Exhibit 10.1
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is entered into by and
between The Greenbrier Companies, Inc., an Oregon corporation (the
“Company”), and Martin R. Baker (the
“Employee”) as of the 6th day of May, 2008.
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 Employee,
notwithstanding the possibility or occurrence of a Change of
Control (as defined in Section 2) of the Company. The Board
believes it is imperative to diminish the inevitable distraction of
the Employee by virtue of the personal uncertainties and risks
created by a pending or potential Change of Control and to
encourage the Employee’s full attention and dedication to the
Company currently and in the event of any pending or potential
Change of Control, and to provide the Employee with compensation
and benefits arrangements upon a Change of Control which ensure
that the compensation and benefits expectations of the Employee
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.
Intent; Certain Definitions.
The intent of this Agreement is to
entitle the Employee to receive from the Company certain payments
and benefits in the event that the Employee’s employment is
terminated following a Change of Control, subject to the terms,
conditions and limitations set forth herein.
(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 occurs, subject to Section 1(c), below.
(b) The “Change of Control
Period” shall mean the period commencing on the Effective
Date and ending on the second anniversary of such date.
(c) Notwithstanding any other
provision of this Agreement to the contrary, if a Change of Control
occurs and if the Employee’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 Employee that such
termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect the
Change of Control or (ii) otherwise arose in connection with
or anticipation of the 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,
and such termination shall be deemed to have occurred during the
Change of Control Period.
2.
Change of Control.
For the
purpose of this Agreement, a “Change of Control” shall
mean the occurrence of any of the following:
(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”)) of beneficial ownership (within the
meaning of Rule 13d–3 promulgated under the Exchange
Act) of 30 percent or more of the stock of any class or
classes having by the terms thereof ordinary voting power to elect
a majority of the directors of the Company (irrespective of whether
at the time stock of any class or classes of the Company shall have
or might have voting power by reason of the happening of any
contingency); provided, however, that for purposes of this
subsection (a), the following acquisitions will not constitute a
Change of Control: (i) any acquisition directly from the
Company; (ii) any acquisition by the Company or a subsidiary
of the Company; or (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company.
(b) The individuals who, as of the
date of this Agreement, are the members of the Board of Directors
of the Company (the “Incumbent Board”) cease for any
reason to constitute a majority of the Board, unless the election
or appointment, or nomination for election or appointment, of any
new member of the Board was approved by a vote of a majority of the
Incumbent Board of Directors, then such new member shall be
considered as though such individual were a member of the Incumbent
Board.
(c) The consummation of a merger or
consolidation involving the Company if the stockholders owning the
capital and profits (“ownership interests”) of the
Company immediately before such merger or consolidation do not, as
a result of such merger or consolidation, own, directly or
indirectly, more than 50 percent of the combined voting power
or ownership interests of the Company, or the entity resulting from
such merger or consolidation, in substantially the same proportion
as their ownership of the combined voting power or ownership
interests outstanding immediately before such merger or
consolidation.
(d) The sale or other disposition of
all or substantially all of the assets of the Company.
(e) The dissolution or the complete or
partial liquidation of the Company.
3.
Termination of Employment.
(a) Death or Disability . The
Employee’s employment shall terminate automatically upon the
Employee’s death during the Change of Control Period. If the
Company determines in good faith that the Disability of the
Employee has occurred during the Change of Control Period (pursuant
to the definition of Disability set forth below), it may give to
the Employee written notice in accordance with Section 11(b) of its
intention to terminate the Employee’s employment. In such
event, the Employee’s employment with the Company shall
terminate effective on the 30th day after receipt of such notice by
the Employee (the “Disability Effective Date”),
provided
Change
of Control Agreement
Page 2
that,
within the 30 days after such receipt, the Employee shall not
have returned to full-time performance of the Employee’s
duties. For purposes of this Agreement, “Disability”
shall mean the absence of the Employee from the Employee’s
duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to
the Employee or the Employee’s legal representative (such
agreement as to acceptability not to be withheld
unreasonably).
(b) Cause . The Company
may terminate the Employee’s employment during the Change of
Control Period for Cause. For purposes of this Agreement,
“Cause” shall mean (i) a willful and continued
failure to perform substantially the Employee’s duties with
the Company, other than such failure (A) resulting from
Employees’ Disability or incapacity due to bodily injury or
physical or mental illness; or (B) for which a demand for
substantial performance is delivered to Employee which specifically
identifies the manner in which Employee has not substantially
performed Employee’s duties and provides a 30-day period
during which time Employee may take corrective actions, which
period of time has not yet expired; or (ii) the conviction of
the Employee (including a plea of nolo contendere) of a felony or
gross misdemeanor under federal or state law which is materially
and demonstrably injurious to the Company or which impairs the
Employee’s ability to perform substantially the
Employee’s duties for the Company.
(c) Good Reason . The
Employee’s employment may be terminated during the Change of
Control Period by the Employee for Good Reason. For purposes of
this Agreement, “Good Reason” shall mean:
(A) A
material change in Employee’s status, positions, duties or
responsibility as an employee of the Company as in effect
immediately prior to the Effective Date which may reasonably be
considered to be an adverse change, except in connection with the
termination of Employee’s employment for Cause or due to
Disability or death, or resulting from Employee’s decision
for any reason other than for Good Reason;
(B) A
reduction by the Company of Employee’s base salary exceeding
5 percent of Employee’s prior year’s base salary
(or an adverse change in the form or timing of the payment thereof)
as in effect immediately prior to the Effective Date;
(C) A
reduction by the Company of Employee’s annual bonus exceeding
20 percent of Employee’s prior year’s annual bonus
(unless such reduction relates to the amount of annual bonus
payable to Employee for the achievement of specified performance
goals or to the attainment of profitability levels of the Company
or certain of its subsidiaries, and the non-achievement of such
goals and/or the non-attainment of profitability levels of the
Company or certain of its subsidiaries is the reason for the
reduction in Employee’s annual bonus compared to the prior
year’s bonus);
(D) the
Company’s requiring the Employee to be based at any office
more than 35 miles from where Employee’s office is located
immediately prior to the
Change
of Control Agreement
Page 3
Effective
Date;
(E) any
purported termination by the Company of the Employee’s
employment otherwise than as expressly permitted by this Agreement;
or
(F) any
failure by the Company to comply with and satisfy
Section 10(c), provided that such successor has received at
least ten days’ prior written notice from the Company or the
Employee of the requirements of Section 10(c).
For
purposes of this Section 3(c), any good faith determination of
“Good Reason” made by the Employee shall be
conclusive.
(d) Notice of
Termination . Any termination by the Company for Cause, or by
the Employee for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with
Section 11(b). 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 Employee’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 of such notice. The
failure by the Employee 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
Employee or the Company hereunder or preclude the Employee or the
Company from asserting such fact or circumstance in enforcing the
Employee’s or the Company’s rights hereunder.
(e) Date of Termination
. “Date of Termination” means (i) if the
Employee’s employment is terminated by the Company for Cause,
or by the Employee 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 Employee’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 Employee of such termination, and (iii) if the
Employee’s employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of
the Employee or the Disability Effective Date, as the case may
be.
4.
Obligations of the Company upon Termination.
(a) Good Reason; Other than
for Cause, or Disability . If, during the Change of Control
Period, the Company shall terminate the Employee’s employment
other than for Cause or Disability or the Employee shall terminate
employment for Good Reason:
(i) Subject to Section 4(e) below,
the Company shall pay to the Employee in a lump sum in cash within
30 days after the Date of Termination the aggregate of the
following amounts:
| 
