Exhibit 10.1
FCSTONE GROUP,
INC.
CHANGE IN CONTROL SEVERANCE
PLAN
(f/k/a FCStone Group, Inc. Change
in Control Agreement)
(As amended and restated
effective September 1, 2006)
SECTION 1
INTRODUCTION
SECTION 1.1 History . FCStone
Group, Inc., a corporation organized and existing under the laws of
the state of Delaware (the “Company”), originally
adopted the FCStone Group, Inc. Change in Control Agreement for key
executives of the Company effective September 1, 2006. The
September 1, 2006 Change in Control Agreement superseded and
replaced, in its entirety, all other change in control benefit
plans or severance plans sponsored by the Company, including the
earlier Change in Control Agreement adopted by the Board in 1995.
This FCStone Group, Inc. Change in Control Severance Plan (the
“Plan”) is an expanded, and in certain areas an
amended, version of the Change in Control Agreement adopted by the
Company’s Board of Directors on August 30, 2006.
Effective September 1, 2006, only those Participants
specifically named on Schedule A hereto are eligible to receive
change in control severance benefits from the Company.
SECTION 1.2 Background and
Purpose . The Board of Directors of the Company recognizes
that, as is the case with many publicly held corporations, there
exists the possibility of a Change in Control of the Company. The
Board also believes that when a Change in Control is perceived as
imminent, or is occurring, the Board should be able to receive and
rely on impartial service from senior executives regarding the best
interests of the Company and its shareholders, without concern that
senior executives might be distracted or concerned by the personal
uncertainties and risks created by the perception of an imminent or
occurring Change in Control. Accordingly, the purpose of this Plan
is (i) to provide assurance that the Company will have the
continued service of the key executives participating in the Plan
notwithstanding the possibility, threat or occurrence of a Change
in Control, (ii) to diminish the distraction to the key
executives that may arise by virtue of the personal uncertainties
and risks created by such a threatened or pending Change in
Control, and (iii) to encourage the key executives’ full
attention and dedication to the Company currently and in the event
of a threatened or pending Change in Control.
SECTION 1.3 Duration . The
Plan shall commence on the Effective Date and shall remain in
effect, subject to the right of the Board to amend or terminate the
Plan at any time pursuant to Section 6.1 hereof.
SECTION 2
DEFINITIONS
SECTION 2.1 The following terms
shall have the meanings set forth below.
“ 1934 Act ”
means the Securities Exchange Act of 1934.
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“Affiliate” of the Company means any Person that directly,
or indirectly through one or more intermediaries, Controls or is
Controlled by, or is under common Control with the
Company.
“Board”
means the Board of Directors of the
Company.
“Cause”
means, (i) any termination for
“cause” under any employment agreement with the Company
the Participant is a party to, (ii) the Participant
intentionally engages in an act of misconduct that materially
impacst the goodwill or business of the Company; (iii) the
Participant willfully breaches a fiduciary trust for personal
profit; or (iv) the Participant intentionally violates any
law, rule or regulation. No act or failure to act on the part of a
Participant shall be considered “willful” unless it is
done, or omitted to be done, by the Participant in bad faith or
without reasonable belief that his action or omission was in the
best interest of Company.
“Change in
Control” means the
first to occur of the following events:
Any Person is or becomes the
Beneficial Owner (within the meaning set forth in Rule 13d-3 under
the 1934 Act), directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by such Person
any securities acquired directly from the Company or its Affiliates
or held by an employee benefit plan of the Company) representing
50% or more of the combined voting power of the Company’s
then outstanding securities, excluding any Person who becomes such
a Beneficial Owner in connection with a transaction described in
clause (x) of paragraph (iii) of this definition;
or
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(i)
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The following
individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the Effective
Date, constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with
an actual or threatened election contest, including a consent
solicitation, relating to the election of directors of the Company)
whose appointment or election by the Board or nomination for
election by the Company’s stockholders was approved by a vote
of at least two-thirds of the directors then still in office who
either were directors on the Effective Date or whose appointment,
election or nomination for election was previously so approved or
recommended; or
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(ii)
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There is consummated a merger or
consolidation of the Company with any other corporation, OTHER THAN
(x) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof), in combination with
the ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of the Company at least 50% of the
combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (y) a merger or
consolidation effected to implement a
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recapitalization of the Company
(or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such
Person any securities acquired directly from the Company or its
Affiliates other than in connection with the acquisition by the
Company or its Affiliates of a business) representing 50% or more
of the combined voting power of the Company’s then
outstanding securities; or
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(iii)
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The
stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially
all of the Company’s assets, other than a sale or disposition
by the Company of all or substantially all of the Company’s
assets to an entity, at least 50% of the combined voting power of
the voting securities of which are owned by stockholders of the
Company in substantially the same proportions as their ownership of
the Company immediately prior to such sale.
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Notwithstanding the foregoing, a
“Change in Control” shall not be deemed to have
occurred by virtue of the consummation of any transaction or series
of integrated transactions immediately following which the record
holders of the Company’s common stock immediately prior to
such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which
owns all or substantially all of the Company’s assets
immediately following such transaction or series of
transactions.
“CIC Protected
Period” means the
period commencing upon the date (A) the Company enters
into an agreement, the consummation of which would result in the
occurrence of a Change in Control; (B) the Company or any
Person publicly announces an intention to take or to consider
taking actions which, if consummated, would constitute a Change in
Control; (C) any Person becomes the Beneficial Owner (within
the meaning set forth in Rule 13d-3 under the 1934 Act), directly
or indirectly, of voting securities of the Company representing 10%
or more of the combined voting power of the Company’s then
outstanding voting securities; or (D) the Board or the
stockholders of the Company adopts a resolution approving any of
the foregoing or approving any Change in Control, and ending
upon either (I) the second anniversary of the Change in
Control or (II) the date the Change in Control transaction is
abandoned or terminated (for this purpose, the Board shall have the
sole and absolute discretion to determine that a proposed
transaction has been abandoned).
“Code”
means the Internal Revenue Code of
1986.
“Company”
means FCStone Group, Inc., an
Delaware corporation, and any successor thereto.
“Disabled” or
“Disability” means an individual (i) is unable to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period
of not less than twelve (12) months or (ii) is, by reason
of any medically determinable
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physical or mental impairment which
can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than
3 months under a Company-sponsored accident and health
plan.
“Effective
Date” means
September 1, 2006.
“Employee”
means a common law employee of the
Company or an Affiliate.
“Good
Reason” means,
without a Participant’s consent (i) any resignation for
“good reason” under any employment agreement with the
Company the Participant is a party to, (ii) any reduction in a
Participant’s annual base salary as in effect immediately
preceding the commencement of the CIC Protected Period or as the
same may be increased from time to time, (iii) any action by
the Board that results in a diminution in the Participant’s
position, authority, duties or responsibilities as in effect
immediately preceding the commencement of the CIC Protected Period,
other than an isolated, insubstantial and inadvertent action that
is not taken in bad faith and is remedied by the Board within a
reasonable time after receipt of notice thereof from the
Participant; or (iv) any requirement by the Board that the
Participant’s services be rendered primarily at a location or
locations other than the company-approved location at which the
Participant is officed at the time of the start of the CIC
Protected Period other than for a de minimis period of
time.
“Multiple”
means, with respect to any
Participant, the number set forth opposite the Participant’s
name under the heading “Benefit Level” on Schedule A
hereto.
“Participant”
means a Participant who is
designated as such pursuant to Section 3.1
“Person”
shall have the meaning ascribed to
such term in Section 3(a)(9) of the 1934 Act and used in
Sections 13(d) and 14(d) thereof, including “group” as
defined in Section 13(d) thereof.
“Plan”
means the FCStone Group, Inc. Change
in Control Severance Plan, as set forth in this instrument and as
hereafter amended from time to time.
“Separation
Benefits” means the
benefits described in Section 4 that are provided to
qualifying Participants under the Plan.
“Separation
Period” means, with
respect to any Participant, the period beginning on the last day of
a Participant’s employment and ending after the number of
months equal to the Multiple for such Participant.
SECTION 2.2 General Interpretive
Principles. (i) Words in the singular shall include the
plural and vice versa, and words of one gender shall include the
other gender, in each case, as the context requires; (ii) the
terms “hereof,” “herein,” and
“herewith” and words of similar import shall, unless
otherwise stated, be construed to refer to this Plan and not to any
particular provision of this Plan, and references to Sections are
references to the Sections of this Plan unless otherwise specified;
(iii) the word “including” and words of
similar import when used in this
Plan shall mean “including, without limitation,” unless
otherwise specified; and (iv) any reference to any U.S.
federal, state, or local statute or law shall be deemed to also
refer to all amendments or successor provisions thereto, as well as
all rules and regulations promulgated under such statute or law,
unless the context otherwise requires.
SECTION 3
ELIGIBILITY
SECTION 3.1 Participants .
Each of the Participants named on Schedule A hereto shall be a
Participant in the Plan.
SECTION 3.2 Duration of
Participation . A Participant shall only cease to be a
Participant in the Plan as a result of an amendment or termination
of the Plan complying with Section 6.1 of the Plan, or when
the Participant ceases to be an Employee, unless, at the time he
ceases to be an Employee, such Participant is entitled to a payment
of Separation Benefit as provided in the Plan or there has been an
event or occurrence that constitutes Good Reason which would enable
the Participant to terminate his employment and receive a
Separation Benefit. A Participant entitled to payment of a
Separation Benefit or any other amount under the Plan shall remain
a Participant in the Plan until the full amount of the Separation
Benefit and any other amounts payable under the Plan have been paid
to the Participant.
SECTION 4
SEPARATION BENEFITS
SECTION 4.1 Terminations Other
Than for Cause, Death or Disability; Participant Resignation .
If, during the CIC Protected Period, a Participant shall terminate
employment for Good Reason or the Company shall terminate a
Participant’s employment other than (I) for Cause or
(II) on account of the Participant’s death or Disability, the
Company shall pay to the Participant in accordance with
Section 4.3, as compensation for services rendered to the
Company, an amount equal to the aggregate of the following amounts
set forth below in Sections 4.1(a), (b), (c) and (d), and
provide to the Participant the benefits provided in
Section 4.1(e).
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(a)
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a cash amount equal to the sum of
(A) the Participant’s full annual base salary from the
Company and its Affiliates through the last day of the
Participant’s employment with the Company, to the extent not
theretofore paid, (B) a bonus in an amount at least equal to
the average annualized incentive awards paid or payable pursuant to
any Company-sponsored annual incentive compensation plan, including
by reason of any deferral under a Company-sponsored deferred
compensation program, to the Participant by the Company and its
Affiliates during the two fiscal years of the Company (or if the
Participant shall have performed services for the Company and its
Affiliates for less than two fiscal years , the years during which
a Participant performed services) immediately preceding the fiscal
year in which the Participant’s employment with the Company
ends, multiplied by a fraction, the numerator of which is the
number of days in the fiscal year in which the Participant’s
employment ends that the
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Participant was employed and the
denominator of which is 365 or 366, as applicable, to the extent
not theretofore paid, (C) any accrued unpaid vacation
pay;
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(b)
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a cash amount
equal to (A) the product of the Participant’s Multiple
multiplied by the Participant’s highest monthly base
salary from the Company and its Affiliates in effect during the
twelve (12)-month period prior to the last day of the
Participant’s employment with the Company, plus (B) the
product of the Participant’s Multiple times the quotient of
(i) the Participant’s average annualized annual
incentive compensation awards, paid, or, but for a deferral under a
Company-sponsored deferred compensation program, would have been
paid, to the Participant by the Company and its Affiliates during
the three fiscal years of the Company (or if the Participant shall
have performed services for the Company and its Affiliates for less
than three fiscal years, the years during which the Participant
performed services) immediately preceding the fiscal year in which
the Participant’s employment ends with the Company divided
by (ii) 12;
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(c)
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if on the date
the Participant’s employment with the Company ends, the
Participant shall not be fully vested in any employer contributions
made on a Participant’s behalf under the Company’s
qualified defined contribution retirement plan, a cash amount equal
to the value of the unvested portion of such employer
contributions;
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(d)
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a cash amount
equal to 50% of the average annualized equity compensation expense
that has been recognized by the Company for financial reporting
purposes, in accordance with Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 123 (revised
2004), Share-Based Payment or other successor release for
share-based payments, for awards, if any, granted to the
Participant under the Company’s long-term incentive plans or
programs during the two immediately preceding fiscal years of the
Company (or if the Participant shall have performed services for
the Company and its Affiliates for less than two fiscal years, the
years during which the Participant performed services);
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(e)
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during the
separation period, the Company shall provide the Participant and
the Participant’s dependents with medical, accident,
disability and/or life insurance coverage upon substantially the
same terms and otherwise substantially to the same extent as such
coverage was being provided to the Participant and the
Participant’s dependent(s) immediately before the last day of
the Participant’s employment with the Company. Additional
requirements for the provision of this continuation coverage are as
follows:
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(i)
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At the Company’s election,
such continuation coverage may be provided by (A) continuing
such coverage under the Company’s existing welfare benefit
plans, (B) with respect to any group health care plan and for
the applicable period permitted under Code
Section 4980B(f)(2), the Participant and/or the
Participant’s dependent(s) being deemed to have elected to
receive such coverage pursuant to a continuation election under
Code Section 4980B with the Company being obligated to pay for
the
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entire portion of the applicable
COBRA premiums, (C) the Company purchasing an individual
policy (to the extent such a policy is reasonably available in the
marketplace) for the Participant and/or the Participant’s
dependent(s) providing substantially similar coverage as offered
under the Company’s plan, or (D) any combination of the
forgoing methods under (A), (B) and (C) of this
paragraph.
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(ii)
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If, before the
end of the Separation Period but after the applicable period
permitted under Code Sections 4980B(f)(2) in which the Participant
and the Participant’s dependent(s) could have elected to
receive coverage under the Company’s existing welfare benefit
plan has expired, the Company is not reasonably able to continue
the above referenced welfare plan coverage under the
Company’s existing welfare benefit plans, and the Company
cannot provide such continued coverage through the purchase of an
individual policy without incurring an expense of more than 150% of
the COBRA premium cost the Company was paying on behalf of the
Participant and the Participant’s dependent(s) immediately
before such entitlement to COBRA coverage ended, then the Company
shall pay the Participant an amount each month for the duration of
the Separation Period equal to 150% of the monthly COBRA premium
cost the Company was paying immediately before the
Participant’s entitlement to receive COBRA continuation
coverage expired.
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(iii)
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Notwithstanding
the foregoing sentence, if any of the medical, accident, disability
or life insurance plans then in effect
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