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EXHIBIT 10.1
EMPLOYMENT AND SEVERANCE AGREEMENT
AGREEMENT made as of February 15, 2001 between ▇▇▇▇▇▇▇
ENTERPRISES, INC., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ (the "Executive").
WHEREAS, Executive is currently employed by the Company; and
WHEREAS, in connection with this Agreement and in exchange for
the consideration described herein (the receipt and sufficiency of which is
hereby acknowledged), the Executive has agreed to waive any rights he may
currently have under the Employment Contract dated August 22, 1997 and any
change in control, severance, or employment agreement or other compensation or
employee benefit plan with or previously assumed by the Company and has agreed
to waive any claim that any previous sale, transfer of assets, acquisition,
spin-off, merger, restructuring, reorganization, or any other corporate
transaction constitutes a "Change in Control" or "Good Reason" to terminate his
employment under any such agreements or other employee benefit or compensation
plans with the Company or its predecessors except as set forth herein; and
WHEREAS, it is the intent of the parties that all the terms of
the Employment Contract dated August 22, 1997 shall be superceded by this
Agreement and the rights and obligations of the parties shall be governed by
this Agreement as of its Effective Date; and
WHEREAS, it is also the intent of the parties that, in
consideration for Executive's waiver of his rights under the Employment Contract
dated August 22, 1997 and the acceptance of benefits under this Agreement,
Executive shall receive execution of this Agreement 111,473 shares of the
Company's Common Stock under the Stock Grant Plan upon execution of this
Agreement in exchange for the equivalent number of shares of Restricted Stock
currently held by Executive, together with receiving payment of the federal and
state income taxes due Executive upon receipt of the shares of Common Stock; and
WHEREAS, it is further the intent of the parties that if the
Executive remains employed by the Company on or after the third anniversary of
the Effective Date of this Agreement and then has a Termination of Employment
for Specific Reason, has a Termination of Employment without Cause, has a
"Change in Control" as described in paragraph 1(e), or has a material reduction
in duties, responsibilities, and authority without Executive's consent giving
rise to Termination for Good Reason under paragraph 1(l) herein, he shall
receive the severance benefits under this Agreement upon the execution of a
Severance Agreement and Release of Claims; and
WHEREAS, the Company desires to assure itself of the
management services of the Executive by directly engaging the Executive as the
Executive Vice President of the Company or in such other capacity as the
Company's Chief Executive Officer elects; and
WHEREAS, the Company recognizes that the Executive's
contribution to the Company's growth and success will be substantial; and
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WHEREAS, the Company wishes to encourage the Executive to
remain with and devote full time and attention to the business affairs of the
Company and wishes to provide income protection to the Executive for a period of
time in the event of an involuntary Termination of Employment without Cause or
for Good Reason under paragraph 1 (l) or a voluntary Termination of Employment
for Specific Reason within the Term of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein and for other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the Company and the
Executive hereby agrees as follows:
1. Definitions.
(a) "Base Salary" shall mean the Executive's regular
annual rate of base pay, as set forth in Paragraph 4(a), as of the date
in question.
(b) The "Benefit Multiplier" shall be equal to 2.0,
except that if Executive's Termination of Employment is pursuant to
Paragraph 7(b), it shall be equal to 3.0.
(c) The "Benefit Period" shall be the period of years
equal to the Benefit Multiplier which follows the Executive's
Termination of Employment.
(d) "Cause" shall mean the Executive's (i) conviction
of a crime involving moral turpitude or theft or embezzlement of
property from the Company or (ii) willful misconduct or willful failure
substantially to perform the duties of his position, but only if such
has continued after receipt of notice from the Company's Board of
Directors and such reasonable cure period as is set forth in such
notice.
(e) A "Change in Control" shall be deemed to have
taken place if, after the Effective Date: (i) any person, corporation,
or other entity or group, including any "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, other than any
employee benefit plan then maintained by the Company, becomes the
beneficial owner of shares of the Company having 30 percent or more of
the total number of votes that may be cast for the election of
Directors of the Company; (ii) as the result of, or in connection with,
any contested election for the Board of Directors of the Company, or
any tender or exchange offer, merger or other business combination or
sale of assets, or any combination of the foregoing (a "Transaction"),
the persons who were Directors of the Company before the Transaction
shall cease to constitute a majority of the Board of Directors of the
Company or any successor to the Company or its assets or (iii) at any
time (a) the Company shall consolidate with, or merge with, any other
Person and the Company shall not be continuing or surviving
corporation, (b) any Person shall consolidate with, or merge with the
Company, and the Company shall be the continuing or surviving
corporation and in connection therewith, all or part of the outstanding
Company stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, (c) the
Company shall be a party to a statutory share exchange with any other
Person after which the Company is a subsidiary of any
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other Person, or (d) the Company shall sell or otherwise transfer 50%
or more of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to any Person or Persons; provided,
however, that notwithstanding anything to the contrary herein, a Change
in Control shall not include any transfer to a consolidated subsidiary,
reorganization, spin-off, split-up, distribution, or other similar or
related transaction(s) or any combination of the foregoing in which the
core business and assets of the Company and its subsidiaries (taken as
a whole) are transferred to another entity ("Controlled") with respect
to which (1) the majority of the Board of Directors of the Company (as
constituted) immediately prior to such transaction(s)) also serve as
directors of Controlled and immediately after such transaction(s)
constitute a majority of Controlled's board of directors, and (2) more
than 70% of the shareholders of the Company (immediately prior to such
transaction(s)) become shareholders of other owners of Controlled and
immediately after the transaction(s) control more than 70% of the
ownership and voting rights of Controlled.
(f) The "Change in Control Date" shall mean the date
immediately prior to the effectiveness of the Change in Control.
(g) The "Committee" shall mean the Compensation
Committee of the Company's Board of Directors.
(h) The "Competitive Businesses" shall mean any of
the health care businesses or research and development activities in
which the Company is engaged on the Effective Date.
(i) "Effective Date" shall mean the date first shown
above.
(j) "Person" shall have the meaning ascribed to such
term in Section 3(a)(9) of the Securities Exchange Act of 1934 and used
in Sections 13(d) and 14(d) thereof, including a "group" as defined in
Section 13(d).
(k) "Specific Reason" shall mean the Termination of
Employment at the end of the Term by Executive because of the transfer
of Executive from the position of Executive Vice President and
President of ▇▇▇▇▇▇▇ Health and Rehabilitation Services, Inc. to the
new position of Executive Vice President - Innovative Services which
occurred in January, 2001. The Company recognizes such transfer as an
employment action which entitled Executive to receive the benefits
described under the Employment Contract dated August 22, 1997 and for
which Executive shall receive severance benefits under the terms of
this Agreement.
(l) "Good Reason" shall mean the Termination of
Employment by Executive because he has a "material reduction" in
duties, responsibilities and authority without his consent. For
purposes of this paragraph, "material reduction" shall mean a
substantial diminution in Executive's duties, responsibilities and
authority existing as of the date of this Agreement resulting in
Executive no longer having senior executive duties, responsibilities
and authority to the extent of other Executive Vice Presidents of the
Company.
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(m) "Target Bonus" shall mean the target bonus (100%
level) established for the Executive for the year in question under the
Company's "Annual Incentive Plan."
(n) "Termination of Employment" shall mean the
termination of the Executive's employment by the Company other than
such a termination in connection with an offer of immediate
reemployment by a successor or assign of the Company or purchaser of
the Company or its assets.
2. Term. The term of this Agreement shall be for the period
commencing on the Effective Date and ending on the third anniversary of the
Effective Date.
3. Position and Duties. During the Term, the Executive shall
serve as an employee of the Company in the position of Executive Vice President
- Innovative Services, and shall have such duties, functions, responsibilities
and authority as determined by the Chief Executive Officer of the Company.
4. Compensation and Related Matters.
(a) Annual Base Salary. The Executive shall receive
a Base Salary at a rate of $400,000 per annum through December 31, 2001
and thereafter at any such greater rate as is determined by the
Committee.
(b) Benefits. During the Term, the Executive shall
be entitled to all of the following and any other benefits and
prerequisites offered by the Company to senior executives generally:
(i) Participate in the Company's present and
future Long-Term Incentive Plan, Stock Grant Plan, and any
other stock option, restricted stock, phantom stock and other
similar equity-based incentive plans, pursuant to their terms;
(ii) Participate in the Company's Employee
Stock Purchase Plan, pursuant to its terms;
(iii) Participate in the Company's Executive
Deferred Compensation Plan, pursuant to its terms;
(iv) Participate in the Company's Executive
SavingsPlus Plan pursuant to its terms;
(v) Participate in the Company's
Supplemental Executive Retirement Plan, pursuant to its terms;
(vi) $300,000 of individual life insurance
coverage under the Company's Executive Split Dollar Life
Insurance Plan;
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(vii) $401,000 (or such greater amount as
the Company may make available to its senior executives
generally) of group term life insurance coverage;
(viii) $100,000 (or such greater amount as
the Company may make available to its senior executives
generally) of business travel accident insurance coverage when
traveling on Company business;
(ix) Participate in the Company's Medical
Plan, and Dental Plan, pursuant to their terms, except that
the premium cost for such shall be treated as a benefit under
the Company's Executive Medical Reimbursement Plan, described
below;
(x) Participate in the Company's Executive
Medical Reimbursement Plan (with a maximum benefit of $5,000
[or such greater or lesser amount as the Company may make
available to its senior executives generally], a portion of
which shall be deemed applied to the payment of premiums under
the Company's Medical Plan and Dental Plan as described
above), pursuant to its terms;
(xi) Participate in the Company's group
Long-Term Disability Plan, at the maximum benefit level,
pursuant to its terms, and participate in the Company's
Supplemental Long-Term Disability Plan, according to its
terms;
(xii) 4 weeks of paid vacation;
(xiii) Participate in or receive benefits
under any other employee benefit plan or other arrangement
made available by the Company to any of its employees, subject
to and on a basis consistent with the terms, conditions and
overall administration of such plan or arrangement.
(c) Restricted Stock. Upon execution of this
Agreement, Executive shall receive 111,473 shares of Common Stock of
the Company, under the Stock Grant Plan, for the equivalent number of
shares of Restricted Stock held by Executive as of February 15, 2001.
As of the date of this Agreement, the Company has paid Executive's
federal and state income taxes incurred by the Executive upon his
receipt of the Common Stock of the Company under the Stock Grant Plan
and this subparagraph. Both the amount of the tax liability paid by the
Company and the methodology used to determine the tax liability are set
forth in Appendix "A" to this Agreement.
(d) Annual Bonus. As additional compensation for
services rendered, the Executive shall be eligible to receive an annual
bonus in cash or stock pursuant to the terms of Company's Annual
Incentive Plan or such other incentive compensation plan.
(e) Expenses. The Company shall promptly reimburse
the Executive for all reasonable travel and other business expenses
incurred by the Executive in the performance of his duties to the
Company hereunder.
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(f) Reporting. The Executive shall report directly to
the President and Chief Executive Officer of the Company.
5. Non-Solicitation.
(a) Executive shall not at any time during the period
of his employment with the Company, or during the one (1) year period
immediately following his Termination of Employment with the Company
("Non-Solicitation Period"), without the prior written consent of the
Company, on behalf of himself or any other person, solicit for
employment or employ any of the current officers or employees of the
Company; provided, however, that nothing contained herein shall
prohibit Executive from hiring employees of the Company when such
employment results from general solicitations for employment.
(b) Executive shall not at any time during the period
of his employment with the Company, or during the Non-Solicitation
Period, without the prior written consent of the Company, solicit for
his own use, or for the use of any company or person by whom he is
employed, or for whom he may be acting, any of the current customers of
the Company, nor shall he divulge to any other person any information
or fact relating to the management, business (including prospective
business), finances, its customers or the terms of any of the contracts
of the Company which has heretofore or which may hereafter come to the
knowledge of Executive which is not freely available to the public.
(c) Executive shall not, during the Non-Solicitation
Period, in any way defame the Company or disparage its business
capabilities, products, plans or management to any customer, potential
customer, vendor, supplier, contractor, subcontractor of the Company so
as to affect adversely the goodwill or business of the Company.
(d) Executive covenants and agrees that a breach of
these subparagraphs (a), (b) or (c) would immediately and irreparably
harm the Company and that a remedy at law would be inadequate to
compensate the Company for its losses by reason of such breach and
therefore that the Company shall, in addition to any rights and
remedies available under this Agreement, at law or otherwise, be
entitled to any injunction to be issued by any court of competent
jurisdiction enjoining and restraining Executive from committing any
violation of these subparagraphs (a), (b) or (c), and Executive hereby
consent to the issuance of such injunction.
(e) For purposes of this Paragraph 5 and in
consideration of this Agreement, this non-solicitation agreement has
been separately negotiated and bargained for, and constitutes a
substantial portion of the consideration for this Agreement.
6. Non-disclosure of Proprietary Information, Surrender of
Records; Inventions and Patents.
(a) Proprietary Information. Executive shall not
during the term of employment or at any time thereafter (irrespective
of the circumstances under which
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Executive's employment terminates), directly or indirectly use for his
own purpose or for the benefit of any person or entity other than
Company, nor otherwise disclose, any proprietary information, as
defined below, to any individual or entity, unless such disclosure has
been authorized in writing by the Company or is otherwise required by
law. For purposes of this Agreement, the term "proprietary information"
shall include, but is not limited to: (a) the name or address of any
client or affiliate of Company or any information concerning the
transactions or relations of any client or affiliate of Company with
Company or any of its shareholders; (b) any information concerning any
product, service, methodology, analysis, presentation, technology or
procedure employed by Company but not generally known to its clients or
competitors, or under development by or being tested by Company but not
at the time offered generally to clients; (c) any information relating
to Company's computer software, computer systems, pricing or marketing
methods, capital structure, operating results, borrowing arrangements
or business plans; (d) any information which is generally regarded as
confidential or proprietary in any line of business engaged in by
Company; (e) any information contained in any of Company's written or
oral policies and procedures or employee manuals; (f) any information
belonging to clients or affiliates of Company which Company has agreed
to hold in confidence; (g) any inventions, innovations or improvements
covered by subparagraph 6(c) below; (h) any other information which
Company has reasonably determined to be confidential or proprietary;
and (i) all written, graphic, electronic and other material relating to
any of the foregoing. Information that is not novel or copyrighted or
patented may nonetheless be proprietary information. Proprietary
information, however, shall not include any information that is or
becomes generally known, or is readily accessible through public means,
to the industries in which Company competes through sources independent
of Company or Executive or through authorized publication by Company to
persons other than Company's employees.
(b) Confidentiality and Surrender of Records.
Executive shall not during the term of employment or at any time
thereafter (irrespective of the circumstances under which Executive's
employment terminates), except as required by law, directly or
indirectly give or disclose any "confidential records" (as hereinafter
defined) to, or permit any inspection of copying of confidential
records by, any individual or entity other than in the ordinary course
and scope of such individual's or entity's employment or retention by
Company, nor shall he use or retain any of the same following
termination of his employment. Executive shall promptly return to
Company all "confidential records" upon the termination of Executive's
employment with Company. For purposes hereof, "confidential records"
means all correspondence, memoranda, files, analyses, studies, reports,
notes, documents, manuals, books, lists, financial, operating or
marketing records, computer software, magnetic tape, or electronic or
other media or equipment of any kind which may be in Executive's
possession or under his control or accessible to him which contain any
proprietary information as defined in subparagraph 6(a) above. All
confidential records shall be and remain the sole property of Company
during the term of employment and thereafter.
(c) Inventions, Patents, and Copyrights. All
inventions, innovations or improvements in Company's method of
conducting its business (including policies, procedures, products,
improvements, software, ideas and discoveries, whether or not
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patentable or copyrightable) conceived or made by Executive, either
alone or jointly with others, during the term of employment belong to
Company. Executive will promptly disclose in writing such inventions,
innovations or improvements to Company and perform all actions
reasonably requested by Company to establish and confirm such ownership
by Company, including, but not limited to, cooperating with and
assisting Company in obtaining patents and copyrights for Company in
the United States and in foreign countries. Any patent or copyright
application filed by Executive within a year after termination of his
employment hereunder shall be presumed to relate to an invention or
work of authorship which was made during the term of employment unless
Executive can provide evidence to the contrary.
7. Eligibility for Severance Benefits. The Executive shall be
eligible for the benefits described in Paragraph 8 (the "Severance Benefits")
if:
(a) during the Term, the Executive has a Termination
of Employment initiated by the Company without Cause, or for "Good
Reason" under paragraph 1(l) herein, or at the end of the Term,
Executive initiates his own Termination for Specific Reason under
Section 1(k) hereof and subsection (b) does not apply; or
(b) during the Term either (i) there has been a
Change in Control and during the two year period commencing on the
Change in Control Date the Executive has a Termination of Employment
which is initiated by the Company without Cause, or (ii) the Executive
has a Termination of Employment initiated by the Company without Cause
following the commencement of any discussion with a third person that
ultimately results in a Change in Control with such third person within
12 months of the commencement of such discussions (in which case, the
date of such discussion shall be substituted for the Change in Control
Date wherever appropriate).
(c) during the Term there has been a Change in
Control and during the thirty-one (31) day period commencing on the
first day of the 13th calendar month following the Change in Control
Date, the Executive has a Termination of Employment initiated by the
Executive without Good Reason.
8. Severance Benefit. Upon satisfaction of the requirements
set forth in Paragraph 7, and subject to Paragraphs 9 and 12, the Executive
shall be entitled to the following Severance Benefits:
(a) Cash Payment. If the Executive's Termination of
Employment arises under Paragraph 7(a), the Executive shall be entitled
to receive an amount of cash equal to the Benefit Multiplier times:
(i) the sum of the Executive's Base Salary
as in effect upon the Termination of Employment, and the
greater of
(A) the Executive's Target Bonus as
in effect upon the Termination of Employment or,
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(B) the Executive's actual bonus
under the Company's "Annual Incentive Plan" for the
year prior to the year of the Executive's Termination
of Employment; or
(b) Cash Payment. If the Executive's Termination of
Employment arises under Paragraph 7(b), the Executive shall be entitled
to receive an amount of cash equal to the Benefit Multiplier times:
(i) the sum of the Executive's Base Salary
as in effect on the Change in Control Date, and the greater of
(A) the Executive's Target Bonus as
in effect upon the Change in Control Date or,
(B) the Executive's actual bonus
under the Company's "Annual Incentive Plan" for the
year prior to the Change in Control Date.
The payment shall be made in a single lump sum within ten days following the
Executive's Termination of Employment.
(c) Long-Term Incentive Award; Equity-Based
Compensation.
(i) In the event the Executive's Termination
of Employment arises under Paragraph 7(a), the Executive's
interest in any outstanding and unvested shares of Restricted
Stock awarded under any of the Company's Long-Term Incentive
Plan(s) shall vest, consistent with any plans under which such
Restricted Stock shall have been issued, and any unvested
stock options shall be fully vested on the date of Termination
of Employment; or
(ii) In the event the Executive's
Termination of Benefit arises under Paragraph 7(b), the
Executive's interest under all of the Company's Long-Term
Incentive Plan(s) shall be fully vested. Any and all (i)
options to purchase Company stock and (ii) restricted stock of
the Company, owned by the Executive shall be fully vested.
(d) Continuation of Benefits. If Executive's
Termination of Employment arises under Paragraphs 7(a) or 7(b):
(i) For the Benefit Period, the Executive
shall be treated as if he had continued to be an executive
employee for all purposes under the Company's Medical Plan,
Executive Medical Reimbursement Plan and Dental Plan, as
described in Paragraph 4(b). Following this period, the
Executive shall be entitled to receive continuation coverage
under Part Six of Title I of ERISA ("COBRA Benefits") treating
the end of this period as a termination of the Executive's
employment (other than for gross misconduct).
(ii) The Company shall fully vest and
maintain in force, at its own expense, for the remainder of
the Executive's life, the life insurance in effect
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under the Company's Executive Split Dollar Life Insurance Plan
(as described in Paragraph 4(b)) as of the Change in Control
Date or as of the date of Termination of Employment, whichever
is greater.
(e) Relocation Benefit. If, within two (2) years
after the date of Executive's Termination of Employment with the
Company under Paragraphs 7(a) or (b), the Executive gives the Company
written notice that he desires to relocate within the continental
United States, the Company will reimburse the Executive for any
reasonable relocation expenses (in accordance with the Company's
general relocation policy for executives as then in effect, or, at the
Executive's election, as in effect on the Change in Control Date) in
connection with such relocation.
(f) Executive SavingsPlus Plan. For the year of the
Executive's Termination of Employment under Paragraphs 7(a) or (b), the
Company will make the contribution to the Executive SavingsPlus Plan on
behalf of the Executive that it would have made if the Executive had
not had a Termination of Employment, but in no event less than the
percentage contribution it made for the Executive in the immediately
preceding year (and increased to take account of the additional year of
Service), in each case taking account of the Executive's annualized
rate of "Compensation" (as defined in the Executive SavingsPlus Plan)
and the percentage of such Compensation that the Executive is
contributing to the Executive SavingsPlus Plan) and the percentage of
such Compensation that the Executive is contributing to the Executive
SavingsPlus Plan, as of the date of Termination of Employment, and the
Company's matching contribution rate for such year (or, if greater, the
preceding year). The portion of the Company's matching contribution
which is based on the preceding year's contribution percentage shall be
contributed to the Executive SavingsPlus Plan on behalf of the
Executive immediately upon the Executive's Termination of Employment
and any additional contribution required shall be paid as soon as the
amount is determined.
(g) Executive Deferred Compensation Plan. For the
year of the Executive's Termination of Employment under Paragraphs 7(a)
or (b), the Company will make the contribution to its Executive
Deferred Compensation Plan (the "EDC Plan") that it would have made if
the Executive had not had a Termination of Employment determined based
on the Executive's deferral for such year. At Executive's election, the
Company contribution shall be paid to the Executive immediately upon
his Termination of Employment.
(h) Disability. For the Benefit Period after the
dates of Termination of Employment under Paragraphs 7(a) or (b), the
Company shall provide long-term disability insurance benefits coverage
to Executive equivalent to the coverage that the Executive would have
had had he remained employed under the Company's Long-Term Disability
Plan and Supplemental Long-Term Disability Plan as described in
Paragraph 4(b) applicable to Executive on the date of Termination of
Employment, or, at the Executive's election, the plan or plans
applicable to Executive as of the Change in Control Date. Should
Executive become disabled during such period, Executive shall be
entitled to receive such benefits, and for such duration, as the
applicable plan(s) provide.
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(i) Plan Amendments. The Company shall adopt such
amendments to its employee benefit plans and insurance policies as are
necessary to effectuate the provisions of this Agreement. If and to the
extent any benefits under this Paragraph 8 are not paid or payable or
otherwise provided to the Executive or his dependents or beneficiaries
under any such plan or policy (whether due to the terms of the plan or
policy, the termination thereof, applicable law, or otherwise), then
the Company itself shall pay or provide for such benefits.
9. Golden Parachute Gross-Up. If, in the written opinion of a
Big 6 accounting firm engaged by either the Company or the Executive for this
purpose (at the Company's expense), or if so alleged by the Internal Revenue
Service, the aggregate of the benefit payments under Paragraph 8 would cause the
payment of one or more of such benefits to constitute an "excess parachute
payment" as defined in Section 280G(b) of the Internal Revenue Code ("Code"),
then the Company will pay to the Executive an additional amount in cash (the
"Gross-Up Payment") equal to the amount necessary to cause the net amount
retained by the Executive, after deduction of any (i) excise tax on payments
under Paragraph 8, (ii) federal, state or local income tax on the Gross-Up
Payment, and (iii) excise tax on the Gross-Up Payment, to be equal to the
aggregate remuneration the Executive would have received under Section 8,
excluding such Gross-Up Payment (net of all federal, state and local excise and
income taxes), as if Sections 280G and 4999 of the Code (and any successor
provisions thereto) had not been enacted into law. The Gross-Up Payment provided
for in this Paragraph shall be made within ten (10) days after the Termination
of Employment, provided however, that if the amount of the payment cannot be
finally determined at the time, the Company shall pay to Executive an estimate
as determined in good faith by the Company of such payments (together with
interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon as
the amount thereof can be determined but in no event later than the thirtieth
(30th) day after the date of termination. Any dispute concerning the application
of this Paragraph shall be resolved pursuant to Paragraph 11, and if Paragraph
12 applies, any reference in this Paragraph to Paragraph 8 shall also be deemed
to include a reference to Paragraph 12 as well.
10. Waiver and Release of Other Severance Benefits. The
benefits payable pursuant to this Agreement are in lieu of any other severance
benefits which may otherwise be payable to the Executive upon termination of
employment with the Company, whether or not in connection with a Change in
Control (including, without limitation, any benefits to which Executive might
otherwise have been entitled under any employment, change in control, or
severance agreement or other compensation or employee benefit plan to which the
Company was a party or which was assumed by the Company), except those benefits
which are to be made available to the Executive as required by applicable law.
Except as otherwise provided herein, Executive waives and releases any claims
Executive may have under the Employment Contract dated August 22, 1997 for any
severance benefits including but not limited to the immediate vesting of any
shares of Restricted Stock held by Executive. Further, Executive agrees that
under the Stock Grant Plan the Company shall cancel 111,473 shares of Restricted
Stock and substitute an equivalent number of shares of Common Stock of the
Company without restrictions.
11. Disputes. Any dispute or controversy arising under, out
of, in connection with or in relation to this Agreement shall, at the election
and upon written demand of either
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party, be finally determined and settled by binding arbitration in the city of
Fort ▇▇▇▇▇, Arkansas, using a single arbitrator, in accordance with the Labor
Arbitration rules and procedures of the American Arbitration Association, and
judgment upon the award may be entered in any court having jurisdiction thereof.
The arbitrator shall have the power to order specific performance, mandamus, or
other appropriate legal or equitable relief to enforce the provisions of this
Agreement. The Company shall pay all costs of the arbitration and all reasonable
attorney's and accountant's fees of the Executive in connection therewith.
12. Additional Payments Due to Dispute. Notwithstanding
anything to the contrary herein, and without limiting the Executive's rights at
law or in equity, if the Company fails or refuses to timely pay to the Executive
the benefits due under Paragraphs 8 and/or 9 hereof, then the benefits under
Paragraph 8(a) shall be increased and the benefits under Paragraphs 8(c), 8(d),
and 8(g) shall each be continued by one additional day for each day of any such
failure or refusal of the Company to pay. In addition, any Gross-Up Payment due
under Paragraph 9 shall be increased to take in to account any increased
benefits under this Paragraph.
13. No Set-Off. There shall be no right of set-off or
counterclaim in respect of any claim, debt, or obligation against any payment to
or benefit for the Executive provided for in this Agreement.
14. No Mitigation Obligation. The parties hereto expressly
agree that the payment of the benefits by the Company to the Executive in
accordance with the terms of this Agreement will be liquidated damages, and that
the Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall any profits, income, earnings or other benefits from any source whatsoever
create any mitigation, offset, reduction or any other obligation on the part of
the Executive hereunder or otherwise.
15. Successors: Binding Agreement.
(a) This Agreement shall not be terminated by the
voluntary or involuntary dissolution of the Company or by any merger or
consolidation where the Company is not the surviving corporation, or
upon any transfer of all or substantially all of the Company's assets,
or any other Change in Control. The Company shall require any
purchaser, assign, surviving corporation or successor (whether direct
or indirect, by purchase, merger, consolidation, reorganization or
otherwise) to all or substantially all of the business and/or assets of
the Company, by agreement in form and substance satisfactory to the
Executive, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent the Company would be required to
perform if no such succession had taken place. This Agreement shall be
binding upon and insure to the benefit of the Company and any
purchaser, assign, surviving corporation or successor to the Company,
including without limitation any persons acquiring directly or
indirectly all or substantially all of the business and/or assets of
the Company whether by purchase, merger, consolidation, reorganization,
transfer of all of substantially all of the business or assets of the
Company, or otherwise (and such purchaser, assign, surviving
corporation or successor shall thereafter be deemed the "Company" for
the purposes of this Agreement),
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but this Agreement shall not otherwise be assignable, transferable or
delegable by the Company.
(b) This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees and/or
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 this Section 15. Without
limiting the generality of the foregoing, the Executive's right to
receive payments hereunder shall not be assignable, transferable or
delegable, whether by pledge, creation of a security interest or
otherwise, or otherwise subject to anticipation, alienation, sale
encumbrance, charge, hypothecation, or set-off in respect of any
claims, debt, or obligation, or to execution, attachment, levy or
similar process, or assignment by operation of law, other than by a
transfer by his will or by the laws of descent and distribution. Any
attempt, voluntary or involuntarily, to effect any action prohibited by
this Paragraph shall be null, void, and of no effect.
16. Notices. Any notice, request, claim, demand, document and
other communication hereunder to any party shall be effective upon receipt (or
refusal of receipt) and shall be writing and delivered personally or sent by
telex, telecopy, or certified or registered mail, postage prepaid, or other
similar means of communication, as follows:
(a) If to the Company, addressed to its principal
executive offices to the attention of its Secretary;
(b) If to the Executive, to him at the address set
forth below under the Executive's signature, or at any such other
address as either party shall have specified by notice in writing to
the other.
17. Amendments: Waivers. This Agreement may not be modified,
amended, or terminated except by an instrument in writing, signed by the
Executive and by a duly authorized representative of the Board of Directors
except as set forth in Paragraph 2. By an instrument in writing similarly
executed, either party may waive compliance by the other party with any
provision of this Agreement that such other party was or is obligated to comply
with or perform; provided, however, that such waiver shall not operate as a
waiver of, or estoppel with respect to, any other or subsequent failure. No
failure to exercise and no delay in exercising any right, remedy, or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, or power hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, or power provided
herein or by law or in equity.
18. Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes all prior agreements, promises covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto. The
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parties further intend that this Agreement shall constitute the complete and
exclusive statement of its terms and that no extrinsic evidence whatsoever may
be introduced in any judicial, administrative, or other legal proceeding
involving this Agreement.
19. Severability; Enforcement. If any provision of this
Agreement, or the application thereof to any person, place, or circumstance
shall be held by a court of competent jurisdiction to be invalid, unenforceable
or void, the remainder of this Agreement and such provisions as applied to other
persons, places and circumstances shall remain in full force and effect.
20. Indemnification. Executive has entered into an
Indemnification Agreement dated May 20, 1996 which shall govern the rights and
obligations of the parties with respect to indemnification.
21. Governing Law. This Agreement shall be interpreted,
administered and enforced in accordance with the law of the state of Arkansas,
except (i) to the extent pre-empted by Federal law, and (ii) Paragraph 20 which
shall be interpreted, administered and enforced in accordance with the law of
the state of Delaware.
22. Severance Agreement and Release. As a precondition to
obtaining any severance benefits under this Agreement, Executive agrees to
execute the attached form of Severance Agreement and Release of Claims within
twenty-one (21) days of his Termination of Employment unless he agrees to a
shorter period of time for consideration of the Severance Agreement and Release
of Claims.
The parties have duly executed this Agreement as of the date
first written above.
▇▇▇▇▇▇▇ ENTERPRISES, INC. EXECUTIVE
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------- --------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Executive Vice President -
Law and Government Relations,
and Secretary
One Thousand ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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