Exhibit 10.1
▇▇▇▇▇▇▇▇ CORPORATION
EMPLOYMENT AGREEMENT
This agreement (this "Agreement") has been entered into this 15th
day of September, 2003, by and between ▇▇▇▇▇▇▇▇ Corporation, a Missouri
corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇, an individual (the
"Executive").
WHEREAS, the Board of Directors of the Company has determined that
it is in the best interests of the Company and its stockholders to hire and
appoint the Executive as President and Chief Executive Officer of the
Company as of the Effective Date (as defined below); and
WHEREAS, this Agreement contains the terms and conditions that have
been negotiated by the Company and the Executive as an inducement to the
Executive to accept employment with the Company and as an incentive to
reinforce and encourage the continued attention and dedication of the
Executive to the Company and its business throughout the Employment Period
(as defined below), even in the face of a potential Change in Control;
NOW THEREFORE, in consideration of the mutual promises herein
contained, the parties hereby agree as follows:
SECTION 1: DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the following
words and phrases, whether or not capitalized, shall have the meanings
specified below, unless the context plainly requires a different meaning.
1.1(a) "ACCRUED OBLIGATIONS" has the meaning set forth in
Section 4.1(a) of this Agreement.
1.1(b) "ADDITIONAL RETIREMENT BENEFITS" has the meaning
set forth in Section 2.4(f) of this Agreement.
1.1(c) "ANNUAL BONUS" has the meaning set forth in
Section 2.4(b) of this Agreement.
1.1(d) "ANNUAL BASE SALARY" has the meaning set forth in
Section 2.4(a) of this Agreement.
1.1(e) "BOARD" means the Board of Directors of the
Company.
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1.1(f) "CAUSE" has the meaning set forth in Section 3.3
of this Agreement.
1.1(g) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual, entity or
group, or a Person (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of
ownership of 20% or more of either (a) the then
outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or (b)
the combined voting power of the then outstanding
voting securities of the Company entitled to vote
generally in the election of directors (the
"Outstanding Company Voting Securities"); or
(ii)Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board")
cease for any reason 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 the Company's stockholders was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board
shall be considered as though such individual
were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board,
any such individual whose initial assumption of
office occurs as a result of either an actual or
threatened election contest (as such terms are
used in Rule l4a-11 of Regulation l4A promulgated
under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(iii) Approval by the stockholders of the Company
of a reorganization, merger or consolidation, in
each case, unless, following such reorganization,
merger or consolidation, (1) more than 50% of,
respectively, the then outstanding shares of
common stock of the corporation resulting from
such reorganization, merger or consolidation and
the combined voting power of the then outstanding
voting securities of such corporation entitled to
vote generally in the election of directors is
then beneficially owned, directly or indirectly,
by all or substantially all of the individuals
and entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such reorganization, merger
or consolidation in substantially the same
proportions as their ownership, immediately prior
to such reorganization, merger or consolidation,
of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the
case may be, (2) no Person beneficially owns,
directly or indirectly, 20% or more of,
respectively, the then outstanding shares of
common stock of the corporation resulting from
such reorganization, merger or consolidation or
the combined voting power of the then outstanding
voting securities of such corporation, entitled
to vote
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generally in the election of directors,
and (3) at least a majority of the members of the
board of directors of the corporation resulting
from such reorganization, merger or consolidation
were members of the Incumbent Board at the time
of the execution of the initial agreement
providing for such reorganization, merger or
consolidation; or
(iv)Approval by the stockholders of the Company
of (a) a complete liquidation or dissolution of
the Company or (b) the sale or other disposition
of all or substantially all of the assets of the
Company, other than to a corporation, with
respect to which following such sale or other
disposition, (1) more than 50% of, respectively,
the then outstanding shares of common stock of
such corporation and the combined voting power of
the then outstanding voting securities of such
corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially
all of the individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to
such sale or other disposition in substantially
the same proportion as their ownership,
immediately prior to such sale or other
disposition, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities,
as the case may be, (2) no Person beneficially
owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of
common stock of such corporation and the combined
voting power of the then outstanding voting
securities of such corporation entitled to vote
generally in the election of directors and (3) at
least a majority of the members of the board of
directors of such corporation were members of the
Incumbent Board at the time of the execution of
the initial agreement or action of the Board
providing for such sale or other disposition of
assets of the Company.
1.1(h) "CHANGE IN CONTROL DATE" means the date that a
Change in Control first occurs.
1.1(i) "COMPANY" has the meaning set forth in the first
paragraph of this Agreement and, with regard to
successors, in Section 6.2 of this Agreement.
1.1(j) "CODE" shall mean the Internal Revenue Code of
1986, as amended.
1.1(k) "CURRENT TARGET BONUS" has the meaning set forth in
Section 4.2(b) of this Agreement.
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1.1(l) "DATE OF TERMINATION" has the meaning set forth
in Section 3.8 of this Agreement.
1.1(m) "DISABILITY" has the meaning set forth in
Section 3.2 of this Agreement.
1.1(n) "DISABILITY EFFECTIVE DATE" has the meaning set
forth in Section 3.2 of this Agreement.
1.1(o) "EFFECTIVE DATE" means the date of this Agreement.
1.1(p) "EMPLOYMENT PERIOD" means the period beginning on
the Effective Date and ending on the earlier of (i) the
Date of Termination, or (ii) expiration of the Term of
this Agreement.
1.1(q) "EXCHANGE ACT" means the Securities Exchange Act
of 1934, as amended.
1.1(r) "EXCISE TAX" has the meaning set forth in
Section 4.2(f) of this Agreement.
1.1(s) "GOOD REASON" has the meaning set forth in
Section 3.4 of this Agreement.
1.1(t) "GROSS-UP PAYMENT" has the meaning set forth
in Section 4.2(f) of this Agreement.
1.1(u) "INCUMBENT BOARD" has the meaning set forth in
Section 1.1(g)(ii) of this Agreement.
1.1(v) "INITIAL TERM" means the period that begins on the
Effective Date and ends as of the close of business on the
third anniversary of the Effective Date.
1.1(w) "NOTICE OF TERMINATION" has the meaning set
forth in Section 3.7 of this Agreement.
1.1(x) "OTHER BENEFITS" has the meaning set forth in
Section 4.1(d) of this Agreement.
1.1(y) "OUTSTANDING COMPANY COMMON STOCK" has the meaning
set forth in Section 1.1(g)(i) of this Agreement.
1.1(z) "OUTSTANDING COMPANY VOTING SECURITIES" has the
meaning set forth in Section 1.1(g)(i) of this Agreement.
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1.1(aa) "PAYMENT" has the meaning set forth in
Section 4.2(f) of this Agreement.
1.1(bb) "PERSON" means any "person" within the meaning of
Sections 13(d) and 14(d) of the Exchange Act.
1.1(cc) "RENEWAL TERM" means the period that begins as of
the anniversary date of the Effective Date in any year on
or after 2006 and ends on the next succeeding anniversary
date of the Effective Date; provided that no notice of
non-renewal has been received prior thereto pursuant to
Section 2.1 of this Agreement.
1.1(dd) "SUPPLEMENTAL PLAN" has the meaning set forth
in Section 4.2(f) of this Agreement.
1.1(ee) "TERM" has the meaning set forth in Section 2.1
of this Agreement.
1.2 GENDER AND NUMBER. When appropriate, pronouns in this
Agreement used in the masculine gender include the feminine gender, words in
the singular include the plural, and words in the plural include the singular.
1.3 HEADINGS. All headings in this Agreement are included solely
for ease of reference and do not bear on the interpretation of the text.
Accordingly, as used in this Agreement, the terms "Article" and "Section"
mean the text that accompanies the specified Article or Section of the
Agreement.
1.4 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri, without
reference to its conflict of law principles.
SECTION 2: TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 PERIOD OF EMPLOYMENT; TERM OF AGREEMENT. The Executive shall
remain in the employ of the Company throughout the Employment Period in
accordance with the terms and provisions of this Agreement. The "Term" of
this Agreement shall be the period that begins on the Effective Date and
ends as of the close of business on the later of: (i) Initial Term, or (ii)
any Renewal Term. This Agreement will automatically renew at the end of the
Initial Term or a Renewal Term annually for an additional Renewal Term
unless either party gives the other written notice by March 15, 2006 in the
Initial Term, or March 15 of any Renewal Term, of such party's intent not to
renew this Agreement.
2.2 POSITIONS AND DUTIES.
2.2(a) Throughout the Employment Period, the Executive
shall serve as President and Chief Executive Officer of
the Company, subject to the reasonable directions of the
Board. The Executive shall have such authority and shall
perform such duties as are specified in or contemplated by
the Bylaws of the Company for the offices to which he
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has been appointed and shall so serve subject to the control
exercised by the Board from time to time. The Executive
shall continue to serve as a director on the Board
throughout the Employment Period until the end of his
current term, at which time he will be subject to the
usual and customary nomination and election policies and
procedures then currently applicable to the Company.
During the Employment Period, the Executive will be paid
no additional fees or other compensation for his service
as a director on the Board or the boards of any of the
Company's subsidiaries, other than the compensation that
the Executive is then being paid by the Company for his
services as an executive officer and employee of the
Company.
2.2(b) Throughout the Employment Period (but excluding any
periods of vacation and sick leave to which the Executive
is entitled), the Executive shall devote reasonable
attention and time during normal business hours to the
business and affairs of the Company and shall use his
reasonable best efforts to perform faithfully and
efficiently such responsibilities as are assigned to him
under or in accordance with this Agreement; provided that,
it shall not be a violation of this Section 2.2(b) for the
Executive to (i) serve on corporate, civic or charitable
boards or committees (subject to the restrictions and
limitations set forth in the two immediately succeeding
sentences of this Section 2.2(b)), (ii) deliver lectures
or fulfill speaking engagements, (iii) manage personal
investments, so long as such activities do not
significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company
in accordance with this Agreement or violate the Company's
conflict of interest policy as is in effect at such times,
or (iv) provide services under the Executive's existing
consulting agreement with the Executive's prior employer.
The Executive agrees that he shall serve on no more than
one other corporate board of directors in addition to his
service on the Board or the board of any subsidiary of the
Company during the first year of the Employment Period and
not more that two other corporate boards of directors in
addition to his service on the Board or the board of any
subsidiary of the Company at any time during the
Employment Period after the first year. The Executive also
agrees that he will not accept an invitation to join or be
nominated to serve on any other corporate board without
prior consultation with and approval by the Board, which
approval will not be unreasonably withheld.
2.3 SITUS OF EMPLOYMENT. Throughout the Employment Period, the
Executive's services shall be performed at the Company's executive offices
located in the greater St. Louis, Missouri metropolitan area.
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2.4 COMPENSATION.
2.4(a) ANNUAL BASE SALARY. The Executive will initially
receive an annual base salary ("Annual Base Salary") of
three hundred and eighty thousand dollars ($380,000.00),
which shall be paid in equal or substantially equal
semi-monthly installments. During the Employment Period,
the Annual Base Salary payable to the Executive shall be
reviewed by the Board and/or the Compensation and
Organization Committee at least once annually and shall be
increased at the discretion of the Board or the
Compensation and Organization Committee of the Board but
shall not be reduced.
2.4(b) ANNUAL INCENTIVE BONUSES. In addition to Annual
Base Salary, the Executive will be entitled to earn an
incentive bonus on an annual basis during the Employment
Period beginning with the Company's 2005 fiscal year
("Annual Bonus"). For the 2005 fiscal year and each fiscal
year of the Employment Period thereafter, the Board will
set, on or before the 90th day of such fiscal year, the
criteria which will be required to be achieved by the
Executive during the fiscal year to earn all or a
specified percentage of his Annual Bonus. The maximum
Annual Bonus that the Executive may earn is 100%, and the
target bonus is 50%, of the Executive's then-current
Annual Base Salary.
2.4(c) LONG-TERM INCENTIVE PLAN AWARDS. The Company
proposes to begin a long-term incentive plan beginning in
the Company's 2005 fiscal year under which the Executive
will be entitled to earn long-term incentive bonus awards
payable in restricted shares of the Company's Common Stock
(the "Long-Term Bonus"). The Executive will be eligible to
earn a Long-Term Bonus during the Employment Period on the
basis of the achievement of performance goals during a
three-year performance period. The Board will set, on or
before the 90th day of such fiscal year, the performance
goals to be achieved during the performance period that is
then commencing in order for the Executive to earn all or
a specified portion of his Long-Term Bonus. The Long-Term
Bonus amount that may be earned by the Executive will be
set at 80% of the Executive's then-current Annual Base
Salary.
2.4(d) STOCK OPTIONS. As an inducement to the Executive
to accept employment with the Company as its President and
Chief Executive Officer, the Board will grant to the
Executive as of the Effective Date options to purchase One
Hundred Thousand (100,000) shares of the Company's Common
Stock with an exercise price equal to the closing price of
the Company's Common Stock on the New York Stock Exchange
on the day prior to the date of this Agreement. The
options shall have a term of ten years from the date of
grant. One-third of the total number of shares subject to
the option shall vest and become exercisable immediately
on each of the first three annual anniversary dates of the
grant of such option. The options described in this
paragraph will be granted
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outside of any existing stock-based compensation plan of
the Company but the Company will use its best efforts to
file, and have declared effective, a registration statement
covering the issuance of the shares subject to this option
as soon as practicable after the date of grant.
As an additional inducement to the Executive to accept
employment with the Company, the Board will grant to the
Executive as of the Effective Date an additional option
for the purchase of Fifty Thousand (50,000) shares of the
Company's Common Stock which will vest and become
exercisable only upon the closing price of the Company's
Common Stock on the New York Stock Exchange being at least
$25.00 per share during any period of five consecutive
trading days during the Employment Period and a second
additional option for the purchase of Fifty Thousand
(50,000) shares of the Company's Common Stock which will
vest and become exercisable only upon the closing price of
the Company's Common Stock on the New York Stock Exchange
being at least $30.00 per share during any period of five
consecutive trading days during the Employment Period. The
options granted under this paragraph will have exercise
prices of $25.00 and $30.00 per share, respectively, to
match the per share stock price goals for each such
option. Each option will have a term of ten years from the
date of grant. The options described in this paragraph
will be granted outside any existing stock-based
compensation plan of the Company but the Company will use
its best efforts to file, and have declared effective, a
registration statement covering the issuance of the shares
subject to these options as soon as practicable after the
date of grant.
All options granted pursuant to this Section 2.4(d) shall
be evidenced by option agreements in the forms presented
to the Compensation and Organization Committee.
2.4(e) RESTRICTED STOCK. As an inducement to the Executive
to accept employment with the Company as its President and
Chief Executive Officer, the Board will grant to the
Executive as of the Effective Date an award of Three
Thousand (3,000) shares of the Company's Common Stock (the
"Restricted Shares"). One thousand (1,000) Restricted
Shares shall vest immediately upon the completion of each
of the first three annual anniversary dates of the grant
of the Restricted Shares. The Executive may not sell or
otherwise dispose of the Restricted Shares prior to their
vesting but the Executive will be entitled to receive all
dividends and other distributions on, and vote, the
Restricted Shares prior to the vesting of such shares. The
terms of the restrictions applicable to the Restricted
Shares, including the circumstances upon which the
Restricted Shares may vest earlier than described in this
Section 2.4(e), will be set forth in detail in the
Restricted Stock Agreement to be delivered by the Company
to the Executive as of the date of grant. The Restricted
Shares are granted outside of any existing stock-based
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compensation plan of the Company but the Company will use
its best efforts to file, and have declared effective, a
registration statement covering these shares as soon as
practicable after the date of grant.
2.4(f) SAVINGS, DEFERRED COMPENSATION AND RETIREMENT
PLANS. Throughout the Employment Period, the Executive
shall be entitled to participate in all savings, deferred
compensation and retirement plans generally available to
other peer executives of the Company, including the
Company's 401(k) Plan, the Mirror 401(k) and Deferred
Compensation Plan, the qualified defined benefit Pension
Plan and the Supplemental Retirement Benefits Plan. For
purposes of the Supplemental Retirement Benefits Plan (the
"Supplemental Plan"), the Executive will participate at
the maximum percentage of fifty percent (50%) of his final
average compensation for purposes of computing the
Executive's benefits thereunder.
In addition to the savings, deferred compensation and
retirement plans available to other similarly situated
executives, the Company will credit the Executive with
three years of service under the Supplemental Plan for
purposes of the calculation of benefits for each year of
actual service rendered by the Executive during the
Employment Period (the "Additional Retirement Benefits").
This agreement with respect to the Additional Retirement
Benefits will either be inserted into the Supplemental
Plan directly by addendum or amendment or will be
reflected in a separate agreement between the Company and
the Executive. The Additional Retirement Benefits will be
offset by any benefits payable to the Executive under the
Pension Plan, the Supplemental Plan (if the Additional
Retirement Benefits are not otherwise incorporated into
such plan) and any other non-contributory retirement plan
benefits (which specifically will not include benefits
payable to the Executive under the Deferred Compensation
Option Plan for Directors or any other deferred
compensation plan of the Company in which the Executive
may participate during the Employment Period) payable by
the Company to the Executive.
2.4(g) WELFARE BENEFIT PLANS. Throughout the Employment
Period (and thereafter, subject to Sections 4.1(c) and
4.2(d) of this Agreement), the Executive and/or the
Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs
provided by the Company (including, without limitation,
medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death
and travel accident insurance plans and programs) to the
extent generally available to other peer executives of the
Company.
2.4(h) BUSINESS EXPENSES. Throughout the Employment
Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable business expenses
incurred by the Executive in the conduct of the business
of the Company (including
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travel and entertainment expenses) in accordance with the
policies, practices and procedures generally applicable
within the Company. The Executive will be entitled to the
reimbursement of dues for one luncheon or athletic club
(not a country club or golf club) and for one airline club
membership. The Executive will also be entitled to
reimbursement for annual executive education and development
programs not to exceed eight (8) regular business days,
provided that no single program may extend beyond five
(5) consecutive regular business days.
2.4(i) OFFICE AND SUPPORT STAFF AND EQUIPMENT. Throughout
the Employment Period, the Executive shall be entitled to
an office or offices of a size and with furnishings and
other appointments, and to personal secretarial and other
assistance commensurate with his office, duties and
responsibilities with the Company. The Executive shall
also be provided, at the Company's expense, a personal
cell phone, laptop and any other electronic communication
device that the Executive reasonably requires to
effectively perform his offices, duties and
responsibilities with the Company.
2.4(j) VACATION. Throughout the Employment Period, the
Executive shall be entitled to paid vacation equal to four
weeks per year.
SECTION 3: TERMINATION OF EMPLOYMENT.
3.1 DEATH. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period.
3.2 DISABILITY. If the Company determines in good faith that the
Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), the Company may
give to the Executive written notice in accordance with Section 7.2 of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that, within the thirty (30) days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean that the Executive has been unable to perform the
services required of the Executive under this Agreement on a full-time basis
for a period of one hundred eighty (180) consecutive regular business days
by reason of a physical and/or mental condition. "Disability" shall be
deemed to exist when certified by a physician selected by the Company and
acceptable to the Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld unreasonably). The
Executive will submit to such medical or psychiatric examinations and tests
as such physician deems necessary to make any such Disability determination.
3.3 TERMINATION FOR CAUSE. The Company may terminate the
Executive's employment during the Employment Period for "Cause," which shall
mean termination based upon: (a) the Executive's willful and continued
failure to substantially perform his duties with the Company (other
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than as a result of incapacity due to physical or mental condition), after a
written demand for substantial performance is delivered to the Executive by the
Board, which specifically identifies the manner in which the Executive has
not substantially performed his duties, (b) the Executive's commission of an
act constituting a criminal offense involving moral turpitude, dishonesty,
or breach of trust, or (c) the Executive's material breach of any provision
of this Agreement. For purposes of this Section 3.3, no act or failure to
act on the Executive's part shall be considered "willful" unless done or
omitted to be done without good faith on the part of the Executive and
without the Executive's reasonable belief that the act or omission was in
the best interest of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause unless and
until (x) he receives a Notice of Termination from the Company, (y) he is
given the opportunity, with counsel, to be heard before the Board, and (z)
the Board finds, in its good faith opinion, the Executive was guilty of the
conduct set forth in the Notice of Termination.
3.4 GOOD REASON. The Executive may terminate his employment with
the Company during the Employment Period for "Good Reason," which shall
mean:
3.4(a) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 2.2(a) or any other action by the
Company which results in a material diminution in such
position, authority, duties or responsibilities, excluding
for this purpose any action not taken in bad faith by the
Company and which the Company remedies promptly after
receipt of notice thereof given by the Executive;
3.4(b) (i) the failure by the Company to continue in
effect any benefit or compensation plan, stock ownership
plan, life insurance plan, health and accident plan or
disability plan to which the Executive is entitled as
specified in Section 2.4, (ii) the taking of any action by
the Company which would adversely affect the Executive's
participation in, or materially reduce the Executive's
benefits under, any plans described in Section 2.4, or
deprive the Executive of any material benefits enjoyed by
the Executive as described in Section 2.4(h) and (i), or
(iii) the failure by the Company to provide the Executive
with paid vacation to which the Executive is entitled as
described in Section 2.4(j);
3.4(c) the Company's requiring the Executive to be based
at any office or location other than that described in
Section 2.3;
3.4(d) a material breach by the Company of any provision
of this Agreement;
3.4(e) any purported termination by the Company of the
Executive's employment otherwise than as expressly
permitted by this Agreement; or
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3.4(f) within a period ending at the close of business on
the date that is three (3) years after the Change in
Control Date, if the Company has failed to comply with and
satisfy Section 6.2 on or after such Change in Control
Date;
For purposes of this Section, any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
3.5 VOLUNTARY TERMINATION BY THE EXECUTIVE. The Executive may
voluntarily terminate his employment with the Company for any reason or for
no reason at any time during the Employment Period; provided the Executive
may not terminate his employment voluntarily (except for Good Reason) unless
the Executive has given the Company at least six month's notice of such
intent to terminate (subject to the Company's determination in its sole
discretion to waive or shorten such notice requirement).
3.6 TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may
terminate the Executive's employment with the Company for any reason or for
no reason, without citing Cause, at any time during the Employment Period,
subject to the provisions of Section 4 of this Agreement.
3.7 NOTICE OF TERMINATION. Any termination by the Company for
Cause or Disability, or by the Executive for Good Reason, shall be
communicated by Notice of Termination given in accordance with Section 7.2
to the other party. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets 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, and (iii) if the Date of Termination (as
defined in Section 3.8 hereof) is other than the date of receipt of such
notice, specifies the Date of Termination. The failure by the Executive or
the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall
not waive any right of the Executive or the Company hereunder or preclude
the Executive or the Company from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
3.8 DATE OF TERMINATION. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause or any other
reason, the date of receipt by the Executive of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by reason of death or Disability, the
date of death of the Executive or the Disability Effective Date, as the case
may be, or (iii) if the Executive's employment is terminated by the
Executive for Good Reason, the date specified in the Notice of Termination
which date shall not be more than thirty (30) or less than fifteen (15) days
after the receipt of such notice; or (iv) if the Executive's employment is
terminated by the Executive voluntarily (either prior to or after a Change
in Control Date), the date that is specified in the Notice of Termination
that is at least six months after the receipt of the Notice of Termination
by the Company unless the Company decides to waive or shorten the notice
period in its sole discretion. If within thirty (30) days after any Notice
of Termination is given, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the
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termination, the Date of Termination shall be the date on which the dispute
is finally determined, either by mutual written agreement of the parties, or
by a final judgment, order or decree of a court of competent jurisdiction
(the time for appeal therefrom having expired and no appeal having been
perfected).
SECTION 4: CERTAIN BENEFITS UPON TERMINATION.
4.1 TERMINATION WITHOUT CAUSE NOT IN CONNECTION WITH A CHANGE IN
CONTROL. If, prior to a Change in Control Date during the Employment Period
(except in the event that one of the following terminations of employment
occurs within the six-month period prior to the earlier of (a) a Change in
Control Date or (b) the execution of a definitive agreement or contract that
eventually results in a Change in Control, which shall result in the payment
of severance benefits set forth in Section 4.2 of this Agreement), (i) the
Company shall terminate the Executive's employment without Cause, (ii) the
Executive shall terminate his employment for Good Reason, or (iii) the
Executive's employment terminates in conjunction with the expiration of the
Term of this Agreement, if the Company is the party giving the notice of
non-renewal (as required by Section 2.1 of this Agreement) causing the
expiration of the Term, the Executive shall be entitled to the payment of
the benefits provided below:
4.1(a) ACCRUED OBLIGATIONS. Within thirty (30) days after
the Date of Termination, the Company shall pay to the
Executive the sum of (i) the Executive's Annual Base
Salary through the Date of Termination to the extent not
previously paid, (ii) the accrued benefit payable to the
Executive under any deferred compensation plan, program or
arrangement in which the Executive is a participant
subject to the computation of benefits provisions of such
plan, program or arrangement, and (iii) any accrued
vacation pay; in each case to the extent not previously
paid (the "Accrued Obligations").
4.1(b) ANNUAL BASE SALARY CONTINUATION. For a period of
twenty-four (24) months beginning in the month immediately
subsequent to the month in which the Date of Termination
occurs, the Company shall pay to the Executive, on a
semi-monthly basis consistent with its then-existing
payroll practices, the Executive's then-current Annual
Base Salary. The Company at any time may elect to pay the
balance of such payments then remaining in a lump sum,
without discount.
4.1(c) MEDICAL AND HEALTH BENEFIT CONTINUATION. For each
year that the Executive is employed by the Company prior
to termination of his employment, the Executive will be
entitled to the continuation for two (2) years after
termination (up to a maximum of ten (10) years in the
aggregate) of medical and health benefits to the Executive
and/or the Executive's family at least equal to those
which would have been provided to them in accordance with
the plans, programs, practices and policies described in
Section 2.4(g) if the Executive's employment had not been
terminated; provided, however, that if the Executive
becomes reemployed with another employer and
13
is eligible to receive medical or health benefits under
another employer-provided plan, the medical and health
benefits described herein shall be secondary to those
provided under such other plan during such applicable
period of eligibility.
4.1(d) OTHER BENEFITS. To the extent not previously paid
or provided, the Company shall timely pay or provide to
the Executive and/or the Executive's family any other
amounts or benefits required to be paid or provided for
which the Executive and/or the Executive's family is
eligible to receive pursuant to this Agreement and under
any plan, program, policy or practice or contract or
agreement of the Company as those provided generally to
other peer executives and their families ("Other
Benefits").
4.2 BENEFITS UPON TERMINATION WITHOUT CAUSE OR FOR GOOD REASON IN
CONNECTION WITH A CHANGE IN CONTROL. If (a) a Change in Control occurs
during the Employment Period and within three (3) years after the Change in
Control Date (i) the Company shall terminate the Executive's employment
without Cause, or (ii) the Executive shall terminate employment with the
Company for Good Reason, OR, alternatively, (b) if one of the
above-described terminations of employment occurs within the six-month
period prior to the earlier of (i) a Change in Control Date or (ii) the
execution of a definitive agreement or contract that eventually results in a
Change in Control, then the Executive shall become entitled to the payment
of the benefits as provided below as of either (y) the Date of Termination,
in the case where the sequence of the requisite events is as set forth in
subsection (a) above or (z) the Change in Control Date, in the case where
the sequence of the requisite events occurred as set forth in subsection (b)
above (the relevant date for purposes of entitlement to the benefits as set
forth in this Section 4.2 is hereinafter referred to as the "Entitlement
Date"):
4.2(a) ACCRUED OBLIGATIONS. Within thirty (30) days
after the Entitlement Date, the Company shall pay to the
Executive the Accrued Obligations.
4.2(b) SEVERANCE AMOUNT. Within thirty (30) days after
the Entitlement Date, the Company shall pay to the Executive
as severance pay in a lump sum, in cash, an amount equal
to two (2) times an amount equal to the Executive's
then-current Annual Base Salary and Current Target Bonus.
For purposes of this Section 4.2(b), "Current Target
Bonus" means the Annual Bonus for the year in which the
termination of the Executive's employment occurs that is
equal to fifty percent (50%) of the Executive's
then-current Annual Base Salary.
4.2(c) STOCK OPTIONS AND RESTRICTED STOCK. To the extent
not otherwise provided for under the terms of the
Company's stock-based compensation plans or the
Executive's award or grant agreements, all stock options
and restricted stock held by the Executive that have not
expired in accordance with their respective terms shall
fully vest as of the Entitlement Date.
4.2(d) MEDICAL AND HEALTH BENEFIT CONTINUATION. For each
year that the
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Executive is employed by the Company prior to termination
of his employment, the Executive will be entitled to the
continuation for two (2) years after termination (up
to a maximum of ten (10) years in the aggregate) of
medical and health benefits to the Executive and/or
the Executive's family at least equal to those which
would have been provided to them in accordance with
the plans, programs, practices and policies described in
Section 2.4(g) if the Executive's employment had not been
terminated; provided, however, that if the Executive
becomes reemployed with another employer and is eligible
to receive medical or health benefits under another
employer-provided plan, the medical and health benefits
described herein shall be secondary to those provided
under such other plan during such applicable period of
eligibility.
4.2(e) OTHER BENEFITS. To the extent not previously paid
or provided, the Company shall timely pay or provide to
the Executive and/or the Executive's family any Other
Benefits required to be paid or provided for which the
Executive and/or the Executive's family is eligible to
receive pursuant to this Agreement and under any plan,
program, policy or practice or contract or agreement of
the Company as those provided generally to other peer
executives and their families.
4.2(f) EXCESS PARACHUTE PAYMENT. Anything in this
Agreement to the contrary notwithstanding, in the event
that it shall be determined that any payment or
distribution by the Company to or for the benefit of the
Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise but determined without regard to any additional
payments required under this Section 4.2(f)) (a "Payment")
would be subject to the excise tax imposed by Code Section
4999 (or any successor provision) or any interest or
penalties are incurred by the Executive with respect to
such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall
be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest or
penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Executive retains
an amount of the Gross-Up Payment on an after-tax basis
equal to the Excise Tax imposed upon the Payment. The
intent of the parties is that the Company shall be
responsible in full for, and shall pay, any and all Excise
Tax on any Payments and Gross-Up Payment(s) and any income
and all excise and employment taxes (including, without
limitation, penalties and interest) imposed on any
Gross-Up Payment(s) as well as any loss of deduction
caused by or related to the Gross-Up Payment(s).
The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon as
practicable but no later than ten
15
business days after the Executive is informed in writing of
such claim by the Internal Revenue Service and the
notification shall apprise the Company of the nature of the
claim and the date on which such claim is required to be
paid. The Executive shall not pay such claim prior to the
expiration of a 30-day period following the date on which the
Executive has given such notification to the Company (or
such shorter period ending on the date that any payment of
taxes with respect to such claim is required). If the
Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such
claim, the Executive shall cooperate with the Company in
so contesting; provided, however, that the Company shall
bear and pay all costs and expenses (including additional
interest and penalties) incurred in connection with such
contest, on an after-tax basis to the Executive.
4.3 DEATH. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period (either prior or
subsequent to the Change in Control Date), this Agreement shall terminate
without further obligations to the Executive's legal representatives under
this Agreement, other than for (i) payment of Accrued Obligations (which
shall be paid to the Executive's estate or beneficiary, as applicable, in a
lump sum in cash within thirty (30) days of the Date of Termination) and
(ii) the timely payment or provision of Other Benefits, including death
benefits pursuant to the terms of any plan, policy, or arrangement of the
Company.
4.4 DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period (either
prior or subsequent to a Change in Control), this Agreement shall terminate
without further obligations to the Executive, other than for (i) payment of
Accrued Obligations (which shall be paid to the Executive in a lump sum in
cash within thirty (30) days of the Date of Termination) and (ii) the timely
payment or provision of Other Benefits including Disability benefits
pursuant to the terms of any plan, policy or arrangement of the Company.
4.5 TERMINATION FOR ANY OTHER REASONS. If the Executive's
employment shall be terminated for Cause during the Employment Period or by
the Executive voluntarily (either prior or subsequent to a Change in Control
Date), this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive the Accrued
Obligations. In such case, all of the Executive's Accrued Obligations shall
be paid to the Executive in a lump sum in cash within thirty (30) days of
the Date of Termination.
4.6 NON-EXCLUSIVITY OF RIGHTS; SUPERCEDING OF CERTAIN BENEFITS.
Except as provided in Sections 4.1(c) and 4.2(d) and in this Section 4.6,
nothing in this Agreement shall prevent or limit the Executive's continuing
or future participation in any plan, program, policy or practice provided by
the Company and for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights that the Executive may have
under any contract or agreement with the Company. Amounts which are vested
benefits of which the Executive is otherwise entitled to receive under any
plan, policy, practice or program of, or any contract or agreement with, the
Company at or subsequent to the Date of Termination, shall be payable in
accordance with such plan, policy, practice or program or contract or
16
agreement except as explicitly modified by this Agreement.
4.7 FULL SETTLEMENT. The parties agree that the Company's
obligation to make the payments provided for in this Agreement and otherwise
to perform its obligations hereunder are intended to be in full settlement
of all claims that the Executive may have against the Company with respect
to the termination of the Executive's employment with the Company and the
Executive may be required to execute and deliver an agreement to this effect
prior to receipt of any payments under this Agreement. The payments to be
made by the Company or any other obligation that the Company is required to
perform pursuant to this Agreement shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as provided in Sections 4.1(c) and
4.2(d), such amounts shall not be reduced whether or not the Executive
obtains other employment. The Company agrees to pay promptly as incurred, to
the full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or
any guarantee of performance thereof (including as a result of any contest
by the Executive regarding the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the
applicable Federal rate provided for in Code Section 7872(f)(2)(A).
4.8 RESOLUTION OF DISPUTES. If there shall be any dispute between
the Company and the Executive (i) as to whether any termination of the
Executive's employment was for Cause, or (ii) as to whether any termination
of the Executive's employment for Good Reason was made in good faith, then,
unless and until there is a final, non-appealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause or that
the determination by the Executive of the existence of Good Reason was not
made in good faith, the Company shall pay all amounts, and provide all
benefits, to the Executive and/or the Executive's family or other
beneficiaries, as the case may be, that the Company would be required to pay
or provide pursuant to Section 4.1 or 4.2 as though such termination was
without Cause or for Good Reason, as the case may be; provided, however,
that the Company shall not be required to pay any disputed amounts pursuant
to this Section 4.8 except upon receipt of an undertaking by or on behalf of
the Executive to repay all such amounts to which the Executive is ultimately
adjudged by such court not to be entitled.
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SECTION 5: NON-COMPETITION.
5.1 NON-COMPETE AGREEMENT.
5.1(a) During the period beginning on the date the
Employment Period expires and ending two (2) years
thereafter, the Executive shall not, without prior written
approval of the Board, become an officer, employee, agent,
partner, or director of any business enterprise in
substantial direct competition (as defined in Section
5.1(b)) with the Company or any of its subsidiaries;
provided that, if the Executive's employment is terminated
for Good Reason, then the Executive will not be subject to
the restrictions of this Section 5.1(a).
5.1(b) For purposes of Section 5.1, a business enterprise
with which the Executive becomes associated as an officer,
employee, agent, partner, or director shall be considered
in substantial direct competition, if such entity competes
with the Company or its subsidiaries in any business in
which the Company or any of its subsidiaries is engaged
and is within in the Company's or the subsidiary's market
area as of the date that the Employment Period expires.
5.1(c) During the period beginning on the date the
Employment Period expires and ending two (2) years
thereafter, the Executive shall not directly or indirectly
solicit the employment of, recruit, employ, hire, cause to
be employed or hired, entice away or establish a business
relationship with, (i) any then current employee of the
Company or any of its subsidiaries or (ii) any person who
was employed by the Company or any of its subsidiaries
during the six (6) months immediately prior to the date
that the Executive first solicits such person.
5.1(d) The above constraints shall not prevent the
Executive from making passive investments, not to exceed
five percent (5%), in any enterprise.
5.2 CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Company
and which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company, or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone
other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive
under this Agreement.
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SECTION 6: SUCCESSORS.
6.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal to the
Executive and, without the prior written consent of the Company, the rights
(but not the obligations) shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Executive's legal
representatives.
6.2 SUCCESSORS OF COMPANY. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform
it if no such succession had taken place. Failure of the Company to obtain
such agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive to terminate this
Agreement at his option on or after the Change in Control Date for Good
Reason. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or
otherwise.
SECTION 7: MISCELLANEOUS.
7.1 OTHER AGREEMENTS. The Board may, from time to time in the
future, provide other incentive programs and bonus arrangements to the
Executive with respect to the occurrence of a Change in Control that will be
in addition to the benefits required to be paid in the designated
circumstances in connection with the occurrence of a Change in Control. Such
additional incentive programs and/or bonus arrangements will affect or
abrogate the benefits to be paid under this Agreement only in the manner and
to the extent explicitly agreed to by the Executive in any such subsequent
program or arrangement.
7.2 NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses as set forth below; provided that all notices to the
Company shall be directed to such other address as one party may have
furnished to the other in writing in accordance herewith, except that notice
of change of address shall be effective only upon receipt.
Notice to Executive:
▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
c/o ▇▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
19
With a Copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
GW & ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Notice to Company:
▇▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
7.3 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
7.4 WITHHOLDING. The Company may withhold from any amounts payable
under this Agreement such Federal, state or local taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
7.5 WAIVER. The Executive's or the Company's failure to insist
upon strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the Company
may have hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant to Section 3.4
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
20
IN WITNESS WHEREOF, the Executive and, the Company, pursuant to the
authorization from its Board, have caused this Agreement to be executed in
its name on its behalf, all as of the day and year first above written.
"Executive"
/s/ ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
---------------------
▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
"Company"
▇▇▇▇▇▇▇▇ CORPORATION
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
-------------
Title: Chairman
--------
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