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1 EXHIBIT 10(e)
SEVERANCE AGREEMENT
AGREEMENT made as of December 15, 2000, between ▇▇▇▇▇-▇▇▇▇▇, Inc., a
Delaware corporation (the "Company"), and __________ (the "Executive").
WHEREAS, the Executive is currently serving as a Senior Vice President
of the Company;
WHEREAS, the Executive possesses an intimate knowledge of the business
and affairs of the Company, its policies, methods, personnel and plans for the
future and has acquired contacts of considerable value to the Company; and
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the Executive's contribution to the growth and success of the Company has
been substantial and wishes to offer an inducement to the Executive to remain in
the employ of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, this Agreement sets
forth benefits which the Company will pay to Executive in the event of
termination of Executive's employment under the circumstances described herein:
1. Term. The term of this Agreement shall be effective upon a Change in
Control (as defined herein) and continue until the earlier of (i) the expiration
of the second anniversary of the occurrence of a Change in Control, (ii) the
Executive's death, or (iii) the Executive's earlier voluntary retirement (except
as provided in Section 3(a)(2)) (the "Term").
2. Definitions.
(a) Cause. For "Cause" means that the Executive shall have
committed:
(i) an intentional material act of fraud or embezzlement
in connection with his duties or in the course of his
employment with the Company;
(ii) intentional wrongful material damage to property of
the Company; or
(iii) intentional wrongful disclosure of material secret
processes or material confidential information of the
Company.
For the purposes of this Agreement, no act, or failure to act, on the part of
the Executive will be deemed "intentional" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that his action
or omission was in the best interest of the Company.
(b) Change in Control. A "Change in Control" of the Company shall
have occurred if any of the following events shall occur:
(i) The Company is merged, consolidated or reorganized
into or with another corporation or other legal
person and as a result of such merger, consolidation
or reorganization less than 60% of the combined
voting power of the then outstanding securities of
the remaining corporation or legal person or its
ultimate parent immediately after such transaction is
received in respect of or in exchange for voting
securities of the Company pursuant to such
transaction;
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2 EXHIBIT 10(e)
(ii) The Company sells all or substantially all of its
assets to any other corporation or other legal person
and as a result of such sale less than 60% of the
combined voting power of the then outstanding
securities of such corporation or legal person or its
ultimate parent immediately after such transaction is
received in respect of or in exchange for voting
securities of the Company pursuant to such sale;
(iii) Any person (including any "person" as such term is
used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act), has become the beneficial owner (as
the term "beneficial owner, is defined under Rule
13d-3 or any successor rule or regulation promulgated
under the Exchange Act) of securities which when
added to any securities already owned by such person
would represent in the aggregate 30% or more of the
combined voting power of the then outstanding
securities of the Company; or
(iv) Such other events that cause a Change in Control of
the Company as determined by the Board in its sole
discretion.
(c) Code. The "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(d) Disability. "Disability" shall have the meaning given to
disability in the Company's long term disability insurance
plan.
(e) Severance Compensation. The "Severance Compensation" shall be
a lump sum cash amount equal to 200% of the sum of (A) the
annual base salary of the Executive in effect immediately
prior to the Change in Control or the Termination Date,
whichever is larger, plus (B) the average of the bonus or
incentive compensation of the Executive, received from the
Company for the two fiscal years preceding the year in which
the Change in Control occurred or for the two fiscal years
preceding the year in which the Termination Date occurs,
whichever is larger.
(f) Termination Date. The "Termination Date" shall be the date
upon which the Executive or the Company terminates the
employment of the Executive.
3. Rights of Executive Upon Change in Control and Termination.
(a) The Company shall provide the Executive, within ten days
following the Termination Date, or, if later, within ten days
following the execution of the release described in Section 6
below, Severance Compensation in lieu of compensation to the
Executive for periods subsequent to the Termination Date, if,
following the occurrence of a Change in Control, any of the
following events shall occur:
(1) the Company terminates the Executive's employment
during the term of this Agreement other than for any
of the following reasons:
(i) the Executive dies;
(ii) the Executive suffers a Disability and is
unable to work (with or without reasonable
accommodation) for a period of 180
consecutive days; or
(iii) for Cause,
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3 EXHIBIT 10(e)
(2) the Executive terminates his employment after such
Change in Control and the occurrence of at least one
of the following events:
(i) A material adverse change in the nature or
scope of the authorities, functions or
duties attached to the position with the
Company that the Executive had immediately
prior to the Change in Control; a reduction
in the Executive's salary, bonus or
incentive compensation or a significant
reduction in scope or value of other
monetary or non-monetary benefits (other
than benefits pursuant to a broad based
employee benefit plan) to which the
Executive was entitled from the Company
immediately prior to the Change in Control,
any of which is not remedied within ten
calendar days after receipt by the Company
of written notice from the Executive of such
change, reduction, alteration or
termination, as the case may be;
(ii) A determination by the Executive made in
good faith that as a result of a Change in
Control and a change in circumstances
thereafter, he has been rendered
substantially unable to carry out, or has
been substantially hindered in the
performance of, the authorities, functions
or duties attached to his position
immediately prior to the Change in Control,
which situation is not remedied within ten
calendar days after receipt by the Company
of written notice from the Executive of such
determination;
(iii) The Company shall require the Executive to
relocate his principal location of work from
the location thereof immediately prior to
the Change in Control, or to travel away
from his office in the course of discharging
his responsibilities or duties significantly
more than required of him prior to the
Change in Control without, in either case,
the Executive's prior written consent; or
(iv) the Company commits any material breach of
this Agreement.
(3) the Executive terminates his employment for any
reason during the 30-day period following the first
anniversary of the Change in Control.
(b) Severance Compensation pursuant to this Section 3 will not be
subject to setoff or mitigation.
(c) Upon a Change in Control, all stock options previously granted
by the Company to the Executive and not yet exercised will
become vested and fully exercisable by the Executive. Such
options shall remain exercisable for their original term;
provided, however, that the Company has the right to require
the Executive to exercise such options within 90 days after
receipt of written notice to the Executive. If the Executive
fails to exercise his options within such 90-day period, the
Company has the right to cancel the options.
(d) In the event the Company becomes obligated hereunder to pay
the Executive the Severance Compensation, the Company shall
also pay the Executive a lump sum cash payment in the amount
necessary to make continuation coverage (COBRA) payments under
the Company's group health insurance plan for a period of 18
months.
(e) If the amounts due to the Executive in connection with a
Change of Control under this and/or other agreements, plans or
arrangements would result in an "excess parachute payment"
within the meaning of Section 280G of the Code, and the total
amounts due to the Executive would have to be reduced by more
than ten percent (10%) to avoid such an "excess parachute
payment," then the Company shall pay to Executive an
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additional amount in cash (a "Gross-Up Payment") equal to the
amount necessary to cause the amount of the aggregate
after-tax compensation and benefits received by the Executive
hereunder (after payment of the excise tax under Section 4999
of the Code with respect to any excess parachute payment, and
any state and federal income and FICA taxes with respect to
the Gross-Up Payment) to be equal to the aggregate after-tax
compensation and benefits such Executive would have received
if Sections 280G and 4999 of the Code had not been enacted. A
nationally recognized public accounting firm selected by the
Company shall determine the amount of the Gross-Up Payment at
the Company's expense. Notwithstanding the foregoing, no
Gross-Up Payment shall be made if, in the opinion of tax
counsel selected by the Company, no excess parachute payments
would occur if the total amounts due to the Executive in
connection with a Change of Control were reduced by ten
percent (10%) or less; in such event, total benefits under
this Agreement shall be reduced by up to ten percent (10%) in
value in the following order: (i) cash amounts payable as
Severance Compensation under Section 3(a) above shall be
reduced first; (ii) if necessary, amounts for the maintenance
of continuation coverage under Section 3(d) above shall be
reduced next; and (iii) if necessary, the accelerated vesting
of options as provided in Section 3(c) above shall be
reduced.
4. Successors, Binding Agreement. This Agreement will be binding upon the
Company, its successors and assigns, and all rights of the Executive hereunder
shall inure to the benefit of and be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees.
5. Notice. The Company shall give written notice to Executive within ten
days after any Change in Control. Failure to give such notice shall constitute a
material breach of this Agreement. 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 received after being
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
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c/o ▇▇▇▇▇-▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
If to the Company:
▇▇▇▇▇-▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
6. Release. In consideration for the benefits and payments provided for
under Sections 3(a) and 3(d) of this Agreement, unless such requirement is
waived by the Board in its sole discretion, the Executive agrees to execute a
release acceptable to the Company releasing the Company, its subsidiaries,
shareholders, partners, officers, directors, employees and agents from any and
all claims and from any and all causes of action of any kind, including but not
limited to all claims or causes of action arising out of the Executive's
employment with the Company or the termination of such employment. The Executive
shall execute such release prior to or as soon as practicable after his
Termination Date.
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7. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, unless specifically
referred to herein, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the substantive laws of the State of Delaware, without regard to principles
of conflicts of law. This Agreement replaces any prior severance agreement
between the Company and the Executive.
8. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
9. Employment Rights. Nothing expressed or implied in this Agreement shall
create any right or duty on the part of the Company or the Executive to have the
Executive remain in the employment of the Company prior to any Change in
Control; provided, however, that any termination of employment of the Executive
or removal of the Executive as an elected officer of the Company following the
commencement of any discussion authorized by the Board of Directors of the
Company with a third person that ultimately results in a Change in Control shall
be deemed to be a termination or removal of the Executive after a Change in
Control for purposes of this Agreement and shall entitle the Executive to all
Severance Compensation. Notwithstanding any other provision hereof to the
contrary, the Executive may, at any time during his employment with the Company
upon the giving of 30 days prior written notice, terminate his employment
hereunder. If this Agreement or the employment of the Executive is terminated
under circumstances in which the Executive is not entitled to any Severance
Compensation, neither the Executive nor the Company shall have any further
obligation or liability hereunder.
10. Withholding of Taxes. The Company may withhold from any amounts payable
under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or government regulation or ruling; provided,
however, that no withholding pursuant to Section 4999 of the Code shall be made
unless, in the opinion of tax counsel selected by the Company and acceptable to
the Executive, such withholding relates to payments which result in the
imposition of an excise tax pursuant to Section 4999 of the Code.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date and year first above written.
▇▇▇▇▇-▇▇▇▇▇, INC.
By:
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Title: Chairman and Chief Executive
Officer
EXECUTIVE
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▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇'Acqua
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇