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Exhibit 10.16
OMEGA WORLDWIDE, INC. EMPLOYMENT
AND CHANGE IN CONTROL AGREEMENT
This Employment and Change in Control Agreement (the "Agreement") is
made as of August 1, 2000 (the "Effective Date") by and between ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ (the "Officer"), and OMEGA WORLDWIDE, INC., a Maryland corporation (the
"Company").
WHEREAS, the Officer presently employed as the President of the
Company.
WHEREAS, the Officer and the Company are currently party to a change in
control agreement dated March 24, 2000 (the "Change in Control Agreement"), and
the Officer and the Company wish to modify the terms of the Change in Control
Agreement and to substitute this Agreement for the Change in Control Agreement
as of the Effective Date, and have the terms of the Officer's employment
governed by this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and in consideration of the continuing employment of Officer by the
Company, the parties agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
shall have the meanings set forth in this paragraph 1:
(a) "Affiliate" means any corporation, partnership, joint venture or other
entity during any period in which at least a twenty-five percent
interest in such entity is owned, directly or indirectly, by the
Company (or a successor to the Company).
(b) The "Agreement Term" shall be the period beginning on the Effective
Date and ending on the three-year anniversary of the Effective Date.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" means (i) willful refusal to follow a lawful written order of
the Board; (ii) willful misconduct or reckless disregard of his duties
by the Officer; (iii) any act of fraud, misappropriation, dishonesty
or moral turpitude; or (iv) the conviction of the Officer of any
felony.
(e) "Change in Control" means the occurrence of the events described in any
of paragraphs (i), (ii), (iii), (iv), or (v) below:
(i) Acquisition of Securities. The acquisition (disregarding any
Excluded Acquisitions) by any Person of ownership of any Voting
Securities if, immediately after such acquisition, such person has
ownership of more than fifty percent (50%) of either the
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Outstanding Company Common Stock, or the combined voting power of the
Outstanding Company Voting Securities.
(ii) Change in Board. During any period of not more than two (2)
consecutive years, not including any period prior to the Effective
Date, Incumbent Directors cease for any reason to constitute at least
a majority of the Board.
(iii) Corporate Transaction. Consummation of a Corporate Transaction,
but not including an Internal Reorganization.
(iv) Sale of Principal Assets. The sale or other disposition of all of
the Principal Assets solely in exchange for cash or cash equivalents to
one or more third-parties not controlled by the Company.
(v) Liquidation. The complete liquidation or dissolution of the
Company. For purposes of this Agreement, the term "complete
liquidation or dissolution" shall include only the complete disposition
of all of the assets of the Company, such that after the disposition,
the only assets held by the Company are cash or cash equivalents.
Definitions. The terms used in the definition of "Change in Control"
shall have the following meanings:
- The term "Company Plan" means an employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company.
- The term "Corporate Transaction" means any reorganization,
merger, consolidation, or other business combination involving
the Company.
- The following shall constitute "Excluded Acquisitions" of Stock
or Voting Securities (whichever is applicable);
(A) Any acquisition of Stock or Voting Securities (whichever is
applicable) by a Company Plan.
(B) Any acquisition of Stock Or Voting Securities (whichever is
applicable) by an underwriter temporarily holding
securities pursuant to an offering of such securities.
(C) Any acquisition of Stock or Voting Securities (whichever is
applicable) by any person pursuant to an Internal
Transaction.
(D) Any acquisition of Stock or Voting Securities (whichever is
applicable) directly from the company (excluding any
acquisition resulting from the exercise of an exercise,
conversion, or exchange privilege unless the
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security being so exercised, converted, or exchanged was
acquired directly from the Company).
(E) Any acquisition of Stock or Voting Securities (whichever is
applicable) by the Company.
- The "Incumbent Directors" shall be the members of the Board on
the Effective Date, and shall also include any director who is
not a director on the Effective Date if that director is elected
to the Board on the recommendation, or with the approval, of at
least two-thirds (2/3) of the directors who then qualify as
Incumbent Directors; and provided further that no director whose
initial assumption of office is in connection with an actual or
threatened election contest relating to the election of directors
shall be deemed to be an Incumbent Director.
- The term "Internal Reorganization" means a sale-leaseback or
other arrangement resulting in the continued utilization of such
assets (or the operating products of such assets) by the Company.
The term "Internal Reorganization" also means a Corporate
Transaction to which all of paragraphs (A), (B), and (C) below
are applicable;
(A) All or substantially all of the individuals and entities
who have ownership, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction
have ownership of more than fifty percent (50%) of,
respectively, the then outstanding shares of common equity
securities and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
ultimate parent entity resulting from such Corporate
Transaction (including, without limitation, an entity
which, as a result of such transaction, have ownership of
the Company or all or substantially all of the assets of
the Company either directly or through one or more
subsidiaries) in substantially the same relative
proportions as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the
case may be.
(B) No Person (other than the Company, any Company Plan or
related trust, the corporation resulting from such
Corporate Transaction, and any Person having ownership,
immediately prior to such Corporate Transaction, directly
or indirectly, more than fifty percent (50%) of the
Outstanding Company Common Stock or the Outstanding Company
Voting Securities, as the case may be) will have ownership
of more than fifty percent (50%) of, respectively, the then
outstanding common stock of the ultimate parent entity
resulting from such Corporate Transaction or the combined
voting power of the then outstanding voting securities of
such entity.
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(C) Individuals who were Incumbent Directors immediately prior
to the Corporate Transaction will constitute at least a
majority of the members of the board of directors of the
ultimate parent entity resulting from such Corporate
Transaction.
- The term "Outstanding Company Common Stock" as of any date means
the then outstanding shares of common stock, of whatever class,
of the Company.
- The term "Outstanding Company Voting Securities" as of any date
means the then outstanding Voting Securities.
- The term "ownership" means beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act.
- The term "Person" means an individual, entity or group as that
term is used in Section 13(d)(3) or 14(d)(2) of the Exchange
Act.
- The term "Voting Securities" as of any date means any of the
outstanding securities of the Company entitled to vote generally
in the election of the Board.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Company" means Omega Worldwide, Inc.
(h) "Compensation Committee" means the Compensation Committee of the Board.
(i) "Confidential Information" means data and information relating to the
business of the Company or an Affiliate (which does not rise to the
status of a Trade Secret) which is or has been disclosed to the Officer
or of which the Officer became aware as a consequence of or through the
Officer's relationship to the Company and which has value to the
Company and is not generally known to its competitors. Confidential
Information shall not include any data or information that has been
voluntarily disclosed to the public by the Company or, where
applicable, an Affiliate (except where such public disclosure has
been made by the Officer without authorization) or that has been
independently developed and disclosed by others, or that otherwise
enters the public domain through lawful means.
(j) "Date of Termination" means the last day the Officer is employed by the
Company.
(k) "Disability" has the same meaning as provided in the long-term
disability plan or policy maintained or, if applicable, most recently
maintained, by the Company for the Officer. If no long-term disability
plan or policy was ever maintained on behalf of the Officer,
Disability means that condition described in Code Section 22(e)(3), as
amended from time to time. In the event of a dispute, the determination
of Disability shall be made by
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the Board and shall be supported by advice of a physician competent in
the area to which such Disability relates.
(l) "Fair Market Value of Restricted Stock Awards" means an amount equal to
the value per share of common stock of the Company multiplied by the
number of shares of common stock subject to restricted stock awards
granted to the Officer during the twelve (12) full months (excluding
any partial month in which a Change in Control occurs) immediately
preceding the Date of Termination. The value per share will be equal
to:
(i) the closing price per share at which sales of the common stock of
the Company shall have been sold on the most recent trading date
immediately prior to the date of grant of the restricted stock award,
as reported by any such exchange or system selected by the Company on
which the shares of common stock are then traded;
(ii) if such market information is not published, the price of one
share of common stock in the over-the-counter market on the most recent
trading date prior to the date of grant of the restricted stock award
that is available as reported by the NASDAQ Stock Market or, if not so
reported, by a generally accepted reporting service; or
(iii) if no such information is available, the value of one share of
common stock as of the date of grant of the restricted stock award, as
determined in good faith by the Company with due consideration being
given to the most recent independent appraisal of the Company and the
valuation methodology used in the appraisal.
(m) "Idun" means Idun Health Care Ltd.
(n) A "Notice of Termination" means a dated notice which indicates the Date
of Termination (not earlier than the date on which the notice is
provided), and which indicates the specific termination provision in
this Agreement relied on and which sets forth in reasonable detail the
facts and circumstances, if any, claimed to provide a basis for
termination of the Officer's employment under the provision so
indicated.
(o) "Omega Australia" means Omega (Australia) Pty Limited.
(p) The "Principal Assets" shall be all of the Company's direct or indirect
interest in Idun, Principal Australia and Principal UK.
(q) "Principal Australia" means Principal Healthcare Finance Trust.
(r) "Principal UK" means Principal Healthcare Finance Limited.
(s) "Quit with Good Reason" mean the Officer's resignation within ninety
(90) days following the occurrence of any of the following events
which (except as to paragraph (vi) below) occurs without the Officer's
written consent:
(i) the failure of the Board to reelect the Officer to his then
existing office;
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(ii) a diminution in the Officer's title, position, authority or
responsibility or the assignment to the Officer of duties or work
responsibilities which are inconsistent with his title, position,
authority or responsibility;
(iii) any reduction in the Officer's base Salary, bonus opportunity or
other compensation, or a material reduction in employee benefits;
(iv) a change in the position to which the Officer reports or the
positions which report to the Officer;
(v) the relocation of the Company's headquarters or the primary place
at which the Officer is to perform his duties to a location more than
fifty (50) miles from the location at which the Officer previously
performed his duties;
(vi) the expiration of one hundred eighty (180) days after the
occurrence of a Change in Control, regardless of whether the Officer
consented to the Change in Control; or
(vii) the occurrence of a complete liquidation or dissolution (as
defined in paragraph 1(e)(v)) of the Company.
Each separate event meeting the above requirements will allow the
Officer to terminate his employment due to a Quit with Good Reason and
the failure of the Officer to do so within one hundred eighty (180)
days from the occurrence of such event in any given case will not
prevent the Officer from terminating his employment due to a Quit With
Good Reason if a later event occurs which entitles the Officer to do
so.
(t) "Termination Payment" means a payment under this Agreement equal to
three (3) times the Officer's Total Compensation less one dollar
($1.00).
(u) "Total Compensation" means that amount paid to the Officer by the
Company during the last twelve (12) full months (excluding any partial
month in which the Change in Control occurs) immediately preceding the
Date of Termination equal to aggregate compensation (Salary, inclusive
of any elective Salary reductions, such as contributions to a plan
described in Code Section 401(k) or to a nonqualified deferred
compensation plan, plus any cash bonus) plus the Fair Market Value of
Restricted Stock Awards (whether or not such awards are vested).
(v) "Trade Secrets" means Company or Affiliate information including, but
not limited to, technical or nontechnical data, formulas, patterns,
compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, product and/or lists of
actual or potential customers or suppliers which: (i) derives economic
value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or
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use; and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
2. Performance of Services. The Officer's employment with the Company
shall be subject to the following:
(a) Subject to the terms of this Agreement, the Company hereby agrees to
employ the Officer as its President during the Agreement Term, and the
Officer hereby agrees to remain in the employ of the Company during the
Agreement Term.
(b) During the Agreement Term, while the Officer is employed by the
Company, the Officer shall devote his full time, energies and talents
to serving as its President. However, it is understood that the Officer
currently devotes substantial time to the management of Principal UK,
Idun, and Principal Australia, in which the Company holds a substantial
ownership interest. It is agreed that during such time as the Company
continues to hold a substantial interest in any such company (or in
any other company), the Officer may continue to devote his time,
energies, and talents to the operation of such company, and it is
further agreed that if the Company ceases to hold a substantial
interest in any such company, the Officer may continue to provide
services to such company or companies except that the provision of such
services may not unreasonably interfere with the provision of services
under this Agreement.
(c) The Officer agrees that he shall perform his duties faithfully and
efficiently subject to the directions of the Board. The Officer shall
not, without his consent, be assigned tasks that would be inconsistent
with those of President of the Company. The Officer shall report to the
Board and shall have such authority, power, responsibilities and duties
as are inherent in his positions (and the undertakings applicable to
his positions) and necessary to carry out his responsibilities and the
duties required of him hereunder.
(d) Notwithstanding the foregoing provisions of this paragraph 2, during
the Agreement Term, the Officer may devote reasonable time to
activities other than those required under this Agreement, including
the supervision of his personal investments, and activities involving
professional, charitable, community, educational, religious and similar
types of organizations, speaking engagements, membership on the boards
of directors of other organizations, and similar types of activities,
to the extent that such other activities do not, in the judgment of the
Board, inhibit or prohibit the performance of the Officer's duties
under this Agreement, or conflict in any material way with the business
of the Company or any Affiliate; provided, however, that except as
otherwise specifically provided in this Agreement, the Officer shall
not serve on the board of any business, or hold any other position with
any business, without the consent of the Board.
3. Compensation. Subject to the terms of this Agreement, during the
Agreement Term, while the Officer is employed by the Company, the Company shall
compensate him for his services as follows:
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(a) The Officer shall receive, for the 12-consecutive month period
beginning on the Effective Date, in substantially equal monthly or more
frequent installments, an annual base salary of not less than $330,000
(the "Salary"), The rate of Salary shall be increased annually,
effective on each anniversary of the Effective Date, in the amount of
3% (three per cent) over the applicable Salary rate during the
preceding 12-month period. The Officer may elect to receive all or any
portion of the Salary in British pounds sterling, rather than in United
States dollars. The amount payable in pounds shall be determined based
on the exchange rate as reported in The Wall Street journal as of a
date shortly before each payment date, with such determination to be as
mutually agreed upon by the Company and the Officer. The Officer's
election as to the portion of the Salary to be paid in pounds shall be
filed with the Company as soon as practicable after the Effective Date
for the remainder of calendar year 2000, and, for each subsequent
calendar year, shall be filed with the Company prior to the beginning
of each calendar year.
(b) For the period ending on September 30, 2000, the Officer shall
participate in an annual performance bonus program. Based on the
performance through the Effective Date, and subject to the provisions
of this Agreement, the Company and the Officer have agreed that the
amount of the performance bonus for such period shall be equal to
$150,000, to be distributed in accordance with the following:
(i) The Officer shall receive a cash payment $100,000 on or before
September 30, 2000.
(ii) The Officer shall receive a restricted stock grant under the
Omega Worldwide, Inc. 1997 Stock Option and Restricted Stock Plan (the
"1997 Plan") and subject to the terms of that plan, with such shares to
have a Fair Market Value (as that term is used in the 1997 Plan without
regard to the restrictions) as of September 30, 2000 of $50,000 (the
"Covered Shares"). If the Date of Termination does not occur during the
Restricted Period with respect to any Installment of the Covered
Shares, then, at the end of the Restricted Period for such shares, the
Officer shall become vested in those Covered Shares, and shall own the
shares free of all restrictions otherwise imposed by this Agreement.
For the Covered Shares, the Restricted Period with respect to each
Installment shown on the schedule shall end on the Vesting Date
applicable to such Installment:
VESTING DATE APPLICABLE TO
INSTALLMENT INSTALLMENT
-----------------------------------------------------------------
1/2 of Covered Shares March 31, 2001
-----------------------------------------------------------------
1/2 of Covered Shares January 1, 2002
Notwithstanding the foregoing provisions of this paragraph (b), the
Officer shall become vested in the Covered Shares, and become owner of
the shares free of all restrictions otherwise imposed by this
Agreement, prior to the end of the Restricted Period, upon a Change in
Control that occurs on or before the Date of Termination.
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(c) For periods beginning after September 30, 2000, the Officer shall
participate in an annual performance bonus program, providing for the
right to earn bonus distributions as determined by the Board.
(d) Following the sale by the Company of Principal Australia and Omega
Australia to one or more third-parties not controlled by the Company,
the Officer shall be entitled to a cash payment equal to 5% (five
percent) of (i) the net amount realized for the Company's interest in
Principal Australia and Omega Australia reduced by (ii) the total cost
(including, without limitation, any capital contribution) of the
Company for such interest. The amount payable in accordance with this
paragraph (d) shall be payable following the Officer's Date of
Termination, subject to the provisions of paragraph 5.
(e) The following options shall be granted under the 1997 Plan on (or as
soon as practicable after) September 18, 2000, subject to the terms of
the plan:
(i) An option to purchase 75,000 shares of Company stock shall be
granted to the Officer with an exercise price of $3.50 per share.
(ii) An option to purchase 50,000 shares of Company stock shall be
granted to the Officer with an exercise price of $4.00 per share.
(iii) An option to purchase 75,000 shares of Company stock shall be
granted to the Officer with an exercise price per share equal to the
market value per share as of close of business September 18, 2000.
The options granted to the Officer in accordance with the foregoing
provisions of this paragraph (e) shall be non-qualified options that
are not intended to be incentive stock options under section 422 of the
Code. Each of the options shall vest over three years, at the rate of
one third per year on each of the first three anniversaries of the
Effective Date, if the Date of Termination has not then occurred. The
Officer may be entitled to further equity-based grants during the
Agreement Term to the extent determined by the Board in its sole
discretion. It is understood by the parties that shares of Company
stock reserved under the 1997 Plan may not be sufficient to permit the
Company to fulfill the Company's obligation under this paragraph (e).
If the Company is unable, within a reasonable time after September 18,
2000 (but in no event later than November 1, 2000) to make the grant
required under this paragraph (e), the Company shall grant an award to
the Officer which shall provide the value to the Officer that is
equivalent to the value that would otherwise be provided to the Officer
by the Options required under this paragraph (e). If an equivalent
award is made in accordance with the preceding sentence, such award
shall be made as of September 18, 2000, and will provide the value that
would have been provided under the options if the options had been
granted as of September 18, 2000.
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(f) The Company shall make contributions on behalf of the Officer in
accordance with the following, provided that, in no event shall the
total amount payable by the Company under this paragraph (f) exceed
the rate of $59,000 per year;
(i) The Company shall make pre-tax elective contributions to the 401
(k) plan maintained by the Company in the United States of America at
the maximum rate permitted under the plan (provided that, subject to
the terms of the plan, the Officer may cancel future contributions to
the plan).
(ii) The Company shall make elective contributions on behalf of the
Officer to the voluntary pension scheme maintained by the Company in
the United Kingdom at the maximum rate permitted under the plan
(provided that, subject to the terms of the plan, the Officer may
cancel future contributions to the plan).
(iii) The Company shall make contributions on behalf of the Officer and
his family to the supplementary health care scheme maintained by the
Company in the United Kingdom (provided that, subject to the terms of
the plan, the Officer may cancel future contributions to and coverage
under the plan).
(g) The Officer is authorized to incur reasonable expenses for
entertainment, traveling, meals, lodging and similar items in promoting
the Company's business. The Company will reimburse the Officer for all
reasonable expenses so incurred, provided that such expenses are
incurred and accounted for in accordance with the reasonable policies
and procedures established by the Company. However, if the Officer
incurs expenses in connection with the business of any other company
where he is employed, reimbursement of such expenses shall be the sole
responsibility of such other company.
(h) Except as otherwise specifically provided to the contrary in this
Agreement, the Officer shall be Provided with the welfare benefits and
other fringe benefits to the same extent and on the same terms as those
benefits are provided by the Company from time to time to the Company's
other senior management employees. However, the Company shall not be
required to provide a benefit under this paragraph (h) if such benefit
would duplicate (or otherwise be of the same type as) a benefit
specifically required to be provided under another provision of this
Agreement. The Officer shall complete all forms and physical
examinations, and otherwise take all other similar actions to secure
coverage and benefits described in this paragraph 3, to the extent
determined to be necessary or appropriate by the Company.
(i) Notwithstanding any of the foregoing provisions of this paragraph 3 to
the contrary, in the event that the Company disposes of all or
substantially all of its direct and indirect ownership interest in any
one or more of Principal UK, Idun, and Principal Australia, and the
Officer continues to perform services for such company or companies
after such disposition while the Officer is employed by the Company,
the Officer's compensation described in paragraph 3(a) (relating to
salary), 3(b) (relating to bonus), 3(c) (relating to bonus), 3(f)
(relating to contributions to other plans), and paragraph 3(h)
(relating to other
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benefits) attributable to periods after such disposition shall be
subject to a pro-rata reduction to reflect the portion of the Officer's
working time that is devoted to such company or companies after the
date of disposition.
(j) All payments, deliveries, and distributions under this Agreement are
subject to withholding of all applicable taxes.
(k) Except as may otherwise be indicated in this Agreement, all references
in this Agreement to dollars ($) refer to United States currency.
4. Termination. The Officer's employment with the Company during the
Agreement Term may be terminated by the Company or the Officer without any
breach of this Agreement only under the circumstances described in paragraphs
4(a) through 4(f):
(a) Death. The Officer's employment hereunder will terminate upon his
death.
(b) Disability. The Company may terminate the Officer's employment during
any period in which he has a Disability.
(c) Cause. The Company may terminate the Officer's employment hereunder at
any time for Cause.
(d) Good Reason. The Officer may Quit with Good Reason.
(e) Termination by Officer. The Officer may terminate his employment
hereunder at any time for any reason by giving the Company prior
written Notice of Termination, which Notice of Termination shall be
effective not less than 60 days after it is given to the Company,
provided that nothing in this Agreement shall require the Officer to
specify a reason for any such termination.
(f) Termination by Company. The Company may terminate the Officer's
employment hereunder at any time for any reason, by giving the Officer
prior written Notice of Termination, which Notice of Termination shall
be effective immediately, or such later time as is specified in such
notice. The Company shall not be required to specify a reason for the
termination under this paragraph 4(f).
(g) Notice of Termination. Any termination of the Officer's employment by
the Company or the Officer (other than a termination pursuant to
paragraph 4(a)) must be communicated by a written Notice of Termination
to the other party hereto.
(h) Effect of Termination. If, on the Date of Termination, the Officer is
a member of the Board of Directors of the Company or any of the
Subsidiaries, or holds any other position with the Company and the
Subsidiaries, the officer shall resign from all such positions as of
the Date of Termination.
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5. Rights Upon Termination. The Officer's right to payment and benefits
under this Agreement for periods after his Date of Termination shall be
determined in accordance with the following provisions of this paragraph 5:
(a) If the Officer's Date of Termination occurs during the Agreement Term
for any reason, the Company shall pay to the Officer:
(i) The Officer's Salary for the period ending on the Date of
Termination.
(ii) Payment for unused vacation days, as determined in accordance
with Company policy as in effect from time to time.
(iii) If the Date of Termination occurs after the end of a performance
period and prior to the payment of the performance bonus (as described
in paragraphs 3(b) and 3(c)) for the period, the Officer shall be paid
such performance bonus amount (if any) at the regularly scheduled time.
(iv) Any other payments or benefits to be provided to the Officer by
the Company pursuant to any employee benefit plans or arrangements
adopted by the Company, to the extent such amounts are due from the
Company.
Except as may otherwise be expressly provided to the contrary in this
Agreement, nothing in this Agreement shall be construed as requiring
the Officer to be treated as employed by the Company for purposes of
any employee benefit plan or arrangement following the date of the
Officer's Date of Termination.
(b) If the Officer's Date of Termination occurs during the Agreement Term
under circumstances described in paragraph 4(c) (relating to the
Officer's termination for Cause) or paragraph 4(e) (relating to the
Officer's resignation), then, except as otherwise expressly provided in
this Agreement or otherwise agreed in writing between the Officer and
the Company, the Company shall have no obligation to make payments
under the Agreement for periods after the Officer's Date of
Termination.
(c) If the Officer's Date of Termination occurs during the Agreement Term
under circumstances described in paragraph 4(a) (relating to Officer's
death), paragraph 4(b) (relating to Officer's being Permanently
Disabled), or if the Officer's employment with the Company terminates
after the end of the Agreement Term then, in addition to the amounts
payable in accordance with paragraph 5(a):
(i) The Officer shall receive payment of the bonus for the
performance period in which his Date of Termination occurs, based on
actual performance for the entire period (but subject to any
applicable minimum as set forth in paragraph 3), and payable at the
same time as it is payable for other participants in the bonus plan;
provided, however, that it shall be subject to a pro-rata reduction for
the portion of the performance period following the Date of
Termination.
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(ii) If, on or before the Date of Termination, the Company has sold
its interest in Principal Australia to one or more third parties who
are not controlled by the Company, the Officer shall be entitled to the
amount of the cash payment (if any) described in paragraph 3(c).
(d) If the Officer's Date of Termination occurs during the Agreement Term
under circumstances described in paragraph 4(d) (relating to Quit for
Good Reason) or paragraph 4(f) (relating to termination by the Company
without Cause), then, in addition to the amounts payable in accordance
with paragraph 5(a):
(i) The Officer shall receive payment of the bonus for the
performance period in which his Date of Termination occurs, based on
actual performance for the entire period (but subject to any
applicable minimum as set forth in paragraph 3), and payable at the
same time as it is payable for other participants in the bonus plan;
provided, however, that it shall be subject to a pro rata reduction for
the portion of the performance period following the Date of
Termination.
(ii) If, on or before the Date of Termination, the Company has sold
its interest in Principal Australia to one or more third parties who
are not controlled by the Company, the Officer shall be entitled to the
amount of the cash payment (if any) described in paragraph 3(c).
(iii) The Company shall pay to the Officer a lump sum cash Termination
Payment within thirty (30) days following the Date of Termination.
(iv) The exercise restrictions with respect to stock options granted
to the Officer by the Company shall lapse, and the options shall become
vested and exercisable as of the Date of Termination. The portion of
any stock option granted to the Officer that is exercisable immediately
prior to the Date of Termination, as well as the portion of any stock
option that becomes exercisable by reason of this paragraph (iv), shall
remain exercisable for 90 days after the Date of Termination, but in no
event later than the date fixed for expiration of the option
(determined without regard to Officer's termination of employment).
In no event, however, shall the Officer be entitled to receive any
amounts, rights, or benefits under this paragraph (d) unless he
executes a release of claims against the Company in a form prepared by
the Company.
(e) Except as may be otherwise specifically provided in an amendment of
this paragraph (e) adopted in accordance with paragraph 16, the
Officer's rights under this paragraph 5 shall be in lieu of any
benefits that may be otherwise payable to or on behalf of the Officer
pursuant to the terms of any severance pay arrangement of the Company
or any Affiliate or any other, similar arrangement of the Company or
any Affiliate providing benefits upon involuntary termination of
employment.
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(f) It is understood that the Officer, by reason of agreement with persons
other than the Company, may be entitled to payments in connection with
the sale of Principal UK, and the right to such payments shall not be
subject to this Agreement.
If the Officer dies before receiving cash payments otherwise due to him under
this Agreement, the Company will pay such amounts to his beneficiary as
designated in writing by the Officer or, in the absence of such written
designation, his estate. The Officer shall designate in writing a beneficiary or
beneficiaries to receive such payments. The Officer may revoke or change his
designation of a beneficiary at any time by written notice to the Company.
6. Tax Indemnity Payment. Should any of the payments or benefits that
are provided for hereunder to be paid to or for the benefit of Officer or
payments or benefits under any other plan, agreement or arrangement between
Officer and the Company, be determined or alleged to be subject to an excise or
similar purpose tax pursuant to Code Section 4999 or any successor or other
comparable federal, state or local tax laws, the Company shall pay to the
Officer such additional compensation as is necessary (after taking into account
all federal, state and local income taxes payable by the Officer as a result of
the receipt of such additional compensation) to place the Officer in the same
after-tax position (including federal, state and local taxes) the Officer would
have been in had no such excise or similar purpose tax (or any interest or
penalties thereon) been paid or incurred. The Company hereby agrees to pay such
additional compensation within ten (10) business days after the Officer notifies
the Company that the Officer intends to file a tax return which takes the
position that such excise or similar purpose tax is due and payable in reliance
upon a written opinion of the Officer's tax counsel (such tax counsel to be
chosen solely by the Officer), that is more likely than not that such excise tax
is due and payable. The costs of obtaining such tax counsel's opinion shall be
borne by the Company, and as long as such tax counsel was chosen by the Officer
in good faith, the conclusions reached in such opinion shall not be challenged
or disputed by the Company. If the Officer intends to make any payment with
respect to any such excise or similar purpose tax as a result of an adjustment
to the Officer's tax liability by any federal, state or local tax authority, the
Company will pay such additional compensation by delivering its cashier's check
payable in such amount to the Officer within ten (10) business days after the
Officer notifies the Company of his intention to make such payment. Without
limiting the obligation of the Company hereunder, the Officer agrees, in the
event the Officer makes any payment pursuant to the preceding sentence, to
negotiate with the Company in good faith with respect to procedures reasonably
requested by the Company which would afford the Officer the ability to contest
the imposition of such excise tax; provided, however, that the Officer will not
be required to afford the Company any right to contest the applicability of any
such excise tax to the extent that the Officer reasonably determines (based upon
the opinion of his tax counsel) that such contest is inconsistent with the
overall tax interests of the Officer.
7. No Mitigation. No amounts or benefits payable to the Officer
hereunder shall be subject to mitigation or reduction by income or benefits the
Officer receives from other sources.
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8. Nondisclosure Of Confidential Information. The Officer agrees not
to disclose, directly or indirectly to any third person any Confidential
Information, Trade Secrets or customer list relating to Company's business
within three (3) years following the Date of Termination.
9. Continued Employment. This Agreement does not constitute a
guarantee of continued employment but instead provides for certain rights and
benefits for the Officer during his employment, and in the event his employment
with the Company terminates under the circumstances described herein.
10. Assignment. The rights and obligations of the Company under this
Agreement shall inure to the benefit of the Company's successors and assigns.
This Agreement may be assigned by the Company to any legal successor to the
Company or to an entity which purchases all or substantially all of the assets
of the Company. In the event the Company assigns this Agreement as permitted by
this Agreement and the Officer remains employed by the assignee, the "Company"
as defined herein will refer to the assignee and the Officer will not be deemed
to have terminated employment hereunder until the Officer terminates employment
from the assignee.
11. Attorneys' Fees. If the Officer (or the Officer's estate in the
event of his death) brings any action at law or in equity to enforce any of the
provisions or rights hereunder, the Company shall pay all costs, expenses and
reasonable attorneys, fees incurred by the Officer.
12. Headings. Sections or other headings contained herein are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13. Entire Agreement. Except as otherwise noted herein, this Agreement
constitutes the entire agreement between the parties concerning the subject
matter hereof and supersedes all prior and contemporaneous agreements, if any,
between the parties relating to the subject matter hereof (including, without
limitation, the Change in Control Agreement); provided, however, that nothing in
this Agreement shall be construed to limit any policy or agreement that is
otherwise applicable relating to confidentiality, rights to inventions,
copyrightable material, business and/or technical information, trade secrets,
solicitation of employees, interference with relationships with other
businesses, competition, and other similar policies or agreement for the
protection of the business and operations of the Company and the Subsidiaries.
14. Severability. In the event that one or more of the provisions of
this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
15. Governing Law. To the full extent controllable by stipulation of
the parties, this Agreement shall be interpreted and enforced under Michigan
law.
16. Amendment. This Agreement may not be modified, amended,
supplemented or terminated except by a written agreement between the Company and
the Officer.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement as
of the Effective Date.
COMPANY:
OMEGA WORLDWIDE, INC.
a Maryland corporation
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Its: Director
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OFFICER:
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Its: President
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