AMENDED AND
RESTATED
EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED AGREEMENT (this “Agreement”), made
and entered into effective as of December 31, 2008 (the
“Effective Date”) by and between Ted R. Antennuci (the
“Executive”) and ProLogis, a Maryland real estate
investment trust (the “Company”),
WHEREAS,
the Executive and the Company are parties to an employment
agreement dated June 5, 2005 (the “Original
Agreement”);
WHEREAS,
the Original Agreement was amended and restated effective as of
May 26, 2006 (the “Amended Agreement”) and the
Amended Agreement was subsequently amended; and
WHEREAS,
the parties desire to amend, restate and continue the Amended
Agreement to reflect certain changes to the terms and conditions of
the Executive’s employment with the Company and to reflect
changes required by section 409A of the Internal Revenue Code of
1986, as amended (the “Code”);
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
set forth below, it is hereby covenanted and agreed by the
Executive and the Company as follows:
1.
Term . Subject to the terms and conditions of this
Agreement, the Company hereby agrees to continue to employ the
Executive as its President and Chief Investment Officer for the
Agreement Term (as defined below), and the Employee hereby agrees
to remain in the employ of the Company and to provide services
during the Agreement Term in accordance with this Agreement. The
“Agreement Term” shall be the period beginning on the
Effective Date and ending on December 31, 2012. Thereafter,
the Agreement Term will be automatically extended for 12-month
periods, unless one party to this Agreement provides notice of
non-renewal to the other at least three months before the last day
of the then current Agreement Term. Notwithstanding the foregoing,
if a Change in Control (as defined below) occurs during the
Agreement Term, the Agreement Term shall continue until the later
of (a) the twenty-fourth calendar month after the calendar
month in which the Change in Control occurs or (b) the date on
which the Agreement Term would otherwise expire. For purposes of
this Agreement, the portion of the Agreement Term that occurs
during the period of twenty-four months following a Change in
Control is sometimes referred to as the “Change in Control
Protection Period”.
2.
Performance of Services . The Executive’s employment
with the Company shall be subject to the following:
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(a)
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During the Agreement Term, while the
Executive is employed by the Company, the Executive shall devote
his full time, energies and talents to serving as its President and
Chief Investment Officer.
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(b)
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The
Executive shall report to the Chief Executive Officer of the
Company. The Executive agrees that he shall perform his duties
faithfully and efficiently subject to the directions of the Chief
Executive Officer of the Company. The Executive’s duties may
include providing services for both the Company and the
Subsidiaries (as defined below), as determined by the Board of
Trustees of the Company (the “Board”); provided, that
the Executive shall not, without his consent, be assigned tasks
that would be inconsistent with those of President and Chief
Investment Officer. The Executive shall have such authority, power,
responsibilities and duties as are inherent in his positions (and
the undertakings applicable to his positions) and necessary to
carry out his responsibilities and the duties required of him
hereunder.
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(c)
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Notwithstanding the foregoing
provisions of this paragraph 2, during the Agreement Term, the
Executive may devote reasonable time to activities other than those
required under this Agreement, including the supervision of his
personal investments, and activities involving professional,
charitable, community, educational, religious and similar types of
organizations, speaking engagements, membership on the boards of
directors of other organizations, and similar types of activities,
to the extent that such other activities do not in the judgment of
the Board, inhibit or prohibit the performance of the
Executive’s duties under this Agreement, or conflict in any
material way with the business of the Company or any Subsidiary;
provided, however, that the Executive shall not serve on the board
of any business, or hold any other position with any business,
without the consent of the Board.
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(d)
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The
term “Subsidiary” shall mean any person with whom the
Company is considered to be a single employer under section 414(b)
of the Code and all persons with whom the Company would be
considered a single employer under section 414(c) of the Code but
using an ownership standard of “more than 50%” rather
than “at least 80%” where applicable.
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3.
Compensation . Subject to the terms of this Agreement,
during the Agreement Term, while the Executive is employed by the
Company, the Company shall compensate him for his services as
follows:
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(a)
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Salary . The Executive shall receive, for
each 12-consecutive month period beginning on the Effective Date
and ending on each anniversary thereof, in substantially equal
monthly or more frequent installments, an annual base salary of not
less than $630,000 (the “Salary”).
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(b)
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Bonus . The Executive may receive an
annual target bonus of $870,000 (the “Target Bonus”);
provided, however, that the actual amount of the Target Bonus that
will be earned by and payable to the Executive in any year will
be
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determined upon the satisfaction of
goals and objectives established by the Chief Executive Officer or
a duly authorized committee of the Board for such year and
communicated to the Executive and shall be subject to such other
terms and conditions of the Company’s bonus plan as in effect
from time to time; and provided further that in no event shall the
amount of the Executive’s annual bonus be less than
80 percent of the Target Bonus. The goals and objectives
established for the Executive shall be similar in magnitude to the
magnitude of the goals and objectives established for other members
of the senior management of the Company. The Target Bonus shall be
paid in accordance with the Company’s annual bonus plan.
Notwithstanding the foregoing, for the Change in Control Protection
Period, the Executive shall be entitled to participate in annual
cash-based incentive compensation plans which, in the aggregate,
provide bonus opportunities which are not materially less favorable
to the Executive than the greater of (i) the opportunities
provided by the Company for executives with comparable levels of
responsibility as in effect from time to time, or (ii) the
opportunities provided in accordance with the foregoing provisions
of this subparagraph 3(b).
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(c)
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Performance Shares
. As of May 26,
2006, the Executive was granted 50,000 performance shares (the
“Performance Shares”) under the ProLogis 2006 Long-Term
Incentive Plan (the “LTIP”). Such Performance Shares
shall vest based on the Company’s performance as compared to
a defined index of 50 publicly traded real estate companies under
the performance program established by the Committee at the time of
grant (the “Performance Measures”). Fifty percent of
the Performance Shares will vest based on satisfaction of the
Performance Measures for the period commencing on May 26, 2006
and ending on December 31, 2009 and fifty percent of the
Performance Shares will vest based on satisfaction of the
Performance Measures for the period commencing on May 26, 2006
and ending on December 31, 2010, provided, in each case, that
the Executive’s Date of Termination has not occurred prior to
the applicable vesting date. The Performance Shares shall be
subject to such other terms and conditions as determined by the
Management Development and Compensation Committee of the Board (the
“Committee”) in accordance with the LTIP.
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(d)
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Long-Term Incentives
. For each
12-consecutive-month period during the Agreement Term beginning in
December, 2008, the Executive shall be entitled to grants of
equity-based awards under the LTIP (or a successor plan thereto)
having an annual aggregate value of $1.2 million. The date on
which such grants shall occur, the types of grants and the terms
and conditions applicable to such awards shall be determined by the
Committee in its discretion under the LTIP (or a successor plan
thereto), provided that the intent is that the awards made pursuant
to this subparagraph 3(d) will be made at the same time as annual
long-term incentive awards are made to other senior executives of
the Company. The foregoing shall not apply to any portion of the
Change in Control Protection Period. For the Change in Control
Protection Period, the Executive shall be eligible to participate
in incentive compensation plans on a basis not
materially
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less favorable to the Executive than
that applicable to other executives of the Company with comparable
levels of responsibility as in effect from time to time.
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(e)
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Benefit Plans
. Except as otherwise
specifically provided to the contrary in this Agreement, the
Executive shall be eligible to participate in the Company’s
employee benefit plans, programs, policies and arrangements to the
same extent and on the same terms as those benefits are provided by
the Company from time to time to the Company’s other
similarly situated senior management employees. However, the
Company shall not be required to provide a benefit under this
subparagraph 3(e) if such benefit would duplicate (or otherwise be
of the same type as) a benefit specifically required to be provided
under another provision of this Agreement. The Executive shall
complete all forms and physical examinations, and otherwise take
all other similar actions to secure coverage and benefits described
in this subparagraph 3(e), to the extent determined to be necessary
or appropriate by the Company.
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(f)
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Expense Reimbursements
. The Executive is
authorized to incur reasonable expenses for entertainment,
traveling, meals, lodging and similar items in promoting the
Company’s business. The Company will reimburse the Executive
for all reasonable expenses so incurred in accordance with the
normal practices of the Company.
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(g)
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Vesting on Change in
Control . In
the event that (i) following a Change in Control, the
Executive’s Date of Termination (as defined in subparagraph
4(h)) occurs as a result of termination by the Company (or a
successor) for reasons other than Cause (as defined in subparagraph
4(c)) or the Executive’s employment terminates by reason of a
Constructive Discharge (as defined in subparagraph 4(d)) or
(ii) the LTIP (or a successor plan thereto) is terminated by
the Company or a successor following a Change in Control without
provision for the continuation of the outstanding equity-based
awards granted to the Executive pursuant to the Original Agreement
(the “Protected Awards”), any portion of the then
outstanding Protected Awards shall become immediately fully vested
and, to the extent applicable, exercisable, and any awards granted
under the ProLogis 1997 Long Term Incentive Plan (the “1997
LTIP”), the LTIP or under any other incentive, compensation
or other plan that are held by the Executive on the Date of
Termination shall vest and shall be exercisable or payable in
accordance with their terms. For purposes of this Agreement, a
“Change in Control” means the happening of any of the
following:
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(i)
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The
consummation of a transaction, approved by the shareholders of the
Company, to merge the Company into or consolidate the Company with
another entity, sell or otherwise dispose of all or substantially
all of its assets or adopt a plan of liquidation, provided,
however, that a Change in Control shall not be deemed to have
occurred by reason of a transaction, or a substantially concurrent
or otherwise related series of transactions, upon the completion of
which 50% or more of the beneficial ownership of the voting power
of the Company, the surviving corporation or corporation
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directly or indirectly controlling
the Company or the surviving corporation, as the case may be, is
held by the same persons (as defined below) (although not
necessarily in the same proportion) as held the beneficial
ownership of the voting power of the Company immediately prior to
the transaction or the substantially concurrent or otherwise
related series of transactions, except that upon the completion
thereof, employees or employee benefit plans of the Company may be
a new holder of such beneficial ownership.
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(ii)
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The
“beneficial ownership” (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) of securities representing 50% of more
of the combined voting power of the Company is acquired, other than
from the Company, by any “person” as defined in
Sections 13(d) and 14(d) of the Exchange Act (other than any
trustee or other fiduciary holding securities under an employee
benefit or other similar stock plan of the Company).
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(iii)
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At
any time during any period of two consecutive years, individuals
who at the beginning of such period were members of the Board cease
for any reason to constitute at least a majority thereof (unless
the election, or the nomination for election by the Company’s
shareholders, of each new trustee was approved by a vote of at
least two-thirds of the trustees still in office at the time of
such election or nomination who were trustees at the beginning of
such period).
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(iv)
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For
purposes of this Agreement, the following terms shall be defined as
indicated:
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(1)
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The
term “Beneficial Owner” shall mean beneficial owner as
defined in Rule 13d-3 under the Exchange Act.
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(2)
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Entities shall be treated as being
under “common control” during any period in which they
are “affiliates” of each other as that term is defined
in the Exchange Act.
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(3)
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The
term “person” shall be as defined in Sections 13(d) and
14(d) of the Exchange Act, but shall exclude any trustee or other
fiduciary holding securities under an employee benefit or other
similar stock plan of the Company.
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If the
Executive becomes employed by the entity into which the Company is
merged, or the purchaser of substantially all of the assets of the
Company, or a successor to such entity or purchaser, the Executive
shall not be treated as having terminated employment for purposes
of this Agreement until such time as the Executive terminates
employment with the merged entity or purchaser (or successor), as
applicable. If the Executive is transferred to employment with a
Subsidiary of the Company (regardless of whether
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before, on,
or after a Change in Control), such transfer shall not constitute a
termination of employment for purposes of this
Agreement.
4.
Termination . The Executive’s employment with the
Company during the Agreement Term may be terminated by the Company
or the Executive without any breach of this Agreement only under
the circumstances described in subparagraphs 4(a) through
4(f):
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(a)
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Death . The Executive’s employment
hereunder will terminate upon his death.
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(b)
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Permanent Disability
. The Company may
terminate the Executive’s employment during any period in
which he is Permanently Disabled. The Executive shall be considered
“Permanently Disabled” during any period in which he is
unable, by reason of a medically determinable physical or mental
impairment, to engage in the material and substantial duties of his
regular occupation, and such condition is expected to be permanent,
as determined by the Board.
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(c)
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Cause . The Company may terminate the
Executive’s employment hereunder at any time for Cause. For
purposes of this Agreement, the term “Cause” shall mean
in the reasonable judgment of the Board (i) the willful and
continued failure by the Executive to substantially perform his
duties with the Company or any Subsidiary after written
notification by the Company or Subsidiary, (ii) the willful
engaging by the Executive in conduct which is demonstrably
injurious to the Company or any Subsidiary, monetarily or
otherwise, or (iii) the engaging by the Executive in egregious
misconduct involving serious moral turpitude. For purposes hereof,
no act, or failure to act, on the Executive’s part shall be
deemed “willful” unless done, or omitted to be done, by
the Executive not in good faith and without reasonable belief that
such action was in the best interest of the Company or
Subsidiary.
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(d)
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Constructive Discharge
. If (I) the
Executive provides written notice to the Company of the occurrence
of Good Reason (as defined below) within 90 days after the
Executive has knowledge of the circumstances constituting Good
Reason (as defined below), which notice specifically identifies the
circumstances which the Executive believes constitute Good Reason;
(II) the Company fails to correct the circumstances within
30 days after receipt of such notice or fails to notify the
Executive of the Company’s intended method of correction and
the timing thereof; (III) the Company fails to cure the
circumstances within the cure period or the time specified in the
Company’s response to the Executive, and (IV) the
Executive resigns within 90 days after the expiration of the
cure period or the time specified in the Company’s response
to the Executive, then the Executive’s Date of Termination
shall be considered to have occurred by reason of a Constructive
Discharge. For purposes of this Agreement, “Good
Reason” shall mean, without the Executive’s express
written consent, the occurrence of any of the following
circumstances which occur during the Agreement Term:
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(i)
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The
assignment to the Executive of any duties materially inconsistent
with the Executive’s position and status as President and
Chief Investment Officer of the Company.
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(ii)
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A
material reduction by the Company in the Executive’s Salary
to an amount that is less than required under subparagraph
3(a).
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(iii)
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The
relocation of the Executive’s base office in Evergreen,
Colorado to an office that is more than 30 highway miles of the
Executive’s base office on the Effective Date.
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(iv)
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The
Company’s material breach of a material term of this
Agreement.
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The
Executive’s right to terminate his employment pursuant to
this subparagraph 4(d) shall not be affected by his incapacity due
to physical or mental illness. The Executive’s continued
employment shall not constitute consent to, or a waiver of rights
with respect to, any circumstance constituting Good Reason
hereunder.
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(e)
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Termination by the
Executive .
The Executive may terminate his employment hereunder at any time
for any reason by giving the Company prior written Notice of
Termination (as defined in subparagraph 4(g)), which Notice of
Termination shall be effective not less than 30 days after it is
given to the Company (15 days following a Change in Control),
provided that nothing in this Agreement shall require the Executive
to specify a reason for any such termination. However, to the
extent that the procedures specified in subparagraph 4(d) are
required, the procedures of this subparagraph 4(e) may not be used
in lieu of the procedures required under subparagraph
4(d).
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(f)
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Termination by Company
. The Company may
terminate the Executive’s employment hereunder at any time
for any reason, by giving the Executive prior written Notice of
Termination, which Notice of Termination shall be effective
immediately, or such later time as is specified in such notice. The
Company shall not be required to specify a reason for the
termination under this subparagraph 4(f), provided that termination
of the Executive’s employment by the Company shall be deemed
to have occurred under this subparagraph 4(f) only if it is not for
reasons described in subparagraph 4(b), 4(c), 4(d), or 4(e).
Notwithstanding the foregoing provisions of this subparagraph 4(f),
if the Executive’s employment is terminated by the Company in
accordance with this subparagraph 4(f), and within a reasonable
time period thereafter, it is determined by the Board that
circumstances existed which would have constituted a basis for
termination of the Executive’s employment for Cause in
accordance with subparagraph 4(c) disregarding circumstances which
could have been remedied if notice had been given in accordance
with subparagraph 4(c), the Executive’s employment will be
deemed to have been terminated for Cause in accordance with
subparagraph 4(c).
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(g)
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Notice of Termination
. Any termination of the
Executive’s employment by the Company or the Executive (other
than a termination pursuant to subparagraph 4(a)) must be
communicated by a written Notice of Termination to the other party
hereto. For purposes of this Agreement, a “Notice of
Termination” means a dated notice which indicates the Date of
Termination (not earlier than the date on which the notice is
provided or such later date otherwise required by this Agreement),
and which indicates the specific termination provision in this
Agreement relied on and which sets forth in reasonable detail the
facts and circumstances, if any, claimed to provide a basis for
termination of the Executive’s employment under the provision
so indicated.
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(h)
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Date of Termination
. “Date of
Termination” means the last day the Executive is employed by
the Company and the Subsidiaries, provided that the
Executive’s employment is terminated in accordance with the
foregoing provisions of this paragraph 4.
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(i)
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Effect of Termination
. If, on the Date of
Termination, the Executive is a member of the Board or the board of
trustees or board of directors any of the Subsidiaries, or holds
any other position with the Company and the Subsidiaries (other
than the position described in subparagraph 2(a)), the Executive
shall resign from all such positions as of the Date of
Termination.
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5.
Rights Upon Termination . The Executive’s right to
payment and benefits under this Agreement for periods after his
Date of Termination shall be determined in accordance with the
following provisions of this paragraph 5:
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(a)
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Minimum Payments and
Benefits . If
the Executive’s Date of Termination occurs during the
Agreement Term for any reason, the Company shall pay to the
Executive:
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(i)
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The
Executive’s Salary (to the extent not previously paid) for
the period ending on the Date of Termination, payable in a lump sum
within 30 days after the Executive’s Date of
Termination.
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(ii)
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Payment for unused vacation days, as
determined in accordance with Company policy as in effect from time
to time, payable, if applicable, in a lump sum within 30 days after
the Executive’s Date of Termination.
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(iii)
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If
the Date of Termination occurs after the end of a performance
period and prior to the payment of the Target Bonus (as described
in subparagraph 3(b)) for the period, the Executive shall be paid
such bonus amount at the regularly scheduled time.
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(iv)
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Any
other payments or benefits to be provided to the Executive by the
Company pursuant to any employee benefit plans or arrangements
adopted by the Company, to the extent such amounts are due from
the
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Company,
payable in accordance with the applicable plans and
arrangements.
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Except as may otherwise be expressly
provided to the contrary in this Agreement, nothing in this
Agreement shall be construed as requiring the Executive to be
treated as employed by the Company for purposes of any employee
benefit plan or arrangement following the date of the
Executive’s Date of Termination.
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(b)
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Death, Permanent Disability, Cause
or Voluntary Resignation . If the Executive’s Date of
Termination occurs during the Agreement Term under circumstances
described in subparagraph 4(a) (relating to the Executive’s
death), subparagraph 4(b) (relating to the Executive’s being
Permanently Disabled), subparagraph 4(c) (relating to the
Executive’s termination for Cause), subparagraph 4(e)
(relating to the Executive’s resignation), or if the
Executive’s employment with the Company terminates after the
end of the Agreement Term then, except as otherwise expressly
provided in this Agreement or otherwise agreed in writing between
the Executive and the Company, the Company shall have no obligation
to make payments under the Agreement for periods after the
Executive’s Date of Termination; provided, however that if
the Date of Termination occurs as a result of death or on account
of the Executive being Permanently Disabled, equity-based awards
granted to the Executive under the 1997 LTIP and the LTIP (or a
successor plan thereto), to the extent then outstanding, shall be
fully vested as of the Date of Termination.
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(c)
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Termination Without Cause;
Constructive Discharge . If the Executive’s Date of
Termination occurs during the Agreement Term under circumstances
described in subparagraph 4(d) (relating to Constructive Discharge)
or subparagraph 4(f) (relating to termination by the Company
without Cause), then, in addition to the amounts payable in
accordance with subparagraph 5(a):
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(i)
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The
Executive shall receive from the Company for the period (the
“Severance Period”) from the Date of Termination
through the end of the Agreement Term or, if later, the six month
an
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