Exhibit 10(b)
EXECUTIVE RETENTION
EMPLOYMENT AGREEMENT
Executive Retention Employment Agreement between NextEra Energy,
Inc., a Florida corporation (the "Company"), and Shaun J. Francis
(the "Executive"), dated as of August 16, 2010. 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 (this "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 third 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 third
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,
upon the terms and subject to the conditions of this paragraph (b),
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”). The foregoing provisions
of this paragraph (b) shall be qualified by the following terms and
conditions. If (A) as of the end of any fiscal year
during the Employment Period the Executive is a “Covered
Employee” as defined in Code Section 162(m), (B) Code
Section 162(m) remains in effect as of the end of such fiscal year
and as of such date is applicable to the payment of an Annual Bonus
for such fiscal year and (C) the Executive participated for such
fiscal year in an Annual Incentive Plan (as hereinafter defined),
the Annual Bonus for such fiscal year shall be paid to the
Executive pursuant to the Annual Incentive Plan, rather than in
accordance with the first four sentences of this paragraph (b), in
the amount, at the time and upon the other terms and conditions
specified in such Annual Incentive Plan; provided, however, that if
a Change of Control occurs before such payment is made, the
Executive shall be paid, in lieu of such amount and on the date on
which such Change of Control occurs, as follows: (A) as the Annual
Bonus for such fiscal year, an amount equal to the greater of (x)
the maximum amount payable to the Executive under the Annual
Incentive Plan for such fiscal year assuming achievement thereunder
of the Corporate Performance Objective (as hereinafter defined) for
such fiscal year and (y) the maximum amount payable in accordance
with the first four sentences of this paragraph (b) and (B) as
Annual Bonuses for all prior fiscal years ended during the
Employment Period, an amount equal to the aggregate amount, if any,
by which the maximum amount otherwise payable in accordance with
the first four sentences of this paragraph (b) for all such prior
fiscal years exceeds the aggregate amount of all Annual Bonuses
previously paid to the Executive for such prior fiscal years
pursuant to the Annual Incentive Plan or otherwise under this
paragraph (b). If, as of the end of any fiscal year for
which an Annual Bonus is payable pursuant to this paragraph (b),
the Executive is not, and at any time during the three full fiscal
years preceding such date was not, a “Covered Employee”
as defined in Section 162(m), the Executive shall be paid the
Annual Bonus for such fiscal year in accordance with the first four
sentences of this paragraph (b); provided, however, that the amount
of the Annual Bonus so paid to the Executive shall be reduced by
the amount, if any, of the annual cash bonus paid to the Executive
for such fiscal year pursuant to an Annual Incentive
Plan. For purposes of this paragraph (b), “Annual
Incentive Plan” means an annual cash incentive compensation
plan of the Company that (x) is intended to result in, and, in the
opinion of a nationally reputable law firm having significant
experience with Code Section 162(m), does result in, the payment of
qualified performance-based compensation for purposes of Code
Section 162(m) (assuming solely for this purpose achievement of the
Corporate Performance Objective to which the payment of such
compensation is subject), (y) conditions the payment of all
compensation pursuant thereto on the achievement of a Corporate
Performance Objective that is generally applicable to all
participants in such plan, and (z) is administered, and includes a
Corporate Performance Objective that is selected, in a manner that
is consistent in all material respects with past practice as
applied to the most recent annual cash incentive compensation plan
of the Company that was in effect prior to the date of this
Agreement (December 31, 2009) for which the applicable Corporate
Performance Objective was achieved. For purposes of this
Agreement, the “Corporate Performance Objective” to
which any payment of compensation is subject shall mean the
objective performance objective which is selected and established
by the Compensation Committee of the Board for purposes of making
such payment fully deductible for federal income tax purposes
pursuant to Code Section 162(m).
(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 NextEra Energy, Inc. 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
