AMENDED AND
RESTATED AGREEMENT FOR EMPLOYMENT
FOLLOWING A CHANGE OF CONTROL
AGREEMENT
by and between GATX Corporation, a New York corporation (the
“Company”) and ___ (the “Executive”) dated
as of the 1 ST
day of
January 2009.
The
Board of Directors of the Company (the “Board”), has
determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined below). The
Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change
of Control and to encourage the Executive’s full attention
and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change
of Control which ensure that the compensation and benefits
expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order
to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.
Certain Definitions . (a) The “Effective
Date” shall mean the first date during the Change of Control
Period (as defined in Section 1(b)) on which a Change of
Control (as defined in Section 2) occurs. Anything in this
Agreement to the contrary notwithstanding, if a Change of Control
occurs, and if the Executive’s employment with the Company is
terminated prior to the date on which the Change of Control occurs,
and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change
of Control or (ii) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this
Agreement the “Effective Date” shall mean the date
immediately prior to the date of such termination of
employment.
(b) The
“Change of Control Period” shall mean the period
commencing on January 1, 2009, and ending on the second
anniversary of the date thereof; provided, however, that commencing
on January 1, 2010, and on each annual anniversary of such date
(such date and each annual anniversary thereof shall be hereinafter
referred to as the “Renewal Date”), unless previously
terminated, the Change of Control Period shall be automatically
extended so as to terminate two years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company
shall give notice to the Executive that the Change of Control
Period shall not be so extended.
2.
Change of Control . For the purpose of this Agreement, a
“Change of Control” shall mean:
(a) The
acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (i) the then outstanding shares of common stock
of the Company (the “Outstanding Company Common Stock”)
or (ii) the combined voting power of the
then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for
purposes of this subsection (a), the following acquisitions shall
not constitute a Change of Control: (1) any acquisition
directly from the Company, (2) any acquisition by the Company,
(3) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (4) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (c) of this
Section 2; or
(b) Individuals
who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
or
(c) Consummation
of a reorganization, merger or consolidation or sale or other
disposition (including, without limitation, a disposition occurring
by merger, consolidation, sale, or other similar transactions of
one or more subsidiaries of the Company) of all or substantially
all of the assets of the Company (a “Business
Combination”), in each case unless, following such Business
Combination (other than a Business Combination of the type referred
to in the first parenthetical of this subsection (c) which
results in the disposition of all or substantially all of the
assets of the Company), (i) all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 65% of, respectively, the then outstanding shares of common
stock 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 corporation resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person
(excluding any corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the
corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such
Business Combination; or
(d) Approval
by the shareholders of the Company of a complete liquidation or
dissolution of the Company; or
2
(e) Consummation
of a reorganization, merger or consolidation or sale or other
disposition of any subsidiary or of all or substantially all of the
assets of any subsidiary of the Company or a disposition (in a
single transaction or series of integrated transactions) of all or
substantially all of the assets of an operating segment of the
Company as identified in the financial statements included in the
Company’s most recent Annual Report on Form 10-K (each a
“Business Segment”) that is, in either case, the
primary employer of the Executive or to which the Executive’s
responsibilities primarily relate immediately prior thereto, and
which does not constitute a Business Combination as defined in
Section 2(c), unless immediately thereafter the Company,
either directly or indirectly, owns (i) at least 50% of the
voting stock of any such subsidiary disposed of or, (ii) in
the case of the disposition of all or substantially all of the
assets of a subsidiary or Business Segment, at least 50% of both
the voting power over and the equity in any entity holding title to
such assets.
3.
Employment Period . The Company hereby agrees to continue
the Executive in its employ, and the Executive hereby agrees to
remain in the employ of the Company subject to the terms and
conditions of this Agreement, for the period commencing on the
Effective Date and ending on the second anniversary of such date
(the “Employment Period”).
4.
Terms of Employment . (a) Position and Duties .
(i) During the Employment Period, (A) the
Executive’s position (including status, offices, titles and
reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the
most significant of those held, exercised and assigned by or to the
Executive at any time during the 120-day period immediately
preceding the Effective Date and (B) the Executive’s services
shall be performed at the location where the Executive was employed
immediately preceding the Effective Date or any office or location
less than 35 miles from such location.
(ii) During
the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive’s reasonable best
efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a
violation of this Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or committees,
(B) deliver lectures, fulfill speaking engagements or teach at
educational institutions and (C) manage personal investments,
so long as such activities do not significantly interfere with the
performance of the Executive’s responsibilities as an
employee of the Company in accordance with this Agreement. It is
expressly understood and agreed that to the extent that any such
activities have been conducted by the Executive prior to the
Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto)
subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of the Executive’s
responsibilities to the Company.
(b)
Compensation . (i) Base Salary . During the
Employment Period, the Executive shall receive an annual base
salary (“Annual Base Salary”), which shall be paid at a
monthly rate, at least equal to twelve times the highest monthly
base salary paid or payable, including any base salary which has
been earned but deferred, to the Executive by the Company and its
Affiliates during the twelve-month period immediately preceding the
month in which the Effective Date occurs. During the Employment
Period, the Annual Base Salary shall be reviewed no more than
twelve months after the last salary increase awarded to the
Executive prior to the Effective Date and thereafter at least
annually. Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this
Agreement.
3
Annual Base
Salary shall not be reduced after any such increase and the term
Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased. As used in this Agreement, the
term “Affiliates” means all persons with whom the
Company is considered to be a single employer under section 414(b)
of the Internal Revenue Code (the “Code”) and all
persons with whom the Company would be considered a single employer
under section 414(c) of the Code.
(ii)
Annual Bonus . In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the
Employment Period, an annual bonus (the “Annual Bonus”)
in cash that is not less than the Executive’s target level of
bonus for the year in which the Change of Control occurs. Each such
Annual Bonus shall be paid no later than the 15
th
day of the
third month of the fiscal year next following the fiscal year for
which the Annual Bonus is awarded.
(iii)
Long-Term Incentive, Savings and Retirement Plans . During
the Employment Period, the Executive shall be entitled to
participate in all long-term incentive, stock compensation, savings
and retirement plans, practices, policies and programs applicable
generally to other peer executives of the Company and its
Affiliates, but in no event shall such plans, practices, policies
and programs provide the Executive with long-term incentive
opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such
distinction is applicable), stock compensation opportunities,
savings opportunities and retirement benefit opportunities, in each
case, less favorable, in the aggregate, than the most favorable of
those provided by the Company and its Affiliates for the Executive
under such plans, practices, policies and programs as in effect at
any time during the 120-day period immediately preceding the
Effective Date or if more favorable to the Executive, those
provided generally at any time after the Effective Date to other
peer executives of the Company and its Affiliates.
(iv)
Welfare Benefits . During the Employment Period, the
Executive and/or the Executive’s family, as the case may be,
shall be eligible for participation in and shall receive all
benefits under the plans, practices, policies and programs provided
by the Company and its Affiliates that provide Welfare Benefits to
the extent applicable generally to other peer executives of the
Company and its Affiliates, but in no event shall such plans,
practices, policies and programs provide the Executive with
benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective
Date to other peer executives of the Company and its Affiliates.
The term “Welfare Benefits” means medical,
prescription, dental, disability, employee life, group life,
accidental death and travel accident insurance benefits.
(v)
Expenses . During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most
favorable policies, practices and procedures of the Company and its
Affiliates in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its Affiliates.
(vi)
Fringe Benefits . During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without
limitation, tax and financial planning services, payment of club
dues, and, if applicable, use of an automobile and payment of
related
4
expenses,
or payment of an automobile allowance in accordance with the most
favorable plans, practices, programs and policies of the Company
and its Affiliates in effect for the Executive at any time during
the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its Affiliates.
(vii)
Office and Support Staff . During the Employment Period, the
Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal
secretarial and other assistance, at least equal to the most
favorable of the foregoing provided to the Executive by the Company
and its Affiliates at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its
Affiliates.
(viii)
Vacation . During the Employment Period, the Executive shall
be entitled to paid vacation in accordance with the most favorable
plans, policies, programs and practices of the Company and its
Affiliates as in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its Affiliates.
5.
Termination of Employment . (a) Death or Disability .
The Executive’s employment shall terminate automatically upon
the Executive’s death during the Employment Period. If
Disability of the Executive has occurred during the Employment
Period (pursuant to the definition of Disability set forth below),
the Company may give to the Executive written notice in accordance
with Section 12(b) of this Agreement of its intention to terminate
the Executive’s employment no sooner than 30 days
following such notice. In such event, the Executive’s
employment with the Company shall terminate effective on the date
specified in such notice (the “Disability Effective
Date”), provided that the Executive shall not have returned
to full-time performance of the Executive’s duties prior
thereto. For purposes of this Agreement, “Disability”
shall mean any disability that (a) entitles the Executive to
disability income benefits under the GATX Long Term Disability
Income Plan as in effect on the day prior to the Effective Date,
and (b) prevents the Executive, for the duration of the
Employment Period, from engaging in the same or comparable type of
employment as that in which the Executive was engaged on the day
prior to the Effective Date.
(b)
Cause . The Company may terminate the Executive’s
employment during the Employment Period only for Cause. For
purposes of this Agreement, “Cause” shall
mean:
(i)
the willful and continued failure of the Executive to perform
substantially the Executive’s duties with the Company or one
of its affiliates (other than any such failure resulting from
incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to the Executive by
the Board or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Board or Chief
Executive Officer believes that the Executive has not substantially
performed the Executive’s duties, or
(ii)
the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the
Company.
5
For
purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered “willful” unless
it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or
omission was in the best interests of the Company. Any act, or
failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions or concurrence
of the Chief Executive Officer or a senior officer of the Company
or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company.
The cessation of employment of the Executive shall not be deemed to
be for Cause unless and until there shall have been delivered to
the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.
(c)
Good Reason . The Executive’s employment may be
terminated during the Employment Period by the Executive for Good
Reason. For purposes of this Agreement, “Good Reason”
shall mean the occurrence of one or more of the following
conditions without the consent of the Executive:
(i)
A material diminution in the Executive’s base compensation,
compared with the base compensation required to be provided to the
Executive in accordance with Section 4(b).
(ii)
A material diminution in the Executive’s authority, duties,
or responsibilities, compared with the authority, duties, and
responsibilities of the Executive provided in
Section 4(a).
(iii)
The Executive is required to report to a supervisor with materially
less authority, duties, or responsibilities than the authority,
duties, and responsibilities of the supervisor who had the greatest
such authority, duties, and responsibilities at the time the
Executive was required to report to such supervisor during the
120-day period immediately preceding the Effective Date.
(iv)
A material diminution in the budget over which the Executive
retains authority, compared with the most significant budget over
which the Executive had authority at any time during the 120-day
period immediately preceding the Effective Date.
(v)
A material change in the geographic location at which the Executive
must perform the services.
(vi)
Any other action or inaction by the Company that constitutes a
material breach of this Agreement.
If
(I) the Executive provides written notice to the Company of
the occurrence of Good Reason within a reasonable time (not more
than 90 days) after the Executive has knowledge of the
circumstances constituting Good Reason, which notice specifically
identifies the circumstances which the Executive believes
constitute Good Reason; (II) the Company fails to notify the
Executive of the Company’s intended method of correction
within a reasonable period of time (not less than 30 days)
after the Company receives the notice, or the Company fails to
correct
6
the
circumstances within a reasonable period of time after such notice
(except that no such opportunity to correct shall be applicable if
the circumstances constituting Good Reason are those described in
paragraph (v) above, relating to relocation); and
(III) the Executive resigns within a reasonable time after
receiving the Company’s response, if such notice does not
indicate an intention to correct such circumstances, or within a
reasonable time after the Company fails to correct such
circumstances (provided that in no event may such termination occur
more than two years after the initial existence of the condition
constituting Good Reason); then the Executive shall be considered
to have terminated for Good Reason.
(d)
Notice of Termination . Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated
by Notice of Termination to the other party hereto given in
accordance with Section 12(b) of this Agreement. For purposes of
this Agreement, a “Notice of Termination” means a
written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination
date (which date shall be not more than thirty days after the
giving of such notice). The failure by the Executive or the Company
to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively,
hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights
hereunder.
(e)
Date of Termination . “Date of Termination”
means (i) if the Executive’s employment is terminated by
the Company for Cause, or by the Executive for Good Reason, the
date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the
Executive’s employment is terminated by the Company other
than for Cause or Disability, the Date of Termination shall be the
date on which the Company notifies the Executive of such
termination and (iii) if the Executive’s employment is
terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be. Notwithstanding the
foregoing, references in the Agreement to the Executive’s
Date of Termination, and the Executive’s termination of
employment (including references to the Executive’s
employment termination, and to the Executive terminating
employment) shall mean the Executive ceasing to be employed by the
Company and its Affiliates, subject to the following:
(i)
The employment relationship will be deemed to have ended at the
time the Executive and his employer reasonably anticipate that the
level of bona f
|
