Nicor Inc.
Form 10-K
Exhibit
10.65
AMENDED AND RESTATED
CHANGE-IN-CONTROL AGREEMENT
THIS
AGREEMENT dated as of 02/07/08 (the
“Agreement Date”) is made by and among Tropical
Shipping and Construction Company Limited (the
“Company” or “Tropical Shipping”), a
Cayman Islands company, and Rick Murrell (the
“Executive”).
Executive
and Birdsall, Inc., a Florida corporation
(“Birdsall”), have previously entered into a
Change-in-Control Agreement dated December 15, 2004 (the
“Prior Agreement”). Birdsall assigned
its rights and obligations with respect to the Prior Agreement
to Tropical Shipping USA, LLC, a Florida limited liability
company (the “LLC”), and the LLC subsequently
assigned its rights and obligations with respect to the Prior
Agreement to the Company. The Company and Executive
desire to amend and restate the Prior Agreement to conform to
the requirements of Section 409A of the Code.
ARTICLE I
PURPOSES
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 services of the Executive, despite the
possibility or occurrence of a Change in Control of Nicor Inc.
or the Company. The Board believes it is imperative
to reduce the distraction of the Executive that would result
from the personal uncertainties caused by a pending or
threatened Change in Control, to encourage the
Executive’s full attention and dedication to the
Company, and to provide the Executive with compensation and
benefits arrangements upon a Change in Control which are
competitive with those of similarly situated
corporations. This Agreement is intended to
accomplish these objectives.
ARTICLE II
CERTAIN DEFINITIONS
When
used in this Agreement, the terms specified below shall have
the following meanings:
2.1. The
“Agreement Term” shall begin on the Agreement Date and
shall continue through December 31, 2008. As of
December 31, 2008, and on each December 31 thereafter,
the Agreement Term shall automatically be extended for one
additional year unless, not later than the preceding June 30,
either party shall have given notice that such party does not wish
to extend the Agreement Term. If a Change in Control
shall have occurred during the Agreement Term (as it may be
extended from time to time), the Agreement Term shall continue for
a period ending on the two-year anniversary of the date of the
Change in Control, but if the Termination Date (as defined below)
occurs during that two-year period, then the Agreement Term shall
continue until the end of the Severance Period (as defined
below). Unless the Termination Date occurs during the
two-year period after a Change in Control so that the Agreement
Term is extended to include the Severance Period, as provided in
the immediately preceding sentence, the Agreement Term shall not
extend beyond the two-year anniversary of the Change in
Control.
2.2. “Board”
means the board of directors of the Company.
2.3. “Change
in Control” means the occurrence of a “change in the
ownership” of Nicor Inc. or Tropical Shipping, a
“change in the effective control” of Nicor Inc. or a
“change in the ownership of a substantial portion of the
assets” of Nicor Inc. or Tropical Shipping, as determined in
accordance with this Section. In determining whether an
event shall be considered a “change in the ownership”
of Nicor Inc. or Tropical Shipping, a “change in
the effective control” of Nicor Inc. or a “change in
the ownership of a substantial portion of the assets” of
Nicor Inc. or Tropical Shipping, the following provisions shall
apply:
2.3.1 A
“change in the ownership” of Nicor Inc. shall occur on
the date on which any one person, or more than one person acting as
a group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (a
“Person”)), acquires ownership of the equity securities
of Nicor Inc. that, together with the equity securities held by
such Person, constitutes more than 50% of the total fair market
value or total voting power of Nicor Inc., as determined in
accordance with Treas. Reg. §1.409A-3(i)(5)(v). If
a Person is considered either to own more than 50% of the total
fair market value or total voting power of the equity securities of
Nicor Inc., or to have effective control of Nicor Inc. within the
meaning of Section 2.3.2, and such Person acquires additional
equity securities of Nicor Inc., the acquisition of additional
equity securities by such Person shall not be considered to cause a
“change in the ownership” of Nicor Inc. In
addition, a “change in the ownership” of Tropical
Shipping shall occur on the date on which any one Person other than
Nicor Inc. or a Subsidiary, acquires ownership of the equity
securities of Tropical Shipping that, together with the equity
securities held by such Person, constitutes more than 50% of the
total fair market value or total voting power of Tropical Shipping,
as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(v). If a Person is considered
either to own more than 50% of the total fair market value or total
voting power of the equity securities of Tropical Shipping, and
such Person acquires additional equity securities of Tropical
Shipping, the acquisition of additional equity securities by such
Person shall not be considered to cause a “change in the
ownership” of Tropical Shipping.
2.3.2 A
“change in the effective control” of Nicor Inc. shall
occur on either of the following dates:
2.3.2.1
The
date on which any Person, acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition
by such Person) ownership of stock of Nicor Inc. possessing 30% or
more of the total voting power of Nicor Inc.’s equity
securities, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vi). If a Person is considered to
possess 30% or more of the total voting power of Nicor Inc.’s
equity securities, and such Person acquires additional stock of
Nicor Inc., the acquisition of additional stock by such Person
shall not be considered to cause a “change in the effective
control” of Nicor Inc.; or
2.3.2.2
The
date on which a majority of the members of the Board of Directors
of Nicor Inc. is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the
members of the Board of
Directors of Nicor Inc. before the
date of the appointment or election, as determined in
accordance with Treas. Reg.
§1.409A-3(i)(5)(vi).
2.3.3 A
“change in the ownership of a substantial portion of the
assets” of Nicor Inc. shall occur on the date on which any
one Person acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such Person)
assets from Nicor Inc. that have a total gross fair market value
equal to or more than 40% of the total gross fair market value of
all of the assets of Nicor Inc. immediately before such acquisition
or acquisitions, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vii). In addition, a “change
in the ownership of a substantial portion of the assets” of
Tropical Shipping shall occur on the date on which any one Person
other than Nicor Inc. or a Subsidiary acquires (or has acquired
during the 12-month period ending on the date of the most recent
acquisition by such Person) substantially all of the assets of
Tropical Shipping immediately before such acquisition or
acquisitions, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vii). A transfer of assets shall
not be treated as a “change in the ownership of a substantial
portion of the assets” when such transfer is made to an
entity that is controlled by the holders of the applicable
company’s equity securities, as determined in accordance with
Treas. Reg. §1.409A-3(i)(5)(vii)(B).
2.3.4 Notwithstanding
the foregoing, the following acquisitions shall not constitute a
Change in Control: (i) an acquisition by Nicor Inc. or entity
controlled by Nicor Inc., or (ii) an acquisition by an employee
benefit plan (or related trust) sponsored or maintained by Nicor
Inc. or any entity controlled by Nicor Inc. In addition,
the circumstances described in this Section 2.3 shall not
constitute a Change in Control with respect to the Executive unless
he is employed at Tropical Shipping immediately before the events
constituting the Change in Control or Potential Change in Control
and then only if the Executive is not employed by Nicor Inc. or a
Subsidiary at any time during the 30-day period following the
events constituting the Change in Control, and further provided
that nothing in this paragraph shall be construed to require the
Executive to accept such employment with Nicor Inc. or a
Subsidiary.
2.3.5 For
purposes of this Section 2.3, (i) the terms Tropical Shipping and
Nicor Inc. shall mean, respectively, Tropical Shipping and any
Tropical Successor and Nicor Inc. and any Nicor Successor; (ii) the
term “Tropical Successor” shall mean any corporation,
partnership, joint venture or other entity that succeeds to the
interests of Tropical Shipping by means of a merger, consolidation,
or other restructuring that does not constitute a Change in
Control; and (iii) the term “Nicor Successor” shall
mean any corporation, partnership, joint venture or other entity
that succeeds to the interests of Nicor Inc. by means of a merger,
consolidation, or other restructuring that does not constitute a
Change in Control.
2.4. “Code”
means the Internal Revenue Code of 1986, as amended.
2.5. “Effective
Date” means the first date during the Agreement Term on which
a Change in Control occurs.
2.6. “Employment
Period” means the period commencing on the Effective Date and
ending on the two-year anniversary of that date.
2.7. “Incentive
Plan” shall have the meaning set forth in
Section 3.2.2.
2.8. “Payment
Date” means the date on which all of the following are
complete (i) the Termination Date, (ii) the execution of the
release required pursuant to Section 5.1, and (iii) the expiration
of the required revocation period specified in the release without
revocation occurring.
2.9. “Plans”
shall have the meaning set forth in
Section 3.2.3.
2.10. A
“Potential Change in Control” shall exist during any
period in which the circumstances described in
Sections 2.10.1, 2.10.2, or 2.10.3 exist (provided, however,
that a Potential Change in Control shall cease to exist not later
than the occurrence of a Change in Control):
2.10.1 The
Company, Birdsall or Nicor Inc. enters into an agreement, the
consummation of which would result in the occurrence of a Change in
Control, provided that a Potential Change in Control described in
this Section 2.10.1 shall cease to exist upon the expiration
or other termination of all such agreements.
2.10.2 Any
person (including the Company, Birdsall or Nicor Inc.) publicly
announces an intention to take or to consider taking actions the
consummation of which would constitute a Change in Control;
provided that a Potential Change in Control described in this
Section 2.10.2 shall cease to exist upon the withdrawal of
such intention, or upon a reasonable determination by the Board or
the Board of Directors of Nicor Inc. that there is no reasonable
chance that such actions would be consummated.
2.10.3 The
Board or the Board of Directors of Nicor Inc. adopts a resolution
to the effect that, for purposes of this Agreement, a Potential
Change in Control exists; provided that a Potential Change in
Control described in this Section 2.10.3 shall cease to exist
upon a reasonable determination by the Board or the Board of
Directors of Nicor Inc. that the reasons that gave rise to the
resolution providing for the existence of a Potential Change in
Control have expired or no longer exist.
2.11. “Separation
from Service” means the termination of Executive’s
services to the Company and all Subsidiaries and affiliates,
whether voluntarily or involuntarily, other than by reason of
death, in accordance with Treas. Reg.
§1.409A-1(h).
2.12. “Severance
Incentive” means the greater of (i) the target annual
incentive under an Incentive Plan applicable to the Executive for
the Performance Period (as such term is defined in Section 3.2.2)
in which the Termination Date occurs, or (ii) the average of
the actual annual incentives paid (or payable, to the extent not
previously paid) to the Executive under the applicable Incentive
Plan for each of the two calendar years preceding the calendar year
in which the Termination Date occurs.
2.13. “Severance
Period” means the period beginning on the Executive’s
Termination Date and ending on the third anniversary thereof;
provided, however, that no Severance Period will occur unless the
Executive’s Termination Date occurs under circumstances
described in
Section 5.1
(relating to termination by the Executive for Good Reason or by the
Company other than for Cause or Permanent Disability).
2.14. “Subsidiary”
shall mean any corporation, partnership, joint venture or other
entity during any period in which at least a fifty percent interest
in such entity is owned, directly or indirectly, by Nicor Inc. (or
a successor to Nicor Inc.).
2.15. “Termination
Date” means the first day on or after which the Executive has
a Separation from Service.
2.16. “Welfare
Plans” shall have the meaning set forth in
Section 3.2.4.
ARTICLE III
TERMS OF EMPLOYMENT
3.1.
Position and Duties .
3.1.1 The
Company hereby agrees to cause the Company to continue the
Executive’s employment during the Employment Period and,
subject to Article IV of this Agreement, the Executive agrees
to remain in the employ of the Company, subject to the terms and
conditions hereof. During the Employment Period, (i) 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 to the
Executive at any time during the 90-day period immediately
preceding the Effective Date, and (ii) 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 25 miles from such location.
3.1.2
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 (i) to serve on
corporate, civic or charitable boards or committees, (ii) to
deliver lectures, fulfill speaking engagements or teach at
educational institutions and (iii) to manage personal
investments, to the extent that such other activities do not, in
the reasonable judgment of the Board of Directors of the Company,
inhibit or prohibit the performance of the Executive’s duties
under this Agreement, or conflict in any material way with the
business of Nicor Inc., the Company or any Subsidiary; provided,
however, that the Executive shall not serve on the board of any
business, or hold any other position with any business, without the
consent of the Board of Directors of the Company.
3.2.
Compensation .
3.2.1
Base Salary . During the Employment Period, the
Executive shall receive an annual base salary (“Annual Base
Salary”), which shall be paid at an annual 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 in respect of 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, and shall be
increased at any time and from time to time as shall be
substantially consistent with increases in base salary awarded to
other senior executives of the Company. Annual Base
Salary shall not be reduced after any such increase unless such
reduction is part of a policy, program or arrangement applicable to
senior executives of the Company and of any successor entity, and
the term Annual Base Salary as used in this Agreement shall refer
to Annual Base Salary as so increased. Any increase in
Annual Base Salary shall not limit or reduce any other obligation
of the Company to the Executive under this Agreement.
3.2.2
Annual Incentive . In
addition to Annual Base Salary, the Company shall pay or cause to
be paid to the Executive an incentive award (the “Annual
Incentive”) for each Performance Period or portion thereof
which falls within the Employment
Period. “Performance Period” means each
period of time designated in accordance with any annual incentive
award arrangement (“Incentive Plan”) which is based
upon performance and approved by the Board or any committee of the
Board, or in the absence of any Incentive Plan or any such
designated period of time, Performance Period shall mean each
calendar year. The Executive’s target and maximum
Annual Incentive with respect to any Performance Period shall not
be less than the target and maximum annual incentive award payable
with respect to the Executive under the Company’s annual
incentive program as in effect immediately preceding the Effective
Date.
3.2.3
Incentive, Savings and Retirement Plans . During
the Employment Period, the Executive shall be entitled to
participate in all incentive, savings and retirement plans,
practices, policies and programs (including, without limitation,
the Nicor Inc. Stock Deferral Plan) (“Plans”)
applicable generally to other senior executives of the Company, but
in no event shall such Plans provide the Executive with incentive
opportunities (measured with respect to long-term and special
incentives, to the extent, if any, that such distinctions are
applicable) or savings and retirement benefits which are less
favorable, in the aggregate, than the greater of (i) those
provided by the Company for the Executive under such Plans as in
effect at any time during the 90-day period immediately preceding
the Effective Date, or (ii) those provided generally at any
time after the Effective Date to other senior executives of the
Company.
3.2.4
Welfare Benefit Plans . 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 welfare benefit plans, practices,
policies and programs (“Welfare Plans”) provided by the
Company (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life,
accidental death and travel accident insurance benefits), but in no
event shall such Welfare Plans provide the Executive with benefits
which are less favorable, in the aggregate, than the greater of
(i) those provided by the Company for the Executive under such
Welfare Plans as were in effect at any time during the 90-day
period immediately preceding the Effective Date, or (ii) those
provided generally at any time after the Effective Date to other
senior executives of the Company.
3.2.5
Other Employee Benefits . During the Employment
Period, the Executive shall be entitled to other employee benefits
and perquisites in accordance with the most favorable plans,
practices, programs and policies of the Company, as in effect with
respect to the Executive at any time during the 90-day period
immediately preceding the Effective Date, or if more favorable, as
in effect generally with respect to other senior executives of the
Company.
3.2.6
Expenses . The Executive shall be entitled to
receive prompt reimbursements for all reasonable expenses incurred
by the Executive during the Employment Period in accordance with
the policies, practices and procedures of the Company, as in effect
with respect to the Executive at any time during the 90-day period
immediately preceding the Effective Date, or if more favorable, as
in effect generally with respect to other senior executives of the
Company. All such expenses shall be reimbursed no later
than the date six (6) months following the Termination
Date. The amount of expenses reimbursed in one year
shall not affect the amount eligible for reimbursement in any
subsequent year.
3.2.7
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, as in effect
with respect to the Executive at any time during the 90-day period
immediately preceding the Effective Date, or if more favorable, as
provided generally with respect to other senior executives of the
Company.
3.2.8
Paid Time Off . During the Employment Period, the
Executive shall be entitled to paid time off in accordance with the
plans, policies, programs and practices of the Company as in effect
with respect to the Executive at any time during the 90-day period
immediately preceding the Effective Date, or if more favorable, as
provided generally with respect to other senior executives of the
Company.
3.2.9
Subsidiaries . To the extent that immediately
prior to the Effective Date, the Executive has been on the payroll
of, and participated in the incentive or employee benefit plans of,
Nicor Inc. or a Subsidiary, the references to the Company contained
in Sections 3.2.1 through 3.2.8 and the other sections of this
Agreement referring to benefits to which the Executive may be
entitled shall be read to refer to Nicor Inc. or such Subsidiary,
as applicable.
ARTICLE IV
TERMINATION OF EMPLOYMENT
4.1.
Disability
.
4.1.1 During
the Agreement Term, the Company may terminate the Executive’s
employment upon the Executive’s Permanent Disability (as
defined in Section 4.1.2) by giving the Executive or his legal
representative, as applicable, (1) written notice in
accordance with Section 11.8 of the Company’s intention
to terminate the Executive’s employment pursuant to this
section, and (2) a certification of the Executive’s
Permanent Disability by a physician selected by the Company or its
insurers and reasonably acceptable to the Executive or the
Executive’s legal representative. The
Executive’s employment shall terminate effective on the 30th
day (the “Permanent Disability Effective Date”) after
the Executive’s receipt of such notice unless, before the
Permanent Disability Effective Date, the Executive shall have
resumed the
full-time
performance of the Executive’s duties. During the
period in which the Executive has a Disability, the Company may
appoint a temporary replacement to assume the Executive’s
responsibilities.
4.1.2 The
Executive shall be considered to have a “Permanent
Disability” during any period in which he has a Disability
(as defined below); provided, however, that the Executive shall not
be considered to have “Permanent Disability” until (i)
for a period of 180 consecutive days, the Executive, as a result of
a Disability, is incapable, after reasonable accommodation, of
performing his duties under this Agreement on a full-time basis;
(ii) such Disability is reasonably expected to continue for at
least another 90 days; and (iii) at the Executive’s
Termination Date, he is eligible for income replacement benefits
under the Company’s long-term disability plan. The
Executive shall be considered to have a “Disability”
during any period in which he has a physical or mental disability
which renders him incapable, after reasonable accommodation, of
performing his duties under this Agreement.
4.2.
Death . The Executive’s employment shall
terminate automatically upon the Executive’s death during the
Agreement Term.
4.3.
Cause . The Company may terminate the
Executive’s employment during the Employment Period for
Cause. For purposes of this Agreement,
“Cause” means:
4.3.1 the
Executive’s willful commission of acts or omissions which
have, have had, or are likely to have a material adverse effect on
the business, operations, financial condition or reputation of
Nicor Inc., the Company or any Subsidiary;
4.3.2 the
Executive’s conviction (including a plea of guilty or nolo
contendere) of a felony or any crime of fraud, theft, dishonesty or
moral turpitude; or
4.3.3 the
Executive’s material violation of any statutory or common law
duty of loyalty to Nicor Inc., the Company or any
Subsidiary.
For
purposes of this Agreement, 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 Nicor Inc., the Company or any
Subsidiary. Any act, or failure to act, pursuant to
direction provided by the person to whom the Executive
reports, or provided by a resolution duly adopted by the
Board, or pursuant to 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 Nicor
Inc., the Company or any Subsidiary.
4.4.
Good Reason . During the Employment Period, the
Executive’s employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, “Good
Reason” means:
4.4.1 a
material diminution in the Executive’s base
compensation;
4.4.2 a
material diminution in the authority, duties or responsibilities of
the Executive;
4.4.3 a
material change, of not less than 25 miles, in the geographic
location at which the Executive must provide services;
or
4.4.4 any
other action or inaction that constitutes a material breach by the
Company of this Agreement;
provided,
however, that the above conditions, as applicable, shall not
constitute Good Reason: (i) unless the Executive gives the
Company written notice of such condition and the Company fails
to remedy the condition within 30 days of such notice; (ii) if
the initial existence of the condition is more than 90 days
before the Executive gives the Company such notice; or (iii)
if the Executive has consented in writing to such condition in
a document that makes specific reference to this Section
4.4.
4.5.
Without Cause During a Potential Change in Control
. If the Executive’s employment is terminated by
the Company without Cause during a Potential Change in Control, and
such date of termination occurs not more than 180 days prior
to the occurrence of a Change in Control and the Executive
establishes by reasonable evidence that such termination of
employment was materially connected with and in anticipation of the
Change in Control, then the Executive shall be entitled to receive
the benefits that would have been provided under Section 5.1,
determined as though:
4.5.1 the
Executive were rehired by the Company immediately prior to the
Change in Control at the salary rate equal to the Executive’s
highest salary rate during the one-year period prior to the date of
the Change in Control, and with other Company compensation and
benefit arrangements comparable to those provided to comparable
executives of the Company;
4.5.2 the
Executive’s employment were terminated by the Company without
Cause immediately after the Change in Control; and
4.5.3 this
Agreement were in full force and effect at the time of the Change
in Control, and at the time of the Executive’s deemed
termination of employment.
4.6.
Right of Resignation and Termination . This
Agreement does not constitute a guarantee of continued employment
at any time, but instead provides for certain rights and benefits
for the Executive during his employment following the occurrence of
a Change in Control, and in the event his employment with the
Company terminates under the circumstances described
herein. The Company may terminate the employment of the
Executive at any time for any reason, without breach of this
Agreement, subject to its obligations set forth in Article V and
elsewhere in this Agreement. The Executive may resign
from the Compan
| 
