Exhibit 10.9
CHANGE IN CONTROL AGREEMENT
(as amended December 12, 2007)
This CHANGE IN CONTROL AGREEMENT, dated __________,
200_, is made by and between THE VALSPAR CORPORATION, a Delaware
corporation (the “Company”), and _________________
(the “Executive”).
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A.
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The Board of Directors of the Company 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 in Control (as defined in
Exhibit A to this
Agreement) of the Company.
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B.
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The Board believes that 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 in Control, to encourage the Executive’s full
attention and dedication to the Company currently and in the event
of any threatened or pending Change in Control and to provide the
Executive with compensation and benefit arrangements upon a Change
in Control which ensure that the compensation and benefit
expectations of the Executive will be satisfied and which are
competitive with those of other corporations.
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C.
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To accomplish these objectives, the Board has
authorized this Agreement.
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In consideration of the premises and the mutual
covenants contained in this Agreement, the Company and the
Executive agree as follows:
1.
Definitions . The
definitions set forth in Exhibit
A to this Agreement are incorporated
herein by reference.
2.
Term of Agreement .
This Agreement shall continue in effect until the earlier of (i)
termination of Executive’s employment prior to a Change in
Control and (ii) a Payment Event shall have occurred and the
Company shall have performed all of its obligations and satisfied
all of its liabilities under this Agreement.
3.
Severance Payments .
Upon a Payment Event, in lieu of any further salary payments and
any cash severance benefit otherwise payable to the Executive, (a)
the Company shall pay to the Executive in cash, within 10 days of
the Payment Event, the Severance Payment and (b) for a
36-month period after the Payment Event or until such earlier time
that the Executive becomes reemployed, the Company shall arrange to
provide the Executive with health insurance, life insurance, dental
insurance and disability insurance benefits substantially similar
to those available to the Executive prior to the Change in Control;
provided, however, that if you become eligible to participate in a
benefit plan or program that provides benefits substantially
similar to any of those provided under this paragraph 3(b), then
you shall cease to receive such benefits under this paragraph 3(b).
Notwithstanding any provision of any incentive compensation plan
requiring continued employment after the completed fiscal year or
other measuring period as a condition to payment, the Company shall
pay to the Executive the amount of any compensation pursuant to an
annual cash incentive bonus arrangement that was allocated or
awarded to the Executive for a completed fiscal year or other
measuring period preceding the occurrence of a Payment Event not
yet paid to the Executive.
4.
Gross-Up Payment .
Following a Payment Event, the Company shall cause its independent
auditors promptly to review, at the Company’s sole expense,
the applicability of Section 4999 of the Code to the Total Payments
to be received by Executive. If such auditors determine that any of
the Total Payments would be subject to the excise tax imposed by
Section 4999 of the Code, or any interest or penalties with respect
to such tax (such excise tax, together with any interest and
penalties, being collectively referred to as the “
Excise Tax ”),
then, in addition to any amounts otherwise payable under this
Agreement, the Company shall pay an additional cash payment (the
“ Gross-Up Payment
”) equal to the Excise Tax imposed on the
Total Payments (which Gross-Up Payment shall take into account any
Excise Tax or any other income and FICA taxes (determined using the
highest applicable rate) that may be imposed on the Gross-Up
Payment), within 30 days of such determination. If no determination
by the Company’s auditors is made prior to the time a tax
return reflecting the Total Payments is required to be filed by
Executive, Executive will be entitled to receive a Gross-Up Payment
calculated on the basis of the Total Payments reported by him in
such tax return, within 30 days of the filing of such tax return.
In all events, if any tax authority determines that a greater
Excise Tax should be imposed on the Total Payments than is
determined by the Company’s independent auditors or reflected
in Executive’s tax return pursuant to this section, Executive
shall be entitled to receive the full Gross-Up Payment calculated
on the basis of the amount of Excise Tax determined to be payable
by such tax authority from the Company within 30 days of such
determination.
5.
Fees and Expenses . The
Company shall pay to the Executive reasonable legal fees and
reasonable expenses incurred in good faith by the Executive in
obtaining the Severance Payment (including, but not limited to, all
such fees and expenses, if any, in seeking in good faith to obtain
or enforce any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder). Such payment shall be made
within five business days after delivery of the Executive’s
written request for payment accompanied with such evidence of fees
and expenses incurred as the Company reasonably may
require.
6.
Outplacement Services .
Upon the occurrence of any Payment Event, the Company shall provide
the Executive with outplacement services substantially similar to
those available to the Executive prior to the Change in
Control.
7.
No Mitigation . The
Company agrees that if a Payment Event occurs, the Executive is not
required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company. The
amount of any payment or benefit provided for in Section 3
(other than as provided in clause (b) thereof) shall not be reduced
by any compensation earned by the Executive as the result of
employment by another employer, by retirement benefits, by offset
against any amount claimed to be owed by the Executive to the
Company or any Subsidiary, or otherwise.
8.
Miscellaneous .
(a)
Governing Law . All
matters relating to the interpretation, construction, validity and
enforcement of this Agreement shall be governed by the internal
laws of the State of Minnesota without giving effect to any choice
or conflict of law provision or rule (whether of the State of
Minnesota or any other jurisdiction) that would cause the
application of laws of any jurisdiction other than the State of
Minnesota.
(b)
Entire Agreement . This
Agreement contains the entire agreement of the parties relating to
the subject matter hereof and supersedes all prior agreements and
understandings with respect to such subject matter, and the parties
hereto have made no agreements, representations or warranties
relating to the subject matter of this Agreement which are not set
forth herein.
(c)
Amendments . No
amendment or modification of this Agreement shall be deemed
effective unless made in writing and signed by the parties
hereto.
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(d)
No Waiver . No term or
condition of this Agreement shall be deemed to have been waived,
nor shall there be any estoppel to enforce any provisions of this
Agreement, except by a statement in writing signed by the party
against whom enforcement of the waiver or estoppel is sought. Any
written waiver shall not be deemed a continuing waiver unless
specifically stated, shall operate only as to the specific term or
condition waived and shall not constitute a waiver of
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