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Exhibit 10.2 CHANGE OF CONTROL AGREEMENT
This AMENDED AND RESTATED CHANGE OF
CONTROL AGREEMENT (this " Agreement "), is entered into as
of the 19 day of December, 2008 (the " Agreement Date
"), by and between COLLECTIVE BRANDS, INC., a Delaware corporation
(the " Company "), and MATTHEW E. RUBEL (the "
Executive "). WHEREAS, the
Board of Directors of the Company (the " Board "), has
determined that it is in the best interests of the Company and its
stockholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined herein).
The Board believes 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
of Control and to encourage the Executive’s full attention
and dedication to the current Company and in the event of any
threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change
of Control that ensure that the compensation and benefits
expectations of the Executive will be satisfied and that 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:
Section 1. Certain
Definitions . (a) "
Effective Date " means the first date on which a Change of
Control occurs. Notwithstanding anything in this Agreement to the
contrary, if a Change of Control occurs and if the
Executive’s employment with the Company is terminated without
Cause or for Good Reason within one year prior to the date on which
the Change of Control occurs then "Effective Date" means the date
immediately prior to the date of such termination of employment
unless such termination did not occur at the request of a
third party that has taken steps reasonably calculated to effect a
Change of Control. Further, notwithstanding anything in this
Agreement to the contrary, if a Potential Change of Control occurs
and if the Executive’s employment with the Company is
terminated as provided in Section 5(e), then "Effective Date"
means the date immediately prior to the date of such termination of
employment. (b) " Change of
Control Period " means the period commencing on the Effective
Date and ending on the third anniversary thereof.
(c) " affiliated company
" means any company controlled by, controlling or under common
control with the Company. (d) "
Change of Control " means:
(1) 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 ")) (a " Person
") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either
(A) the then-outstanding shares of common stock of the Company
(the " Outstanding Company Common Stock ") or (B) the
combined voting power of the then-outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the " Outstanding Company Voting Securities ");
provided , however , that, for purposes of this
Section 1(d), none of the following shall constitute a
Change
of Control: (i) any acquisition directly from the Company
of 30% or less of Outstanding Company Common Stock or Outstanding
Company Voting Securities provided that at least a majority of the
members of the board of directors of the Company following such
acquisition were members of the Incumbent Board at the time of the
Board’s approval of such acquisition, (ii) any
acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any affiliated company, or (iv) any acquisition
by the Company which, by reducing the number of shares of
Outstanding Company Common Stock or Outstanding Company Voting
Securities, increases the proportionate number of shares of
Outstanding Company Common Stock or Outstanding Company Voting
Securities beneficially owned by any Person to 20% or more of the
Outstanding Company Common Stock or Outstanding Company Voting
Securities; provided, however, that, if such Person shall
thereafter become the beneficial owner of any additional shares of
Outstanding Company Common Stock or Outstanding Company Voting
Securities and beneficially owns 20% or more of either the
Outstanding Company Common Stock or the Outstanding Company Voting
Securities, then such additional acquisition shall constitute a
Change of Control; or
(2) Individuals who, as of the
date hereof, constitute the Board (the " Incumbent Board ")
cease for any reason to constitute at least a majority of the
Board; provided , however , that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(3) Consummation of a
reorganization, merger, consolidation or sale or other disposition
of all or substantially all of the assets of the Company (a "
Business Combination "), in each case, unless, immediately
following such Business Combination, (A) more than 50%,
respectively, of the then-outstanding shares of common stock and
the combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of (x) the corporation resulting from such
Business Combination, or (y) a corporation that, as a result
of such transaction, owns the Company or all or substantially all
of the Company’s assets either directly or through one or
more subsidiaries, is represented by the Outstanding Company Common
Stock and the Outstanding Company Voting Securities (or, if
applicable, is represented by shares into which Outstanding Company
Common Stock or Outstanding Company Voting Securities were
converted pursuant to such Business Combination) in substantially
the same proportions as their ownership immediately prior to such
Business Combination of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities, as the case may be,
(B) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related
trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly,
20% or more of, respectively, the then-outstanding shares of common
stock of the corporation resulting from such Business Combination
or the combined voting power of the then-outstanding voting
securities of such corporation, except to the extent that such
ownership existed prior to the Business Combination, and
(C) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board
providing for such Business Combination; or
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(4) Approval by the
stockholders of the Company of a complete liquidation or
dissolution of the Company.
(e) " Potential Change of
Control " means: (1) At
least two directors of a particular class of directors, as of the
date hereof, are replaced for any reason by directors who are not
members of the Incumbent Board at the time of such replacement;
provided , however , that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(2) The Board adopts a
resolution to the effect that, for purposes of this Agreement, a
Potential Change of Control has occurred.
Section 2. Term of
Agreement and Covered Employment . (a) Term of
Agreement . This Agreement shall be in effect from the
Agreement Date and shall terminate on the third anniversary
thereof; provided , however , that, commencing on the
date one year after the Agreement Date, and on each annual
anniversary of such date (such date and each annual anniversary
thereof, the " Renewal Date "), unless previously
terminated, this Agreement shall be automatically extended so as to
terminate three years from such Renewal Date, unless, at least
60 days prior to the Renewal Date, the Company shall give
notice to the Executive that the Change of Control Period shall not
be so extended (a " Nonrenewal Notice "). Notwithstanding
the delivery of any such Nonrenewal Notice, this Agreement shall
continue in effect for the Change of Control Period if a Change of
Control occurs during the term of this Agreement. Notwithstanding
anything in this Section to the contrary, this Agreement shall
terminate if (i) the Executive or the Company terminates the
Executive’s employment prior to a Change of Control (except
as provided in Section 1(a)), or (ii) the Executive’s
employment terminates in accordance with Sections 1(a), 4 or 5
and the Company has fulfilled all of its obligations to the
Executive under this Agreement.
(b) Covered
Employment . The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain
in the employ of the Company, subject to the terms and conditions
of this Agreement, for the Change of Control Period.
Section 3. Terms of
Employment . (a) Position and Duties .
(1) During the Change of Control Period, (A) 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 at any time
during the 120-day period immediately preceding the Effective Date
and (B) the Executive’s services shall be performed at
the office where the Executive was employed immediately preceding
the Effective Date or at any other location provided
Executive’s one-way commute from the Executive’s
principal residence is increased by no more than thirty-five
(35) miles.
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(2) During the Change of
Control 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 Change of Control Period, it shall not
be a violation of this Agreement for the Executive to
(A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements
or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly
interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that, to the
extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive’s responsibilities to the Company.
(b) Compensation
. (1) Base Salary . During the Change of Control
Period, the Executive shall receive an annual base salary (the "
Annual Base Salary "), which Annual Base Salary shall be
paid at a monthly rate at least equal to 12 times the highest
monthly base salary paid or payable, including any base salary that
has been earned but deferred, to the Executive by the Company and
the affiliated companies in respect of the 12-month period
immediately preceding the month in which the Effective Date occurs.
During the Change of Control Period, the Annual Base Salary shall
be reviewed at least annually, beginning no more than
12 months after the last salary increase awarded to the
Executive prior to the Effective Date. Any increase in the Annual
Base Salary shall not serve to limit or reduce any other obligation
to the Executive under this Agreement. The Annual Base Salary shall
not be reduced after any such increase and the term "Annual Base
Salary" shall refer to the Annual Base Salary as so increased.
(2) Annual Bonus
. In addition to the Annual Base Salary, the Executive shall be
awarded, for each fiscal year ending during the Change of Control
Period, an annual bonus (the " Annual Bonus ") in cash at
least equal to the Executive’s highest bonus under the
Company ’s annual and long-term incentive plans, or any
comparable bonus under any predecessor or successor plan, for the
last three full fiscal years prior to the Effective Date
(annualized, in the event that the Executive was not employed by
the Company for the whole of such fiscal year) (the " Recent
Annual Bonus "). Each such Annual Bonus shall be paid no later
than the end of the third month of the fiscal year next following
the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus.
(3) Incentive, Savings
and Retirement Plans . During the Change of Control Period,
the Executive shall be entitled to participate in all incentive,
savings and retirement plans (other than the Collective Brands,
Inc. Supplementary Retirement Plan and any successor plan (the
"SRP")), practices, policies, and programs applicable generally to
other peer executives of the Company and the affiliated companies,
but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the
extent, if any, that such distinction is applicable), savings
opportunities and retirement benefit opportunities, in each case,
less favorable, in the aggregate, than the most favorable of those
provided by the Company and the affiliated companies for the
Executive under such plans, practices, policies and programs as in
effect at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to
other
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peer executives of the Company and the affiliated companies
(excluding, for all purposes, the SRP)."
(4) Welfare Benefit
Plans . During the Change of Control 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 provided by
the Company and the affiliated companies (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance
plans and programs) to the extent applicable generally to other
peer executives of the Company and the affiliated companies, but in
no event shall such plans, practices, policies and programs provide
the Executive with benefits that are less favorable, in the
aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of the
Company and the affiliated companies.
(5) Expenses .
During the Change of Control Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most
favorable policies, practices and procedures of the Company and the
affiliated companies in effect for the Executive at any time during
the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
the affiliated companies. (6)
Fringe Benefits . During the Change of Control
Period, the Executive shall be entitled to fringe benefits,
including, without limitation, tax and financial planning services,
payment of club dues, and, if applicable, use of an automobile,
airplane and payment of related expenses, in accordance with the
most favorable plans, practices, programs and policies of the
Company and the affiliated companies in effect for the Executive at
any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and the affiliated companies.
(7) Office and Support
Staff . During the Change of Control 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, at least equal to the most
favorable of the foregoing provided to the Executive by the Company
and the affiliated companies at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and the affiliated
companies. (8)
Vacation . During the Change of Control Period, the
Executive shall be entitled to paid vacation in accordance with the
most favorable plans, policies, programs and practices of the
Company and the affiliated companies as in effect for the Executive
at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and the affiliated companies.
Section 4. Termination of
Employment . (a) Death or Disability . The
Executive’s employment shall terminate automatically if the
Executive dies during the Change of Control Period. If the Company
determines in good faith that the Disability (as defined herein)
of
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the Executive has occurred during the Change of Control Period
(pursuant to the definition of "Disability"), it may give to the
Executive written notice in accordance with Section 11(b) of its
intention to terminate the Executive’s employment. In such
event, the Executive’s employment with the Company shall
terminate effective on the thirtieth (30th) day after receipt of
such notice by the Executive (the " Disability Effective
Date "), provided that, within the thirty (30) days
after such receipt, the Executive shall not have returned to
full-time performance of the Executive’s duties. "
Disability " means the absence of the Executive from the
Executive’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 that is determined to be total and
permanent by a physician selected by the Company or its insurers
and acceptable to the Executive or the Executive’s legal
representative. (b)
Cause . The Company may terminate the
Executive’s employment during the Change of Control Period
for Cause. " Cause " means:
(A) the willful and continued failure
of the Executive to perform substantially the Executive’s
duties with the Company or any affiliated company (other than any
such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is
delivered to the Executive by the Board or the Chief Executive
Officer of the Company that specifically identifies the manner in
which the Board or the Chief Executive Officer of the Company
believes that the Executive has not substantially performed the
Executive’s duties, or (B) the
willful engaging by the Executive in illegal conduct or gross
misconduct that is materially and demonstrably injurious to the
Company. For purposes of this
Section 4(b), 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 the Company. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by
the Board or upon the instructions of the Chief Executive Officer
of the Company or a senior officer of the Company or based upon the
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 the Company. The cessation of employment
of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting
of the Board called and held for such purpose (after reasonable
notice is provided to the Executive and the Executive is given an
opportunity, together with counsel for the Executive, to be heard
before the Board and a thirty (30) day period to cure the
condition constituting Cause), finding that, in the good faith
opinion of the Board, the Executive is guilty of the conduct
described in Section 4(b)(1) or 4(b)(2), and specifying the
particulars thereof in detail. If the Board does not give a Notice
of Termination for Cause within ninety (90) days after any
member of the Board (other than the Executive and any other member
of the Board involved in the event constituting Cause) has actual
knowledge that an event constituting Cause has occurred, the Board
cannot assert that event as a basis to terminate the
Executive’s employment for Cause.
(c) Good Reason .
The Executive’s employment may be terminated by the Executive
for Good Reason. " Good Reason " means in
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