Exhibit 10(b)
EXECUTIVE RETENTION EMPLOYMENT AGREEMENT
Executive Retention
Employment Agreement between FPL Group, Inc., a Florida corporation
(the "Company"), and Joseph T. Kelliher (the "Executive"), dated as
of May 21, 2009. The Board of Directors of the Company
(the "Board") has determined that it is in the best interests of
the Company and its shareholders to assure that the Company and its
Affiliated Companies will have the continued dedication of the
Executive, notwithstanding the possibility, threat or occurrence of
a Potential Change of Control or a Change of Control (each as
defined below) of the Company. The Board believes it is
imperative to diminish the inevitable distraction of the Executive
by virtue of the personal uncertainties and risks created by the
circumstances surrounding a Potential Change of Control or a Change
of Control and to encourage the Executive's full attention and
dedication to the Company and its Affiliated Companies currently
and in the event of any Potential Change of Control or Change of
Control (and, under certain circumstances, in the event of the
termination or abandonment of a Change of Control transaction), and
to provide the Executive with compensation and benefits
arrangements which ensure that the compensation and benefits
expectations of the Executive will be satisfied and which are
competitive with those of other corporations which may compete with
the Company for the services of the Executive. Therefore, in order
to accomplish these objectives, the Board has caused the Company to
enter into this Executive Retention Employment Agreement (the
"Agreement").
Therefore, the
Company and the Executive agree as follows:
The effective date of this Agreement
(the "Effective Date") shall be the date on which (i) a Potential
Change of Control occurs, (ii) the Board approves a plan of
complete liquidation or dissolution of the Company, (iii) a Change
of Control occurs pursuant to Section 2(a)(1) or (2) below or (iv)
a definitive agreement is signed by the Company which provides for
a transaction that, if approved by shareholders or consummated, as
applicable, would result in a Change of Control pursuant to Section
2(a)(3) or (4) below; provided, however, that any of the foregoing
which may have occurred prior to the date hereof shall be
disregarded. Anything in this Agreement to the contrary
notwithstanding, if, prior to the Effective Date, the Executive's
employment with the Company or its Affiliated Companies was
terminated by the Company or its Affiliated Companies, or both, as
applicable, other than for Cause or Disability (each as defined
below) or by the Executive for Good Reason (as defined below) and
the Executive can reasonably demonstrate that such termination (or
the event constituting Good Reason) took place (a) at the request
or direction of a third party who took action that caused a
Potential Change of Control or (b) in contemplation of an event
that would give rise to an Effective Date, an Effective Date will
be deemed to have occurred ("Deemed Effective Date") immediately
prior to the Date of Termination (as defined in Section 7(e)
below), provided that a Change of Control occurs within a two-year
period following such Date of Termination. As used in this
Agreement, the term "Affiliated Companies" shall include any
corporation or other entity controlled by, controlling or under
common control with the Company and the term "Subsidiary" shall
mean (x) any corporation or other entity (other than the Company)
with respect to which the Company owns, directly or indirectly, 50%
or more of the total combined voting power of all classes of stock
or other ownership interests or (y) any other related entity which
may be designated by the Board as a Subsidiary, provided such
entity could be considered a subsidiary according to generally
accepted accounting principles.
2.
Change of Control; Potential Change of Control
. For the purposes of this Agreement:
(a)
A "Change of Control" shall mean the first (and only the first) to
occur of the following:
(1)
The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (x) the then outstanding
shares of common stock of the Company (the "Outstanding Company
Common Stock") or (y) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that the following
acquisitions (collectively, the "Excluded Acquisitions") shall not
constitute a Change of Control (it being understood that shares
acquired in an Excluded Acquisition may nevertheless be considered
in determining whether any subsequent acquisition by such
individual, entity or group (other than an Excluded Acquisition)
constitutes a Change of Control): (i) any acquisition directly from
the Company or any Subsidiary; (ii) any acquisition by the Company
or any Subsidiary; (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or
any Subsidiary; (iv) any acquisition by an underwriter temporarily
holding Company securities pursuant to an offering of such
securities; (v) any acquisition in connection with which, pursuant
to Rule 13d-1 promulgated pursuant to the Exchange Act, the
individual, entity or group is permitted to, and actually does,
report its beneficial ownership on Schedule 13G (or any successor
Schedule); provided that, if any such individual, entity or group
subsequently becomes required to or does report its beneficial
ownership on Schedule 13D (or any successor Schedule), then, for
purposes of this paragraph, such individual, entity or group shall
be deemed to have first acquired, on the first date on which such
individual, entity or group becomes required to or does so report,
beneficial ownership of all of the Outstanding Company Common Stock
and/or Outstanding Company Voting Securities beneficially owned by
it on such date; or (vi) any acquisition in connection with a
Business Combination (as hereinafter defined) which, pursuant to
subparagraph (3) below, does not constitute a Change of Control;
or
(2)
Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of an individual, entity or group other
than the Board; or
(3)
Consummation by the Company of a reorganization, merger,
consolidation or other business combination (any of the foregoing,
a "Business Combination") of the Company or any Subsidiary of the
Company with any other corporation, in any case with respect to
which:
(i)
the Outstanding Company Voting Securities outstanding immediately
prior to such Business Combination do not, immediately following
such Business Combination, continue to represent (either by
remaining outstanding or being converted into voting securities of
the resulting or surviving entity or any ultimate parent thereof)
more than 55% of the outstanding common stock and of the then
outstanding voting securities entitled to vote generally in the
election of directors of the resulting or surviving entity (or any
ultimate parent thereof); or
(ii)
less than a majority of the members of the board of directors of
the resulting or surviving entity (or any ultimate parent thereof)
in such Business Combination (the "New Board") consists of
individuals ("Continuing Directors") who were members of the
Incumbent Board (as defined in subparagraph (2) above) immediately
prior to consummation of such Business Combination (excluding from
Continuing Directors for this purpose, however, any individual
whose election or appointment to the Board was at the request,
directly or indirectly, of the entity which entered into the
definitive agreement with the Company or any Subsidiary providing
for such Business Combination); or
(4)
(i) Consummation of a sale or other disposition of all or
substantially all of the assets of the Company, other than to a
corporation with respect to which, following such sale or other
disposition, more than 55% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior
to such sale or other disposition in substantially the same
proportion as their ownership, immediately prior to such sale or
other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities as the case may be; or (ii)
shareholder approval of a complete liquidation or dissolution of
the Company.
The term "the sale or
disposition by the Company of all or substantially all of the
assets of the Company" shall mean a sale or other disposition
transaction or series of related transactions involving assets of
the Company or of any Subsidiary (including the stock of any
Subsidiary) in which the value of the assets or stock being sold or
otherwise disposed of (as measured by the purchase price being paid
therefor or by such other method as the Board determines is
appropriate in a case where there is no readily ascertainable
purchase price) constitutes more than two-thirds of the fair market
value of the Company (as hereinafter defined). The "fair
market value of the Company" shall be the aggregate market value of
the then Outstanding Company Common Stock (on a fully diluted
basis) plus the aggregate market value of the Company's other
outstanding equity securities. The aggregate market
value of the shares of Outstanding Company Common Stock shall be
determined by multiplying the number of shares of Outstanding
Company Common Stock (on a fully diluted basis) outstanding on the
date of the execution and delivery of a definitive agreement with
respect to the transaction or series of related transactions (the
"Transaction Date") by the average closing price of the shares of
Outstanding Company Common Stock for the ten trading days
immediately preceding the Transaction Date. The
aggregate market value of any other equity securities of the
Company shall be determined in a manner similar to that prescribed
in the immediately preceding sentence for determining the aggregate
market value of the shares of Outstanding Company Common Stock or
by such other method as the Board shall determine is
appropriate.
(b)
A "Potential Change of Control" shall be deemed to have occurred if
an event set forth in either of the following subparagraphs shall
have occurred:
(1)
the Company or any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) publicly
announces or otherwise communicates to the Board in writing an
intention to take or to consider taking actions ( e.g.
, a "bear hug" letter, an unsolicited offer or the commencement of
a proxy contest) which, if consummated or approved by
shareholders, as applicable, would constitute a Change of Control;
or
(2)
any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) directly or
indirectly, acquires beneficial ownership of 15% or more of
the Outstanding Company Common Stock or Outstanding Company Voting
Securities; provided, however, that Excluded Acquisitions shall not
constitute a Potential Change of Control.
(a)
The Company hereby agrees to continue the Executive in its or its
Affiliated Companies' employ, or both, as the case may be, and the
Executive hereby agrees to remain in the employ of the Company, or
its Affiliated Companies, or both, as the case may be, subject to
the terms of this Agreement, for a period commencing on the
Effective Date and ending on the second anniversary of such date
(such period or, if shorter, the period from the Effective Date to
the Date of Termination, is hereinafter referred to as the
"Employment Period").
(b)
Anything in this Agreement to the contrary notwithstanding, (x) if
an Effective Date occurs (other than as a result of a Change of
Control under Section 2(a)(1) or (2) above) and the Board adopts a
resolution to the effect that the event or circumstance giving rise
to the Effective Date no longer exists (including by reason of the
termination or abandonment of the transaction contemplated by the
definitive agreement referred to in clause (iv) of Section 1
hereof), the Employment Period shall terminate on the date the
Board adopts such resolution, but this Agreement shall otherwise
remain in effect, and (y) if a Change of Control occurs pursuant to
Section 2(a)(3) or (4) above during the Employment Period, the
Employment Period shall immediately extend to and end on the second
anniversary of the date of such Change of Control
(or, if earlier, to the Date of Termination) and a new Effective
Date will be deemed to have occurred on the date of such Change of
Control.
During the Employment
Period, the Executive's status, offices, titles, and reporting
requirements with the Company or its Affiliated Companies or both,
as the case may be, shall be commensurate with those in effect
during the 90-day period immediately preceding the Effective Date.
The duties and responsibilities assigned to the Executive may be
increased, decreased or otherwise changed during the Employment
Period, provided that the duties and responsibilities assigned to
the Executive at any given time are not materially inconsistent
with the Executive's status, offices, titles, and reporting
requirements as in effect during the 90-day period immediately
preceding the Effective Date. The Executive's services shall be
performed at the location where the Executive was employed
immediately preceding the Effective Date or any location less than
20 miles from such location, although the Executive understands and
agrees that he may be required to travel from time to time for
business purposes.
During the Employment
Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote
substantially all of his time and attention during normal business
hours to the business and affairs of the Company and its Affiliated
Companies and to use his reasonable best efforts to perform
faithfully and efficiently the duties and responsibilities assigned
to him hereunder. During the Employment Period it shall
not be a violation of this Agreement for the Executive to serve on
corporate, civic or charitable boards or committees, deliver
lectures, fulfill speaking engagements or teach at educational
institutions and devote reasonable amounts of time to the
management of his and his family's personal investments and
affairs, so long as such activities do not significantly interfere
with the performance of the Executive's responsibilities as an
employee of the Company or its Affiliated Companies in accordance
with this Agreement. It is expressly understood and
agreed that to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the
reinstatement or continued conduct of such activities (or the
reinstatement or conduct of activities similar in nature and scope
thereto) subsequent to the Effective Date shall not thereafter be
deemed to interfere with the performance of the Executive's
responsibilities to the Company and its Affiliated Companies.
During the
Employment Period, the Executive shall be compensated as
follows:
(a)
Annual Base Salary . The Executive shall be paid
an annual base salary ("Annual Base Salary"), in equal biweekly
installments or otherwise in accordance with the Company's
then-current payroll practice, at least equal to the annual rate of
base salary being paid to the Executive by the Company and its
Affiliated Companies as of the Effective Date. The
Annual Base Salary shall be reviewed at least annually and shall be
increased substantially consistent with increases in base salary
generally awarded to other peer executives of the Company and its
Affiliated Companies. Such increases shall in no event
be less than the increases in the U.S. Department of Labor Consumer
Price Index - U.S. City Average Index. Any increase in
Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual
Base Salary shall not be reduced after any such increase and the
term "Annual Base Salary" as utilized in this Agreement shall refer
to Annual Base Salary as so increased.
(b)
Annual Bonus . In addition to Annual Base Salary,
the Executive shall be awarded, for each fiscal year ending during
the Employment Period, an annual cash bonus (the "Annual Bonus")
equal to a percentage of his Annual Base Salary. Such
percentage shall be substantially consistent with the targeted
percentages generally awarded to other peer executives of the
Company and its Affiliated Companies, but at least equal to the
higher of (i) the percentage obtained by dividing his targeted
annual bonus for the then current fiscal year by his then Annual
Base Salary or (ii) the average percentage of his annual base
salary (as in effect for the applicable years) that was
paid or payable, including by reason of any deferral, to the
Executive by the Company and its Affiliated Companies as an annual
bonus (however described, including as annual incentive
compensation) for each of the three fiscal years
immediately preceding the fiscal year in which the Effective Date
occurs (or, if higher, for each of the three fiscal years
immediately preceding the fiscal year in which a Change of Control
occurs, if a Change of Control occurs following the Effective
Date). For the purposes of any calculation required to
be made under clause (ii) of the preceding sentence, an annual
bonus shall be annualized for any fiscal year consisting of less
than twelve full months or with respect to which the Executive was
employed for, and received pro-rated annual incentive compensation
with respect to, less than the full twelve months, and, if the
Executive has not been employed for the full duration of the three
fiscal years immediately preceding the year in which the Effective
Date occurs, the average shall be calculated over the duration of
the Executive's employment in such period. Each such
Annual Bonus shall be paid no later than the end of the second
month of the fiscal year next following the fiscal year for which
the Annual Bonus is awarded, unless the Executive otherwise elects
to defer the receipt of such Annual Bonus in accordance with a
deferred compensation plan of the Company or its Affiliated
Companies that complies with Section 409A of the Internal Revenue
Code (the "Code").
(c)
Long Term Incentive Compensation . During the
Employment Period, the Executive shall be entitled to participate
in all incentive compensation plans, practices, policies, and
programs applicable generally to other peer executives of the
Company and its Affiliated Companies, but in no event shall such
plans, practices, policies, and programs provide the Executive with
incentive opportunities and potential benefits, both as to amount
and percentage of compensation, less favorable, in the aggregate,
than those provided by the Company and its Affiliated Companies for
the Executive under the FPL Group Amended and Restated Long Term
Incentive Plan (including, without limitation, performance share
awards, stock option grants and restricted stock awards), or other
plan providing for the grant of equity compensation for executive
officers, as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its
Affiliated Companies.
(d)
Savings and Retirement Plans . During the
Employment Period, the Executive shall be entitled to participate
in all savings and retirement plans, practices, policies, and
programs applicable generally to other peer executives of the
Company and its Affiliated Companies, but in no event shall such
plans, practices, policies, and programs provide the Executive with
savings opportunities and retirement benefit opportunities, in each
case, less favorable, in the aggregate, than the most favorable of
those provided by the Company and its Affiliated Companies for the
Executive under such plans, practices, policies, and programs as in
effect at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to other
peer executives of the Company and its Affiliated Companies.
In addition, during
the Employment Period the Executive shall be entitled under this
Agreement to the Payment in Lieu of Lost Future Benefits described
in Annex A attached hereto and made a part hereof by this reference
("Payment in Lieu of Lost Future Benefits"). The vesting
of such Payment in Lieu of Lost Future Benefits shall be determined
in accordance with Section 8 of this Agreement. The
payment of such amount shall be determined in accordance with
Section 8 of this Agreement, to the extent the ability to make such
payment under Section 8 is consistent with the limitations of Code
Section 409A and the terms of the Company's Supplemental Executive
Retirement Plan.
To the extent that
the payment of this amount pursuant to Section 8 would be
inconsistent with the limitations of Code Section 409A or the terms
of the Company's Supplemental Executive Retirement Plan, the
payment of this amount described in Annex A shall be made under the
terms of the Company's Supplemental Executive Retirement Plan,
pursuant to the provisions therein relating to post-2005 accrued
benefits that are subject to Code Section 409A.
(e)
Benefit Plans . During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies, and programs
provided by the Company and its Affiliated Companies (including,
without limitation, medical, executive medical, annual executive
physical, prescription, dental, vision, short-term disability,
long-term disability, executive long-term disability, salary
continuance, employee life, group life, accidental death and
dismemberment, and travel accident insurance plans and programs) to
the extent applicable generally to other peer executives of the
Company and its Affiliated Companies, but in no event shall such
plans, practices, policies, and programs provide the Executive with
benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies, and programs in
effect for the Executive at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its
Affiliated Companies.
(f)
Expenses . During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in accordance with
the most favorable policies, practices, and procedures of the
Company and its Affiliated Companies in effect for the Executive at
any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its Affiliated
Companies. The payment of such reimbursements shall be
made within thirty (30) days after submission of requests for
reimbursement in accordance with applicable policies and procedures
of the Company. Notwithstanding anything to the contrary
in this Section 5(f) or elsewhere, reimbursement of expenses will
be made consistent with the Company's Expense Reimbursement Policy,
which is intended to comply with the requirements of Code Section
409A and Treasury Regulation Section 1.409A-3(i)(1)(iv).
(g)
Fringe Benefits . During the Employment Period,
the Executive shall be entitled to fringe benefits, including but
not limited to those described in Section 8(a)(5), in accordance
with the most favorable plans, practices, programs, and policies of
the Company and its Affiliated Companies in effect for the
Executive at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its Affiliated
Companies.
(h)
Office and Support Staff . During the Employment
Period, the Executive shall be entitled to an office or offices of
a size and with furnishings and other appointments, and to
exclusive personal secretarial and other assistance, at least equal
to the most favorable of the foregoing provided to the Executive by
the Company and its Affiliated Companies at any time during the
90-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the Company and
its Affiliated Companies.
(i)
Vacation . During the Employment Period, the
Executive shall be entitled to paid vacation in accordance with the
most favorable plans, policies, programs, and practices of the
Company and its Affiliated Companies as in effect for the Executive
at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its Affiliated
Companies. In addition to, and notwithstanding anything
to the contrary in, the preceding sentence, any unused vacation
days shall be carried over from year to year.
(a)
Benefits Upon Change of Control . If, as of the
date of a Change of Control which occurs during the Employment
Period (including on the Effective Date), the Executive is employed
by the Company or one of its Affiliated Companies, then as of such
date:
(1)
50% of each outstanding performance stock-based award granted to
the Executive shall become fully vested and earned at a deemed
achievement level equal to the higher of (x) the targeted level of
performance for such award or (y) the average level (expressed as a
percentage of target) of achievement in respect of similar
performance stock-based awards which matured over the three fiscal
years immediately preceding the year in which the Change of Control
occurred; payment of each such vested award shall be made to the
Executive, in the form described below, as soon as practicable
following such Change of Control consistent with Code Section 409A;
and the remainder of each such award shall remain outstanding (on a
converted basis, if applicable) and shall remain subject to the
terms and conditions of the plan under which such award was
granted, as well as the terms and conditions of this Agreement;
and
(2)
all other outstanding stock-based awards granted to the Executive
shall be fully vested and earned; and
(3)
any outstanding option, stock appreciation right, and other
outstanding award in the nature of a right that may be exercised
that was granted to the Executive and which was not previously
exercisable and vested shall become fully exercisable and vested;
and
(4)
the restrictions and forfeiture conditions applicable to any
outstanding award granted to the Executive under an incentive
compensation plan, practice, policy or program shall lapse and such
award shall be deemed fully vested.
If as a result of the
Change of Control, the Outstanding Company Common Stock is
exchanged for or converted into a different form of equity security
and/or the right to receive other property (including cash),
payment in respect of the underlying awards described in
subparagraphs (1), (2) and, with respect to stock-based awards, (4)
hereof shall, to the maximum extent practicable, be made in the
same form. If a Change of Control occurs and Company
shareholders do not, as a group, receive consideration in
connection with such Change of Control, then payment in respect of
awards described in subparagraphs (1), (2) and, with respect to
stock-based awards, (4) hereof shall be made in cash based on the
average closing price of the shares of Outstanding Company Common
Stock for the 20 trading days immediately preceding the date of the
Change of Control.
(b)
Benefits Upon First Anniversary of Change of Control
. If the Executive has remained employed by the Company
or one of its Affiliated Companies from the date of a Change of
Control which occurs during the Employment Period (including on the
Effective Date) to the date of the first anniversary of such Change
of Control, the performance stock-based awards outstanding
immediately prior to such Change of Control that did not become
vested and earned at the time of such Change of Control pursuant to
Section 6(a)(1) shall become vested and earned as of such first
anniversary date and payment in respect of such awards shall be
made as soon as practicable following such date, but in no event
later than the 15th day of the third month following the end of the
first taxable year in which the right to such payment
arises. The deemed level of achievement with respect to
such awards, as well as the form of payment thereof, shall be as
described in paragraph (a) above.
7.
Termination of Employment .
(a)
Death or Disability . The Executive's employment
shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good
faith that the Disability of the Executive has occurred during the
Employment Period (pursuant to the definition of Disability set
forth below), it may give to the Executive written notice in
accordance with Section 15(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective
on the 30th day after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall mean the absence of
the Executive from the Executive's duties with the Company on a
full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness which is determined to
be total and permanent by a physician selected by the Company or
its insurers and acceptable to the Executive or the Executive's
legal representative (such agreement as to acceptability not to be
withheld unreasonably).
(b)
Cause . The Company may terminate the Executive's
employment during the Employment Period for Cause. For
purposes of this Agreement, "Cause" shall mean (i) repeated
violations by the Executive of the Executive's obligations under
Section 4 of this Agreement (other than as a result of incapacity
due to physical or mental illness) which are demonstrably willful
and deliberate on the Executive's part, which are committed in bad
faith or without reasonable belief that such violations are in the
best interests of the Company and which are not remedied in a
reasonable period of time after receipt of written notice from the
Company specifying such violations or (ii) the conviction of the
Executive of a felony involving an act of dishonesty intended to
result in substantial personal enrichment at the expense of the
Company or its Affiliated Companies.
(c)
Good Reason . The Executive's employment may be
terminated during the Employment Period by the Executive for Good
Reason. For purposes of this Agreement, "Good Reason"
shall mean:
(1)
any failure by the Company to comply with the provisions of Section
4 of this Agreement, including without limitation, the assignment
to the Executive of any duties and responsibilities that are
materially inconsistent with the Executive's status, offices,
titles, and reporting requirements as in effect during the 90-day
period immediately preceding the Effective Date, but excluding for
this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly
after receipt of written notice thereof given by the Executive;
(2)
any failure by the Company to comply with any of the provisions of
Sections 5 or 6 of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith
and which is remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(3)
the Company's requiring the Executive to be based at any office or
location other than that described in Section 4 hereof;
(4)
any purported termination by the Company of the
Executive's employment other than as expressly permitted
by this Agreement; or
(5)
any failure by the Company to comply with and satisfy Section 14(c)
of this Agreement, provided that such successor has received at
least ten days prior written notice from the Company or the
Executive of the requirements of Section 14(c) of the
Agreement.
For purposes of this
Section 7(c), any good faith determination of "Good Reason" made by
the Executive shall be conclusive.
(d)
Notice of Termination . Any termination by the
Company for Cause, or by the Executive for Good Reason, shall be
communicated by Notice of Termination to the other party hereto
given in accordance with Section 15(b) of this
Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated, and (iii)
if the Date of Termination (as defined below) is other than the
date of receipt of such notice, specifies the termination date
(which date shall be not more than fifteen calendar days after the
giving of such notice). The failure by the Executive or
the Company to set forth in the Notice of Termination any facts or
circumstances which contribute to a showing of Good Reason or Cause
shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such facts or circumstances in
enforcing the Executive's or the Company's rights hereunder.
(e)
Date of Termination . "Date of Termination" means
(i) if the Executive's employment is terminated by the Company for
Cause, or by the Executive for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein, as
the case may be, (ii) if the Executive's employment is terminated
by the Company other than for Cause or Disability, the date on
which the Company notifies the Executive of such termination, and
(iii) if the Executive's employment is terminated by reason of
death or Disability, the date of death of the Executive or the
Disability Effective Date, as the case may be.
8.
Obligations of the Company upon Termination .
(a)
Following a Change of Control: Good Reason; Other Than for Cause
or Disability . If following a Change of Control and
during the Employment Period, the Company terminates the
Executive's employment other than for Cause or Disability or death
or the Executive terminates employment for Good Reason, then:
(1)
the Company shall pay to the Executive in a lump sum in cash within
45 days after the Date of Termination the aggregate of the
following amounts (such aggregate being hereinafter referred to as
the "Special Termination Amount"):
(i)
the sum of (1) the Executive's Annual Base Salary through the Date
of Termination to the extent not theretofore paid, (2) the product
of (x) the Annual Bonus in effect at such date and (y) a fraction,
the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which
is 365 (such amount to be paid in addition to and not in lieu of
any Annual Bonus earned for such year), and (3) any accrued
vacation pay at the Annual Base Salary rate in effect as of the
termination of employment, in each case to the extent not
theretofore paid (the sum of the amounts described in subclauses
(1), (2), and (3) herein shall be called the "Accrued
Obligations"); and
(ii)
the amount equal to the product of (1) two , and (2) the sum of (x) the
Executive's Annual Base Salary and (y) the Executive's Annual Bonus
in effect at such date; provided, however, that such amount shall
be paid in lieu of, and the Executive hereby waives the right to
receive, any other amount of severance relating to salary or bonus
continuation to be received by the Executive upon termination of
employment of the Executive under any severance plan, policy or
