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Exhibit
10.32
EMPLOYMENT
AGREEMENT
Amended and Restated as of
January 1, 2008
THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT by and between MeadWestvaco Corporation, a
Delaware corporation (the “Company”) and [
] the “Executive”), is dated as of January 1,
2008.
RECITALS
WHEREAS, the Executive and
the Company are parties to an Employment Agreement, dated as of
January 29, 2004 (the “Existing Agreement”), which
was entered into based upon the determination of the Board of
Directors of the Company (the “Board”) that it was in
the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the
Executive, notwithstanding the possibility, threat or occurrence of
a Change of Control (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 a pending or threatened Change of Control and to
encourage the Executive’s full attention and dedication to
the Company currently and in the event of any threatened or pending
Change of Control, and to provide the Executive with compensation
and benefits arrangements upon a Change of Control which ensure
that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives,
the Board caused the Company to enter into the Existing
Agreement.
WHEREAS, the Company and
Executive desire to amend the Existing Agreement to comply with
section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) and make other appropriate changes to comply
with applicable law.
NOW, THEREFORE, IT IS HEREBY
AGREED that the Existing Agreement is amended and restated as
follows:
1. Change of Control .
For the purpose of this Agreement, a “Change of
Control” shall mean:
(a) 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”)) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or
(ii) 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 for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (c) of this
Section 1; or
(b) 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 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 a Person other than the Board; or
(c) Consummation of a
reorganization, merger, statutory share exchange or consolidation
or similar corporate transaction involving the Company or any of
its subsidiaries, or a sale or other disposition of all or
substantially all of the assets of the Company (as determined under
applicable Delaware General Corporation Law) (each, a
“Business Combination”), in each case, unless,
following such Business Combination, (i) all or substantially
all of the individuals and entities that were the beneficial
owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries) (the “Resulting
Corporation”) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding the
Resulting Corporation and its affiliates or any employee benefit
plan (or related trust) of the Resulting Corporation and its
affiliates) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then-outstanding shares of common stock of
the Resulting corporation or the combined voting power of the then
outstanding voting securities of the Resulting Corporation except
to the extent that such ownership existed with respect to the
Company prior to the Business Combination, and (iii) at least
a majority of the members of the board of directors of the
Resulting Corporation (the “Resulting Board”) were
members of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for
such Business Combination; or
(d) Approval by the
shareholders of the Company of a complete liquidation or
dissolution of the Company.
2. Certain Other
Definitions . (a) “Affiliated Companies” shall
include any company controlled by, controlling or under common
control with the Company.
(b) The “Change of
Control Period” shall mean the period commencing on the date
hereof and ending on the second anniversary of the date hereof, as
subsequently extended as described below. The Change of Control
Period shall be automatically extended for successive one-year
periods unless the Company notifies the Executive in writing, at
least one year prior to the end of the then current term, that the
Change of Control Period will not be extended; provided, however,
that the Change of Control Period and this Agreement shall
terminate if the Executive’s employment with the Company
terminates for any reason before a Change of Control, except as
provided in Section 2(c) and Section 13(f)
below.
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(c) The “Effective
Date” shall mean the first date during the Change of Control
Period on which a Change of Control occurs. Anything in this
Agreement to the contrary notwithstanding, if a Change of Control
occurs and if the Executive’s employment with the Company is
terminated prior to the date on which the Change of Control occurs,
and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change
of Control or (ii) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this
Agreement the “Effective Date” shall mean the date
immediately prior to the date of such termination of
employment.
(d) “Merger of Equals
Period” shall mean (i) any portion of the Employment
Period (as defined in Section 3) up to and including the first
anniversary of the Effective Date during which the conditions set
forth in the next sentence are met, and (ii) if the conditions
set forth in the next sentence are met on the first anniversary of
the Effective Date, the portion of the Employment Period that
follows the first anniversary of the Effective Date. The conditions
referred to in the preceding sentence are that (A) the Change
of Control that occurred on the Effective Date was a Business
Combination, and (B) at the time in question, (I) at
least 50% of the members of the Resulting Board are individuals who
were members of the Incumbent Board (as defined in
Section 1(b)) at the time of the execution of the initial
agreement, or of the action of the Board, providing for such
Business Combination, and (II) either (x) the position of
chief executive officer of the Resulting Corporation is occupied by
an individual who was employed by the Company immediately before
such Business Combination, or (y) a majority of the leadership
positions reporting directly to the chief executive officer of the
Resulting Corporation are occupied by individuals who were employed
by the Company immediately before such Business
Combination.
(e) The
“Multiple” means three.
(f) “Peer
Executives” shall mean, at any given time, the other persons
employed by the Company or any of the Affiliated Companies who
either (1) were, immediately before the Effective Date, party
to agreements with the Company substantially in the form of this
Agreement (without regard to the definition of
“Multiple”) or (2) are similarly situated
executives who were employed, before the Effective Date, by the
other party to the transaction constituting a Change of Control
hereunder.
(g) “Relevant
Time” shall mean immediately before the Effective Date,
except to the extent otherwise provided in
Section 4(b)(ix).
3. Employment Period .
The Company hereby agrees to continue the Executive in its employ,
subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the second
anniversary of such date (the “Employment Period”). The
Employment Period shall terminate upon the termination of the
Executive’s employment for any reason.
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4. Terms of Employment
. (a) Position and Duties . (i) During the
Employment Period, there shall be no material reduction in the
Executive’s position, authority, duties, responsibilities or
salary grade as compared to those held, exercised and assigned to
the Executive at the Relevant Time. Notwithstanding the foregoing,
during any Merger of Equals Period, the Executive’s position
may be changed in a manner violating the requirements of this
Section 4(a)(i), provided that the Executive continues to have
responsibilities and authority that are, in the aggregate,
comparable to those held by the Executive at the Relevant Time; and
provided, further, that neither a reduced scope of the
Executive’s responsibilities resulting from the fact that the
Change of Control has created a larger organization, nor a change
in the Executive’s title and reporting responsibilities,
shall be the sole basis for determining whether the requirements of
this sentence are met.
(ii) During the Employment
Period, the Executive’s services shall be performed at the
location where the Executive was employed immediately preceding the
Effective Date, or at any other location that does not result in
the Executive’s commuting distance from, the
Executive’s residence being increased by more than 40 miles;
provided , that if the Executive voluntarily changes his
residence after the Effective Date, then a new work location shall
not be considered to have increased the Executive’s commuting
distance by more than 40 miles unless such an increase both
(1) occurs in relation to the Executive’s new residence
and (2) would have occurred even if the Executive had not
changed his residence.
(iii) During the Employment
Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder,
to use the Executive’s reasonable best efforts to perform
faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for
the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and
(C) manage personal investments, so long as such activities do
not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company 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
continued conduct of such activities (or the 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.
(b) Compensation
.
(i) Base Salary .
During the Employment Period, the Executive shall receive an annual
base salary (“Annual Base Salary”) which shall be not
less than the Executive’s annual base salary from the Company
and the Affiliated Companies as in effect immediately before the
Effective Date, except as otherwise permitted below in this
Section 4(b)(i). Any increase in Annual Base Salary during the
Employment Period shall not serve to limit or reduce any other
obligation to the Executive under this Agreement, and except as
provided in the next sentence, the Annual Base Salary shall not be
reduced during the Employment Period. Notwithstanding the foregoing
during any Merger of Equals Period the Annual Base Salary may be
decreased if all the annual base
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salaries of all of the Peer Executives
are decreased by the same or a greater percentage. The term Annual
Base Salary as utilized in his Agreement shall refer to Annual Base
Salary as increased or decreased to the extent permitted by this
Section 4(b)(i).
(ii) Incentive
Compensation Opportunities . In addition to the Annual Base
Salary, the Executive shall be granted, during the Employment
Period, cash-based and equity-based awards representing the
opportunity to earn incentive compensation on terms and conditions
no less favorable to the Executive, in the aggregate, than those
provided generally at any time after the Effective Date to the Peer
Executives or, if more favorable to the Executive, than those
provided by the Company and the Affiliated Companies for the
Executive immediately before the Effective Date. In determining
whether the Executive’s incentive compensation opportunities
during the Employment Period meet the requirements of the preceding
sentence, there shall be taken into account all relevant terms and
conditions, including, without limitation and to the extent
applicable, the potential value of such awards at minimum, target
and maximum performance levels, and the difficulty of achieving the
applicable performance goals.
(iii) 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 the
Peer Executives, on comparable terms and conditions, but in no
event shall such plans, practices, policies and programs provide
the Executive with savings opportunities and retirement benefits,
in each case, less favorable, in the aggregate, to the Executive
than those provided by the Company and the Affiliated Companies to
the Executive at the Relevant Time.
(iv) Welfare Benefit
Plans . During the Employment Period, the Executive and/or the
Executive’s family, as the case maybe, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company and the Affiliated Companies (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance
plans and programs) (collectively, “Welfare Benefits”)
to the extent applicable generally to the Peer Executives, on
comparable terms and conditions, but in no event shall such Welfare
Benefits for the Executive be less favorable, in the aggregate, to
the Executive than the Welfare Benefits provided by the Company and
the Affiliated Companies to the Executive at the Relevant
Time.
(v) 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 policies, practices and procedures
as in effect for the Peer Executives; provided, that such policies,
practices and procedures shall not be less favorable to the
Executive than those provided by the Company and the Affiliated
Companies to the Executive at the Relevant Time.
(vi) Fringe Benefits .
During the Employment Period, the Executive shall be entitled to
fringe benefits, including, without limitation, tax and financial
planning services, payment of club dues, and, if applicable, use of
an automobile and payment of related expenses, as in effect for
Peer Executives; provided, that such fringe benefits shall not be
less favorable, in the aggregate, to the Executive than those
provided by the Company and the Affiliated Companies to the
Executive at the Relevant Time.
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(vii) 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 personal secretarial and other
assistance, as in effect for the Peer Executives; provided, that
such facilities and assistance shall not be less favorable, in the
aggregate, to the Executive than those provided by the Company and
the Affiliated Companies to the Executive at the Relevant
Time.
(viii) Vacation .
During the Employment Period, the Executive shall be entitled to
paid vacation in accordance with the plans, policies, programs and
practices of the Company and the Affiliated Companies as in effect
for the Peer Executives; provided, that such plans, policies,
programs and practices shall not be less favorable to the Executive
than those provided by the Company and the Affiliated Companies to
the Executive at the Relevant Time.
(ix) Changes During Merger
of Equals Period . Notwithstanding the foregoing, during any
Merger of Equals Period, the incentive compensation opportunities
and benefits provided to the Executive may be changed in a manner
violating the requirements of any of Sections 4(b)(ii)-(viii), if
such changes apply to Peer Executives generally. Following any such
change, the “Relevant Time” for determining whether
such requirements continue to be satisfied with respect to the
particular benefit that has been changed shall be immediately
following the effectiveness of such change.
5. 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 12(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.
(b) Cause . The
Company may terminate the Executive’s employment during the
Employment Period for Cause or without Cause. For purposes of this
Agreement, “Cause” shall mean:
(i) the willful and continued
failure of the Executive to perform substantially the
Executive’s duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board or the Chief
Executive Officer of the Company which specifically identifies the
manner in which the Board or Chief Executive Officer believes that
the Executive has not substantially performed the Executive’s
duties, or
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(ii) the willful engaging by
the Executive in illegal conduct or gross misconduct; or
(iii) a clearly established
violation by the Executive of the Company’s Code of Conduct
that is materially and demonstrably injurious to the
Company.
For purposes of this provision, no act
or failure to act, on the part of the Executive, shall be .
considered “willful” unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief
that the Executive’s action or omission was in the best
interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board
or upon the instructions of the Chief Executive Officer or a senior
officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of
the Company.
(c) Good Reason . The
Executive’s employment may be terminated by the Executive for
Good Reason or without Good Reason. For purposes of this Agreement,
“Good Reason” shall mean:
(i) A material diminution in
the Executive’s Annual Base Salary (other than as permitted
under Section 4(b)(i) hereof);
(ii) A material diminution in
the Executive’s authority, duties, or responsibilities (other
than as permitted by Section 4(a) hereof);
(iii) A material change in
the geographic location at which the Executive must perform
services for the Company in violation of Section 4(a)(ii)
hereof; or
(iv) Any other action or
inaction that constitutes a material breach by the Company of this
Agreement, including any failure of the Company to comply with and
satisfy Section 11(c) of this Agreement.
(d) Notice of Termination;
Opportunity to Cure . 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 12(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)
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specifies the Date of Termination (as
defined below). If the Executive is terminating employment for Good
Reason, (i) the Executive shall give the Company the Notice of
Termination not less than 60 days following the event giving rise
to the Executive’s Good Reason termination, and (ii) the
Company shall have a period of 30 days after receiving the Notice
of Termination to remedy the action or inaction on which Good
Reason is based. If the Company fails to remedy the action or
inaction on which Good Reason is based within s
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