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Exhibit 10.H.7
EXECUTIVE EMPLOYMENT AGREEMENT
THIS IS AN EMPLOYMENT AGREEMENT (“ Agreement ”),
effective May 3, 2007, (“ Effective Date ”)
between Crown Holdings, Inc., (the “ Company ”),
and Raymond L. McGowan, Jr. (the “ Executive
”).
Background
WHEREAS,
the Company desires to assure itself of the continued employment of
the Executive with the Company and to encourage his continued
attention and dedication to the best interests of the
Company.
WHEREAS,
the Executive desires to remain and continue in the employment of
the Company in accordance with the terms of this
Agreement.
NOW, THEREFORE, in consideration of the promises and
mutual covenants contained herein and intending to be legally bound
hereby, the parties agree as follows:
Terms
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| 1. |
Definitions . As used in this Agreement, the
following terms shall have the meanings set forth below: |
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1.1. |
“ Board ” shall mean the Board of Directors
of the Company. |
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1.2. |
“ Cause ” shall mean the termination of the
Executive’s employment with the Company as a result of: |
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(a) the Executive’s willful failure to perform such
services as may be reasonably delegated or assigned to the
Executive by the Board, the Chairman of the Board, the Vice
Chairman of the Board, the Company’s Chief Executive Officer
or any other executive to whom the Executive reports; |
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(b) the continued failure by the Executive to devote his
full-time best effort to the performance of his duties under the
Agreement (other than any such failure resulting from the
Executive’s incapacity due to physical or mental
illness); |
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(c) the breach by the Executive of any provision of Sections 6,
7 and 8 hereof; |
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(d) the willful engaging by the Executive in misconduct which
is materially injurious to the Company, monetarily or otherwise;
or |
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(e) the Executive’s conviction of, or a plea of nolo
contendere to, a felony or a crime involving moral
turpitude. |
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1.3. |
“ Change in Control ” shall mean any of the
following events: |
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(a) a “person” (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the “ Exchange Act ”), other than a trustee or
other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, is or
becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined
voting power of the Company’s then outstanding securities;
or |
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(b) during any period of 2 consecutive years, individuals who
at the beginning of such period constitute the Board and any new
director (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction
described in Section 1.3(a), Section 1.3(c) or Section 1.3(d)
hereof) whose 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 at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or |
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(c) the Company merges or consolidates with any other
corporation, other than in a merger or consolidation that would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) at least 75% of the combined voting power
of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or |
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(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or the Company sells or otherwise
disposes of all or substantially all of the Company’s
assets. |
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1.4. |
“ Code ” means the Internal Revenue Code of
1986, as amended from time to time. |
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1.5. |
“ Good Reason ” shall mean: |
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(a) the assignment to the Executive, without the
Executive’s express written approval, of duties or
responsibilities, inconsistent, in a material respect, with the
Executive’s title and position on the date of a Change in
Control or the reduction in the Executive’s duties,
responsibilities or authority from those in effect on the date of a
Change in Control; |
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(b) a reduction by the Company in the Executive’s Base
Salary (as defined in Section 4.1 below) or in the other
compensation and benefits, in the aggregate, payable to the
Executive hereunder, or a material adverse change in the terms or
conditions on which any such compensation or benefits are payable
as in effect on the date of a Change in Control; |
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(c) following a Change in Control, the Company’s failure,
without the express consent of the Executive, to pay the Executive
any amounts otherwise vested and due hereunder or under any plan or
policy of the Company; |
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(d) a relocation of the Executive’s primary place of
employment, without the Executive’s express written approval,
to a location more than 20 miles from the location at which the
Executive performed his duties on the date of a Change in Control;
or |
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(e) the failure or refusal of the Company’s Successor (as
defined in Section 13 below) to expressly assume this Agreement in
writing, and all of the duties and obligations of the Company
hereunder in accordance with Section 13. |
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1.6. |
“ Short-Term Disability ” shall mean the
temporary incapacity of the Executive that, as determined by the
Board in a uniformly-applied manner, renders the Executive
temporarily incapable of engaging in his usual executive function
and as a result, the Executive is under the direct care and
treatment of a physician who certifies to such incapacity. |
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1.7. |
“ Total Disability” shall mean that a
qualified physician designated by the Company has determined that
the Executive: |
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(a) 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 12 months, or |
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(b) is, 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 12
months, receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering
employees of the Company. |
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| 2. |
Position and Duties . The Company agrees to
continue to employ the Executive and the Executive hereby agrees to
continue to be employed by the Company, upon the terms, conditions
and limitations set forth in this Agreement. The Executive shall
serve as the Company’s President – North America Food
Can Division, with the customary duties, authorities and
responsibility of such position of a publicly-traded corporation
and such other duties, authorities and responsibility (a) as have
been agreed upon by the Company and the Executive or (b) as may
from time to time be delegated to the Executive by the Board, the
Chairman of the Board, the Vice Chairman of the Board, the
Company’s Chief Executive Officer or any other executive to
whom the Executive reports as are consistent with such position.
The Executive agrees to perform the duties and responsibilities
called for hereunder to the best of his ability and to devote his
full time, energies and skills to such duties, with the
understanding that he may participate in charitable and similar
activities and may have business interests in passive investments
which may, from time to time, require portions of his time, but
such activities shall be done in a manner consistent with his
obligations hereunder. |
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| 3. |
Term . The Executive’s employment
under this Agreement shall commence on the Effective Date and
unless sooner terminated as provided in Article 5 shall continue
for a period of one year (the “ Initial Term ”).
Except as otherwise provided herein, unless either party gives
written notice to the other party at least 30 days before any
anniversary of the Effective Date that the term hereunder shall not
be extended beyond its then term (a “ Nonrenewal
Notice ”), the term of the Agreement shall automatically
be extended for an additional one year period from each
anniversary, subject to the same terms, conditions and limitations
as applicable to the Initial Term unless amended or terminated as
provided herein (the “ Renewal Term ”). For
purposes of this Agreement, the Initial Term and all subsequent
Renewal Terms shall be collectively referred to as the “
Term ” of the Agreement. |
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| 4. |
Compensation and Benefits . |
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4.1. |
Base Salary . The Company shall pay to the Executive for
the performance of his duties under this Agreement an initial base
salary of $295,000 per year (the “ Base Salary
”), payable in accordance with the Company’s normal
payroll practices. Thereafter, the rate of the Executive’s
Base Salary will be reviewed and adjusted as appropriate in
accordance with the Company’s regular compensation review
practices. Effective as of the date of any such increase, the Base
Salary so increased shall be considered the new Base Salary for all
purposes of this Agreement. |
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4.2. |
Incentive Bonus . During the Term, in addition to Base
Salary, for each fiscal year of the Company ending during the Term,
the Executive shall participate in, and shall have the opportunity
to receive a bonus in an amount to be determined in accordance
with, the Company’s existing incentive bonus plan or any
successor bonus plan, and any other bonus or incentive plan,
program or arrangement established by the Company for the benefit
of its executive officers (the “ Incentive Bonus
Payment ”). |
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4.3. |
Employee Benefits . During the Term, the Executive shall
be entitled to participate in all of the Company’s employee
benefit plans, programs and policies, including any retirement
benefits or plans, group life, hospitalization or disability
insurance plans, health programs, fringe benefit programs and
similar plans, programs and policies, that are now or hereafter
made available to the Company’s salaried personnel generally,
as such plans, programs and policies may be in effect from time to
time, in each case to the extent that the Executive is eligible
under the terms of such plans, programs and policies. Without
limiting the generality of the foregoing, the Executive shall also
be eligible to participate in the Company’s Senior Executive
Retirement Plan (the “ SERP ”) and the
Company’s 2006 Stock-Based Incentive Compensation Plan, and
any other equity-based incentive plans as maintained by the Company
from time to time for the benefit of senior executives. |
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4.4. |
Vacation . The Executive shall be entitled to vacation
in accordance with the Company’s vacation policy. |
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4.5. |
Automobile . During the Term, the Company shall make an
automobile available to the Executive in accordance with and
subject to the conditions of the Company’s standard
automobile policy or practices as in effect from time to time. |
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4.6. |
Reimbursement of Expenses . During the Term, the Company
will reimburse the Executive in accordance with the Company’s
expense reimbursement policy as in effect from time to time for
expenses reasonably and properly incurred by him in performing his
duties, provided that such expenses are incurred and accounted for
in accordance with the policies and procedures presently or
hereinafter established by the Company. |
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4.7. |
Short-Term Disability . In the event that the Executive
incurs a Short-Term Disability, the Executive shall be entitled to
six months of Base Salary and incentive payments, payable in
accordance with the Company‚s normal payroll practices,
provided that all payments under this provision shall be reduced
dollar-for-dollar by any other short-term disability benefits the
Executive is entitled to under any other Company-sponsored
short-term disability plan or arrangement and shall cease as of the
earliest of the Executive’s cessation of Short-Term
Disability, the occurrence of Total Disability, death or attainment
of his Normal Retirement Date. |
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4.8. |
Medical Examination Benefit . During the Term, the
Executive shall be entitled to reimbursement for actual costs
incurred, up to $2,500 per calendar year, for medical
examinations. |
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| 5. |
Termination . |
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5.1. |
Death . The Executive’s employment under this
Agreement shall terminate immediately upon the Executive’s
death, and the Company shall have no further obligations under this
Agreement, except to pay to the Executive’s estate (or his
beneficiary, as may be appropriate) (a) any Base Salary earned
through his date of death, to the extent theretofore unpaid, (b) a
pro-rated Incentive Bonus Payment equal to the product of (i) the
target Incentive Bonus Payment multiplied by (ii) a fraction, the
numerator of which is the number of completed days in the year of
termination during which the Executive was employed by the Company
and the denominator of which is 365, and provided that such amount
will be paid in the normal course and shall only be paid if the
Executive would have become entitled to such amount if he had not
terminated his employment, (c) such retirement and other benefits
earned and vested (if applicable) by the Executive as of the date
of his death under any employee benefit plan of the Company in
which the Executive participates, including without limitation all
payments due under the SERP and other retirement plans, all of the
foregoing to be paid in the normal course for such payments and in
accordance with the terms of such plans and (d) the health and
dental benefits provided for in Section 5.8. |
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5.2. |
Disability . If the Executive is unable to perform his
duties under this Agreement because of a Total Disability, the
Company may terminate the Executive’s employment by giving
written notice to the Executive. Such termination shall be
effective as of the date of such notice and the Company shall have
no further obligations under this Agreement, except to pay to the
Executive (a) any Base Salary earned through the date of such
termination, to the extent theretofore unpaid, (b) Total Disability
benefits as described below, (c) a pro-rated Incentive Bonus
Payment equal to the product of (i) the target Incentive Bonus
Payment multiplied by (ii) a fraction, the numerator of which is
the number of completed days in the year of termination during
which the Executive was employed by the Company and the denominator
of which is 365, and provided that such amount will be paid in the
normal course and shall only be paid if the Executive would have
become entitled to such amount if he had not terminated his |
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