYEE").
R E C I T A L S
The Company has employed the Key Employee in an officer position and
has determined that the Key Employee holds a critical position with the
Company.
The Company believes that, in the event it is confronted with a
situation that could result in a change in ownership or control of the
Company, continuity of management will be essential to its ability to evaluate
and respond to such situation in the best interests of its shareholders, and
the Company desires to assure itself of the Key Employee's services during the
period in which it is confronting such a situation, and to provide certain
financial assurances to the Key Employee.
The Key Employee has had access to important confidential information
and important employee and customer relationships, all of which the Key
Employee agrees are valuable assets of the Company that the Company and the
Key Employee desire to reasonably protect.
To achieve these objectives, the Company and the Key Employee desire
to enter into an agreement providing the Company and the Key Employee with
certain rights and obligations upon the occurrence of a Change in Control (as
defined in Section 2 hereof);
The Company and the Key Employee hereby agree as follows:
1. OPERATION OF AGREEMENT.
(a) TERM. This Agreement shall become effective as of
the date first set forth above (the "COMMENCEMENT Date") and shall remain in
effect until the third anniversary of the Commencement Date (the "EXPIRATION
DATE").
(b) EFFECTIVE DATE. Notwithstanding the provisions of
Section 1(a) hereof, this Agreement shall govern the terms and conditions of
the Key Employee's employment and the benefits and compensation to be provided
to the Key Employee only if a Change in Control is consummated prior to the
Expiration Date. For purposes of this Agreement, the "EFFECTIVE DATE" shall
mean the date, prior to the Expiration Date, on which a Change in Control is
consummated; PROVIDED that if the Key Employee is not employed by the Company
on the Effective Date or at any time during the ninety (90) days immediately
prior to the Effective Date, then the Key Employee shall not have any rights
under this Agreement. For the avoidance of doubt, the parties acknowledge that
the Key Employee shall not have any rights under, and the terms, conditions
and benefits of such Key Employee's employment shall not be governed by,
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this Agreement prior to the Effective Date, or if a Change in Control does not
occur prior to the Expiration Date.
2. DEFINITION OF CHANGE IN CONTROL.
"CHANGE IN CONTROL" shall be deemed to occur upon:
(i) the acquisition by any individual, entity or group (a
"PERSON") (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "EXCHANGE ACT")) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more (on a fully diluted basis) of either (A) the
then outstanding shares of common stock of the Company ("COMMON STOCK"),
taking into account as outstanding for this purpose such Common Stock
issuable upon the exercise of options or warrants, the conversion of
convertible stock or debt, and the exercise of any similar right to
acquire such Common Stock (the "OUTSTANDING COMPANY COMMON STOCK") or (B)
the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors (the
"OUTSTANDING COMPANY VOTING SECURITIES"); PROVIDED, HOWEVER, that for
purposes of this Plan, the following acquisitions shall not constitute a
Change in Control: (I) any acquisition by the Company or any entity that
directly or indirectly is controlled by controls or is under common
control with the Company (an "AFFILIATE"), (II) any acquisition by any
employee benefit plan sponsored or maintained by the Company or any
Affiliate, or (III) any acquisition by the Key Employee or any group of
persons including the Key Employee (or any entity controlled by the Key
Employee or any group of persons including the Key Employee);
(ii) individuals who, on the date hereof, constitute the Board of
Directors of the Company (the "INCUMBENT DIRECTORS") cease for any reason
to constitute at least a majority of the Board of Directors (the
"Board"), provided that any person becoming a director subsequent to the
date hereof, whose election or nomination for election was approved by a
vote of at least two-thirds of the Incumbent Directors then on the Board
(either by a specific vote or by approval of a registration statement of
the Company describing such person's inclusion on the Board, or a proxy
statement of the Company in which such person is named as a nominee for
director, without written objection to such nomination) shall be an
Incumbent Director; PROVIDED, HOWEVER, that no individual initially
elected or nominated as a director of the Company as a result of an
actual or threatened election contest, as such terms are used in Rule
14a-11 of Regulation A promulgated under the Exchange Act, with respect
to directors or as a result of any other actual or threatened
solicitation of proxies or consents by or on behalf of any person other
than the Board shall be deemed to be an Incumbent Director;
(iii) the dissolution or liquidation of the Company;
(iv) the sale, transfer or other disposition of all or
substantially all of the business or assets of the Company; or
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(v) the consummation of a reorganization, recapitalization,
merger, consolidation, statutory share exchange or similar form of
corporate transaction involving the Company that requires the approval of
the Company's stockholders, whether for such transaction or the issuance
of securities in the transaction (a "BUSINESS COMBINATION"), unless
immediately following such Business Combination: (A) more than 50% of the
total voting power of (x) the entity resulting from such Business
Combination (the "SURVIVING Company"), or (y) if applicable, the ultimate
parent entity that directly or indirectly has beneficial ownership of
sufficient voting securities eligible to elect a majority of the members
of the board of directors (or the analogous governing body) of the
Surviving Company (the "PARENT COMPANY"), is represented by the
Outstanding Company Voting Securities that were outstanding immediately
prior to such Business Combination (or, if applicable, is represented by
shares into which the Outstanding Company Voting Securities were
converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportion as the
voting power of the Outstanding Company Voting Securities among the
holders thereof immediately prior to the Business Combination, and (B) at
least a majority of the members of the board of directors (or the
analogous governing body) of the Parent Company (or, if there is no
Parent Company, the Surviving Company) following the consummation of the
Business Combination were Board members at the time of the Board's
approval of the execution of the initial agreement providing for such
Business Combination.
3. PROTECTED PERIOD. If the Key Employee is an employee of the
Company on the Effective Date, the Company agrees to continue the Key Employee
in its employ, and the Key Employee agrees to remain in the employ of the
Company, on the terms and subject to conditions of this Agreement, for a
period commencing on the Effective Date and ending on the earlier of (i) the
termination of the Key Employee's employment with the Company in accordance
with the terms hereof and (ii) two years immediately following the Effective
Date (the "PROTECTED PERIOD"). For purposes of clarity and not by way of
limitation, in the event of a Change in Control after the Commencement Date
but prior to the Expiration Date set forth in Section l(a), the Expiration
Date shall be adjusted to coincide with the last day of the Protected Period.
4. POSITION AND DUTIES.
(a) NO REDUCTION IN POSITION. During the Protected
Period, the Key Employee's position (including titles), authority and
responsibilities shall be at least commensurate with those held, exercised and
assigned immediately prior to the Effective Date. It is understood that, for
purposes of this Agreement, such position, authority and responsibilities
shall not be regarded as not commensurate merely by virtue of the fact that
(i) an entity or group of related entities shall have acquired all or
substantially all of the business, capital stock and/or assets of (an
"ACQUIRER") or (ii) the Company or the Acquirer imposes upon the Key Employee
additional or changed reporting obligations or other similar and customary
responsibilities within the group structure of the Acquirer.
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(b) BUSINESS TIME. During the Protected Period, the Key
Employee agrees to devote his full attention during normal business hours to
the business and affairs of the Company and to use his best efforts to perform
faithfully and efficiently the responsibilities assigned to him hereunder, to
the extent necessary to discharge such responsibilities, except for (i) time
spent in managing his personal, financial and legal affairs and serving on
corporate, civic or charitable boards or committees, in each case only if and
to the extent not interfering in any material respect with the performance of
such responsibilities and to the extent permitted by the policies of the
Company and the Acquirer, and (ii) periods of vacation and sick leave to which
he is entitled.
5. COMPENSATION.
(a) BASE SALARY. During the Protected Period, the Key
Employee shall receive a base salary at a monthly rate at least equal to the
monthly salary paid to the Key Employee by the Company immediately prior to
the Effective Date. The base salary shall be reviewed at least once each year
after the Effective Date, and may be increased (but not decreased) at any time
and from time to time by action of the Board or any committee thereof or any
individual having authority to take such action in accordance with the
Company's regular practices. The Key Employee's base salary, as it may be
increased from time to time, shall hereafter be referred to as the "Base
Salary." Neither the Base Salary nor any increase in the Base Salary after the
Effective Date shall serve to limit or reduce any other obligation of the
Company hereunder.
(b) ANNUAL BONUS. During the Protected Period, in
addition to the Base Salary, the Key Employee shall be eligible to receive
discretionary annual bonuses or incentive compensation as may be authorized
from time to time by action of the Board of Directors or the Acquirer or any
committee thereof or any individual having authority to take such action in
accordance with the Company's or the Acquirer's regular practices in their
sole discretion (the "ANNUAL BONUS OPPORTUNITY"). The Annual Bonus shall be an
amount that provides the Key Employee with the same bonus opportunity as other
employees of the Company or the Acquirer of comparable rank ("SIMILARLY
SITUATED KEY EMPLOYEES"). If any fiscal year commences but does not end during
the Protected Period, the Key Employee shall receive a pro-rated amount in
respect of the Annual Bonus Opportunity for the portion of the fiscal year
occurring during the Protected Period. Any amount payable in respect of the
Annual Bonus Opportunity shall be paid as soon as practicable following the
year for which the amount (or any prorated portion) is earned or awarded,
unless electively deferred by the Key Employee pursuant to any deferral
programs or arrangements that the Company or the Acquirer may make available
to the Key Employee.
(c) LONG-TERM INCENTIVE COMPENSATION PROGRAMS. During
the Protected Period, the Key Employee shall be eligible to participate in all
long-term incentive compensation programs that are made available from time to
time to Similarly Situated Key Employees, subject to and on a basis consistent
with the terms, conditions, and overall administration of such programs.
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(d) BENEFIT PLANS. During the Protected Period, the Key
Employee (and, to the extent applicable, his dependents) shall be entitled to
participate in or be covered under all pension, retirement, deferred
compensation, savings, medical, dental, health, disability, group life,
accidental death and travel accident insurance plans and programs of the
Company and any Affiliate that are made available from time to time to other
Similarly Situated Key Employees, subject to and on a basis consistent with
the terms, conditions, and overall administration of such plans and
arrangements.
(e) EXPENSES. During the Protected Period, the Key
Employee shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Key Employee (the "EXPENSES") in accordance with the
policies and procedures of the Company as in effect from time to time with
respect to expenses incurred by other Similarly Situated Key Employees.
(f) VACATION AND FRINGE BENEFITS. During the Protected
Period, the Key Employee shall be entitled to paid vacation and fringe
benefits that are made available from time to time to other Similarly Situated
Key Employees.
(g) INDEMNIFICATION. During and after the Protected
Period, the Company shall indemnify the Key Employee and hold the Key Employee
harmless from and against judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees, on the same terms and
conditions applicable from time to time with respect to the indemnification of
other Similarly Situated Key Employees.
(h) OFFICE AND SUPPORT STAFF. The Key Employee shall be
entitled to an office with furnishings and other appointments, and to
secretarial and other assistance, that are made available to other Similarly
Situated Key Employees.
6. TERMINATION.
(a) DEATH, DISABILITY OR RETIREMENT. The Key Employee's
employment with the Company shall terminate automatically upon the Key
Employee's death, termination due to "Disability" (as defined below) or
voluntary retirement under any of the Company's retirement plans as in effect
from time to time. For purposes of this Agreement, "DISABILITY" shall have the
meaning set forth in the long-term disability plan then made available to the
Key Employee by the Company or the Acquirer.
(b) VOLUNTARY TERMINATION; TERMINATION WITHOUT CAUSE.
Notwithstanding anything in this Agreement to the contrary, the Key Employee
may voluntarily terminate employment with the Company, and the Company may
terminate the employment of the Key Employee, at any time for any reason
(including early retirement under the terms of any of the Company's retirement
plans as in effect from time to time), upon not less than 30 days' written
notice, PROVIDED any termination by the Key Employee pursuant to Section 6(d)
hereof on account of Good Reason (as defined therein) shall not be treated as
a voluntary termination under this Section 6(b).
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(c) CAUSE. The Company may terminate the Key Employee's
employment for Cause. For purposes of this Agreement, "CAUSE" means (i) the
commission by the Key Employee of an act of fraud, dishonesty, embezzlement
(including the unauthorized disclosure or use of confidential or proprietary
information of the Company, the Acquirer or their respective Affiliates or
clients) or other act or omission intended or with consequences that bring, or
could reasonably be expected to bring, the Company, the Acquirer or any of
their respective Affiliates into disrepute or otherwise materially harm, or
could reasonably be expected to materially harm, their respective commercial
or governmental relationships or licenses, (ii) the Key Employee pleads guilty
or no contest to or is convicted of any criminal offense for which a penalty
of imprisonment may be imposed (other than an offense under road traffic
legislation), (iii) material misconduct as an employee of the Company or any
of its subsidiaries or other conduct tending to bring the Company, the
Acquirer or any of their respective Affiliates or shareholders into disrepute
or failure to comply with any written guidelines adopted or promulgated by the
Company or the Acquirer, (iv) abandonment or material neglect by the Key
Employee of any of the duties for which he has been employed by the Company,
(v) persistent failure of the Key Employee to comply with or carry out the
instructions of the Company's or the Acquirer's Board of Directors or
management if the ability to comply with or carry out such instructions is
reasonably within the control of the Employee, or (vi) material breach by the
Key Employee of his duties under this Agreement, or material failure to carry
out any such duties; provided that any such breach or failure shall not have
been remedied by the Key Employee within thirty days of receipt by the Key
Employee of written notice from the Company of the occurrence of such breach
or failure.
(d) GOOD REASON. The Key Employee may terminate his
employment at any time for Good Reason, effective thirty days after receipt by
the Company of Notice of Termination (as defined below); provided that the
Good Reason shall not have been remedied by the Company prior to the
expiration of such 30-day period. For purposes of this Agreement, "GOOD
REASON" means the occurrence of any of the following, without the express
written consent of the Key Employee, after the Effective Date or at any time
during the ninety (90) day period immediately preceding the Effective Date:
(1) a material reduction in the Key Employee's title, authority or
responsibilities, provided that such a reduction shall not be deemed to have
occurred because the Company or an Acquirer imposes upon the Key Employee
additional or changed reporting obligations or additional responsibilities,
(2) a reduction in the salary paid to the Key Employee by the Company, or (3)
a more than 50 mile change in the location of the Key Employee's office
(excluding travel required for the performance of the Key Employee's
responsibilities) (in each case compared to the state of affairs in effect
immediately prior to the commencement of the Protected Period or such 90-day
period, as the case may be). In no event shall the mere occurrence of a Change
in Control, absent any further impact on the Key Employee, be deemed to
constitute Good Reason.
(e) NOTICE OF TERMINATION. Any termination by the
Company for Cause or by the Key Employee for Good Reason shall be communicated
by Notice of
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Termination to the other party hereto given in accordance with Section 9(e)
hereof. For purposes of this Agreement, a "NOTICE OF TERMINATION" means a
written notice given, (i) in the case of a termination for Cause, by the
Company at any time after discovery of the events giving rise to such
termination, or (ii) in the case of a termination for Good Reason, within 30
days of the Key Employee's having actual knowledge of the events giving rise
to such termination. Any such Notice of Termination shall (i) indicate the
specific termination provision in this Agreement relied upon, (ii) set forth a
general description of the facts and circumstances claimed to provide a basis
for termination of the Key Employee's employment under the provision so
indicated, and (iii) if the termination date is other than the date of receipt
of such notice, specify the termination date of this Agreement (which date
shall be not more than 30 days after the giving of such notice). The failure
by the Company or the Key Employee to set forth in a Notice of Termination any
fact or circumstance which contributes to a showing of Cause or Good Reason
shall not waive any right of the Company or the Key Employee hereunder or
preclude the Company or the Key Employee from asserting such fact or
circumstances in enforcing its or his rights hereunder.
(f) DATE OF TERMINATION. For the purpose of this
Agreement, the term "DATE OF TERMINATION" means (i) in the case of a
termination for Cause, the date of receipt of such Notice of Termination or,
if later, the date specified therein, as the case may be, (ii) in the case of
termination for Good Reason, thirty days after the date of receipt by the
Company of the Notice of Termination, subject to the proviso to the first
sentence of Section 6(d) and (iii) in all other cases, the actual date on
which the Key Employee's employment terminates during the Protected Period.
(g) OTHER.
(i) Upon the termination of the Key Employee's
employment with the Company for any reason, the Key Employee (or, if
applicable, his estate) shall immediately deliver to the Company all
documents, correspondence, memoranda, notes, records, reports, plans, designs,
studies and any other papers or items made or received by the Key Employee in
connection with his employment with the Company and including all copies of
the foregoing), and all computer equipment, disks and software, keys, credit
cards, books and other property of or relating to the Company or any of its
Affiliates (including without limitation all documents prepared by the Key
Employee or which may have come into the Key Employee's possession in the
course of his employment hereunder, and including copies thereof) then in the
Key Employee's (or, if applicable, his estate's) possession.
(ii) After the termination of the Key
Employee's employment with the Company for any reason, the Key Employee shall
not at any time thereafter represent himself as being in any way connected
with or interested in the business of or employed by the Company or its
Affiliates, or use for trade or other purposes the name of the Company or its
Affiliates, or any name capable of confusion therewith.
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(iii) Upon the termination of the Key Employee's
employment with the Company for any reason, the Key Employee shall immediately
be deemed to have resigned from all offices the Key Employee holds in the
Company or any of its Affiliates, and any directorships held at the request of
or on the behalf of the Company or its Affiliates.
7. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) DEATH OR DISABILITY. If, during the Protected
Period or at any time during the ninety (90) day period immediately preceding
the Effective Date, the Key Employee's employment is terminated by reason of
the Key Employee's death or Disability, this Agreement shall terminate without
further obligations to the Key Employee or the Key Employee's legal
representatives under this Agreement, except that the Company shall be
obligated to pay to the Key Employee (or his beneficiary or estate), at the
times determined below (i) the Key Employee's full Base Salary through the
Date of Termination (the "EARNED SALARY"), (ii) any vested amounts or benefits
owing to the Key Employee under or in accordance with the terms and conditions
of the Company's otherwise applicable employee benefit plans and programs,
including any compensation previously deferred by the Key Employee (together
with any accrued earnings thereon) and not yet paid by the Company, any
accrued vacation pay not yet paid by the Company, and any unreimbursed
Expenses (the "ACCRUED OBLIGATIONS"), and (iii) any other benefits payable due
to the Key Employee's death or Disability under the Company's applicable
plans, policies or programs (the "ADDITIONAL BENEFITS").
Any Earned Salary shall be paid in cash in a single lump sum as soon
as practicable, but in no event more than 30 days (or at such earlier date
required by law), following the Date of Termination. Any Accrued Obligations
and Additional Benefits shall be paid in accordance with the terms of the
applicable plan, program or arrangement.
(b) CAUSE AND VOLUNTARY TERMINATION. If, during the
Protected Period or at any time during the ninety (90) day period immediately
preceding the Effective Date, the Key Employee's employment shall be
terminated by the Company for Cause or voluntarily terminated by the Key
Employee (other than on account of Good Reason), the Company shall pay the Key
Employee (i) the Earned Salary in cash in a single lump sum as soon as
practicable, but in no event more than 30 days, following the Date of
Termination, and (ii) any Accrued Obligations in accordance with the terms of
the applicable plan, program or arrangement.
(c) TERMINATION BY THE COMPANY WITHOUT CAUSE AND
TERMINATION BY THE KEY EMPLOYEE FOR GOOD REASON. If, during the Protected
Period or at any time during the ninety (90) day period immediately preceding
the Effective Date, (x) the Company terminates the Key Employee's employment
without Cause or (y) the Key Employee terminates his employment for Good
Reason, then:
(i) LUMP SUM PAYMENTS. The Company shall pay
to the Key Employee, at the times determined below, the following amounts:
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(A) the Key Employee's Earned Salary;
(B) a cash amount (the "SEVERANCE AMOUNT") equal to the
sum of
(1) two times the higher of (x) the Key
Employee's annual rate of Base Salary as
then in effect or (y) the average
annualized Base Salary of the Key Employee
for each of the 24 months of employment
ended immediately prior to the Effective
Date (or, if less, the number of months
during which the Key Employee was an
employee of the Company); and
(2) two times the average of the annual cash
bonuses payable to the Key Employee under
the Company's annual incentive plan for
each of the three fiscal years of the
Company (or, if less, the number of prior
fiscal years during which the Key Employee
was an employee of the Company) ended
immediately prior to the Effective Date
for which an annual bonus amount had been
determined prior to the Effective Date. If
the Key Employee was employed by the
Company for only a portion of any fiscal
year included in the period for which the
average referred to in the immediately
preceding sentence is determined and the
bonus payable for such fiscal year took
into account such partial period of
employment, such bonus for such fiscal
year shall be annualized for purposes of
calculating such average; and
(C) any Accrued Obligations.
The Earned Salary and Severance Amount shall be paid in cash in a
single lump sum as soon as practicable, but in no event more than 30 days (or
at such earlier date required by law), following the Date of Termination. Any
Accrued Obligations shall be paid in accordance with the terms of the
applicable plan, program or arrangement.
(ii) CONTINUATION OF BENEFITS. The Key Employee
(and, to the extent applicable, his dependents) shall be entitled, after the
Date of Termination (or, in the event of termination during the 90 days
immediately preceding to the Effective Date, the Effective Date) until the
first anniversary of the Date of Termination (or, in the event of termination
during the 90 days immediately preceding to the Effective Date, the Effective
Date) (the "END DATE"), to continue participation in all of the Company's
plans providing medical, dental and longterm disability benefits for which the
Key Employee was eligible as of the Date of Termination (collectively, the
"CONTINUING BENEFIT PLANS"); PROVIDED, HOWEVER, that the participation by the
Key Employee and, to the extent
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applicable, his dependents) in any Continuing Benefit Plan shall cease on the
date, if any, prior to the End Date on which the Key Employee becomes eligible
for comparable benefits under a similar plan, policy or program of a
subsequent employer (the "PRIOR DATE"). The Key Employee's participation in
the Continuing Benefit Plans will be on the same terms and conditions that are
made available to employees of the Company who have a rank similar to the Key
Executive's rank prior to termination. To the extent any such benefits cannot
be provided under the terms of the applicable plan, policy or program, the
Company shall provide a cash payment to the Key Employee in an amount equal to
the employer contribution that would have been made in accordance with the
terms of such plan, policy or program.
(d) DISCHARGE OF THE COMPANY'S OBLIGATIONS. The Key
Employee's sole remedy for the Company's breach of this Agreement during the
Protected Period, to the extent constituting Good Reason, shall be to
terminate this Agreement and to receive payments under this Section 7. Except
as expressly provided in this Section 7(d), the amounts payable to the Key
Employee pursuant to this Section 7 (whether or not reduced pursuant to
Section 7(e) hereof) shall be in full and complete satisfaction of the Key
Employee's rights under this Agreement following termination of his employment
and any claims he may have in respect of employment by the Company or any of
its Affiliates (or termination thereof), for breach by the Company of this
Agreement or for severance payments. Such amounts shall constitute liquidated
damages with respect to any and all such rights and claims and, subject to the
Key Employee's receipt of such amounts, the Company and its directors,
officers, shareholders, affiliates and agents shall be released and discharged
from any and all liability to the Key Employee in connection with this
Agreement, the breach thereof or otherwise in connection with the Key
Employee's employment with the Company and its Affiliates or the termination
thereof. Notwithstanding the foregoing, the obligations of the Company under
this Agreement are meant to supplement and not replace any rights of the Key
Employee under any equity incentive or stock option plan, as such rights may
be determined in accordance with the terms of such plans, if any. As a
condition to any payment under this Section 7, (1) the Key Employee shall be
required to sign and deliver to the Company a waiver and release (to be
provided by the Company following the termination of the employment of the Key
Employee) waiving and releasing any claims he or she may have against the
Company and its parents, subsidiaries, affiliates, predecessors, assigns and
representatives, and their respective present and former benefit and severance
plans, plan administrators, insurers, agents, shareholders, officers,
directors, attorneys and employees, except as expressly provided in this
Section 7(d) and payments and benefits due under this Section 7, and (2) seven
days shall have elapsed following delivery of such release to the Company
without such release being revoked by the Key Employee by written notice to
the Company to the addresses set forth for notices in Section 9(e). The waiver
and release will include, but not be limited to, any claims arising under any
federal, state or local law or ordinance, tort, employment contract (express
or implied), public policy, whisteblower law, wrongful discharge or any other
obligation including any claims arising under the Civil Rights Act of 1866,
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Age Discrimination in Employment Act of 1967 ("ADEA"), as amended by the Older
Workers Benefit
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Protection Act, the Americans With Disabilities Act of 1990, the Employee
Retirement Income Security Act of 1974, the Worker Adjustment Retraining and
Notification Act, or State law, and all claims for wages, severance, bonuses,
monetary or equitable relief or other damages of any kind, vacation pay, other
employee fringe benefits or attorneys' fees.
(e) POTENTIAL EXCISE TAX AND SHAREHOLDER APPROVAL.
(i) APPLICATION OF SECTION 7(E) HEREOF. In the
event that any amount or benefit paid or distributed to the Key Employee
pursuant to this Agreement, taken together with any amounts or benefits
otherwise paid or distributed to Key Employee by the Company or any Affiliate
(collectively, the "COVERED PAYMENTS"), would be an "excess parachute payment"
as defined in Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), and would thereby subject the Key Employee to the tax (the
"EXCISE TAX") imposed under Section 4999 of the Code (or any similar tax that
may hereafter be imposed), the provisions of this Section 7(e) shall apply to
determine the amounts payable to the Key Employee pursuant to this Agreement.
(ii) SHAREHOLDER APPROVAL. If Covered Payments
that would otherwise be reduced or eliminated, as the case may be, pursuant to
this Section 7(e) would not be so reduced or eliminated, as the case may be,
if the shareholder approval requirements of section 280G(b)(5) of the Code are
capable of being satisfied, the Company shall use its reasonable best efforts
to cause such payments to be submitted for such approval prior to any Change
in Control.
(iii) CALCULATION OF BENEFITS. Promptly after
delivery of any Notice of Termination, the Company shall notify the Key
Employee of the aggregate present value of all termination benefits to which
he would be entitled under this Agreement and any other plan, program or
arrangement as of the projected Date of Termination, together with the
projected maximum payments, determined by the Board of Directors in good faith
as of such projected Date of Termination that could be paid without the Key
Employee being subject to the Excise Tax.
(iv) IMPOSITION OF PAYMENT CAP. If the
aggregate value of all compensation payments or benefits to be paid or
provided to the Key Employee under this Agreement and any other plan,
agreement or arrangement with the Company exceeds the amount which can be paid
to the Key Employee without the Key Employee incurring an Excise Tax, then the
amounts payable to the Key Employee under this Section 7 shall be reduced (but
not below zero) to the maximum amount which may be paid hereunder without the
Key Employee becoming subject to such an Excise Tax (such reduced payments to
be referred to as the "PAYMENT CAP"). In the event that the Key Employee
receives reduced payments and benefits hereunder, the Key Employee shall have
the right to designate which of the payments and benefits otherwise provided
for in this Agreement that he will receive in connection with the application
of the Payment Cap.
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(f) Notwithstanding anything else in this Section 7 to
the contrary, nothing in this Section 7 shall be construed to release the
Company from (or to otherwise waive or modify) the Company's obligation to
indemnify the Key Employee pursuant to Section 5(g) hereof.
8. SUCCESSORS.
(a) This Agreement is personal to the Key Employee and,
without the prior written consent of the Company, shall not be assignable by
the Key Employee otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Key Employee's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and their successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would
be required to perform if no such succession had taken place.
9. MISCELLANEOUS.
(a) APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applied
without reference to principles of conflict of laws.
(b) ARBITRATION. Any dispute, alleged breach,
interpretation, or disagreement whatsoever arising out of this Agreement that
the parties are unable to resolve shall be resolved by final and binding
arbitration before a panel of three arbitrators pursuant to the Commercial
Arbitration Rules of the American Arbitration Association in the County of
Onondaga, State of New York. The party demanding arbitration shall have thirty
days in which to select an arbitrator. Thereafter, the other party shall have
thirty days in which to select an arbitrator, failing which the American
Arbitration Association shall select such arbitrator. Such arbitrators shall,
thereafter, within thirty days, jointly select a third arbitrator, failing
which the American Arbitration Association shall select such arbitrator. Such
arbitration shall be the exclusive means for settling any disputes hereunder.
The majority decision of the panel of arbitrators may, but need not, be
entered as judgment in accordance with the provisions of applicable law. The
parties shall share equally the costs and expenses in connection with any
arbitration or other proceeding hereunder, provided that a panel of
arbitrators acting in accordance with the provisions of this Section 9 shall
have the power to award attorneys' fees in connection with the issuance of any
final decision by such panel. If this arbitration provision is for any reason
held to be invalid or otherwise inapplicable to any dispute, the parties
hereto agree that any action or proceeding brought with respect to any dispute
arising under this Agreement, or to interpret or clarify any rights or
obligations arising
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hereunder, shall be maintained solely and exclusively in courts located in the
County of Onondaga, State of New York.
(c) AMENDMENTS. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto
or their respective successors and legal representatives.
(d) ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the parties hereto with respect to the matters
referred to herein and, except as expressly provided herein, supersedes any
and all prior agreements or understandings. No other agreement relating to the
terms of the Key Employee's employment by the Company, oral or otherwise,
shall be binding between the parties unless it is in writing and signed by the
party against whom enforcement is sought. There are no promises,
representations, inducements or statements between the parties respecting the
subject matter hereof other than those that are expressly contained herein.
The Key Employee acknowledges that he is entering into this Agreement of his
own free will and accord, and with no duress, that he has read this Agreement
and has had at least 21 days to review this Agreement with his or her attorney
and that he understands it and its legal consequences.
(e) NOTICES. All notices and other communications
hereunder shall be in writing and shall be given by hand-delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Key Employee: at the home address of the Key Employee
noted on the records of the Company
If to the Company The Penn Traffic Company
XX Xxx 0000
Xxxxxxxx XX 00000-0000
Attn: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(f) TAX WITHHOLDING. The Company shall withhold from
any amounts payable under this Agreement such Federal, state or local taxes as
shall be required to be withheld pursuant to any applicable law or regulation.
(g) SEVERABILITY: REFORMATION. In the event that one or
more of the provisions of this Agreement shall become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
(h) WAIVER. Waiver by any party hereto of any breach or
default by the other party of any of the terms of this Agreement shall not
operate as a waiver of any other breach or default, whether similar to or
different from the breach or
14
default waived. No waiver of any provision of this Agreement shall be implied
from any course of dealing between the parties hereto or from any failure by
either party hereto to assert its or his rights hereunder on any occasion or
series of occasions.
(i) CAPTIONS; PRONOUNS. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect. Any
masculine personal pronoun shall be considered to mean the corresponding
feminine personal pronoun, as the context requires.
(j) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Key Employee has executed this Agreement and
the Company has caused this Agreement to be executed in its name on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary, all as of the date first above written.
----------------------------------
Print name: Xxxxxx X. Xxxxxxx
Title: President
ATTESTED:
--------------------------------------------
Print name: Xxxxxxx X. Xxxxx, Xx., Secretary
KEY EMPLOYEE:
----------------------------------
Print name:
-----------------------
WITNESSED:
--------------------------------------
Print name:
---------------------------
