Exhibit 10.34
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”)
made December 11 2007, between TIME WARNER INC., a Delaware
corporation (the “Company”), and Jeffrey Bewkes
(“You”).
You are
currently employed by Time Warner Inc. (the “Company”)
pursuant to an Employment Agreement between you and the Company
dated December 22, 2003, which includes a separate
Confidentiality Non Competition and Ownership Agreement (the
“Prior Agreement”). The Prior Agreement shall continue
to govern the terms of your employment through December 31,
2007 and this Agreement shall become effective January 1, 2008
(the “Effective Date”) for all purposes other than
Section 3.5, which shall be and become effective upon the
execution of this Agreement. In all other respects, this Agreement
shall amend and supersede the terms of the Prior Agreement
(including the Confidentiality Non Competition and Ownership
Agreement) effective with the Effective Date. You and the Company
therefore agree as follows:
1. Term of Employment .
Your “term of employment” as this phrase is used
throughout this Agreement shall be for the period beginning on the
Effective Date and ending on December 31, 2012 (the
“Term Date”), subject, however, to earlier termination
as set forth in this Agreement.
2. Employment . During
the term of employment, you shall serve as Chief Executive Officer,
Time Warner Inc. and shall report only to the Board of Directors of
the Company. You shall have the authority, functions, duties,
powers and responsibilities normally associated with such position
and such additional authority, functions, duties, powers and
responsibilities as the Board of Directors of the Company may from
time to time delegate to you in addition thereto consistent with
your position with the Company. You shall, subject to your election
as such from time to time and without additional compensation,
serve during the term of employment in such additional offices of
comparable or greater stature and responsibility in the Company and
its subsidiaries and as a director and as a member of any committee
of the Board of Directors of the Company and its subsidiaries to
which you may be elected from time to time. During your employment,
(i) your services shall be rendered on a substantially
full-time, exclusive basis and you will apply on a substantially
full-time basis all of your skill and experience to the performance
of your duties, (ii) you shall have no other employment and,
without the prior written consent of the Board of Directors of the
Company, no outside business activities which require the devotion
of substantial amounts of your time, and (iii) unless you
consent otherwise, the place for the performance of your services
shall be the principal executive offices of the Company in the New
York City metropolitan area, subject to such reasonable travel as
may be required in the performance of your duties. The foregoing
shall be subject to the Company’s written policies, as in
effect from time to time, regarding vacations, holidays, illness
and the like and shall not prevent you from devoting such time to
your personal affairs (including service as a director of another
entity) as shall not interfere with the performance of your duties
hereunder, provided that you
comply
with Section 9 and any generally applicable written policies
of the Company on conflicts of interest and service as a director
of another corporation, partnership, trust or other entity.
3. Compensation .
3.1
Base Salary . The Company shall pay you a base salary at the
rate of not less than $1,750,000 per annum during the term of
employment (“Base Salary”). If you are elected to serve
as Chairman of the Board during the term of employment, your Base
Salary will be increased to not less than $2,000,000 per annum for
the remainder of the term of employment. The Company may increase,
but not decrease, your Base Salary during the term of employment
and upon any such increase the term “Base Salary” shall
mean such increased amount (subject to Section 5). Base Salary
shall be paid in accordance with the Company’s then current
payroll practices and policies with respect to senior executives.
For the purposes of this Agreement “senior executives”
shall mean the executive officers of the Company.
3.2
Bonus . In addition to Base Salary, you may be entitled to
receive during the term of employment an annual cash bonus
(“Bonus”) subject to and pursuant to the
Company’s Annual Bonus Plan for Executive Officers (such
plan, together with any successor plan of Company intended to
comply with Section 162(m) of the Internal Revenue Code of 1986, as
amended (the “Code”), being hereinafter referred to as
the “Annual Bonus Plan”). Although your Bonus is fully
discretionary, your target annual Bonus is $8,500,000, but the
parties acknowledge that your actual Bonus will vary depending on
the actual performance of you and the Company from a minimum of $0
and up to a maximum Bonus of $12,750,000 as determined by the
Compensation and Human Development Committee of the Board of
Directors of the Company (the “Compensation
Committee”). Each year, your personal performance will be
considered in the context of your executive duties and any
individual goals set for you, and your actual Bonus will be
determined at that time. Although as a general matter the Company
expects to pay bonuses at the target level in cases of satisfactory
individual performance, it does not commit to do so, and your Bonus
may be negatively affected by the exercise of the Compensation
Committee’s discretion based on overall Company performance.
Payments of any bonus compensation under this Section 3.2
shall be paid to you between January 1 and March 15 of the
calendar year immediately following the performance year in respect
of which such Bonus is earned.
3.3
Deferred Compensation Account . Pursuant to the terms of
employment agreements with the Company that preceded the Prior
Agreement, you previously have been paid deferred compensation
which has been deposited in a special account (the “Trust
Account”) maintained on the books of a Time Warner Inc.
grantor trust (the “Rabbi Trust”) for your benefit.
Consistent with the terms of the Prior Agreement, the Trust Account
shall be maintained by the trustee (“Trustee”) thereof
in accordance with the terms of Annex A attached hereto and
the
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trust
agreement (the “Trust Agreement”) establishing the
Rabbi Trust (which Trust Agreement shall in all respects remain
consistent with the terms of Annex A), until the full amount which
you are entitled to receive therefrom has been paid in full. The
Company shall pay all fees and expenses of the Trustee and shall
enforce the provisions of the Trust Agreement for your benefit. The
Company and you acknowledge that no amounts have been paid by the
Company or deferred by you into the Trust Account and the terms and
conditions governing the Trust Account have not been modified
subsequent to October 1, 2004.
3.4
Long Term Incentive Compensation . So long as the term of
employment has not terminated the Company annually shall provide
you with long term incentive compensation with a target value of
$8,500,000 (based on the valuation method and process used by the
Company with respect to awards made to its senior executives). In
2008, the long term incentive compensation will be in the form of
options to purchase no more than 1,500,000 shares of Time Warner
Common Stock and, for the remainder of the term of employment, the
long term incentive compensation will be paid through a combination
of stock option grants, restricted stock units, performance shares
or other equity-based awards, cash-based long-term plans or other
components as may be determined by the Compensation Committee of
the Company’s Board of Directors from time to time in its
sole discretion. The long term incentive compensation paid pursuant
to this section will be paid at the same times as paid to other
senior executives of the Company.
3.5
Upfront Equity Grants . Following execution of the Agreement
by both parties, you will be awarded a signing grant of 950,000
options to purchase shares of Time Warner Common Stock (the
“Upfront Options”) on the next regular grant date (the
1 st
and 15 th of each month
(or the next business day if the 1 st or 15
th is
not a business day)). The Upfront Options will be reflected in a
separate stock option agreement that will set forth the terms and
conditions of the Upfront Options. In the event your employment
with the Company is terminated as a result of a termination of
employment pursuant to Section 4.2 or due to your retirement,
then (i) there shall be no additional vesting of the Upfront
Options other than a pro-rata portion (based on the number of days
from the previous vesting date through the date of termination) of
the next installment of the Upfront Options shall vest on the
effective date of termination of your employment, and (ii) the
vested portion of the Upfront Options shall remain exercisable for
a period of five years (but not beyond the term of such Upfront
Options) from the earlier of the Severance Term Date and the
Benefit Cessation Date or the effective date of your retirement, as
applicable.
In addition, in January 2008,
you will be awarded 250,000 target performance stock units (the
“Upfront PSU Grant”). The Upfront PSU Grant shall be
reflected in a separate Performance Stock Units Agreement that will
set forth the terms and conditions of the Upfront PSU Grant,
including a provision that the performance period for the Upfront
Performance Stock Units
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Grant
will be the five-year period beginning on January 1, 2008 and
ending on December 31, 2012 and that the number of performance
stock units that will vest will be determined by the Compensation
Committee following the end of the performance period based on the
highest total stockholder return (“TSR”) of Time Warner
Common Stock for the three periods beginning January 1, 2008
and ending December 31, 2010, December 31, 2011 and
December 31, 2012, respectively, relative to the TSR of the
S&P 500 Index for the same periods, with a payout of 200% of
the Upfront PSU Grant if the Company’s TSR is at the 100
th
percentile and a payout of 100% if the Company’s TSR is at
the 50 th percentile and
a payout of 0 if the Company’s TSR is below the 25
th
percentile. In the event your employment with the Company is
terminated as a result of a termination pursuant to
Section 4.2 or due to your retirement, then (a) the
performance period for the Upfront PSU Grant will end at
December 31, 2008 if you retire pursuant to the second
sentence of Section 4.6 or, otherwise, at December 31 of
the year in which the effective date of termination of employment
or retirement occurs, (b) the Company’s relative TSR
will be measured based on the highest TSR achieved for the
period(s) beginning January 1, 2008 and ending on each
December 31 occurring thereafter during the shortened
performance period, and, subject to the certification by the
Compensation Committee of the performance level achieved by the
Company, the number of shares to be paid to you will be
(i) determined based on the highest TSR for such period(s) and
(ii) pro-rated at 20% if your termination occurs because you
retire pursuant to the second sentence of Section 4.6 or,
otherwise, pro-rated based on a fraction, the numerator of which is
the number of days from January 1, 2008 through the effective
date of termination of employment, and the denominator of which is
1827, and (c) the shares of Time Warner Common Stock to be
paid with respect to the Upfront PSU Grant will be paid to you as
soon as practicable following but not later than March 15 of
the year following the effective date of termination of
employment.
3.6 Indemnification . You
shall be entitled throughout the term of employment (and after the
end of the term of employment, to the extent relating to service
during the term of employment) to the benefit of the
indemnification provisions contained on the date hereof in the
Restated Certificate of Incorporation and By-laws of the Company
and in any other agreements or arrangements intended to provide you
with indemnification rights (not including any amendments or
additions after the date hereof that limit or narrow, but including
any that add to or broaden, the protection afforded to you by those
provisions).
4. Termination .
4.1
Termination for Cause . The Company may terminate the term
of employment and all of the Company’s obligations under this
Agreement, other than its obligations set forth below in this
Sections 4.1 and in Section 3.6, for “cause”.
Termination by the Company for “cause” shall mean
termination because of your (a) conviction (treating a nolo
contendere plea as a conviction) of a felony (whether or not any
right to appeal has been or may be exercised) other
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than as
a result of a moving violation or a Limited Vicarious Liability,
(b) willful failure or refusal without proper cause to perform
your material duties with the Company, including your material
obligations under this Agreement (other than any such failure
resulting from your incapacity due to physical or mental
impairment), (c) willful misappropriation, embezzlement or
reckless or willful destruction of Company property having a
significant adverse financial effect on the Company or a
significant adverse effect on the Company’s reputation,
(d) willful and material breach of any statutory or common law
duty of loyalty to the Company having a significant adverse
financial effect on the Company or a significant adverse effect on
the Company’s reputation; or (e) material and willful
breach of any of the covenants provided for in Sections 9 and
10. Such termination shall be effected by written notice thereof
delivered by the Company to you and shall be effective as of the
date of such notice; provided, however, that if (i) such
termination is because of your willful failure or refusal without
proper cause to perform your material duties with the Company
including any one or more of your material obligations under this
Agreement or for intentional and improper conduct, and
(ii) within 30 days following the date of such notice you
shall cease your refusal and shall use your best efforts to perform
such obligations or cease such intentional and improper conduct,
the termination shall not be effective. For purposes of this
definition of Cause, no act, or failure to act, on your part shall
be considered “willful” or “intentional”
unless done, or omitted to be done, by you not in good faith and
without reasonable belief that such action or omission was opposed
to the best interest of the Company. The term “Limited
Vicarious Liability” shall mean any liability which is based
on acts of the Company for which you are responsible solely as a
result of your office(s) with the Company; provided that
(x) you are not directly involved in such acts and either had
no prior knowledge of such intended actions or, upon obtaining such
knowledge, promptly acted reasonably and in good faith to attempt
to prevent the acts causing such liability or (y) after
consulting with the Company’s counsel, you reasonably
believed that no law was being violated by such acts.
In the
event of termination by the Company for cause, without prejudice to
any other rights or remedies that the Company may have at law or in
equity, the Company shall have no further obligation to you other
than (i) to pay Base Salary through the effective date of
termination, (ii) to pay any Bonus for any year prior to the
year in which such termination occurs that has been determined but
not yet paid as of the date of such termination, and
(iii) with respect to any rights you have with respect of
amounts credited to the Trust Account or the Deferred Compensation
Plan established by the Company on November 18,1998, as
amended, (the “Deferred Plan”), through the effective
date of termination or pursuant to any insurance or other benefit
plans or arrangements of the Company (including rights under
Section 8.2 hereof). You hereby disclaim any right to receive
a pro rata portion of any Bonus with respect to the year in which
such termination occurs.
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4.2
Termination by You for Material Breach by the Company and
Termination by the Company Without Cause . Unless previously
terminated pursuant to any other provision of this Agreement and
unless a Disability Period shall be in effect, you shall have the
right, exercisable by written notice to the Company, to terminate
the term of employment effective 30 days after the giving of
such notice, if, at the time of the giving of such notice, the
Company is in material breach of its obligations under this
Agreement; provided, however, that, with the exception of clause
(i) below, this Agreement shall not so terminate if such
notice is the first such notice of termination delivered by you
pursuant to this Section 4.2 and within such 30-day period the
Company shall have cured all such material breaches and provided
further, that such notice is provided to the Company within
90 days after your knowledge of the occurrence of such
material breach. A material breach by the Company shall include,
but not be limited to, (ii) the Company violating
Section 2 with respect to your title, your reporting solely to
the Board of Directors of the Company, authorities, functions,
duties, place of employment, powers or responsibilities (whether or
not accompanied by a change in title); and (iii) the Company
failing to cause any successor to all or substantially all of the
business and assets of the Company expressly to assume the
obligations of the Company under this Agreement.
The
Company shall have the right, exercisable by written notice to you
delivered before the date which is 60 days prior to the Term
Date, to terminate your employment under this Agreement without
cause, which notice shall specify the effective date of such
termination. If such notice is delivered on or after the date which
is 60 days prior to the Term Date, and the effective date of
such termination is no earlier than the Term Date, the provisions
of Section 4.3 shall apply.
4.2.1
After the effective date of a termination pursuant to this
Section 4.2 (a “termination without cause”), you
shall receive Base Salary and a pro rata portion of your Average
Annual Bonus (as defined below) through the effective date of
termination. Your Average Annual Bonus shall be equal to the
average of the regular annual bonus amounts (excluding the amount
of any special or spot bonuses) in respect of the two calendar
years during the most recent five calendar years for which the
annual bonus received by you during your employment as CEO was the
greatest; provided, however, if the Company has previously paid you
less than two annual bonuses for years during which you served as
CEO, then your Average Annual Bonus shall equal your target Bonus.
Your pro-rata Average Annual Bonus pursuant to this
Section 4.2.1 shall be paid to you at the time set forth in
Section 4.8.
4.2.2
After the effective date of a termination without cause, you shall
continue to be treated as an employee of the Company for a period
ending on the date (the “Severance Term Date”) which is
two years after the effective date of such termination, and during
such period you shall be entitled to receive, whether or not you
become disabled during such period
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but
subject to Section 6, (a) Base Salary (on the
Company’s normal payroll payment dates as in effect for
senior executives immediately prior to the effective date of your
termination without cause) at an annual rate equal to your Base
Salary in effect immediately prior to the notice of termination,
and (b) an annual Bonus in respect of each calendar year or
portion thereof (in which case a pro rata portion of such Bonus
will be payable) during such period equal to your Average Annual
Bonus. Except as provided in the second succeeding sentence, if you
accept other full-time employment during such period or notify the
Company in writing of your intention to terminate your status as an
employee during such period, you shall cease to be treated as an
employee of the Company for purposes of your rights to receive
certain post-termination benefits under Section 8.2 effective
upon the commencement of such other employment or the effective
date of such termination as specified by you in such notice,
whichever is applicable (the “Benefit Cessation Date”),
and you shall receive the remaining payments of Base Salary and
Bonus pursuant to this Section 4.2.2 at the times specified in
Section 4.8 of the Agreement. Notwithstanding the foregoing,
if you accept employment with any not-for-profit entity or
governmental entity, then you shall continue to be treated as an
employee of the Company for purposes of your rights to receive
certain post-termination benefits pursuant to Section 8.2 and
you will continue to receive the payments as provided in the first
sentence of this Section 4.2.2; and if you accept full-time
employment with any affiliate of the Company, then the payments
provided for in this Section 4.2.2 shall immediately cease and
you shall not be entitled to any further payments. For purposes of
this Agreement, the term “affiliate” shall mean any
entity which, directly or indirectly, controls, is controlled by,
or is under common control with, the Company.
4.3
After the Term Date . If at the Term Date, the term of
employment shall not have been previously terminated pursuant to
the provisions of this Agreement, no Disability Period is then in
effect and the parties shall not have agreed to an extension or
renewal of this Agreement or on the terms of a new employment
agreement, then the term of employment shall continue on a
month-to-month basis and you shall continue to be employed by the
Company pursuant to the terms of this Agreement, subject to
termination by either party hereto on 90 days written notice
delivered to the other party (which notice may be delivered by
either party at any time on or after the date which is 90 days
prior to the Term Date). If the Company shall terminate the term of
employment on or after the Term Date for any reason (other than for
cause as defined in Section 4.1, in which case Section 4.1
shall apply), then you shall receive any unpaid Annual Bonus or
award under Section 3.4 with respect to a year prior to the
year of termination which has been determined but not yet paid,
Base Salary and a pro rata portion of your Average Annual Bonus
through the effective date of termination. At the end of the 90-day
notice period provided for in the first sentence of this
Section 4.3, the term of employment shall end and you shall
cease to be an employee of the Company and you shall have no
further obligations or liabilities to the Company whatsoever,
except that Sections 3.6, 7, 9.1, 9.2, 10, 11 and 13, and
Annex A, shall survive such termination.
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4.4 Office Facilities . In the
event of a termination of your employment pursuant to
Section 4.2 or 4.3, then for the period beginning on the
effective date of such termination and ending one year thereafter,
the Company shall, without charge to you, make available to you
office space at your principal job location immediately prior to
your termination of employment, or other location reasonably close
to such location, together with secretarial services, office
facilities, services and furnishings, in each case reasonably
appropriate to an employee of your position and responsibilities
prior to such termination of employment but taking into account
your reduced need for such office space, secretarial services and
office facilities, services and furnishings as a result of your no
longer being a full-time employee.
4.5 Release . A condition
precedent to the Company’s obligation to make or continue the
payments associated with a termination without cause shall be your
execution and delivery of a release in the form attached hereto as
Annex B. If you shall fail to execute and deliver such release, or
if you revoke such release as provided therein, then in lieu of the
payments provided for herein, you shall receive a severance payment
determined in accordance with the Company’s policies relating
to notice and severance reduced by the aggregate amount of
severance payments paid pursuant to this Agreement, if any, prior
to the date of your refusal to deliver, or revocation or, such
release.
4.6 Retirement . Because you
have attained age 55 and ten years of service with the Company or
an Affiliate of the Company, if your employment is voluntarily
terminated by you at any time (other than pursuant to
Section 4.2) you will be considered to have
“retired” for purposes of this Agreement. Moreover, if
you are not elected to serve as Chairman of the Board of the
Company by January 1, 2009, and you give notice of your
retirement between January 1, 2009 and March 31, 2009,
then the retirement will become effective 30 days after the
giving of such notice and your obligations under Section 9.2
will not apply. In addition, if you retire pursuant to the
preceding sentence, you will receive an Annual Bonus with respect
to 2008, as well as Base Salary and a pro rata portion of your
Average Annual Bonus through the effective date of retirement. A
retirement pursuant to this Section 4.6 shall not be deemed a
“termination without cause” under this Agreement.
4.7 No Mitigation/No Offset .
The Company’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder
shall not be affected by any set-off, counterclaim, recoupment,
defense, or other claim, right or action that the Company may have
against you or others. In no event shall you be obligated to seek
other employment or take any other action by way of mitigation of
the amounts payable to you under any of the provisions of this
Agreement, and such amounts shall not be reduced whether or not you
obtain other employment.
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4.8 Payments . Payments of
Base Salary and Bonus required to be made to you after any
termination shall be made at the same times as such payments would
otherwise have been paid to you pursuant to Sections 3.1 and
3.2 if you had not been terminated, subject to
Section 13.17.
5. Disability .
5.1
Disability Payments . If during the term of employment and
prior to the delivery of any notice of termination without cause,
you become physically or mentally disabled, whether totally or
partially, so that you are prevented from performing your usual
duties for a period of six consecutive months, or for shorter
periods aggregating six months in any twelve-month period, the
Company shall, nevertheless, continue to pay your full compensation
through the last day of the sixth consecutive month of disability
or the date on which the shorter periods of disability shall have
equaled a total of six months in any twelve-month period (such last
day or date being referred to herein as the “Disability
Date”), subject to Section 13.17. If you have not
resumed your usual duties on or prior to the Disability Date, the
Company shall pay you a pro rata Bonus (based on your Average
Annual Bonus) for the year in which the Disability Date occurs and
thereafter shall pay you disability benefits for the period ending
on the later of (i) the Term Date or (ii) the date which
is twelve months after the Disability Date (in the case of either
(i) or (ii), the “Disability Period”), in an annual
amount equal to 75% of (a) your Base Salary at the time you
become disabled and (b) the Average Annual Bonus, in each
case, subject to Section 13.17.
5.2
Recovery from Disability . If during the Disability Period
you shall fully recover from your disability, the Company shall
have the right (exercisable within 60 days after notice from
you of such recovery), but not the obligation, to restore you to
full-time service at full compensation. If the Company elects to
restore you to full-time service, then this Agreement shall
continue in full force and effect in all respects and the Term Date
shall not be extended by virtue of the occurrence of the Disability
Period. If the Company elects not to restore you to full-time
service, you shall continue to receive disability benefits and
shall be entitled to obtain other employment, subject, however, to
the following: (i) you shall perform advisory services during
any balance of the Disability Period; and (ii) you shall
comply with Sections 9 and 10 during the Disability Period.
The advisory services referred to in clause (i) of the
immediately preceding sentence shall consist of rendering advice
concerning the business, affairs and management of the Company as
requested by the Board of Directors of the Company but you shall
not be required to devote more than five days (up to eight hours
per day) each month to such services, which shall be performed at a
time and place mutually convenient to both parties. Any income from
such other employment shall not be applied to reduce the
Company’s obligations under this Agreement.
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5.3
Other Disability Provisions . The Company shall be entitled
to deduct from all payments to be made to you during the Disability
Period pursuant to this Section 5 an amount equal to all
disability payments received by you during the Disability Period
from Worker’s Compensation, Social Security and disability
insurance policies maintained by the Company; provided, however,
that for so long as, and to the extent that, proceeds paid to you
from such disability insurance policies are not includible in your
income for federal income tax purposes, the Company’s
deduction with respect to such payments shall be equal to the
product of (i) such payments and (ii) a fraction, the
numerator of which is one and the denominator of which is one less
the maximum marginal rate of federal income taxes applicable to
individuals at the time of receipt of such payments. All payments
made under this Section 5 after the Disability Date are
intended to be disability payments, regardless of the manner in
which they are computed. Except as otherwise provided in this
Section 5, the term of employment shall continue during the
Disability Period and you shall be entitled to all of the rights
and benefits provided for in this Agreement, except that
Sections 4.2 shall not apply during the Disability Period, and
unless the Company has restored you to full-time service at full
compensation prior to the end of the Disability Period, the term of
employment shall end and you shall cease to be an employee of the
Company at the end of the Disability Period and shall not be
entitled to notice and severance or to receive or be paid for any
accrued vacation time or unused sabbatical.
6. Death . If you die
during the term of employment, this Agreement and all obligations
of the Company to make any payments hereunder shall terminate
except that your estate (or a designated beneficiary) shall be
entitled to receive any unpaid Annual Bonus award with respect to
the year prior to your death, Base Salary to the last day of the
month in which your death occurs and Bonus compensation (at the
time bonuses are normally paid) based on the Average Annual Bonus,
but prorated according to the number of whole or partial months you
were employed by the Company in such calendar year. For purposes of
clarity, it is intended that your death shall not affect any vested
rights you or your beneficiaries may have at the time of your death
pursuant to any insurance or other death benefit plans or
arrangements of the Company or any subsidiary or benefit and
incentive plans described in Sections 3.3, 8.1 and 8.2, which
vested rights shall continue to be governed by the provisions of
such plans and this Agreement.
7. Life Insurance . The
parties confirm that pursuant to the terms of the Prior Agreement
and employment agreements with the Company or Affiliates that
preceded the Prior Agreement, the Company has maintained $4,000,000
face amount of split ownership life insurance on your life. The
Company shall continue to maintain such life insurance, which will
be structured to comply with Section 409A of the Cod, and IRS
Notice 2007-34, and shall maintain such policy (without reduction
in the face amount of the coverage) until your death and
irrespective of any termination of this Agreement, except pursuant
to Section 4.1. You shall be entitled to designate the
beneficiary or beneficiaries of such policy, which may include a
trust. At your death, or on the
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earlier
surrender of such policy by the owner, your estate (or the owner of
the policy) shall promptly pay to the Company an amount equal to
the premiums on such policy paid by the Company and its
subsidiaries (net of (i) tax benefits, if any, to the Company
and its subsidiaries in respect of payments of such premiums,
(ii) any amounts payable by the Company which have been paid
by you or on your behalf with respect to such insurance,
(iii) dividends received by the Company and its subsidiaries
in respect of such premiums, but only to the extent such dividends
are not used to purchase additional insurance on your life, and
(iv) any unpaid borrowings by the Company and its subsidiaries
under the policy). If other than the Company, the owner of the
policy from time to time shall execute, deliver and maintain a
customary split dollar insurance agreement and collateral
assignment form, assigning to the Company the proceeds of the
policy but only to the extent necessary to secure the reimbursement
of the obligation contained in the preceding sentence. The Company
agrees that it will not borrow against the policy an amount in
excess of the premiums on such policy paid by the Company and its
subsidiaries (net of the amounts referred to in clauses (i),
(ii) and (iii) above). The life insurance provided for in
this Section 7 shall be in addition to any other insurance
hereafter provided by the Company or any of its subsidiaries on
your life under any group or individual policy. In addition to the
foregoing, during your employment with the Company, the Company
shall (x) provide you with $50,000 of group life insurance and
(y) pay you annually an amount equal to the premium you would
have to pay to obtain life insurance under the Group Universal Life
(“GUL”) insurance program made available by the Company
in an amount equal to (i) twice your Base Salary minus (ii)
$50,000. You shall be under no obligation to use the payments made
by the Company pursuant to the preceding sentence to purchase GUL
insurance or to purchase any other life insurance. If the Company
discontinues its GUL insurance program, the Company shall
nevertheless make the payments required by this Section 7 as
if such program were still in effect. The payments made to you
hereunder shall not be considered as “salary” or
“compensation” or “bonus” in determining
the amount of any payment under any pension, retirement,
profit-sharing or other benefit plan of the Company or any
subsidiary of the Company. The parties intend that any life
insurance provided under this Section 7 shall be provided in a
manner consistent with applicable laws.
8. Other Benefits
8.1
General Availability . To the extent that (a) you are
eligible under the general provisions thereof (including without
limitation, any plan provision providing for participation to be
limited to persons who were employees of the Company or certain of
its subsidiaries prior to a specific point in time) and
(b) the Company maintains such plan or program for the benefit
of its senior executives, during the term of your employment with
the Company, you shall be eligible to participate in any savings
plan, pension, profit-sharing, stock option or similar plan or
program and in any group life insurance (to the extent set forth in
Section 7), hospitalization, medical, dental, accident,
disability or similar plan or program of the Company now
11
existing
or established hereafter. In addition, you shall be entitled during
the term of employment, to receive other benefits generally
available to all senior executives of the Company to the extent you
are eligible under the general provisions thereof, including,
without limitation, to the extent maintained in effect by the
Company for its senior executives, an automobile allowance and
financial services.
8.2.
Benefits After a Termination or Disability . After the
effective date of a termination of employment pursuant to
Section 4.2 and prior to the Severance Term Date or, if
earlier, the Benefit Cessation Date or during the Disability
Period, you shall continue to be treated as an employee of the
Company for purposes of eligibility to participate in the
Company’s health and welfare benefit plans other than
disability programs and to receive the health and welfare benefits
(other than disability programs) required to be provided to you
under this Agreement to the extent such health and welfare benefits
are maintained in effect by the Company for its executives. During
the same period, you will also continue to receive all other
benefits maintained in effect by the Company for its senior
executives, such as financial services reimbursement or an
automobile allowance. After the effective date of a termination of
employment pursuant to Section 4 or during a Disability
Period, you shall not be entitled to any additional awards or
grants under any stock option, restricted stock or other
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