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EXHIBIT
10.1
CHANGE IN CONTROL
SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL
SEVERANCE AGREEMENT is made effective as of the 5
th
day of May, 2008, between
Apogee Enterprises, Inc., a Minnesota corporation, with its
principal offices at Wells Fargo Financial Center, 7900 Xerxes
Avenue South, Suite 1800, Minneapolis, Minnesota 55431 (the “
Company ”) and Gregory A. Silvestri (“
Executive ”), residing at 4820 West Sunnyslope Road,
Edina, Minnesota 55424.
WITNESSETH
THAT:
WHEREAS, this Agreement is
intended to specify the financial arrangements that the Company
will provide to Executive upon Executive’s separation from
employment with the Company and all subsidiaries of the Company
(collectively, the “ Apogee Entities ”) under
any of the circumstances described herein; and
WHEREAS, this Agreement is
entered into by the Company in the belief that it is in the best
interests of the Company and its shareholders to provide stable
conditions of employment for Executive notwithstanding the
possibility, threat or occurrence of certain types of change in
control, thereby enhancing the Company’s ability to attract
and retain highly qualified people.
NOW, THEREFORE, to assure the
Company that it will have the continued dedication of Executive
notwithstanding the possibility, threat or occurrence of a bid to
take over control of the Company, and to induce Executive to remain
in the employ of the Apogee Entities, and for other good and
valuable consideration, the Company and Executive agree as
follows:
1. Term of Agreement .
The term of this Agreement shall commence on the date hereof as
first written above and shall continue through December 31,
2008; provided that commencing on January 1, 2009 and each
January 1 thereafter, the term of this Agreement shall
automatically be extended for one additional year unless, not later
than September 30 of the preceding year, the Board of
Directors of the Company (a majority of which, at such time, shall
be composed of Continuing Directors) shall have authorized, by
majority vote, management of the Company to give notice to
Executive, and the Company shall have given such notice, that the
Company does not wish to extend this Agreement; and provided,
further, that, notwithstanding any such notice by the Company not
to extend, this Agreement shall continue in effect for a period of
24 months beyond the term provided herein if a Change in Control
(as defined in Section 3(a) hereof) shall have occurred during
such term.
2. Termination of
Employment .
(a) Prior to a Change in
Control . Prior to a Change in Control, any Apogee Entity may
terminate Executive from employment with such Apogee Entity at
will, with or without Cause (as defined in Section 3(c)
hereof), at any time. Executive’s rights upon termination of
employment from all Apogee Entities prior to a Change in Control
shall be governed by the employing Apogee Entity’s standard
employment termination policy applicable to Executive in effect at
the time of termination and the provisions of the offer of
employment letter from the Company to Executive dated June 27,
2007.
(b) After a Change in
Control .
(i) From and after the date
of a Change in Control during the term of this Agreement, neither
the Company nor the Apogee Entity then employing Executive shall
terminate Executive from employment with the Company or any Apogee
Entity except as provided in this Section 2(b) or as a result
of Executive’s Disability (as defined in Section 3(d)
hereof) or his death.
(ii) From and after the date
of a Change in Control during the term of this Agreement, the
Company (or the other Apogee Entity then employing Executive) shall
have the right to terminate Executive from employment with the
Apogee Entities at any time during the term of this Agreement for
Cause, by
written notice to Executive,
specifying the particulars of the conduct of Executive forming the
basis for such termination, such notice to be effective on the 30th
day following delivery thereof to Executive if Executive has not
substantially cured the conduct identified in such
notice.
(iii) From and after the date
of a Change in Control during the term of this
Agreement:
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(A) |
the Company (or the other Apogee Entity then employing
Executive) shall have the right to terminate Executive’s
employment without Cause, at any time; and |
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(B) |
Executive shall, upon the occurrence of such a termination by
the Company or such other Apogee Entity without Cause, or upon the
voluntary termination of Executive’s employment by Executive
for Good Reason (as defined in Section 3(b) hereof), be
entitled to receive the benefits provided in Section 4 hereof.
Executive shall evidence a voluntary termination for Good Reason by
written notice to the Company given within 60 days after the date
of the occurrence of any event that Executive knows or should
reasonably have known constitutes Good Reason for voluntary
termination. Such notice need only identify Executive and set forth
in reasonable detail the facts and circumstances claimed by
Executive to constitute Good Reason. |
3. Definitions
.
(a) A “ Change in
Control ” shall mean:
(i) a change in control of a
nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under
the Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), or successor provision thereto,
whether or not the Company is then subject to such reporting
requirement including, without limitation, any of the following
events:
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(A) |
the consummation of any consolidation or merger of the Company
in which the Company is not the continuing or surviving corporation
or pursuant to which shares of the Company’s common stock
would be converted into cash, securities, or other property, other
than a merger of the Company in which all or substantially all of
the holders of the Company’s common stock immediately prior
to the consolidation or merger own more than 65% of the common
stock of the surviving corporation immediately after the merger in
the same relative proportions as their ownership of the
Company’s common stock immediately prior to the consolidation
or merger; |
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(B) |
any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all,
of the assets of the Company; |
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(C) |
any reorganization, reverse stock split, or recapitalization of
the Company which would result in a Change in Control;
or |
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(D) |
any transaction or series of related transactions having,
directly or indirectly, the same effect as any of the foregoing; or
any agreement, contract, or other arrangement providing for any of
the foregoing. |
(ii) any “
person ” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the “ Beneficial
Owner ” (as defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the Company
representing 35% or more of the combined voting power of the
Company’s then outstanding securities;
(iii) the Continuing
Directors (as defined in Section 3(e) hereof) cease to
constitute a majority of the Company’s Board of Directors;
or
(iv) the majority of the
Continuing Directors determine in their sole and absolute
discretion that there has been a change in control of the
Company.
(b) “ Good
Reason ” shall mean the occurrence of any of the
following events, in each case, after the Executive has provided
written notice to the Company of the occurrence of such event and
the Company has failed to cure, to the Executive’s reasonable
satisfaction, the cause of such event within thirty (30 days after
the date of such written notice, except for the occurrence of such
an event in connection with the termination or reassignment of
Executive’s employment by the Company (or any other Apogee
Entity then employing Executive) for Cause, for Disability or for
death:
(i) the assignment to
Executive of employment duties or responsibilities which are not at
least of materially comparable responsibility and status as the
employment duties and responsibilities held by Executive
immediately prior to a Change in Control, or any removal of
Executive from or any failure to reelect or reappoint Executive to
any positions held by Executive immediately prior to a Change in
Control, except in connection with the termination of his
employment for Disability, retirement or Cause, or as a result of
Executive’s death, or by Executive other than for Good
Reason;
(ii) a material reduction by
the Company (or any other Apogee Entity then employing Executive)
in Executive’s base salary as in effect immediately prior to
a Change in Control or as the same may be increased from time to
time during the term of this Agreement;
(iii) the Company’s (or
any other Apogee Entity then employing Executive) requiring
Executive to be based anywhere other than within 50 miles of
Executive’s office location immediately prior to a Change in
Control, except for requirements of temporary travel on the
Company’s business to an extent substantially consistent with
Executive’s business travel obligations immediately prior to
a Change in Control;
(iv) the failure by the
Company to obtain, as specified in Section 5(a) hereof, an
assumption of the obligations of the Company to perform this
Agreement by any successor to the Company; or
(v) any material breach by
the Company of this Agreement.
(c) “ Cause
” shall mean termination by the Company (or any other Apogee
Entity then employing Executive) of Executive’s employment
based upon (i) the willful and continued failure by Executive
substantially to perform his duties and obligations (other than any
such failure resulting from his incapacity due to physical or
mental illness or any such actual or anticipated failure resulting
from Executive’s termination for Good Reason) or
(ii) the willful engaging by Executive in misconduct which is
materially injurious to the Company, monetarily or otherwise. For
purposes of this Section 3(c), no action or failure to act on
Executive’s part shall be considered “ willful
” unless done, or omitted to be done, by Executive in bad
faith and without reasonable belief that his action or omission was
in the best interests of the Company.
(d) “ Disability
” shall mean any physical or mental condition which would
qualify Executive for a disability benefit under any long-term
disability plan maintained by the Company (or any other Apogee
Entity then employing Executive) either before or after a Change in
Control.
(e) “ Continuing
Director ” shall mean any person who is a member of the
Board of Directors of the Company, who is not an Acquiring Person
(as hereinafter defined) or an Affiliate or Associate (as
hereinafter defined) of an Acquiring Person, or a representative of
an Acquiring Person or of any such Affiliate or Associate, and who
(i) was a member of the Board of Directors on the date of this
Agreement as first written above or (ii) subsequently becomes
a member of the Board of Directors, if such person’s initial
nomination for election or initial election to the Board of
Directors is recommended or approved by a majority of the
Continuing Directors. For purposes of this Section 3(e):
“ Acquiring Person ” shall mean any “
person ” (as such term is used in Sections
13(d)
and 14(d) of the Exchange Act) who or
which, together with all Affiliates and Associates of such person,
is the Beneficial Owner of 10% or more of the shares of Common
Stock of the Company then outstanding, but shall not include the
Company, any subsidiary of the Co
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