EXHIBIT 10.8
SEVERANCE PROTECTION AGREEMENT
THIS AGREEMENT made as of the 30th day of November, 2001, by and
between Acuity Brands, Inc. (the "Company") and ______________
_______________________________ (the "Executive").
WHEREAS, effective November 30, 2001 ("Spin-off Date"), National
Service Industries, Inc. ("NSI") is spinning off its lighting and chemicals
businesses through a tax-free distribution of the Company's stock to NSI
stockholders; and
WHEREAS, in connection with the spin-off, Executive will become a key
management employee of the Company; and
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the possibility of a Change in Control (as hereinafter defined) exists and
that the threat of or the occurrence of a Change in Control can result in
significant distractions of its key management personnel because of the
uncertainties inherent in such a situation;
WHEREAS, the Board has determined that it is essential and in the best
interest of the Company and its stockholders to retain the services of the
Executive in the event of a threat or occurrence of a Change in Control and to
ensure his continued dedication and efforts in such event without undue concern
for his personal financial and employment security; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Company, particularly in the event of a threat or the occurrence of a Change
in Control, the Company desires to enter into this Agreement with the Executive
to provide the Executive with certain benefits in the event his employment is
terminated as a result of, or in connection with, a Change in Control and to
provide the Executive with the Gross-Up Payment (as hereinafter defined) and
certain other benefits whether or not the Executive's employment is terminated.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. Term of Agreement.
(a) This Agreement shall commence as of November 30, 2001
and shall continue in effect until November 30, 2003; provided, however, that
commencing on November 30, 2002 and on each November 30 thereafter, the term of
this Agreement shall automatically be extended for one (1) year unless either
the Company or the
Executive shall have given written notice to the other at least ninety (90) days
prior to such November 30 that the term of this Agreement shall not be so
extended.
(b) Notwithstanding the foregoing, (1) the term of this
Agreement shall not expire during a Threatened Change in Control Period or prior
to the expiration of 24 months after the occurrence of a Change in Control and
(2) prior to a Change in Control and other than during a Threatened Change in
Control Period, the term of this Agreement shall expire on the date the
Executive ceases to serve in the capacity he is serving on the effective date of
this Agreement, or in another capacity as an executive officer (as defined in
Rule 3b-7 under the 1934 Act), unless such cessation was at the request of a
Third Party or otherwise occurred in connection with, or in anticipation of, a
Change in Control.
(c) Each place in this Agreement where a reference to the
"Company" appears that relates to the Executive's employment, termination of
employment or performing services, including the definitions of "Cause" and
"Good Reason", shall mean and include any subsidiary of the Company which is the
primary employer of the Executive. Further, in each place where this Agreement
refers to a benefit plan or program, payment of compensation, compensation
arrangement or other similar plan or program maintained by the Company, such
reference shall include any plan, program or arrangement maintained or
established by a subsidiary of the Company. Notwithstanding the foregoing, the
references in the definitions of "Change in Control," "Threatened Change in
Control Period" and similar references to changes in ownership and control of
the Company shall mean and refer to Acuity Brands, Inc., a Delaware corporation.
2. Definitions.
2.1 Cause. For purposes of this Agreement, a termination
for "Cause" is a termination evidenced by a resolution adopted in good faith by
two-thirds of the Board that the Executive (a) intentionally and continually
failed to substantially perform his duties with the Company (other than a
failure resulting from the Executive's incapacity due to physical or mental
illness) which failure continued for a period of at least thirty (30) days after
a written notice of demand for substantial performance has been delivered to the
Executive specifying the manner in which the Executive has failed to
substantially perform, or (b) intentionally engaged in conduct which is
demonstrably and materially injurious to the Company, monetarily or otherwise;
provided, however that no termination of the Executive's employment shall be for
Cause as set forth in clause (b) above until (x) there shall have been delivered
to the Executive a copy of a written notice setting forth that the Executive was
guilty of the conduct set forth in clause (b) and specifying the particulars
thereof in detail, and (y) the Executive shall have been provided an opportunity
to be heard by the Board (with the assistance of the Executive's counsel if the
Executive so desires). No act, nor failure to act, on the Executive's part,
shall be considered "intentional" unless he has acted, or failed to act, with an
absence of
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good faith and without a reasonable belief that his action or failure to act was
in the best interest of the Company. Notwithstanding anything contained in this
Agreement to the contrary, no failure to perform by the Executive after a Notice
of Termination is given by the Executive shall constitute Cause for purposes of
this Agreement.
2.2 Change in Control. For purposes of this Agreement, a
"Change in Control" shall mean any of the following events:
(a) The acquisition (other than from the
Company) by any "Person" (as the term person is used for purposes of Sections
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "1934
Act") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the ▇▇▇▇ ▇▇▇) of twenty percent (20%) or more of the combined voting power
of the Company's then outstanding voting securities; or
(b) The individuals who, as of December 1, 2001,
are members of the Board (the "Incumbent Board"), cease for any reason to
constitute at least two-thirds of the Board; provided, however, that if the
election, or nomination for election by the Company's stockholders, of any new
director was approved by a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of this Agreement, be considered as a
member of the Incumbent Board; or
(c) a merger or consolidation involving the
Company if the stockholders of the Company, immediately before such merger or
consolidation do not, as a result of such merger or consolidation, own, directly
or indirectly, more than seventy percent (70%) of the combined voting power of
the then outstanding voting securities of the corporation resulting from such
merger or consolidation in substantially the same proportion as their ownership
of the combined voting power of the voting securities of the Company outstanding
immediately before such merger or consolidation; or
(d) a complete liquidation or dissolution of the
Company or an agreement for the sale or other disposition of all or
substantially all of the assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
pursuant to Section 2.2(a), solely because twenty percent (20%) or more of the
combined voting power of the Company's then outstanding securities is acquired
by (i) a trustee or other fiduciary holding securities under one or more
employee benefit plans maintained by the Company or any of its subsidiaries or
(ii) any corporation which, immediately prior to such acquisition, is owned
directly or indirectly by the stockholders of the Company in the same proportion
as their ownership of stock in the Company immediately prior to such acquisition
(hereinafter referred to as "Related Persons").
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(e) Notwithstanding anything contained in this
Agreement to the contrary, if the Executive's employment is terminated prior to
a Change in Control and the Executive reasonably demonstrates that such
termination (1) was at the request of a Third Party (as hereinafter defined) or
(2) otherwise occurred in connection with, or in anticipation of, a Change in
Control (including, without limitation, during a Threatened Change in Control
Period), then for all purposes of this Agreement, the date of a Change in
Control shall mean the date immediately prior to the date of such termination of
the Executive's employment.
2.3 Confidential Information. For purpose of this
Agreement, "Confidential Information" shall mean all technical, business, and
other information relating to the business of the Company or its subsidiaries or
affiliates, including, without limitation, technical or nontechnical data,
formulae, compilations, programs, devices, methods, techniques, processes,
financial data, financial plans, product plans, and 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, and (ii) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy or confidentiality. Such
information and compilations of information shall be subject to protection under
this Agreement whether or not such information constitutes a trade secret and is
separately protectable at law or in equity as a trade secret.
2.4 Disability. For purposes of this Agreement,
"Disability" shall mean a physical or mental infirmity which impairs the
Executive's ability to substantially perform his duties under this Agreement for
a period of one hundred eighty (180) consecutive days.
2.5 (a) Good Reason. For purposes of this Agreement,
"Good Reason" shall mean the occurrence after a Change in Control of any of the
events or conditions described in Subsections (1) through (9) hereof:
(1) a change in the Executive's status,
title, position or responsibilities (including reporting responsibilities)
which, in the Executive's reasonable judgment, represents an adverse change from
his status, title, position or responsibilities as in effect immediately prior
thereto; the assignment to the Executive of any duties or responsibilities
which, in the Executive's reasonable judgment, are inconsistent with his status,
title, position or responsibilities; or any removal of the Executive from or
failure to reappoint or reelect him to any of such offices or positions, except
in connection with the termination of his employment for Disability, Cause, as a
result of his death or by the Executive other than for Good Reason;
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(2) a reduction in the Executive's base
salary or any failure to pay the Executive any compensation or benefits to which
he is entitled within five days of the date due;
(3) a failure to increase the
Executive's base salary at least annually at a percentage of base salary no less
than the average percentage increases (other than increases resulting from the
Executive's promotion) granted to the Executive during the three full years
ended prior to a Change in Control (or such lesser number of full years during
which the Executive was employed);
(4) the Company's requiring the
Executive to be based at any place outside a ▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, except for reasonably required travel on the Company's business which
is not greater than such travel requirements prior to the Change in Control;
(5) the failure by the Company (A) to
continue in effect (without reduction in benefit level, and/or reward
opportunities) any compensation or employee benefit plan in which the Executive
was participating immediately prior to the Change in Control, including, but not
limited to, the plans listed on Appendix A in which Executive is participating,
unless a substitute or replacement plan has been implemented which provides
substantially identical compensation or benefits to the Executive or (B) to
provide the Executive with compensation and benefits, in the aggregate, at least
equal (in terms of benefit levels and/or reward opportunities) to those provided
for under each other compensation or employee benefit plan, program and practice
as in effect immediately prior to the Change in Control (or as in effect
following the change in Control, if greater);
(6) the insolvency or the filing (by
any party, including the Company) of a petition for bankruptcy of the Company;
(7) any material breach by the Company
of any provision of this Agreement;
(8) any purported termination of the
Executive's employment for Cause by the Company which does not comply with the
terms of Section 2.1; or
(9) the failure of the Company to
obtain an agreement, satisfactory to the Executive, from any successor or assign
of the Company to assume and agree to perform this Agreement, as contemplated in
Section 9 hereof.
(b) Any event or condition described in Section
2.5(a)(1) through (9) which occurs prior to a Change in Control but which the
Executive
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reasonably demonstrates (1) was at the request of a third party who has
indicated an intention or taken steps reasonably calculated to effect a Change
in Control (a "Third Party"), or (2) otherwise arose in connection with or in
anticipation of a Change in Control, shall constitute Good Reason for purposes
of this Agreement notwithstanding that it occurred prior to the Change in
Control.
(c) The Executive's right to terminate his
employment pursuant to this Section 2.5 shall not be affected by his incapacity
due to physical or mental illness.
2.6 Threatened Change in Control. For purposes of this
Agreement, a Threatened Change in Control shall mean the occurrence of any of
the following events:
(a) when the Company is aware of or is
contemplating, a proposal (a "Proposal") for any Person other than a Related
Person (1) to acquire five percent (5%) or more of the voting power of the
Company's outstanding securities, or (2) to merge or consolidate with another
entity, transfer or sell assets of the Company, or liquidate or dissolve the
Company, in each case described in this clause (2) in a transaction that would
constitute a Change in Control; or
(b) any Person other than a Related Person,
(1) acquires five percent (5%) or more
of the voting power of the Company's outstanding securities, other than as a
holder whose investment in the Company is eligible to be reported on Schedule
13G pursuant to Rule 13d-l (b) (1) promulgated under the Exchange Act, or
(2) initiates a tender or exchange
offer to acquire such number of securities as would result in such Person
holding twenty percent (20%) or more of the voting power of the Company's
outstanding securities, or
(3) solicits proxies for votes to elect
members of the Board at a shareholders' meeting of the Company.
2.7 Threatened Change in Control Period. For purposes of
this Agreement, a Threatened Change in Control Period shall mean the period
commencing on the date that a Threatened Change in Control has occurred and
ending upon:
(a) the date the Proposal referred to in Section
2.6(a) is abandoned;
(b) the acquisition of five percent (5%) of the
voting power of the Company's outstanding securities by the Person referred to
in Section 2.6(a)(1) if such acquisition does not constitute a Threatened Change
in Control under Section 2.6(b)(1);
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(c) (1) the date when any Person described in
Section 2.6(b)(1) shall own less than five percent (5%) of the voting power of
the Company's outstanding securities, (2) shall have abandoned the tender or
exchange offer, or (3) shall not have elected a member of the Board as the case
may be; or
(d) the date a Change in Control occurs.
2.8 1934 Act. The Securities Exchange Act of 1934, as
amended.
3. Termination of Employment.
3.1 If, during the term of this Agreement, the
Executive's employment with the Company shall be terminated within 24 months
following a Change in Control, the Executive shall be entitled to the following
compensation and benefits depending upon the circumstances of such termination
(in addition to any compensation and benefits provided for under any of the
Company's employee benefit plans, policies and practices):
(a) If the Executive's employment with the
Company shall be terminated during such 24-month period (1) by the Company for
Cause or Disability, (2) by reason of the Executive's death, or (3) by the
Executive other than for Good Reason (as each term is defined herein), the
Company shall pay the Executive all amounts earned or accrued through the
Termination Date but not paid as of the Termination Date, including (i) base
salary, (ii) reimbursement for reasonable and necessary expenses incurred by the
Executive on behalf of the Company during the period ending on the Termination
Date, (iii) vacation pay, and (iv) sick leave (collectively, "Accrued
Compensation"). In addition to the foregoing, if the Executive's employment is
terminated by the Company for Disability or by reason of the Executive's death,
the Company shall pay to the Executive or his beneficiaries an amount equal to
the "Pro Rata Bonus" (as hereinafter defined). The "Pro Rata Bonus" is an amount
equal to the Bonus Amount (as hereinafter defined) multiplied by a fraction the
numerator of which is the number of days in such fiscal year through the
Termination Date and the denominator of which is 365. The term "Bonus Amount"
shall mean the greatest of the following: (x) most recent annual bonus paid or
payable to the Executive, or, (y) the target annual bonus payable for the fiscal
year during which the Termination Date occurs, or, if greater the fiscal year
during which a Change in Control occurred or (z) average of the annual bonuses
paid or payable during the three full fiscal years ended prior to the
Termination Date or, if greater, the three full fiscal years ended prior to the
Change in Control (or, in each case, such lesser period for which annual bonuses
were paid or payable to the Executive). Executive's entitlement to any other
compensation or benefits shall be determined in accordance with the Company's
employee benefit plans and other applicable programs and practices then in
effect.
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(b) If the Executive's employment with the
Company shall be terminated (other than by reason of death) during such 24-month
period, (1) by the Company other than for Cause or Disability, or (2) by the
Executive for Good Reason, the Executive shall be entitled to the following:
(i) the Company shall pay the Executive
all Accrued Compensation and a Pro-Rata Bonus;
(ii) the Company shall pay the Executive
as severance pay and in lieu of any further compensation for periods subsequent
to the Termination Date, in a single payment an amount (the "Severance Amount")
in cash equal to two (2) times the sum of (A) the greater of the Executive's
base salary in effect on the Termination Date or at any time during the 90-day
period prior to the Change in Control ("Base Salary") and (B) the Bonus Amount.
Notwithstanding the foregoing, if the Executive has attained at least age 63 on
the Termination Date the Severance Amount to be paid under this Subsection (ii)
shall be the amount described in the preceding sentence multiplied by a fraction
(which in no event shall be less than one-half) the numerator of which shall be
the number of months (for this purpose any partial month shall be considered as
a whole month) remaining until the Executive's 65th birthday (but in no event
shall be less than 12) and the denominator of which shall be 24;
(iii) for a number of months equal to the
lesser of (A) 24 or (B) the number of months remaining until the Executive's
65th birthday (the "Continuation Period"), the Company shall at its expense
continue on behalf of the Executive and his dependents and beneficiaries the
life insurance, disability, medical, dental and hospitalization benefits
provided (x) to the Executive at the time the Notice of Termination is given, at
any time during the 90-day period prior to the Change in Control or at any time
thereafter, or (y) to other similarly situated executives who continue in the
employ of the Company during the Continuation Period. The coverage and benefits
(including deductibles and costs) provided in this Section 3.1(b) (iii) during
the Continuation Period shall be no less favorable to the Executive and his
dependents and beneficiaries, than the most favorable of such coverages and
benefits during any of the periods referred to in clauses (x) and (y) above. The
Company's obligation hereunder with respect to the foregoing benefits shall be
limited to the extent that the Executive obtains any such benefits pursuant to a
subsequent employer's benefit plans, in which case the Company may reduce the
coverage of any benefits it is required to provide the Executive hereunder as
long as the aggregate coverages and benefits of the combined benefit plans is no
less favorable to the Executive than the coverages and benefits required to be
provided hereunder. This Subsection (iii) shall not be interpreted so as to
limit any benefits to which the Executive or his dependents may be entitled
under any of
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the Company's employee benefit plans, programs or practices following the
Executive's termination of employment, including without limitation, retiree
medical and life insurance benefits;
(iv) the Company shall pay in a single
payment an amount in cash equal to the excess of (A) the Supplemental Retirement
Benefit (as defined below) had (w) the Executive remained employed by the
Company for an additional two (2) complete years of credited service (or until
his 65th birthday if earlier), (x) his annual compensation during such period
been equal to his Base Salary and the Bonus Amount, (y) the Company and/or the
Business Unit made employer contributions to each defined contribution plan in
which the Executive was a participant at the Termination Date (in an amount
equal to the amount of such contribution for the plan year immediately preceding
the Termination Date) and (z) he been fully (100%) vested in his benefit under
each retirement plan in which the Executive was a participant, over (B) the lump
sum actuarial equivalent of the aggregate retirement benefit the Executive is
actually entitled to receive under such retirement plans. For purposes of this
Subsection (iv), the "Supplemental Retirement Benefit" shall mean the lump sum
actuarial equivalent of the aggregate retirement benefit the Executive would
have been entitled to receive under the Company's supplemental executive and
other retirement plans including, but not limited to, the Acuity Brands, Inc.
Supplemental Retirement Plan for Executives ("SERP"), the Acuity Brands, Inc.
401(k) Plan for Corporate Employees, and the Acuity Brands, Inc. Pension Plan
("Pension Plan"); provided, however, if the Executive has attained at least age
50 and has been employed by the Company for at least 10 years as of the
Termination Date the calculation of the Supplemental Retirement Benefit shall be
made pursuant to the early retirement provisions under the SERP and the Pension
Plan without regard to the Executive's attained age or years of credited
service. For purposes of this Subsection (iv), the "actuarial equivalent" shall
be determined in accordance with the actuarial assumptions used for the
calculation of benefits under the Pension Plan as applied prior to the
Termination Date in accordance with such plan's past practices; and
(v) (A) the restrictions on any
outstanding incentive awards (including achievement awards, restricted stock and
granted Performance Shares) granted to the Executive under the Long-Term
Incentive Plan or under any other incentive plan or arrangement shall lapse and
such incentive awards shall become one hundred percent (100%) vested (provided,
however, that Aspiration Achievement Incentive Award shall be prorated as of the
date of the Change in Control, as provided in the Aspiration Achievement
Incentive Award Agreements), all stock options and stock appreciation rights
granted to the Executive shall become immediately exercisable and shall become
100% vested, and all Performance Units granted to the Executive shall become
100% vested and (B) the Executive shall have the right to require the Company to
purchase, for cash, any shares of unrestricted stock or shares purchased upon
exercise
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of any options, at a price equal to the fair market value of such shares on the
date of purchase by the Company.
(c) The amounts provided for in Sections 3.1(a)
and 3.1(b)(i), (ii), (iv) and (v) shall be paid within five (5) days after the
Executive's Termination Date.
(d) The Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise and no such payment shall be offset or reduced by
the amount of any compensation or benefits provided to the Executive in any
subsequent employment except as provided in Section 3.1(b)(iii).
3.2 The severance pay and benefits provided for in
Sections 3.1(a) and 3.1(b)(i) and (ii) shall be in lieu of any other severance
pay to which the Executive may be entitled under any Company severance plan,
program or arrangement for a termination of employment covered by such
circumstances.
4. Notice of Termination. During a Threatened Change in Control
Period and following a Change in Control, any purported termination by the
Company or by the Executive shall be communicated by written Notice of
Termination to the other. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. For purposes of this
Agreement, no such purported termination shall be effective without such Notice
of Termination.
5. Termination Date. "Termination Date" shall mean in the case of
the Executive's death, his date of death, and in all other cases, the date
specified in the Notice of Termination subject to the following:
(a) If the Executive's employment is terminated by the
Company for Cause or due to Disability, the date specified in the Notice of
Termination shall be at least thirty (30) days from the date the Notice of
Termination is given to the Executive, provided that in the case of Disability
the Executive shall not have returned to the full-time performance of his duties
during such period of at least 30 days; and
(b) If the Executive's employment is terminated for Good
Reason, the date specified in the Notice of Termination shall not be more than
sixty (60) days from the date the Notice of Termination is given to the Company.
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6. Excise Tax Payments.
(a) Notwithstanding anything contained in this Agreement
to the contrary and without regard to whether the Executive's employment with
the Company has terminated, in the event that any payment or benefit (within the
meaning of Section 280G(b) (2) of the Internal Revenue Code of 1986, as amended
(the "Code"), to the Executive or for his benefit, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise in connection with, or arising out of, his employment with the Company
or a change in ownership or effective control of the Company or of a substantial
portion of its assets (a "Payment" or "Payments"), would be subject to the
excise tax imposed by Section 4999 of the Code 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 and the Excise Tax), including any Excise
Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) An initial determination as to whether a Gross-Up
Payment is required pursuant to this Section 6 and the amount of such Gross-Up
Payment shall be made by an accounting firm selected by the Company and
reasonably acceptable to the Executive which is designated one of the five
largest accounting firms in the United States (the "Accounting Firm"). The
Accounting Firm shall provide its determination (the "Determination"), together
with detailed supporting calculations and documentation to the Company and the
Executive within five days of the Termination Date if applicable, or such other
time as requested by the Company or by the Executive (provided the Executive
reasonably believes that any of the Payments may be subject to the Excise Tax)
and if the Accounting Firm determines that no Excise Tax is payable by the
Executive with respect to a Payment or Payments, it shall furnish the Executive
with an opinion reasonably acceptable to the Executive that no Excise Tax will
be imposed with respect to any such Payment or Payments. Within five days of the
delivery of the Determination to the Executive, the Executive shall have the
right to dispute the Determination (the "Dispute). The Gross-Up Payment, if any,
as determined pursuant to this Section 6(b) shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm's determination
or, subject to Executive's approval, all or a portion of the Gross-Up Payment
may be paid directly to the appropriate tax authorities. The existence of the
Dispute shall not in any way affect the right of the Executive to receive the
Gross-Up Payment in accordance with the Determination. If there is no Dispute,
the Determination shall be binding, final and conclusive upon the Company and
the Executive subject to the application of Section 6(c).
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(c) As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up Payment (or a
portion thereof) will be paid which should not have been paid (an "Excess
Payment") or a Gross-Up Payment (or a portion thereof) which should have been
paid will not have been paid (an "Underpayment"). An Underpayment shall be
deemed to have occurred (1) upon notice (formal or informal) to the Executive
from any governmental taxing authority that the tax liability of the Executive
(whether in respect of the then current taxable year of the Executive or in
respect of any prior taxable year of the Executive) may be increased by reason
of the imposition of the Excise Tax on a Payment or Payments with respect to
which the Company has failed to make a sufficient Gross-Up Payment, (2) upon a
determination by a court, (3) by reason of a determination by the Company (which
shall include the position taken by the Company, or together with its
consolidated group, on its federal income tax return) or (4) upon the resolution
to the satisfaction of the Executive of the Dispute. If an Underpayment occurs,
the Executive shall promptly notify the Company and the Company shall pay to the
Executive at least five days prior to the date on which the applicable
government taxing authority has requested payment, an additional Gross-Up
Payment equal to the amount of the Underpayment plus any interest and penalties
(other than interest and penalties imposed by reason of a failure to file timely
a tax return or pay taxes shown due on a return) imposed on the Underpayment. An
Excess Payment shall be deemed to have occurred upon a "Final Determination" (as
hereinafter defined) that the Excise Tax shall not be imposed upon a Payment or
Payments with respect to which the Executive had previously received a Gross-Up
Payment. A Final Determination shall be deemed to have occurred when the
Executive has received from the applicable government taxing authority a refund
of taxes or other reduction in his tax liability by reason of the Excess Payment
and upon either (i) the date a determination is made by, or an agreement is
entered into with, the applicable governmental taxable authority which finally
and conclusively binds the Executive and such taxing authority, or in the event
that a claim is brought before a court of competent jurisdiction, the date upon
which a final determination has been made by such court and either all appeals
have been taken and finally resolved or the time for all appeals has expired or
(ii) the statute of limitations with respect to the Executive's applicable tax
return has expired. If an Excess Payment is determined to have been made, the
amount of the Excess Payment shall be treated as a loan by the Company to the
Executive and the Executive shall pay to the Company on demand (but not less
than 10 days after the determination of such Excess Payment) the amount of the
Excess Payment plus interest at an annual rate equal to the rate provided for in
Section 1274(b)(2)(B) of the Code from the date the Gross-Up Payment (to which
the Excess Payment relates) was paid to the Executive until the date of
repayment to the Company.
(d) Notwithstanding anything contained in this Agreement
to the contrary, in the event that, according to the Determination, an Excise
Tax will be imposed on any Payment or Payments, the Company shall pay to the
applicable
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government taxing authorities as Excise Tax withholding, the amount of the
Excise Tax that the Company has actually withheld from the Payment or Payments.
7. Unauthorized Disclosure. During the period that the Executive
is actively employed by the Company or Business Unit, the Executive shall not
make any Unauthorized Disclosure. For purposes of this Agreement, "Unauthorized
Disclosure" shall mean disclosure by the Executive without the consent of the
Board (other than pursuant to a court order) to any person, other than an
employee or director of the Company or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by the Executive of
his duties as an executive of the Company or as may be legally required, of any
material Confidential Information obtained by the Executive while in the employ
of the Company (including any material Confidential Information with respect to
any of the Company's customers or methods of distribution) the disclosure of
which is demonstrably and materially injurious to the Company; provided,
however, that such term shall not include the use or disclosure by the
Executive, without consent, of any information known generally to the public
(other than as a result of disclosure by him in violation of this Section 7) or
any information not otherwise considered confidential and material by a
reasonable person engaged in the same business as that conducted by the Company;
provided further, however, that any breach of this Section 7 shall in no event
subject the Executive to damages (including costs, fees and expenses incurred by
the Company or the Business Unit) in excess of $10,000 in the aggregate.
8. Non-Compete. During the period that the Executive is actively
employed by the Company or Business Unit, the Executive shall not directly or
indirectly, own, manage, operate, control, consult with, or be connected as an
officer, employee, agent, partner, director or consultant with, or have any
financial interest in, or assist anyone in the conduct of, any business which
directly competes with the businesses of the Company in the State of Georgia.
Notwithstanding the foregoing, the Executive shall not be in violation of the
preceding sentence due to ownership (directly or indirectly) by the Executive of
not more than five percent (5%) of the issued and outstanding class of
securities of a corporation whose securities are publicly traded.
9. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and shall inure
to the benefit of the Company, its successors and assigns and the Company shall
require any successor or assign to expressly assume 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 or assignment had taken place. The
term "the Company" as used herein shall include such successors and assigns. The
term "successors and assigns" as used herein shall mean a corporation or other
entity acquiring all or substantially all the assets and business of the Company
(including this Agreement) whether by operation of law or otherwise.
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(b) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the Executive, his
beneficiaries or legal representatives, except by will or by the laws of descent
and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal personal representative.
10. Fees and Expenses. The Company shall pay all legal fees and
related expenses (including the costs of experts, evidence and counsel) incurred
by the Executive as they become due as a result of (a) the Executive's
termination of employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination of employment), (b) the
Executive seeking to obtain or enforce any right or benefit provided by this
Agreement or by any other plan or arrangement maintained by the Company under
which the Executive is or may be entitled to receive benefits, including,
without limitation, the plans listed on Appendix A in which Executive is
participating, or (c) the Executive's hearing before the Board as contemplated
in Section 2.1 of this Agreement; provided, however, that the circumstances
which result in the Executive incurring the fees and related expense set forth
in clauses (a) and (b) (other than as a result of the Executive's termination of
employment under circumstances described in Section 2.2(e)) occurred on or after
a Change in Control.
11. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company. All notices
and communications shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.
12. Non-Exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its subsidiaries and for which the Executive may qualify, nor shall
anything herein limit or reduce such rights as the Executive may have under any
other agreements with the Company or any of its subsidiaries. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan or program of the Company or any of its subsidiaries shall be payable
in accordance with such plan or program, except as explicitly modified by this
Agreement.
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13. Settlement of Claims. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others.
14. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other 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 agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.
15. Prior Agreement. This Agreement supersedes and replaces in its
entirety the Severance Protection Agreement between Executive and NSI and
Executive shall have no further rights under such agreement.
16. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Georgia
without giving effect to the conflict of laws principles thereof. Any action
brought by any party to this Agreement shall be brought and maintained in a
court of competent jurisdiction in ▇▇▇▇▇▇ county in the State of Georgia.
17. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
18. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has executed this
Agreement as of the day and year first above written.
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ATTEST: ACUITY BRANDS, INC.
By:
----------------------------- ------------------------------------------
Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman of the Board, President and
Chief Executive Officer
EXECUTIVE:
----------------------------------------
Name
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APPENDIX A
BENEFIT PLANS
(Applicable To Extent Executive Is Participating In Such Plans)
Management Compensation and Incentive Plan
Executives' Deferred Compensation Plan
Supplemental Deferred Savings Plan
Long-Term Incentive Plan
Senior Management Benefit Plan
Pension Plan C (or similar
retirement plan covering the Executive)
401(k) Plan for Corporate Employees (or similar deferred
compensation plan covering the Executive)
Supplemental Retirement Plan for Executives (or similar supplemental retirement
plan covering the Executive)
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