EXHIBIT 99.3
THIS AGREEMENT MADE EFFECTIVE THE 1ST DAY OF AUGUST, 2006.
Between:
▇▇▇▇▇▇▇ International, Inc., a Delaware corporation ("▇▇▇▇▇▇▇")
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Executive")
WHEREAS, ▇▇▇▇▇▇▇ desires to employ the Executive and the Executive desires to be
employed by ▇▇▇▇▇▇▇;
WHEREAS, ▇▇▇▇▇▇▇ and Executive entered into an Employment Agreement dated August
20, 2004 ("Initial Employment Agreement") and Change of Control Agreement dated,
August 20, 2004 (the "Old Agreements"); and
WHEREAS, ▇▇▇▇▇▇▇ and Executive intend to amend and restate the Initial
Employment Agreement and replace the Change of Control Agreement with this
Agreement.
NOW THEREFORE, the parties have agreed that the terms and conditions of the
relationship shall be as follows:
ARTICLE 1 -- DEFINITIONS
Whenever used in this Agreement, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word is
capitalized:
(a) "Accrued Obligations" means any unpaid amounts with respect to (i) the
Executive's Base Salary through the Date of Termination, (ii) any
then-unpaid Annual Bonus or other incentive compensation that the
Executive may have earned pursuant to the terms of any applicable
incentive compensation or bonus plan of ▇▇▇▇▇▇▇ with respect to any fiscal
year or other performance period completed prior to the Date of
Termination, (iii) reimbursement for any properly incurred, unreimbursed
business expenses incurred prior to termination in accordance with
▇▇▇▇▇▇▇'▇ business reimbursement policy applicable to the Executive prior
to the Date of Termination and (iv) payments and benefits under the
employee benefit and incentive plans and perquisite programs of ▇▇▇▇▇▇▇,
in accordance with the respective terms of those plans and perquisite
programs.
(b) "Agreement" means this employment agreement, as amended from time to time.
(c) "Annual Bonus" means the annual bonus under ▇▇▇▇▇▇▇'▇ Short Term Incentive
Plan or any successor annual incentive plan.
(d) "Base Salary" means the salary of record paid to the Executive as annual
salary, and as further indicated in Section (a) of Article 4.
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(e) "Board" means the Board of Directors of ▇▇▇▇▇▇▇.
(f) "Cause" means:
(i) the continuous and willful failure or refusal by the Executive to
perform the Executive's material duties and responsibilities of his
position with ▇▇▇▇▇▇▇ (other than any such failure resulting from
the Executive's incapacity due to physical or mental illness), which
has not ceased within twenty (20) days after a written demand for
substantial performance is delivered to the Executive by ▇▇▇▇▇▇▇,
which demand identifies with particularity the manner in which
▇▇▇▇▇▇▇ believes that the Executive has not performed such duties;
(ii) Executive's willful malfeasance or willful misconduct in connection
with Executive's duties hereunder or any willful act or willful
omission, including a willful failure to abide by the ▇▇▇▇▇▇▇
International, Inc. Code of Business Conduct and Ethics, which is
materially injurious to the financial condition or business
reputation of ▇▇▇▇▇▇▇ or any significant Subsidiary;
(iii) the Executive's commission of an act of fraud, embezzlement or theft
in connection with the Executive's duties or in the course of his
employment with ▇▇▇▇▇▇▇ or any Subsidiary;
(iv) the conviction of the Executive of, or the entering of a plea of
nolo contendere by, the Executive with respect to a felony; or
(v) Executive's breach of the provisions of Article 7 of this Agreement.
For purposes of this Section (f) and Article 17, no act or omission by the
Executive shall be considered "willful" unless it is done or omitted in
bad faith or without reasonable belief that the Executive's action or
omission was in the best interests of ▇▇▇▇▇▇▇. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the
Board or based upon the advice of counsel for ▇▇▇▇▇▇▇ shall be
conclusively presumed to be done, or omitted to be done, in good faith and
in the best interests of ▇▇▇▇▇▇▇. A termination of employment shall not be
deemed to be for Cause unless prior to such termination the Executive
shall have received a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the disinterested membership of the
Board at a meeting of such Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given
an opportunity to be heard before such Board), finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct
described in Subsection (i), (ii), (iii), (iv) or (v) of this Section (f)
above.
(g) "Change in Control" means the occurrence during the term of this Agreement
of any of the following events:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership
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(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of fifty percent (50%) or more of the then-outstanding Voting
Stock; provided, however, that the following acquisitions shall not
constitute a Change in Control: (A) any acquisition directly from
▇▇▇▇▇▇▇, (B) any acquisition by ▇▇▇▇▇▇▇, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
▇▇▇▇▇▇▇ or any Subsidiary, or (D) any acquisition by any Person
pursuant to a transaction that complies with clauses (A), (B) and
(C) of Subsection (iii) of this Section (g);
(ii) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason (other than death or
disability) to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by ▇▇▇▇▇▇▇'▇ stockholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent
Board (either by a specific vote or by approval of the proxy
statement of ▇▇▇▇▇▇▇ in which such person is named as a nominee for
director, without objection to such nomination) shall be considered
as though such individual were a member of the Incumbent Board, but
excluding for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest (within the meaning of Rule 14a-11 of the Exchange
Act) with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board;
(iii) consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of
▇▇▇▇▇▇▇ (a "Business Combination"), unless, in each case,
immediately following such Business Combination, (A) all or
substantially all of the individuals and entities who were the
beneficial owners of Voting Stock of ▇▇▇▇▇▇▇ immediately prior to
such Business Combination beneficially own, directly or indirectly,
more than fifty percent (50%) of the then outstanding shares of
common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors of the entity resulting from such Business Combination
(including, without limitation, an entity which as a result of such
transaction owns ▇▇▇▇▇▇▇ or all or substantially all of ▇▇▇▇▇▇▇'▇
assets either directly or through one or more subsidiaries) in
substantially the same proportions relative to each other as their
ownership, immediately prior to such Business Combination, of the
Voting Stock of ▇▇▇▇▇▇▇, (B) no Person (excluding any entity
resulting from such Business Combination or any employee benefit
plan (or related trust) sponsored or maintained by ▇▇▇▇▇▇▇, any
Subsidiary or such entity resulting from such Business Combination)
beneficially owns, directly or indirectly, fifteen percent (15%) or
more of the then outstanding shares of common stock of the entity
resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such entity
except to the extent such ownership existed prior to the Business
Combination, and (C) at least a majority of the members of the board
of directors of the entity resulting from such Business Combination
were members of the Incumbent Board at the time of the
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execution of the initial agreement or of the action of the Board
providing for such Business Combination; or
(iv) approval by the stockholders of ▇▇▇▇▇▇▇ of a complete liquidation or
dissolution of ▇▇▇▇▇▇▇.
(h) "Code" means the Internal Revenue Code of 1986, as amended.
(i) "Committee" means the Human Resources and Compensation Committee of the
Board.
(j) "Date of Termination" has the meaning ascribed to such term in Section (e)
of Article 6.
(k) "Effective Date" means the date first above written.
(l) "Employee Benefits" means the perquisites, benefits and service credit for
benefits as provided under any and all employee retirement income and
welfare benefit policies, plans, programs or arrangements in which the
Executive is entitled to participate, including, without limitation, any
stock option, performance share, performance unit, stock purchase, stock
appreciation, savings, pension, supplemental executive retirement, or
other retirement income or welfare benefit, compensation, incentive
compensation, group or other life, health, medical/hospital or other
insurance (whether funded by actual insurance or self-insurance by ▇▇▇▇▇▇▇
or a Subsidiary), salary continuation, expense reimbursement and other
employee benefit policies, plans, programs or arrangements.
(m) "Exchange Act" means the Securities Exchange Act of 1934.
(n) "Executive" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
(o) "Good Reason" means the occurrence of one or more of the following events
(regardless of whether any other reason, other than Cause, for such
termination exists or has occurred, including, without limitation, other
employment):
(i) With respect to the two (2) year period commencing on a Change in
Control, the failure to elect or reelect or otherwise to maintain
the Executive in the office or the position, or a substantially
equivalent office or position, of or with ▇▇▇▇▇▇▇ and/or a
Subsidiary (or any successor thereto by operation of law of or
otherwise), as the case may be, which the Executive held immediately
prior to a Change in Control, or the removal of the Executive as a
director of ▇▇▇▇▇▇▇ and/or a Subsidiary (or any successor thereto)
if the Executive shall have been a director of ▇▇▇▇▇▇▇ and/or a
Subsidiary immediately prior to the Change in Control;
(ii) With respect to the two (2) year period commencing on a Change in
Control, (A) a significant adverse change in the nature or scope of
the authorities, powers, functions, responsibilities or duties
attached to the position with ▇▇▇▇▇▇▇ and any Subsidiary which the
Executive held immediately prior to the Change in Control, (B) a
reduction in the aggregate of the Executive's Base Salary received
from ▇▇▇▇▇▇▇ and any Subsidiary or the Executive's Incentive Pay
opportunity from ▇▇▇▇▇▇▇ or its Subsidiaries, or (C) the termination
or denial of the Executive's
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rights to Employee Benefits or a reduction in the scope or value
thereof to a level that is substantially lower in the aggregate from
the level in effect at the time of the Change in Control, any of
which is not remedied by ▇▇▇▇▇▇▇ within ten (10) calendar days after
receipt by ▇▇▇▇▇▇▇ of written notice from the Executive of such
change, reduction, denial or termination, as the case may be;
(iii) The liquidation, dissolution, merger, consolidation or
reorganization of ▇▇▇▇▇▇▇ or transfer of all or substantially all of
its business and/or assets, unless the successor or successors (by
liquidation, merger, consolidation, reorganization, transfer or
otherwise) to which all or substantially all of its business and/or
assets have been transferred (by operation of law or otherwise)
assumes all duties and obligations of ▇▇▇▇▇▇▇ under this Agreement
pursuant to Section (a) of Article 14;
(iv) ▇▇▇▇▇▇▇ relocates its principal executive offices (if such offices
are the principal location of the Executive's work), or requires the
Executive to have his principal location of work changed, to any
location that, in either case, increases the Executive's commute to
work by more than fifty (50) miles without, his prior written
consent; or
(v) Without limiting the generality or effect of the foregoing, any
material breach of this Agreement by ▇▇▇▇▇▇▇ or any successor
thereto which is not remedied by ▇▇▇▇▇▇▇ within tent (10) calendar
days after receipt by ▇▇▇▇▇▇▇ of written notice from the Executive
of such breach.
(p) "▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ International Inc., a Delaware corporation.
(q) "Notice of Termination" has the meaning ascribed to such term in Section
(d) of Article 6.
(r) "Retirement Plans" means the retirement income, supplemental executive
retirement, excess benefits and retiree medical, life and similar benefit
plans, programs or arrangements of ▇▇▇▇▇▇▇ or a Subsidiary in which the
Executive is entitled to participate.
(s) "Subsidiary" means an entity in which ▇▇▇▇▇▇▇ directly or indirectly
beneficially owns fifty percent (50%) or more of the outstanding Voting
Stock.
(t) "Target Bonus" has the meaning ascribed to such term in Section (b) of
Article 4.
(u) "Voting Stock" means securities entitled to vote generally in the election
of directors.
ARTICLE 2 -- TERM OF THE AGREEMENT
The term of this Agreement shall commence on the Effective Date and shall
continue until terminated in accordance with the provisions of this Agreement.
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ARTICLE 3 -- TITLE; COMMENCEMENT OF EMPLOYMENT; REPORTING
The Executive shall serve as the Vice President and Chief Financial Officer of
▇▇▇▇▇▇▇. The Executive shall report to the Chief Executive Officer.
ARTICLE 4 -- COMPENSATION
(a) Unless otherwise provided, all dollar amounts set forth in this Agreement
shall be in United States Dollars. The Base Salary of the Executive for
his services is established by the Committee at the annualized rate of Two
Hundred, Ninety Six Thousand Six Hundred and Forty Dollars ($296,640.00).
The Base Salary shall be payable twice monthly on the fifteenth business
day and the last business day of each month. The Base Salary shall be
reviewed annually during ▇▇▇▇▇▇▇'▇ normal review period. The review will
be undertaken by assessing the Executive's achievement of the overall
objectives established by the Committee in consultation with the Executive
and with regard to the market rates of remuneration paid for similar
duties and responsibilities. As a result of such review, the Executive's
Base Salary may be increased, but not decreased.
(b) The Executive will be eligible to participate in and be eligible to
receive an Annual Bonus under ▇▇▇▇▇▇▇'▇ Short Term Incentive Plan or any
successor plan or program. For each fiscal year of ▇▇▇▇▇▇▇, the
Executive's target bonus shall be no less than fifty percent (50%) of Base
Salary (the "Target Bonus") and the maximum bonus shall be no less than
one hundred percent (100%) of Base Salary. The Executive's right to
receive any bonus under ▇▇▇▇▇▇▇'▇ Short Term Incentive Plan shall be
determined based upon measurements established by the Committee after
consultation with the Executive and as set forth in accordance with
▇▇▇▇▇▇▇'▇ Short Term Incentive Plan.
(c) The Executive shall participate in the Supplemental Executive Retirement
Plan sponsored by ▇▇▇▇▇▇▇ for the benefit of its employees.
(d) Subject to approval by the Committee, the Executive will be eligible to
receive equity or equity based grants from time to time. Such grants will
be on terms and conditions established by the Committee in accordance with
the ▇▇▇▇▇▇▇ International, Inc Amended and Restated 2003 Equity and
Performance Incentive Plan or any successor plan.
ARTICLE 5 -- BENEFITS
(a) AUTOMOBILE
▇▇▇▇▇▇▇ will provide the Executive with a monthly allowance of Seven
Hundred Fifty Dollars ($750.00) for expenses incurred by the Executive for
an automobile and its related operating expenses.
(b) EXPENSES
It is understood and agreed that the Executive will incur expenses in
connection with his duties under this Agreement, including, but not
limited to, travel expenses, home facsimile expenses, personal computer
expenses and telephone expenses. ▇▇▇▇▇▇▇ shall reimburse the Executive for
any such expenses provided that the Executive provides to ▇▇▇▇▇▇▇ an
itemized written account and receipts acceptable to ▇▇▇▇▇▇▇.
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(c) VACATION
The Executive shall be entitled to four (4) weeks vacation during each
calendar year. The vacation shall be taken at the discretion of the
Executive with the understanding that the Executive will take into account
business needs and operations in scheduling vacation. All vacation earned
must be taken by the end of the calendar year following accrual or it is
forfeited.
(d) WELFARE BENEFITS
The Executive shall be entitled to those welfare benefit coverages as are
offered by ▇▇▇▇▇▇▇ to its employees generally (such as medical insurance,
dental insurance, short and long-term disability insurance and group term
life insurance), all in accordance with the employee benefit plans and
policies maintained by ▇▇▇▇▇▇▇ or a Subsidiary for the benefit of
employees of ▇▇▇▇▇▇▇, and as amended from time to time.
(e) EXECUTIVE BENEFIT STIPEND
▇▇▇▇▇▇▇ shall pay the Executive an annual sum equal to Twenty Thousand
Dollars ($20,000.00), in two equal installments (on January 1 and July 1
of each year), grossed up to enable Executive to pay applicable income
taxes. Such Stipend is intended to cover items such as automobile
expenses, club memberships and professional advice.
(f) CHANGE IN CONTROL VESTING
Upon a Change in Control, and notwithstanding any provision to the
contrary in any applicable plan, program or agreement, upon the occurrence
of a Change in Control, all equity incentive awards held by the Executive
shall become fully vested and all stock options held by the Executive
shall become fully exercisable.
ARTICLE 6 -- TERMINATION OF EMPLOYMENT
(a) The parties understand and agree that this Agreement and the Executive's
employment hereunder may be terminated in the following manner in the
specified circumstances:
(i) The Executive's employment hereunder shall automatically terminate
upon the death of the Executive.
(ii) By ▇▇▇▇▇▇▇, if, as a result of the Executive's incapacity due to
physical or mental illness which is expected to be of more than a
brief duration, the Executive has been unable to perform the
essential functions of his job for one hundred eighty (180) days
(whether or not consecutive) during any period of eighteen (18)
consecutive months ("Disability"), and no reasonable accommodation
can be made that will allow Executive to perform the essential
functions of his position with ▇▇▇▇▇▇▇. Upon such termination, the
Executive shall be entitled to the same severance benefits and
payments described in Subsection (v) or (vi), as applicable, as if
such termination was a termination by ▇▇▇▇▇▇▇ without Cause.
(iii) By the Executive, at any time, for any reason. ▇▇▇▇▇▇▇ may waive
notice required by Section (d) of this Article 6, in whole or in
part, upon immediate payment to the Executive of the Executive's
Base Salary for such portion of notice period as
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is waived by ▇▇▇▇▇▇▇. If such termination is for Good Reason, then
unless the provisions of Subsection (vi) apply, the Executive shall
be entitled to the same payments and benefits as provided in
Subsection (v) for terminations by ▇▇▇▇▇▇▇ without Cause. If such
termination is for any other reason, ▇▇▇▇▇▇▇ shall pay to the
Executive the Accrued Obligations.
(iv) By ▇▇▇▇▇▇▇, in its absolute discretion, without any pay in lieu of
notice, for Cause. Upon such termination, ▇▇▇▇▇▇▇ shall pay to the
Executive the Accrued Obligations.
(v) By ▇▇▇▇▇▇▇, in its absolute discretion and for any reason, without
Cause. Upon such termination, unless the provisions of Subsection
(vi) hereof apply, ▇▇▇▇▇▇▇ shall (A) continue to pay the Executive
his Base Salary in effect at the time of such termination for a
period of twelve (12) months following such termination, (B) pay the
Executive a monthly amount equal to one-twelfth of the Executive's
Target Bonus in effect at the time of Executive's termination of
employment for a period of twelve (12) months following such
termination, (C) continue to provide the Executive term life
insurance for a period of twelve (12) months after termination, or,
if such benefits cannot be provided by ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ shall pay to
the Executive an equivalent lump sum cash amount in lieu of such
benefits, (D) continue to provide the Executive (and his eligible
dependents) with the opportunity to continue to participate in its
group medical and dental benefits (with such continuation being
counted towards any required COBRA continuation period), at the
Executive's sole expense based on COBRA rates charged from time to
time; provided, however, that ▇▇▇▇▇▇▇ shall pay to the Executive
over the twelve (12) month period an amount equal to the full COBRA
cost of such coverage, and (E) pay to the Executive the Accrued
Obligations. Notwithstanding the foregoing, if the Executive is a
"specified employee" within the meaning of Code Section 409A at the
Date of Termination, then
(I) the total amount which would have been payable to the
Executive over the twelve (12) month period pursuant to this
Subsection (v) shall instead be paid to the Executive in equal
monthly amounts over the period commencing on the Date of
Termination and ending no later than the first day of the
third month following the later of (X) the calendar year in
which the Date of Termination occurred and (Y) the fiscal year
of ▇▇▇▇▇▇▇ in which the Date of Termination occurred, if such
payments would not be subject to Code Section 409A, or
(II) if the payments specified in Clause (I) would be subject to
Code Section 409A, then such payments shall be paid in the
manner set forth above without regard to Clause (I) hereof,
but payments which would otherwise have been made during the
first six (6) months following the Date of Termination, shall
be withheld and paid to the Executive during the seventh month
following the Date of Termination, increased for interest as
provided in Section (b) hereof.
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(vi) In the event that during the two (2) year period commencing on the
date of a Change in Control, ▇▇▇▇▇▇▇ terminates the Executive's
employment without Cause or the Executive terminates employment for
Good Reason, ▇▇▇▇▇▇▇ shall pay to the Executive the amounts
described in Annex A within five (5) business days after the Date of
Termination and shall provide to the Executive the benefits
described on Annex A for the periods described therein.
Notwithstanding the foregoing, in the event that the Executive is at
the Date of Termination a "specified employee" within the meaning of
Code Section 409A, payment to the Executive shall be made within
five (5) days following the expiration of six (6) months from the
Date of Termination, and not before such six (6) month period, if
necessary to avoid adverse tax consequences to the Executive under
Code Section 409A.
(b) Without limiting the rights of the Executive at law or in equity, in the
event it is determined that ▇▇▇▇▇▇▇ fails to make any payment or provide
any benefit required to be made or provided under Section (a) hereof on a
timely basis, ▇▇▇▇▇▇▇ shall pay interest on the amount or value thereof at
an annualized rate of interest equal to the so-called composite "prime
rate" as quoted from time to time during the relevant period in The Wall
Street Journal. Any change in such prime rate shall be effective on and as
of the date of such change. In addition, if any payment described in
Subsection (v) or (vi) of Section (a) hereof by ▇▇▇▇▇▇▇ subjects the
Executive to the excise tax under Code Section 409A on such payment,
▇▇▇▇▇▇▇ shall pay on the Executive's behalf to the applicable taxing
authorities, an amount which, after payment of all state, local and
federal income and employment taxes which may be due on such payment
(calculated at the highest marginal rates), is equal to the excise tax
under Code Section 409A which arose as a result of ▇▇▇▇▇▇▇'▇ delay or
acceleration in making such payment.
(c) In order to receive the entitlement under Subsection (vi) of Section (a)
hereof, or Clauses (A), (B) and (C) of Subsection (v) of Section (a)
hereof (whether such termination is by the Executive for Good Reason or by
▇▇▇▇▇▇▇ without Cause), the Executive must undertake to sign a release in
a form satisfactory to ▇▇▇▇▇▇▇, fully releasing ▇▇▇▇▇▇▇ from further
claims upon payment of the amounts stipulated herein and must not revoke
such release. However, the form of release shall not require that the
Executive give up any rights of indemnity which the Executive may have had
against ▇▇▇▇▇▇▇ for acts carried out by the Executive in the ordinary
course of ▇▇▇▇▇▇▇'▇ business, nor shall it require the release of the
benefits under this Agreement payable due to or after the Executive's
termination of employment. ▇▇▇▇▇▇▇ may withhold payment of such amount
until the period during which the Executive may revoke such waiver
(normally seven (7) days) has elapsed.
(d) Any purported termination of the Executive's employment by ▇▇▇▇▇▇▇ or by
the Executive shall be communicated by written Notice of Termination to
the other party hereto in accordance with Article 15. "Notice of
Termination" shall mean a notice that shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated.
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(e) "Date of Termination" shall mean (i) if the Executive's employment is
terminated because of death, the date of the Executive's death, (ii) if
the Executive's employment is terminated for Disability, the date Notice
of Termination is delivered to the Executive following a determination
that Disability exists pursuant to the provisions of this Agreement, (iii)
if the Executive's employment is terminated by ▇▇▇▇▇▇▇ for any other
reason other than Disability or for Cause or if the Executive terminates
employment for Good Reason, the date specified in the Notice of
Termination which shall not be less than thirty (30) days from the date
such Notice of Termination is given, (iv) if the Executive's employment is
terminated by ▇▇▇▇▇▇▇ for reasons of Cause, immediately upon delivery of
the Notice of Termination and the expiration of any cure period provided
under Section (d) of Article I, and (v) if the Executive's employment is
terminated by the Executive pursuant to Subsection (iii) of Section (a) of
this Article for reasons other than Good Reason, the date specified in the
Notice of Termination which shall not be less than ninety (90) days from
the date such Notice of Termination is given.
(f) Any termination of employment of the Executive or the removal of the
Executive from the office or position in ▇▇▇▇▇▇▇ or any Subsidiary that
occurs (i) not more than ninety (90) days prior to the date on which a
Change in Control occurs, and (ii) following the commencement of any
discussion with a third person that ultimately results in a Change in
Control, shall be deemed to be a termination or removal of the Executive
within the two (2) year period commencing on a Change in Control for
purposes of this Agreement and the term of this Agreement shall be deemed
to have been extended until such Change in Control solely for purposes of
determining any payments due to the Executive as a result of such
termination.
ARTICLE 7 -- RESTRICTIVE COVENANTS
(a) Ownership and Protection of Proprietary Information.
(i) "Confidential Information" means data and information relating to
the business of ▇▇▇▇▇▇▇ (which does not rise to the status of a
Trade Secret) which is or has been disclosed to the Executive or of
which the Executive became aware as a consequence of or through his
employment relationship to ▇▇▇▇▇▇▇ and which has value to ▇▇▇▇▇▇▇ or
its Subsidiaries and is not generally known to its competitors.
Confidential Information shall not include any data or information
that has been voluntarily disclosed to the public by ▇▇▇▇▇▇▇ or its
Subsidiaries (except where such public disclosure has been made by
the Executive without authorization) or that has been independently
developed and disclosed by others, or that otherwise enters the
public domain through lawful means.
(ii) "Trade Secrets" means information including, but not limited to,
technical or non-technical data, formulas, patterns, compilations,
programs, devices, methods, techniques, drawings, processes,
financial data, financial plans, or product plans which (i) derives
economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other
persons who can obtain economic value from its disclosure or use,
and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
10
(iii) Confidentiality. All Confidential Information and Trade Secrets and
all physical embodiments thereof received or developed by the
Executive while employed by ▇▇▇▇▇▇▇ are confidential to and are and
will remain the sole and exclusive property of ▇▇▇▇▇▇▇ or its
Subsidiaries. Except to the extent necessary to perform the duties
assigned to him by ▇▇▇▇▇▇▇, the Executive will hold such
Confidential Information and Trade Secrets in strictest confidence,
and will not use, reproduce, distribute, disclose or otherwise
disseminate the Confidential Information and Trade Secrets or any
physical embodiments thereof and may in no event take any action
causing any Confidential Information and Trade Secrets disclosed to
or developed by the Executive to lose its character or cease to
qualify as Confidential Information or Trade Secrets.
(iv) Return of Company Property. Upon request by ▇▇▇▇▇▇▇ or its
Subsidiaries, and in any event upon termination of the employment of
the Executive with ▇▇▇▇▇▇▇ for any reason, as a prior condition to
receiving any final compensation hereunder, the Executive will
promptly deliver to ▇▇▇▇▇▇▇ or its Subsidiaries all property
belonging to ▇▇▇▇▇▇▇, including, without limitation, all
Confidential Information and Trade Secrets (and all embodiments
thereof) then in the Executive's custody, control or possession.
(v) Survival. The covenants of confidentiality set forth herein will
apply on and after the date hereof to any Confidential Information
and Trade Secrets disclosed by ▇▇▇▇▇▇▇ or its Subsidiaries or
developed by the Executive prior to or after the date hereof. The
covenants restricting the use of Confidential Information will
continue and be maintained by the Executive for a period of two (2)
years following the Date of Termination under this Agreement. The
covenants restricting the use of Trade Secrets will continue and be
maintained by the Executive following the Date of Termination under
this Agreement for so long as permitted by applicable law.
(b) Non Solicitation of Employees. During the Term and for a period of twelve
(12) months following the Date of Termination of his employment, the
Executive shall not, directly or indirectly, solicit or induce any
employee of ▇▇▇▇▇▇▇ or its Subsidiaries, with whom the Executive has had
material contact during his employment, to terminate employment with
▇▇▇▇▇▇▇ or the Subsidiary in favor of employment by any person, firm, or
entity affiliated with the Executive; provided, however, that the
foregoing covenant shall not apply to general solicitations for a position
not specifically directed to a particular individual which is contained in
newspapers, magazines, periodicals or electronic media of general
circulation. This provision will apply whether or not the employee who is
solicited or induced to terminate his employment is employed pursuant to a
written agreement and whether or not his employment is for a determined
period or at-will. Notwithstanding the foregoing, in the event Subsection
(vi) of Section (a) of Article 6 applies to the Executive's termination,
the provisions of this Section (b) shall apply for a period of twenty-four
(24) months following the Date of Termination of his employment.
(c) Non-Solicitation of Customers. The Executive agrees that during the Term
and for a period of twelve (12) months following the Date of Termination
of his employment, the Executive will not, either directly or indirectly,
on the Executive's own behalf or in the
11
service of or on behalf of others, solicit, divert or appropriate, or
attempt to solicit, divert or appropriate, to a business involving the
provision of contract bus services for school bus transportation in Canada
and/or the United States, municipal and paratransit bus transportation
within the United States, or inter-city and tourism bus transportation
throughout North America (a "Competing Business"), any individual or
entity which was an actual or actively sought prospective client or
customer of ▇▇▇▇▇▇▇ or its Subsidiaries and with whom the Executive had
material contact during the Executive's last two (2) years of employment
with ▇▇▇▇▇▇▇. Nothing in this Section (c) shall be construed to restrict
the Executive from working for a Competing Business solely because such
Competing Business does business with a client or customer of ▇▇▇▇▇▇▇ or
its Subsidiaries or prospective client or customer of ▇▇▇▇▇▇▇ or its
Subsidiaries or because individuals of such Competing Business who have
contact with such clients or customers report directly or indirectly to
the Executive. Notwithstanding the foregoing, in the event Subsection (vi)
of Section (a) of Article 6 applies to the Executive's termination, the
provisions of this Section (c) shall apply for a period of twenty-four
(24) months following the Date of Termination of his employment.
(d) Non-Competition. The Executive agrees that during employment pursuant to
this Agreement and for twelve (12) months following termination without
Cause of his employment by ▇▇▇▇▇▇▇ and payment of the severance payment
amount and benefit continuation as detailed in Subsection (v) or (vi), as
applicable, of Section (a) of Article 6, he shall not either individually
or in partnership, or jointly in conjunction with any other person, entity
or organization, as principal, agent, consultant, lender, contractor,
employer, employee, investor, shareholder, or in any other manner,
directly or indirectly, advise, manage, carry on, establish, control,
engage in, invest in, offer financial assistance or services to, or permit
his name to be used by any Competing Business that competes with the
then-existing business of ▇▇▇▇▇▇▇ or its Subsidiaries, provided that the
Executive shall be entitled, for investment purposes, to purchase and
trade shares of a public company which are listed and posted for trading
on a recognized stock exchange and the business of which public company
may be in competition with the business of ▇▇▇▇▇▇▇ or its Subsidiaries,
provided that the Executive shall not directly or indirectly own more than
five percent (5%) of the issued share capital of the public company, or
participate in its management or operation, or in any advisory capacity
within the time limits set out herein. In the event that Subsection (vi)
of Section (a) of Article 6 applies to the Executive's termination, the
provisions of this Section (d) shall apply for a period of twenty-four
months following the Date of Termination of his employment.
(e) Enforcement of Covenants. Without limiting the right of ▇▇▇▇▇▇▇ to pursue
all other legal and equitable remedies available for violation by the
Executive of the covenants contained in this Article 7, it is expressly
agreed by the Executive and ▇▇▇▇▇▇▇ that other remedies cannot fully
compensate ▇▇▇▇▇▇▇ for any violation by the Executive of the covenants
contained in this Article 7 and that ▇▇▇▇▇▇▇ shall be entitled to
injunctive relief, without the necessity of proving actual monetary loss,
to prevent any such violation or any continuing violation thereof. ▇▇▇▇▇▇▇
and the Executive further agree that all payments under Subsection (v) or
Subsection (vi), as applicable, of Section (a) of Article 6 hereof shall
immediately cease and shall no longer be an obligation of ▇▇▇▇▇▇▇ in the
event of any violation of the covenants contained in Sections (b) or (c)
hereof which is not cured within (10) days of written notice by ▇▇▇▇▇▇▇ to
the Executive of such
12
violation or of a willful and material violation of the covenants
contained in Section (d) hereof. ▇▇▇▇▇▇▇ and the Executive further agree
that such forfeiture shall not be deemed to be liquidated damages for
breach of such covenants. Each party intends and agrees that if in any
action before any court or agency legally empowered to enforce the
covenants contained in this Article 7, any term, restriction, covenant or
promise contained herein is found to be unreasonable and accordingly
unenforceable, then such term, restriction, covenant or promise shall be
deemed modified to the extent necessary to make it enforceable by such
court or agency.
ARTICLE 8 -- AUTHORITY
(a) The Executive shall have such duties, responsibilities and authority as
are reasonable and appropriate for the Executive's title and position and
as are assigned to him by the Chief Executive Officer and the Board from
time to time. The Executive shall support the Chief Executive Officer in
carrying out the general or specific instructions and directions of the
Chief Executive Officer and the Board and together with the Chief
Executive Officer in doing so, may enter into contracts, engagements or
commitments of every nature or kind, in the name of and on behalf of
▇▇▇▇▇▇▇, and may engage, employ and dismiss all managers and other
employees and agents of ▇▇▇▇▇▇▇, subject to the by-laws and charter
documents of ▇▇▇▇▇▇▇ and the authority given him by ▇▇▇▇▇▇▇ from time to
time.
(b) The Executive shall conform to all lawful instructions and directions
given to him by the Chief Executive Officer and the Board and obey and
carry out the by-laws of ▇▇▇▇▇▇▇.
ARTICLE 9 -- SERVICE
The Executive, throughout the term of his employment, shall devote his full time
and attention to the business and affairs of ▇▇▇▇▇▇▇, and shall not undertake
any other business or occupation or, unless approved by the Chief Executive
Officer or as part of his job functions or responsibilities, become either (i)
an officer, employee or agent of any other company or firm which is a commercial
venture or (ii) a director of more than two companies or firms which are
commercial ventures. The Executive shall well and faithfully serve ▇▇▇▇▇▇▇ and
use his best efforts to promote the interests thereof.
ARTICLE 10 -- CERTAIN ADDITIONAL PAYMENTS
(a) Anything in this Agreement to the contrary notwithstanding and except as
set forth below, in the event it shall be determined that any Payment
would be subject to the Excise Tax, then the Executive shall be entitled
to receive an additional payment (the "Gross-Up Payment") in an amount
such that, after payment by the Executive of all taxes (and any interest
or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment and
after the payment of all additional taxes and interest imposed under Code
Section 409A(a)(1)(B) on the Gross-Up Payment and any severance payment
made to the Executive hereunder, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section (a), if it shall
be
13
determined that the Executive is entitled to the Gross-Up Payment, but
that the Parachute Value of all Payments does not exceed one hundred and
ten percent (110%) of the Safe Harbor Amount, then no Gross-Up Payment
shall be made to the Executive and the amounts payable under this
Agreement shall be reduced so that the Parachute Value of all Payments, in
the aggregate, equals the Safe Harbor Amount. The reduction of the amounts
payable hereunder, if applicable, shall be made by first reducing the cash
payments under Annex A unless an alternative method of reduction is
elected by the Executive, and in any event shall be made in such a manner
as to maximize the Value of all Payments actually made to the Executive.
For purposes of reducing the Payments to the Safe Harbor Amount, only
amounts payable under this Agreement (and no other Payments) shall be
reduced. If the reduction of the amount payable under this Agreement would
not result in a reduction of the Parachute Value of all Payments to the
Safe Harbor Amount, no amounts payable under this Agreement shall be
reduced pursuant to this Section (a). ▇▇▇▇▇▇▇'▇ obligations under this
Article 10 shall not be conditioned upon the Executive's termination of
employment, and they shall survive the termination of the Executive's
employment and the Term with respect to any Payments that are determined
by the Accounting Firm to be contingent on a "change of control" (as
defined in Code Section 280G) of ▇▇▇▇▇▇▇ that occurs during the Term.
(b) Subject to the provisions of Section (c) hereof, all determinations
required to be made under this Article 10, including whether and when a
Gross-Up Payment is required, the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be
made by the independent accounting firm regularly servicing ▇▇▇▇▇▇▇ prior
to the Change in Control, or such other nationally recognized certified
public accounting firm as may be designated by the Executive (the
"Accounting Firm"). The Accounting Firm shall provide detailed supporting
calculations both to ▇▇▇▇▇▇▇ and the Executive within fifteen (15)
business days of the receipt of notice from the Executive that there has
been a Payment or such earlier time as is requested by ▇▇▇▇▇▇▇. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, the Executive
may appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by ▇▇▇▇▇▇▇. Any Gross-Up
Payment, as determined pursuant to this Article 10, shall be paid by
▇▇▇▇▇▇▇ to the Executive or the applicable taxing authorities within five
(5) business days of the receipt of the Accounting Firm's determination,
which determination shall be made no later than the end of the second
month following the later of (i) the calendar year in which the
Executive's employment with ▇▇▇▇▇▇▇ terminates or (ii) the taxable year of
▇▇▇▇▇▇▇ in which the Executive's employment with ▇▇▇▇▇▇▇ terminates. In
the event that such determination cannot be made within such period,
payment may be made as soon as practicable after such determination can be
made. Any determination by the Accounting Firm shall be binding upon
▇▇▇▇▇▇▇ and the Executive. As a result of the uncertainty in the
application of Code Section 4999 at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments
that will not have been made by ▇▇▇▇▇▇▇ should have been made (the
"Underpayment"), consistent with the calculations required to be made
hereunder. In the event ▇▇▇▇▇▇▇ exhausts its remedies pursuant to Section
(c) hereof and the Executive thereafter is required to make a payment of
any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment
14
that has occurred and any such Underpayment shall be promptly paid by
▇▇▇▇▇▇▇ to or for the benefit of the Executive.
(c) The Executive shall notify ▇▇▇▇▇▇▇ in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by ▇▇▇▇▇▇▇
of the Gross-Up Payment. Such notification shall be given as soon as
practicable, but no later than ten (10) business days after the Executive
is informed in writing of such claim. The Executive shall apprise ▇▇▇▇▇▇▇
of the nature of such claim and the date on which such claim is requested
to be paid. The Executive shall not pay such claim prior to the expiration
of the thirty (30) day period following the date on which the Executive
gives such notice to ▇▇▇▇▇▇▇ (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If ▇▇▇▇▇▇▇
notifies the Executive in writing prior to the expiration of such period
that ▇▇▇▇▇▇▇ desires to contest such claim, the Executive shall:
(i) give ▇▇▇▇▇▇▇ any information reasonably requested by ▇▇▇▇▇▇▇
relating to such claim,
(ii) take such action in connection with contesting such claim as
▇▇▇▇▇▇▇ shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected
by ▇▇▇▇▇▇▇,
(iii) cooperate with ▇▇▇▇▇▇▇ in good faith in order to effectively
contest such claim, and
(iv) permit ▇▇▇▇▇▇▇ to participate in any proceedings relating to
such claim;
provided, however, that ▇▇▇▇▇▇▇ shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in
connection with such contest, and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties) imposed as a result of such
representation and payment of costs and expenses. Without limitation on
the foregoing provisions of this Section (c), ▇▇▇▇▇▇▇ shall control all
proceedings taken in connection with such contest, and, at its sole
discretion, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the applicable taxing authority
in respect of such claim and may, at its sole discretion, either direct
the Executive to pay the tax claimed and ▇▇▇ for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts, as
▇▇▇▇▇▇▇ shall determine; provided, however, that if ▇▇▇▇▇▇▇ directs the
Executive to pay such claim and ▇▇▇ for a refund, ▇▇▇▇▇▇▇ shall advance
the amount of such payment to the Executive, on an interest-free basis,
and shall indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or penalties)
imposed with respect to such advance or with respect to any imputed income
in connection with such advance; and provided, further, that any extension
of the statute of limitations relating to payment of taxes for the taxable
year of the Executive with respect to which such contested amount is
claimed to be due is
15
limited solely to such contested amount. Furthermore, ▇▇▇▇▇▇▇'▇ control of
the contest shall be limited to issues with respect to which the Gross-Up
Payment would be payable hereunder, and the Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of a Gross-Up Payment or an amount
advanced by ▇▇▇▇▇▇▇ pursuant to Section (c) hereof, the Executive becomes
entitled to receive any refund with respect to the Excise Tax to which
such Gross-Up Payment relates or with respect to such claim, the Executive
shall (subject to ▇▇▇▇▇▇▇'▇ complying with the requirements of Section (c)
hereof, if applicable) promptly pay to ▇▇▇▇▇▇▇ the amount of such refund
(together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an amount
advanced by ▇▇▇▇▇▇▇ pursuant to Section (c) hereof, a determination is
made that the Executive shall not be entitled to any refund with respect
to such claim and ▇▇▇▇▇▇▇ does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of thirty
(30) days after such determination, then such advance shall be forgiven
and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
(e) Notwithstanding any other provision of this Article 10, ▇▇▇▇▇▇▇ may, in
its sole discretion, withhold and pay over to the Internal Revenue Service
or any other applicable taxing authority, for the benefit of the
Executive, all or any portion of any Gross-Up Payment, and the Executive
hereby consents to such withholding.
(f) Definitions. The following terms shall have the following meanings for
purposes of this Article 10.
(i) "Excise Tax" shall mean the excise tax imposed by Code Section 4999,
together with any interest or penalties imposed with respect to such
excise tax.
(ii) "Parachute Value" of a Payment shall mean the present value as of
the date of the change of control for purposes of Code Section 280G
of the portion of such Payment that constitutes a "parachute
payment" under Code Section 280G(b)(2), as determined by the
Accounting Firm for purposes of determining whether and to what
extent the Excise Tax will apply to such Payment.
(iii) "Payment" shall mean any payment or distribution in the nature of
compensation (within the meaning of Code Section 280G(b)(2)) to or
for the benefit of the Executive, whether paid or payable pursuant
to this Agreement or otherwise.
(iv) "Safe Harbor Amount" means 2.99 times the Executive's "base amount,"
within the meaning of Code Section 280G(b)(3).
(v) "Value" of a Payment shall mean the economic present value of a
Payment as of the date of the change of control for purposes of Code
Section 280G, as determined by the Accounting Firm using the
discount rate required by Code Section 280G(d)(4).
16
ARTICLE 11 --NON-EXCLUSIVITY OF RIGHTS
Nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, bonus, incentive or other plan or program
provided by ▇▇▇▇▇▇▇ or any of its affiliates and for which the Executive may
qualify, nor shall anything herein limit or otherwise prejudice such rights as
the Executive may have under any other agreements with ▇▇▇▇▇▇▇ or any of its
affiliates, including, but not limited to stock option, deferred share, or
restricted stock agreements. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or program of ▇▇▇▇▇▇▇
or any of its affiliates at or subsequent to the Date of Termination shall be
payable in accordance with such plan or program.
ARTICLE 12 -- FULL SETTLEMENT
Except as provided in Article 7, ▇▇▇▇▇▇▇'▇ obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
▇▇▇▇▇▇▇ may have against the Executive or others whether by reason of the
subsequent employment of the Executive or otherwise. In no event shall the
Executive be obligated to seek other employment by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement.
Without otherwise limiting the purpose or effect of this Article 12, employee
benefits (as described in Section 2 of Annex A) otherwise receivable by the
Executive pursuant to Section 2 of Annex A will be reduced to the extent
comparable welfare benefits are actually received by the Executive from another
employer during the Continuation Period (as defined in Annex A) following the
Executive's Date of Termination, and any such benefits actually received by the
Executive shall be reported by the Executive to ▇▇▇▇▇▇▇.
ARTICLE 13 -- POST-TERMINATION ASSISTANCE
Executive shall provide such information and assistance to ▇▇▇▇▇▇▇ as ▇▇▇▇▇▇▇
may reasonably request, upon reasonable notice, in connection with any
litigation in which it or any of its affiliates is or may become a party.
▇▇▇▇▇▇▇ shall reimburse the Executive for any expenses, including travel
expenses, incurred by the Executive in connection with providing such
information and assistance.
ARTICLE 14 -- ASSIGNMENT OF RIGHTS
(a) ▇▇▇▇▇▇▇ will require any successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business or assets of ▇▇▇▇▇▇▇, by agreement in
form and substance reasonably satisfactory to the Executive, expressly to
assume and agree to perform this Agreement in the same manner and to the
same extent ▇▇▇▇▇▇▇ would be required to perform if no such succession had
taken place. This Agreement will be binding upon and inure to the benefit
of ▇▇▇▇▇▇▇ and any successor to ▇▇▇▇▇▇▇, including, without limitation,
any persons acquiring directly or indirectly all or substantially all of
the business or assets of ▇▇▇▇▇▇▇ whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor shall
thereafter be deemed "▇▇▇▇▇▇▇" for the purposes of this Agreement), but
will not otherwise be assignable, transferable or delegable by ▇▇▇▇▇▇▇.
17
(b) This Agreement will inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees and legatees.
(c) This Agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign, transfer or delegate this
Agreement or any rights or obligations hereunder except as expressly
provided in Sections (a) and (b) hereof. Without limiting the generality
or effect of the foregoing, the Executive's right to receive payments
hereunder will not be assignable, transferable or delegable, whether by
pledge, creation of a security interest, or otherwise, other than by a
transfer by Executive's will or by the laws of descent and distribution
and, in the event of any attempted assignment or transfer contrary to this
Section (c), ▇▇▇▇▇▇▇ shall have no liability to pay any amount so
attempted to be assigned, transferred or delegated.
ARTICLE 15 -- NOTICES
All notices and other communications required or permitted hereunder, or
necessary or convenient in connection herewith, shall be in writing and shall be
deemed to have been given when hand delivered, delivered by facsimile or mailed
by registered mail as follows (provided that notice of change of address shall
be deemed given only when received):
If to ▇▇▇▇▇▇▇, to:
General Counsel
▇▇▇▇▇▇▇ International, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Executive, at such address as Executive provides to ▇▇▇▇▇▇▇ from time
to time as part of his personnel records, or to such other names or addresses as
▇▇▇▇▇▇▇ or the Executive shall designate by notice to the other in the manner
specified in this Article 15.
ARTICLE 16 -- LIABILITY INSURANCE
▇▇▇▇▇▇▇ shall maintain the Executive's liability insurance in accordance with
▇▇▇▇▇▇▇'▇ corporate policy and applicable law.
ARTICLE 17 -- INDEMNIFICATION
▇▇▇▇▇▇▇ agrees that if the Executive is made a party to any action, suit,
proceeding or any other claim whatsoever, by reason of the fact that the
Executive is or was a director, officer, employee or agent of ▇▇▇▇▇▇▇, or is or
was serving at the request of ▇▇▇▇▇▇▇ as a director, officer, employee or agent
of another ▇▇▇▇▇▇▇, partnership, joint venture, trust or other enterprise,
including acting as a fiduciary of an employee benefit plan of ▇▇▇▇▇▇▇ or one of
its Affiliates, whether or not the basis of such claim is the Executive's
alleged action in an official capacity while in service as a director, officer,
employee or agent of ▇▇▇▇▇▇▇ or fiduciary of such employee benefit plan, the
Executive shall be indemnified and held harmless by ▇▇▇▇▇▇▇ to the fullest
extent legally permitted or authorized by ▇▇▇▇▇▇▇'▇ certificate of incorporation
or bylaws
18
or Board resolutions against all expenses, liability and loss, including,
without limitation, legal fees, fines or penalties and amounts paid or to be
paid in settlement, all as reasonably incurred by the Executive in connection
therewith, and such indemnification shall continue as to the Executive even
after the Executive has ceased to be a director, officer, employee or agent of
▇▇▇▇▇▇▇ or fiduciary of such employee benefit plan, and shall inure to the
benefit of the Executive's heirs, executors and administrators.
ARTICLE 18 --LEGAL FEES AND EXPENSES
It is the intent of ▇▇▇▇▇▇▇ that the Executive not be required to incur legal
fees and the related expenses associated with the interpretation, enforcement or
defense of the Executive's rights under this Agreement with respect to any
termination of the Executive's employment occurring during the two (2) year
period commencing on a Change in Control, by litigation or otherwise because the
cost and expense thereof would substantially detract from the benefits intended
to be extended to the Executive hereunder. Accordingly, if the Executive
reasonably believes that ▇▇▇▇▇▇▇ has failed to comply with any of its
obligations under this Agreement during the two (2) year period commencing on
the date of a Change in Control or in the event that ▇▇▇▇▇▇▇ or any other person
takes or threatens to take any action to declare this Agreement void or
unenforceable, or institutes any litigation or other action or proceeding
designed to deny, or to recover from, the Executive the benefits provided or
intended to be provided to the Executive hereunder, subject to the other
provisions of this Article 18, ▇▇▇▇▇▇▇ irrevocably authorizes the Executive from
time to time to retain counsel of the Executive's choice, at the expense of
▇▇▇▇▇▇▇ to the extent and as hereafter provided, to advise and represent the
Executive in connection with any such interpretation, enforcement or defense,
including, without limitation, the initiation or defense of any litigation or
other legal action, whether by or against ▇▇▇▇▇▇▇ or any director, officer,
stockholder or other person affiliated with ▇▇▇▇▇▇▇, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between
▇▇▇▇▇▇▇ and such counsel, ▇▇▇▇▇▇▇ irrevocably consents to the Executive's
entering into an attorney-client relationship with such counsel, and in that
connection ▇▇▇▇▇▇▇ and the Executive agree that a confidential relationship
shall exist between the Executive and such counsel. ▇▇▇▇▇▇▇ will pay and be
solely responsible for any and all attorneys' and related fees and expenses
incurred by the Executive in connection with any of the foregoing, except to the
extent that the Executive fails to prevail on a material claim in any such
proceeding described in this Article 18.
ARTICLE 19 -- SURVIVAL
The provisions of this Agreement which are intended to be performed following
the termination of the Executive's employment with ▇▇▇▇▇▇▇ and/or the expiration
or earlier termination of the term of this Agreement, shall survive such
termination, expiration or earlier termination, including without limitation the
provisions of Articles 6, 7, 10, 13, 17 and 18.
ARTICLE 20 -- WITHHOLDING OF TAXES
▇▇▇▇▇▇▇ shall be entitled to withhold from any amounts payable under this
Agreement all taxes as legally shall be required pursuant to applicable federal,
state or local laws. Except as otherwise provided in this Agreement, ▇▇▇▇▇▇▇
shall not be obligated to compensate the Executive for the payment of such
taxes.
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ARTICLE 21 -- SEVERABILITY
If any provision of this Agreement or the application thereof to anyone, or
under any circumstances, is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect any other
provision or application of this Agreement which can be given effect without the
invalid or unenforceable provision or application and shall not invalidate or
render unenforceable such provision or application in any other jurisdiction. If
any provision of this Agreement or the application of any provision hereof to
any person or circumstances is held invalid, unenforceable or otherwise illegal,
the provision so held to be invalid, unenforceable or otherwise illegal will be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid or legal.
ARTICLE 22 -- ENTIRE AGREEMENT
This Agreement, including Annex A hereto, constitutes the entire agreement
between the parties with respect to the employment and appointment of the
Executive and any and all previous agreements, written or oral, express or
implied, between the parties or on their behalf, relating to the employment and
appointment of the Executive by ▇▇▇▇▇▇▇, are terminated and cancelled and each
of the parties releases and forever discharges the other of and from all manner
of actions, causes of action, claims and demands whatsoever, under or in respect
of any previous agreement; provided, however, that this does not terminate or
cancel the separate indemnification agreement between ▇▇▇▇▇▇▇ and the Executive.
ARTICLE 23 -- AMENDMENT, WAIVER, ETC.
No provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and ▇▇▇▇▇▇▇. No waiver by any party hereto at any time of any breach
by any other party hereto of, or compliance with, any condition 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.
ARTICLE 24 -- HEADINGS
The headings used in this Agreement are for convenience only and are not to be
construed in any way as additions to or limitations of the covenants and
agreements contained in it.
ARTICLE 25 -- COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.
ARTICLE 26 -- GENDER AND NUMBER
Except where otherwise indicated by the context, any masculine term used herein
shall also include the feminine; the plural shall include the singular, the
singular shall include the plural.
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ARTICLE 27 -- GOVERNING LAW
This Agreement shall be governed by the internal law, and not the laws of
conflicts, of the State of Delaware.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the 1st day
of August, 2006.
▇▇▇▇▇▇▇ INTERNATIONAL INC.
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TITLE: PRESIDENT AND CHIEF EXECUTIVE OFFICER
EXECUTIVE
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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ANNEX A
1. ▇▇▇▇▇▇▇ shall pay to the Executive a lump sum payment in an amount
equal to two (2) times the sum of (A) Base Salary (at the highest rate in effect
for any period prior to the Date of Termination), plus (B) Annual Bonus (in an
amount equal to not less than the higher of (x) the highest aggregate Annual
Bonus earned in any fiscal year after the Change in Control or in any of the
three (3) fiscal years immediately preceding the year in which the Change in
Control occurred or (y) the Target Bonus for the year in which the Change in
Control occurred).
2. ▇▇▇▇▇▇▇ shall, for a period of twenty-four (24) months following the
Termination Date (the "Continuation Period"), arrange to provide the Executive
with Employee Benefits that are welfare benefits within the meaning of Section
3(1) of the Employee Retirement Income Security Act of 1974, as amended,
substantially similar to those that the Executive was receiving or entitled to
receive immediately prior to the Date of Termination (or, if greater,
immediately prior to the reduction, termination or denial described in
Subsection (ii) of Section (o) of Article 1 of the Agreement), at the expense of
▇▇▇▇▇▇▇ with respect to all such benefits other than medical or dental benefits,
except that the level of any such Employee Benefits to be provided to the
Executive may be reduced in the event of a corresponding reduction generally
applicable to all recipients of or participants in such Employee Benefits. With
respect to medical and dental benefits, the Executive (and his eligible
dependents) will be entitled to continue to participate in such plans during the
Continuation Period (which continuation shall count toward any required COBRA
continuation) at the Executive's sole expense based on COBRA rates charged from
time to time; provided, however, that ▇▇▇▇▇▇▇ shall pay to the Executive at the
time payment is made of the amount in Section 1 of this Annex, an amount equal
to the full COBRA cost of such coverage during the Continuation Period. Without
otherwise limiting the purpose or effect of Article 12 of the Agreement,
Employee Benefits otherwise receivable by the Executive pursuant to this Section
2 (but not the amount paid by ▇▇▇▇▇▇▇ for medical and dental coverage) will be
reduced to the extent comparable welfare benefits are actually received by the
Executive from another employer during the Continuation Period following the
Executive's Date of Termination, and any such benefits actually received by the
Executive shall be reported by the Executive to ▇▇▇▇▇▇▇.
Notwithstanding the foregoing, in the event that a plan or program
providing any such welfare benefit does not allow for the continuation of such
benefit and either cannot be amended without adverse tax consequences to
participants or the insurance company providing such benefit is unwilling to
provide for such continuation, then ▇▇▇▇▇▇▇ shall pay to the Executive, at the
same time as payment of the amount under Section 1 of this Annex is made, an
amount equal to the cost to ▇▇▇▇▇▇▇, determined at the cost as of the date of
such payment, of providing such benefit for the Continuation Period, and
thereafter ▇▇▇▇▇▇▇ shall have no obligation to provide such benefit to the
Executive.
3. The Continuation Period will be considered service with ▇▇▇▇▇▇▇ for the
purpose of determining vesting for the Executive under ▇▇▇▇▇▇▇'▇ retirement
income, supplemental executive retirement and other benefit plans of ▇▇▇▇▇▇▇
applicable to the Executive, except to the extent that to do so would jeopardize
the tax-qualified status of any such plan.
4. In addition to the retirement income, supplemental executive
retirement, and other benefits to which the Executive is entitled under the
Retirement Plans, a lump sum payment in an
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amount equal to the actuarial equivalent of the excess of (x) the retirement
pension and the medical, life and other benefits that would be payable to the
Executive under the Retirement Plans if the Executive continued to be employed
through the Continuation Period given the Executive's Base Salary (as determined
in Section 1 hereof) (without regard to any amendment to the Retirement Plans
made subsequent to a Change in Control which adversely affects in any manner the
computation of retirement or welfare benefits thereunder), over (y) the
retirement pension and the medical, life and other benefits that the Executive
is entitled to receive (either immediately or on a deferred basis) under the
Retirement Plans. For purposes of this Section, "actuarial equivalent" shall be
determined using the actuarial assumptions mandated under Code Section 417(e)(3)
in effect for the month second preceding the date of payment and the
Continuation Period will be considered service with ▇▇▇▇▇▇▇ for the purpose of
determining vesting, service credits and benefits under clause (x) hereof.
5. Reasonable outplacement services by a firm selected by the Executive,
at the expense of ▇▇▇▇▇▇▇, in an amount up to Twenty-Five Thousand Dollars
($25,000.00).
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