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EXHIBIT 10.3
CHANGE OF CONTROL AGREEMENT FOR SENIOR MANAGERS
AGREEMENT
by and between The Greenbrier Companies, Inc., a Delaware
corporation (the "Company"), and
________________ (the "Executive"), dated as of
the ____ day of ________________,
200___.
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 Executive, 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 Executive by virtue of
the personal uncertainties and risks
created by a pending or potential Change of
Control and to encourage the
Executive'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
Executive with compensation and benefits
arrangements upon a Change of Control
which ensure that the compensation and
benefits expectations of the Executive
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. CERTAIN
DEFINITIONS.
(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.
Anything in this Agreement to the contrary
notwithstanding, if a Change of
Control occurs and if the Executive'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 Executive 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.
(b) The
"Change of Control Period" shall mean the period commencing on
the
date hereof and ending on the second
anniversary of such date; provided,
however, that commencing on the date one
year after the date hereof, and on each
annual anniversary of such date (such date
and each annual anniversary thereof
shall be hereinafter referred to as the
"Renewal Date"), the Change of Control
Period shall be automatically extended so
as to terminate two 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.
2. CHANGE OF CONTROL.
For the purpose of this Agreement, a
"Change of Control": shall mean the
occurrence of any of the following:
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(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")) (a "Person")
of beneficial ownership (within the
meaning of Rule 13d - 3 promulgated under
the Exchange Act) of 50 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 Executive's employment shall terminate
automatically upon the Executive's death
during the Change of Control Period. If
the Company determines in good faith that
the Disability of the Executive has
occurred during the Change of Control
Period (pursuant to the definition of
Disability set forth below), it may give to
the Executive written notice in
accordance with Section 12(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 30th day after
receipt of such notice by the
Executive (the "Disability Effective
Date"), provided that, within the 30 days
after such receipt, the Executive shall not
have returned to full-time
performance of the Executive's duties. For
purposes of this Agreement,
"Disability" shall mean 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 which 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 (such
agreement
Change of Control Agreement
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as to acceptability not to be withheld
unreasonably).
(b) CAUSE.
The Company may terminate the Executive'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
Executive's duties with the Company, other
than such failure (A) resulting from
Executives' Disability or incapacity due to
bodily injury or physical or mental
illness; or (B) for which a demand for
substantial performance is delivered to
Executive which specifically identifies the
manner in which Executive has not
substantially performed Executive's duties
and provides a 30-day period during
which time Executive may take corrective
actions, which period of time has not
yet expired; or (ii) the conviction of the
Executive (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
Executive's ability to perform
substantially the Executive's duties for the
Company.
(c) GOOD
REASON; WINDOW PERIOD. The Executive's employment may be
terminated (i) during the Change of Control
Period by the Executive for Good
Reason or (ii) during the Window Period by
the Executive without any reason. For
purposes of this Agreement, the "Window
Period" shall mean the 30 - day period
immediately following the first anniversary
of the Effective Date. For purposes
of this Agreement, "Good Reason" shall
mean:
(A) A material change in Executive's status, positions, duties
or
responsibility as an executive 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
Executive's
employment
for Cause or due to Disability or death, or resulting from
Executive's decision for any reason other than for Good Reason;
(B) A reduction by the Company of Executive's base salary
exceeding
5 percent of Executive'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 Executive's annual bonus
exceeding
20 percent of Executive's prior year's annual bonus (unless
such
reduction
relates to the amount of annual bonus payable to Executive 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 Executive's annual bonus compared to the prior
year's bonus);
(D) the Company's requiring the Executive to be based at any
office
more than 35 miles from where Executive's office is located
immediately prior to the Effective Date;
(E) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by
this
Agreement;
or
(F) any failure by the Company to comply with and satisfy
Section
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11(c),
provided that such successor has received at least ten days'
prior
written
notice from the Company or the Executive of the requirements of
Section
11(c).
For purposes of this Section 3(c), any good
faith determination of "Good Reason"
made by the Executive shall be
conclusive.
(d) NOTICE
OF TERMINATION. Any termination by the Company for Cause, or by
the Executive without any reason during the
Window Period or for Good Reason,
shall be communicated by Notice of
Termination to the other party hereto given
in accordance with Section 12(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 Executive'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 Executive 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 Executive or the Company
hereunder or preclude the Executive or the
Company from asserting such fact or
circumstance in enforcing the Executive's
or the Company's rights hereunder.
(e) DATE
OF TERMINATION. "Date of Termination" means (i) if the
Executive's employment is terminated by the
Company for Cause, or by the
Executive during the Window Period or 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 Executive'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 Executive of such
termination, and (iii) if the Executive's
employment is terminated by reason of death
or Disability, the Date of
Termination shall be the date of death of
the Executive or the Disability
Effective Date, as the case may be.
4. OBLIGATIONS OF THE
COMPANY UPON TERMINATION.
(a) GOOD
REASON OR DURING THE WINDOW PERIOD; OTHER THAN FOR CAUSE, DEATH
OR DISABILITY. If, during the
