Exhibit 10.1
AMENDED AND
RESTATED
CHANGE IN CONTROL SEVERANCE
AGREEMENT
This Change in
Control Severance Agreement (this “ Agreement
”), effective as of August
, 2007, is between
Marten Transport, Ltd., a Delaware corporation, located at 129
Marten Street, Mondovi, Wisconsin 54755 (the “ Company
”) and
,
an individual residing at
(the ” Executive ”).
A.
The Company and the Executive entered into a Change in Control
Severance Agreement, dated as of March 29, 2006
(the ”Original CIC Severance Agreement”).
B.
The Company and the Executive desire to amend and restate the
Original CIC Severance Agreement to make changes that are necessary
or desirable to reflect the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the “ Code
”) or an appropriate exception to the requirement of Section
409A, as set forth herein.
C.
The Company and the Executive intend that the benefits provided
under this Agreement will comply, in form and operation, with the
requirements of Section 409A of the Code or an appropriate
exception to the requirements of Section 409A and this Agreement
will be construed and administered in a manner that is consistent
with and give effect to such intention.
D.
Certain capitalized terms that are used in this Agreement are
defined in Exhibit A, which is an integral part of this
Agreement.
Accordingly, the
Company and Employee each intending to be legally bound, agree as
follows:
1.
Term of Agreement . This Agreement is effective
immediately and will continue in effect until terminated as
provided herein. This Agreement will automatically terminate
upon termination of the Executive’s employment with the
Company, except for a termination contemplated by Section 2, in
which case this Agreement will remain in effect until the date on
which the Company’s obligations to the Executive arising
under or in connection with this Agreement have been satisfied in
full. The Company terminates this Agreement upon fifteen (15)
months prior written notice to the Executive. Notwithstanding
anything in the foregoing to the contrary, if a Change in Control
has occurred during the term of this Agreement, this Agreement will
continue in effect beyond the termination date then in effect for a
period of [CEO - 24 months; other officers - 12 months] following
the month during which the Change in Control occurs or, if later,
until the date on which the Company’s obligations to the
Executive arising under or in connection with this Agreement have
been satisfied in full.
2.
Benefits upon a Change in Control Termination . The
Executive will become entitled to the benefits described in this
Section 2 on account of a Termination of Employment if and only if
(i) the Company terminates the Executive’s employment
for any reason other than the Executive’s death or Cause, or
the Executive terminates the Executive’s employment with the
Company for Good Reason, and (ii) the Termination of
Employment occurs either within the period beginning on the date of
a Change in Control and ending on the last day of the 24th month
that begins after the month during which the Change in Control
occurs or prior to a Change in Control if the
Executive’s
termination was either a condition of the
Change in Control or was at the request or insistence of a Person
related to the Change in Control.
(a)
Cash Payment . Not more than 10 days following the
Date of Termination, or, if later, not more than 10 days following
the date of the Change in Control, the Company will make a lump-sum
cash payment to the Executive in an amount equal to the sum of
(i) [CEO - two times; other officers - one times] the
Executive’s Base Pay, plus (ii) [CEO - two times; other
officers - one times] the Executive’s highest bonus in the
three calendar years preceding the year in which the Change in
Control occurs.
(b)
Definitions . For purposes of this section, the
Continuation Period is the period beginning on the
Executive’s Date of Termination and ending on (i) the
last day of the [CEO — 24th month; other officers —
12th month] month that begins after the Executive’s Date of
Termination or, if earlier, (ii) in the case of the group
health and dental plans referred to in Section 2(c), the date after
the Executive’s Date of Termination on which the Executive
first becomes eligible to participate as an employee in a plan of
another employer providing group health and dental benefits to the
Executive and the Executive’s eligible family members and
dependents which plan does not contain any exclusion or limitation
with respect to any pre-existing condition of the Executive or any
eligible family member or dependent who would otherwise be covered
under the Company’s plan but for this clause (ii) or (iii) in
the case of the other welfare benefits referred to in Section 2(d),
the date after the Executive’s Date of Termination on which
the Executive first becomes eligible to participate as an employee
in a plan of another employer providing substantially similar
welfare benefits to the Executive and the Executive’s
eligible family members and dependents.
(c)
Group Health Plans . If the Executive elects
continuation coverage, then, during the Continuation Period, the
Company shall be responsible for a portion of the Executive’s
monthly cost of continuation coverage under the Company’s
group medical and dental plan(s), which by their terms cover the
Executive (and the Executive’s family members and dependents
who were eligible to be covered at any time during the 90-day
period immediately prior to the date of the Change in Control for
the period after the Change in Control in which such family members
and dependents would otherwise continue to be covered under the
terms of the plan in effect immediately prior to the Change in
Control). The Executive’s coverage will be deemed to include
any Company contribution to a “health savings account”
(or similar arrangement) for the Executive. The portion of the cost
of continuation coverage for which the Company shall be responsible
is the portion in excess of that portion which the Executive would
have been responsible had the Executive’s termination of
employment not occurred. If the level of the Executive’s
coverage changes during the Continuation Period, as, for example,
from single to family coverage or to no coverage, the amount for
which the Company is responsible will be determined as if the new
coverage level had been the level of coverage in effect immediately
prior to the Termination of Employment or Change in Control, as the
case may be. During this period, the Executive shall be responsible
for the portion of the cost of continuation coverage for which he
would have been responsible had his termination of employment not
occurred. The Company’s obligation is contingent upon
the Executive electing continuation coverage in accordance with
applicable state and/or federal law and paying all or a portion of
the cost of continuation coverage (as determined in this Section
2(c)) in a timely manner in accordance with applicable state and/or
federal law. If the Executive’s applicable continuation
coverage under the Medical Plan or Dental Plan is an insured
option, then the Executive shall pay only
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that portion of the cost of such continuation
coverage for which he is responsible and the Company shall pay the
portion of the cost of such continuation coverage for which the
Employer is responsible. In all other cases, the Executive shall
pay the full amount of the cost of continuation coverage and the
Company shall reimburse the Executive for that portion of the cost
of continuation for which the Company is responsible. The
Executive shall be entitled to elect health care continuation
coverage under the Company’s group health and/or dental plans
for that portion of the Continuation Period that extends beyond the
end of the 18-month COBRA continuation period. If COBRA
continuation coverage is not available to the Executive during any
portion of the Continuation Period (other than by reason of his or
her failure to elect COBRA continuation coverage or to pay the
required premiums for such coverage), the Company will provide
comparable medical benefits pursuant to an alternative arrangement,
such as an individual medical insurance contract, and such
alternative benefits will be treated as part of the Company’s
health and/or dental plan.
(d)
Additional Welfare Benefits . At the time the payment
is made under Section 2(a), the Company will make a lump-sum
cash payment to the Executive equal to the aggregate amount of
premiums the Company would have paid during the Continuation Period
on behalf of Executive for accidental death and dismemberment,
short and long-term disability, group life insurance and other life
insurance coverages, which by their terms covered the Executive
(and the Executive’s family members and dependents who were
eligible to be covered at any time during the 90-day period
immediately prior to the date of the Change in Control for the
period after the Change in Control in which such family members and
dependents would otherwise continue to be covered under the terms
of the plan in effect immediately prior to the Change in Control)
under the same terms and at the same cost to the Company had the
Executive continued to be employed by the Company. The amount
of the premiums will be based on the premiums in effect at the time
of payment and any known, scheduled increases in such premiums
during the Continuation Period.
(e)
Tax Gross-up . To the extent the Executive incurs a
tax liability (including Federal, state and local taxes) in
connection with a benefit provided pursuant to Section 2(c) which
the Executive would not have incurred had the Executive been an
active employee of the Company participating in the Company’s
group health and dental plans, the Company will make a payment to
the Executive in an amount equal to such tax liability plus an
additional amount sufficient to permit the Executive to retain a
net amount, after all taxes, equal to the initial tax liability in
connection with the benefit. The payment pursuant to this
Section 2(e) will be made within 10 days after the
Executive’s remittal of a written request for payment
accompanied by a statement indicating the basis for and amount of
the Executive’s tax liability, but in no event later than
December 31 of the calendar year next following the calendar year
in which the related taxes are remitted to the appropriate taxing
authority.
3.
Gross-Up Payments .
(a)
If the Executive becomes entitled to payments and benefits
following a Change in Control under Section 2, the Company will
cause its independent auditors (the ”Accounting
Firm”) promptly to review, at the Company’s sole
expense, the applicability of Code Section 4999 to any payment or
distribution of any type by the Company to or for the
Executive’s benefit, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement, any stock
option agreement or
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certificate or otherwise, but determined
without regard to any payments required under this Section 3 (the
“Payments”). If the Accounting Firm determines
that the Total Payments result in an excise tax imposed on the
Executive by Code Section 4999 or any comparable state or local law
(such excise tax referred to as the “Excise Tax”), the
Company will make an additional cash payment (a “Gross-Up
Payment”) to the Executive equal to an amount such that after
payment by the Executive of all the taxes imposed on the Executive,
including any Excise Tax, as a result of the Gross-Up Payment, the
Executive would retain an amount of the Gross-Up Payment equal to
the Excise Tax as a result of the Payments.
(b)
Subject to the provisions of Section 3(d), all determinations
required to be made under this Section 3, including whether and
when a Gross-Up Payment is required and the amount such Gross-Up
Payment and the assumptions to be used in arriving at such
determination, must be made by the Accounting Firm, which must
provide detailed supporting calculations both to the Company and
the Executive within 15 business days of the receipt of notice from
the Executive that there has been a Payment, or such earlier time
as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the
Executive must appoint another nationally recognized accounting
firm to make the determinations required hereunder (which
accounting firm will then be referred to as the “Accounting
Firm” hereunder). All fees and expenses of the
Accounting Firm will be borne solely by the Company.
(c)
If no determination of the Excise Tax is made by the Accounting
Firm prior to the time the Executive is required to file a tax
return reflecting the Payments, the Executive will be entitled to
receive from the Company a Gross-Up Payment calculated on the basis
of the Excise Tax the Executive reported in such tax
return.
(d)
If any taxing authority determines that a greater Excise Tax should
be imposed upon the Payments than is determined by the
Company’s independent auditors or reflected in the
Executive’s tax return pursuant to this Section 3, the
Executive will be entitled to receive from the Company the full
Gross-Up Payment calculated on the basis of the amount of Excise
Tax determined to be payable by such taxing authority. The
Executive must notify the Company in writing of any claim by the
Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by the Company of any
Gross-Up Payment. Such notification must be given as soon as
practicable but no later than 10 business days after the Executive
knows of such claim and must apprise the Company of the nature of
such claim and the date on which such claim is requested to be
paid. The Executive must not pay such claim prior to the
expiration of the 30-day period following the date on which it
gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is
due). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest such
claim, the Executive must:
(i)
give the Company any information reasonably requested by the
Company relating to such claim;
(ii)
take such action in connection with contesting such claim as the
Company will reasonably request in writing from time to time,
including accepting
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legal representation with respect to such claim
by an attorney reasonably selected by the Company;
(iii)
cooperate with the Company in good faith in order to effectively
contest such claim; and
(iv)
permit the Company to participate in any proceedings relating to
such claim; provided, however, that the Company will bear and pay
directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and will
indemnify and hold the Executive harmless, on an after-tax basis,
for any Excise Tax or income tax (including interest and penalties
with respect thereto) or expense imposed or incurred as a result of
such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section
3(d), the Company will control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct the Executive to pay the tax
claimed and sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts,
as the Company will determine; provided further, however, that if
the Company directs the Executive to pay such claim and sue for a
refund, the Company will advance the amount of such payment to the
Executive on an interest-free basis and will indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and provided further that any
extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company’s
control of the contest will be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the
Executive will be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any
other taxing authority.
(e)
If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 3(d), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive must
(subject to the Company’s complying with the requirements of
Section 3(d)) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 3(d), a
determination is made that the Executive will not be entitled to
any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such
denial of refund prior to the expiration of thirty days after such
determination, then such advance will be forgiven and will not be
required to be repaid and the amount of such advance will offset,
to the extent thereof, the amount of Gross-Up Payment required to
be paid.
(f)
The payment(s) pursuant to this Section 3 will be made within 10
days after the Executive’s remittal of a written request for
payment accompanied by a statement indicating the basis for and the
amount of the Executive’s actual tax liability.
Reimbursement
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of
the Gross-Up Payment, and any expenses incurred by the Executive
under Section 3(d), will
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