Exhibit 10.1
EXECUTION COPY
THE MILLS
CORPORATION
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT
(“Agreement”) is made and entered into on
September 13, 2006 and effective as of the 1st day of June
2006 (the “Effective Date”), by and between THE MILLS
CORPORATION, a Delaware corporation (the “Company”),
and RICHARD J. NADEAU (“Executive”).
Recitals
R-1 The Company is engaged directly and indirectly
in the business of developing, constructing, leasing, financing and
managing super regional value-oriented retail and
entertainment-based shopping centers, malls, strip centers and
other commercial properties.
R-2 Executive currently is employed by the Company
in the capacity of Executive Vice President and Chief Financial
Officer, and has considerable experience and an intimate knowledge
of the business and affairs of the Company, its policies, methods,
personnel and operations. The Company wishes to continue to employ
Executive, and Executive wishes to accept continued employment with
the Company, on the terms and conditions set forth
herein.
Agreement
NOW, THEREFORE
, for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive, intending to be legally
and equitably bound, hereby agree as follows:
1. Employment; Employment
Period .
1.1 Employment.
The Company hereby employs
Executive, and Executive hereby accepts employment with the
Company, all upon the terms and conditions set forth in this
Agreement.
1.2 Employment Period.
The term of Executive’s
employment under this Agreement shall be the period commencing on
the Effective Date and ending on December 31, 2007 (the
“Employment Period”); provided that, commencing on
January 1, 2008, and on each January 1 thereafter, the
Employment Period shall automatically be extended for one
(1) year unless either party has given written notice of
non-renewal to the other party at least ninety (90) days prior
to the then scheduled expiration of the Employment Period, and each
such extension shall, ipso facto , become part of
(and incorporated into) the Employment Period for all purposes of
this Agreement; and provided, further, that Executive’s
employment hereunder may be terminated prior to the end of the
Employment Period as provided in Section 6 hereof.
Notwithstanding anything in this Agreement to the contrary, upon a
Change in Control (as defined in Section 7.1) of the Company,
the term of Executive’s employment under this Agreement shall
be the longer of the period commencing on the effective date of
such Change in Control and ending on the second anniversary of the
effective date of the Change in Control and the term that would
otherwise apply pursuant to this Section 1.2, subject in any
case to earlier termination of Executive’s employment
pursuant to Section 6 hereof.
2. Duties .
During the Employment Period,
Executive shall be employed by the Company as an executive.
Executive shall perform the customary duties of a Chief Financial
Officer of a company such as the Company, along with such
additional duties and responsibilities as are reasonably assigned
to Executive by the Company in its sole discretion during the
Employment Period.
3. Performance of
Duties/Standard of Care . During the Employment Period, Executive shall
act at all times in the best interests of the Company and
diligently discharge his duties and responsibilities to the Company
under this Agreement. Without limiting the generality of the
foregoing, Executive shall at all times abide strictly by the
policies of the Company including, without limitation, The Mills
Corporation Code of Business Conduct and Ethics as it may be
amended from time to time in the Company’s sole discretion
(the “Code of Conduct”). Such duties shall be rendered
at the principal office of the Company and Executive shall travel
to other places as the interests, needs, business or opportunity of
the Company shall require. During the Employment Period, Executive
agrees to devote his full business time, attention and energies to
the business of the Company and its subsidiaries and not to engage
in any other business activity, whether or not such business
activity is pursued for gain, profit or other economic or financial
advantage, except that Executive may serve in charitable or
philanthropic capacities or positions and serve as a director of
other companies which do not directly or indirectly compete with
the Company with the prior consent of the Chief Executive Officer
or President of the Company, in each case so long as such
activities comply with the Code of Conduct, are not injurious to
the Company and do not interfere with the performance of
Executive’s duties hereunder. In connection with the
performance of his duties hereunder, Executive shall at all times
seek to exercise the highest degree of loyalty to the Company and
shall comply with the highest standards of conduct in the
performance of his duties. Subject to compliance with the Code of
Conduct and the provisions of this Agreement, this Section 3
shall not be construed to prevent or prohibit Executive from
managing his personal assets or investments as long as such
activities do not interfere with the performance of
Executive’s duties hereunder.
4. Compensation and
Expenses .
4.1 Base Salary.
The Company shall pay to Executive,
during the Employment Period, an annual base salary (the
“Base Salary”) in accordance with the Company’s
normal payroll practice applicable to executives of the Company in
the same or similar positions to that of Executive. Initially, the
Base Salary shall be calculated at the rate of $465,000. The Base
Salary shall be reviewed effective as of April 1, 2007 and at
least annually thereafter for such adjustments as may be determined
by the Executive Compensation Committee of the Board of Directors
(the “Executive Compensation Committee”) to be
appropriate; provided, however, that the Base Salary shall not be
decreased below the amount set forth in this Section 4.1
except as part of a salary reduction program approved by the Board
of Directors that is generally applicable to executives of the
Company in the same or similar positions to that of
Executive.
4.2 Annual Bonus
Program.
(a) During each calendar year of the
Employment Period, Executive will be eligible to participate in the
Company’s annual short-term performance incentive plan
applicable to executives in the same or similar positions to that
of Executive, as such plan may exist from time to time (the
“PIP”). The amount of Executive’s target annual
bonus under the PIP for each calendar year during the Employment
Period (each a “Target Annual Bonus”) shall be
determined by the Executive Compensation Committee in its
discretion; provided, however, that Executive’s Target Annual
Bonus for the 2006 calendar year shall be at least $209,250.
The
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amount of the actual annual bonus, if any,
awarded to Executive under the PIP with respect to any calendar
year during the Employment Period (each an “Annual Bonus
Award”) shall be determined in accordance with the terms of
the PIP as administered by the Executive Compensation Committee.
All decisions regarding the criteria to be used to determine awards
under the PIP (which may consist of both corporate and individual
performance factors and metrics), the amount, if any, to be awarded
to Executive under the PIP with respect to any calendar year during
the Employment Period and interpretations of the terms of the PIP
shall be made solely and exclusively by the Executive Compensation
Committee in its discretion. The Company reserves the right to
change, alter, or terminate the PIP at any time in its sole
discretion; provided, that no such change, alteration or
termination shall adversely affect Executive’s rights under
this Agreement, or with respect to any Annual Bonus Award made
prior to the date of such change, alteration or termination,
without Executive’s prior written consent.
(b) Each Annual Bonus Award shall be
paid to Executive in cash when the Company customarily pays annual
bonus awards to other executives in the same or similar positions
to that of Executive under the PIP; provided that payment shall in
all event be made not later than the end of calendar year
immediately following the annual performance period to which the
bonus relates.
4.3 Long Term Incentive
Plan. Executive will be
eligible to participate in the Company’s long term incentive
plan applicable to executives in the same or similar positions to
that of Executive, as such plan may exist from time to time (the
“LTIP”). Executive’s target LTIP award for any
LTIP performance period during the Employment Period (each a
“Target LTIP Award”) shall be determined by the
Executive Compensation Committee in its discretion. The amount of
the actual LTIP award, if any, made to Executive with respect to
any LTIP performance period during the Employment Period (each an
“LTIP Award”) shall be determined in accordance with
the terms of the LTIP as administered by the Executive Compensation
Committee. All decisions regarding the criteria to be used to
determine LTIP Awards (which may consist of both corporate and
individual performance factors and metrics), the actual amount of
the LTIP Award, if any, with respect to any LTIP performance period
during the Employment Period, the form of payment of such awards
(which may be in cash, shares of Company Stock or a combination
thereof, or any other medium chosen by the Executive Compensation
Committee), and interpretations of the terms of the LTIP shall be
made solely and exclusively by the Executive Compensation Committee
in its discretion. The Company reserves the right to change, alter
or terminate the LTIP at any time in its sole discretion; provided,
that no such change, alteration or termination shall adversely
affect Executive’s rights under this Agreement or under any
LTIP Award made prior to the date of such change, alteration or
termination. Payment shall be made as soon as practicable after
completion of the performance period; provided that it shall in all
events be made not later than the end of the calendar year
immediately following the completion of such performance
period.
4.4 Expense Reimbursement
Policy. During the
Employment Period, the Company shall reimburse Executive for all
ordinary and reasonable business expenses paid by Executive in
connection with the performance of his duties under this Agreement
in accordance with and subject to the Company’s expense
reimbursement policies then in effect for executives in the same or
similar positions to that of Executive.
4.5 Special Performance
Bonus. Executive shall be
entitled to a one-time special performance bonus award of up to
$465,000 payable on February 28, 2007 if Executive
successfully achieves the performance objectives set forth on
Schedule 1 attached hereto and incorporated herein by reference
(the “Special Performance Bonus”). The actual amount
of
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Executive’s Special Performance Bonus
shall be based on the evaluation of Executive’s performance
against the performance objectives set forth on Schedule 1, which
evaluation shall be done jointly by the Company’s Chief
Executive Officer and the Executive Compensation Committee, with
significant input from the Audit Committee. Notwithstanding
anything contained hereinto to the contrary, the Special
Performance Bonus shall be paid in full if, prior to
February 28, 2007, Executive is terminated by the Company
without Cause or Executive terminates his employment for Good
Reason, with the Special Performance Bonus paid on the day
Executive ceases to be employed.
5. Personnel Policies and
Benefits .
5.1 Benefits
Generally. During the
Employment Period, Executive shall be entitled to participate in
all benefit programs, policies or plans adopted by the Company and
applicable to executives in the same or similar positions to that
of Executive on the same basis as such other executives, as such
programs, policies or plans may be interpreted, adopted, revised or
terminated from time to time by the Company in its sole discretion.
All matters of eligibility for coverage or benefits under any such
benefit programs, policies or plans shall be determined in
accordance with the provisions of the applicable program, policy or
plan. The Company reserves the right to change, alter, interpret or
terminate any such programs, policies or plans at any time in its
sole discretion.
5.2 Personnel
Policies. Except as
otherwise provided herein, Executive’s employment shall be
subject to the personnel policies that apply generally to the
Company’s executives in the same or similar positions to that
of Executive, as the same may be interpreted, adopted, revised or
terminated from time to time during the Employment Period by the
Company in its sole discretion.
6.
Termination.
6.1 Payment of Accrued But Unpaid
Amounts Upon Termination. Notwithstanding any provision in this Agreement
to the contrary, in the event of termination of Executive’s
employment for any reason during the Employment Period, Executive
or his beneficiaries or estate (as provided in Section 10.2)
shall be entitled to receive, in addition to any other payments or
benefits required to be made or provided under the remaining
provisions of this Article 6, within fourteen (14) days after
the Effective Date of Termination (as defined below):
(a) any accrued but unpaid Base
Salary for services rendered by Executive to the Company prior to
the Effective Date of Termination;
(b) any earned but unpaid Annual
Bonus Awards for calendar years that have ended prior to the
Effective Date of Termination;
(c) reimbursement of any accrued but
unpaid expenses required to be reimbursed under this Agreement that
were incurred by Executive prior to the Effective Date of
Termination;
(d) payment for any accrued but
unpaid vacation time to the extent consistent with Company policy
in effect as of the Effective Date of Termination; and
(e) any earned but unpaid LTIP
Awards.
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Except as specifically provided in this
Agreement and under the terms of any incentive compensation and
benefit plans in effect and applicable to Executive on the
Effective Date of Termination, Executive shall have no right to
receive any other compensation, or to participate in any other
plan, arrangement or benefit of the Company after such termination
and all other obligations of the Company and rights of Executive
under this Agreement shall terminate effective as of the Effective
Date of Termination.
6.2 Termination Due to
Death. Executive’s
employment with the Company shall automatically terminate upon
Executive’s death. From and after the date of death, the
Company shall have no further obligation to pay any Base Salary to
Executive. In the event of such termination:
(a) the entitlement of any
beneficiary of Executive to benefits under any benefit program,
policy or plan described in Section 5.1 hereof shall be
determined in accordance with the provisions of such program,
policy or plan;
(b) vesting and all other rights
with respect to stock options and any other equity-based
compensation awards not covered by Section 6.1 above (other
than LTIP Awards) will be treated in accordance with the equity
incentive plan under which the relevant grant was made and any
applicable grant documents; provided, however, that Executive shall
be considered for such purpose to have been employed at the end of
the calendar year in which the termination occurred; and
(c) any LTIP Awards that are not
covered by Section 6.1 above will be treated in accordance
with the LTIP as then in effect.
6.3 Termination by the Company
Due to Disability.
(a) If Executive becomes
“Disabled” (as defined below) during the Employment
Period, the Company shall have the right to terminate
Executive’s employment by giving written notice of such
termination to Executive, which notice shall specify the Effective
Date of Termination and which Effective Date of Termination shall
be no less than thirty (30) calendar days after the date of
such notice. From and after the Effective Date of Termination, the
Company shall have no further obligation to pay any Base Salary to
Executive. In the event of such termination:
(i) the entitlement of Executive to
benefits under any benefit program, policy or plan described in
Section 5.1 hereof shall be determined in accordance with the
provisions of such program, policy or plan;
(ii) vesting and all other rights
with respect to stock options and any other equity-based
compensation awards not covered by Section 6.1 above (other
than LTIP Awards) will be treated in accordance with the equity
incentive plan under which the relevant grant was made and any
applicable grant documents; provided, however that Executive shall
be considered for such purpose to have been employed at the end of
the calendar year in which the termination occurred; and
(iii) any LTIP Awards that are not
covered by Section 6.1 above will be treated in accordance
with the LTIP as then in effect.
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(b) The term “Disabled”
or “Disability” shall mean that (i) Executive has
been unable, notwithstanding such reasonable accommodations as may
be required by applicable law, to engage in the essential functions
of his position with the Company due to a disability, as determined
by the Company upon receipt of and in reliance on independent
competent medical advice, for more than one hundred eighty
(180) total calendar days during any period of twelve
(12) consecutive months, or (ii) the Company has
reasonably determined, upon receipt of and in reliance on
independent competent medical advice, that Executive is unlikely to
be able, notwithstanding such reasonable accommodations as may be
required by applicable law, to engage in the essential functions of
his position with the Company due to a disability for more than one
hundred eighty (180) total calendar days during any period of
twelve (12) consecutive months. With respect to Executive, the
foregoing definition of Disability shall supersede the definition
of Disability set forth in, and shall be used for purposes of, the
Company’s 2004 Stock Incentive Plan, as it has been or may be
amended from time to time (the “2004 Plan”), the
Operating Guidelines for the Administration of Executive Long-Term
Incentive Awards (“LTIP Guidelines”) and the Operating
Guidelines for the Administration of Annual Incentive Awards
(“PIP Guidelines”) and any awards or grants under the
2004 Plan, the LTIP Guidelines and the PIP Guidelines.
6.4 Voluntary Termination by
Executive. Executive may
terminate his employment at any time during the Employment Period
without Good Reason (as defined in Section 6.7) by giving the
Company written notice of Executive’s intent to terminate not
less than ninety (90) calendar days before the effective date
of such termination; provided, however, that the required notice
period shall be reduced to forty-five (45) days in the event
Executive’s voluntary termination is not for the purpose of
taking alternative employment. Such written notice of termination
shall state the Effective Date of Termination, which shall not be
earlier than the last day of the applicable notice period set forth
in the preceding sentence. From and after the Effective Date of
Termination, the Company shall have no further obligation to pay
any Base Salary to Executive. In the event of such
termination:
(a) the entitlement of Executive to
benefits under any benefit program, policy or plan described in
Section 5.1 shall be determined in accordance with the
provisions of such program, policy or plan;
(b) all unvested equity or
equity-based compensation awards shall be forfeited by Executive;
and
(c) any LTIP Awards that are not
covered by Section 6.1 or Section 6.4(b) above will be
treated in accordance with the LTIP as then in effect.
6.5 Termination by the Company
without Cause.
(a) The Company may terminate
Executive’s employment at any time during the Employment
Period for reasons other than death, Disability or Cause by giving
written notice to Executive, which notice shall specify the
Effective Date of Termination and which Effective Date of
Termination shall be no less than thirty (30) calendar days
after the date of such notice. From and after the Effective Date of
Termination, the Company shall have no further obligation to pay
any Base Salary to Executive. In the event of such termination,
except as provided in Section 6.8 with respect to termination
within twenty-four (24) months after a Change in Control,
Executive shall be entitled to the payments and benefits described
in Section 6.5(b), contingent upon executing and returning to
the Company (and not revoking) a release of claims in substantially
the form attached hereto as Exhibit A within the time permitted by
the Company (which permitted time period shall not be less than
twenty-one (21) days).
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(b) Within the later of
(x) fifteen (15) days following the Effective Date of
Termination and (y) eight (8) days after Executive
provides an executed release of claims which he is obligated to
deliver as described above, and as long as such release of claims
is not revoked by Executive during the seven (7) day period
following its execution by Executive), the Company shall pay to
Executive a lump sum cash payment equal to (i) two
(2) times the sum of (A) Executive’s Base Salary in
effect as of the Effective Date of Termination and
(B) Executive’s Target Annual Bonus for the year in
which the termination occurs and (ii) a pro rata cash payment
equal to Executive’s Target Annual Bonus for the year of
termination based on service from commencement of the applicable
bonus year through the Effective Date of Termination. In addition,
vesting and all other rights with respect to stock options and
other equity-based compensation awards not covered under
Section 6.1 above (other than LTIP Awards) will be treated in
accordance with the equity incentive plan under which the relevant
grant was made and any applicable grant documents; provided,
however, that Executive shall be considered for such purpose to
have been employed at the end of the calendar year in which the
termination occurred. Any LTIP Awards not covered by
Section 6.1 above will be treated in accordance with the LTIP
as then in effect. The entitlement of Executive to benefits under
any benefit program, policy or plan described in Section 5.1
hereof shall be determined in accordance with the provisions of
such program, policy or plan; provided, however, that, subject to
the last sentence of this Section 6.5, the Company shall
provide, at its expense, continued participation in any medical
insurance and dental insurance plans in which Executive or his
dependents participated as of the Effective Date of Termination for
twenty-four (24) months following the Effective Date of
Termination at the same coverage level as in effect as of the
Effective Date of Termination, but subject to such modifications as
shall be established for executives of the Company in the same or
similar positions to that of Executive. As a condition to receiving
such continued coverage, Executive may be required to elect
continuation coverage under “COBRA” under the terms of
the applicable plans, in which case the Company shall reimburse
Executive for the cost of such continued coverage at the same
coverage level as in effect as of the Effective Date of Termination
subject to such modifications as shall be established for
executives of the Company in the same or similar positions to that
of Executive.
6.6 Termination by the Company
for Cause.
(a) The Company may terminate
Executive’s employment at any time during the Employment
Period for “Cause,” which termination shall be
effective immediately upon written notice to Executive.
(b) For purposes of this Agreement
and notwithstanding any other provision of this Agreement,
“Cause” shall mean any of the following:
(i) Executive commits an act of fraud or embezzlement with
respect to the Company or any of its affiliates;
(ii) Executive is convicted of, or enters a plea of guilty or
nolo contendere to, any felony; (iii) Executive commits
any act of dishonesty, breach of fiduciary duty or misconduct
(whether in connection with Executive’s responsibilities as
an employee of the Company or otherwise) that, in the
Company’s reasonable judgment, either (A) materially
impairs the Company’s business, goodwill or reputation or
(B) materially compromises Executive’s ability to
perform Executive’s job duties or represent the Company with
the public; (iv) Executive fails to substantially perform any
of his duties hereunder (other than any such failure resulting from
a material breach of this Agreement by the Company or the
Disability of Executive) which failure continues for more than
thirty (30) days after written notice by the Company;
(v) such carelessness, lack of judgment,
ineffectiveness
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or inefficiency in performance by Executive of
his duties that Executive is determined by the Executive
Compensation Committee to be unfit to continue in service; provided
that Executive shall be given notice and an opportunity to cure
unless the Executive Compensation Committee determines, in its sole
discretion, not to provide Executive with notice and an opportunity
to cure given the severity or frequency of the carelessness, lack
of judgment, ineffectiveness or inefficiency; or
(vi) Executive materially violates any provision of this
Agreement. With respect to Executive, the foregoing definition of
Cause shall supersede the definition of Cause set forth in, and
shall be used for purposes of, the 2004 Plan, the LTIP Guidelines
and the PIP Guidelines and any awards or grants under the 2004
Plan, the LTIP Guidelines and the PIP Guidelines.
(c) From and after the Effective
Date of Termination, the Company shall have no further obligation
to pay any Base Salary to Executive. In the event of such
termination:
(i) the entitlement of Executive to
benefits under any benefit program, policy or plan described in
Section 5.1 shall be determined in accordance with the
provisions of such program, policy or plan;
(ii) any unvested equity or
equity-based compensation awards shall be forfeited by Executive;
and
(iii) any LTIP Awards that are not
covered by Section 6.1 or Section 6.6(c)(ii) above will
be treated in accordance with the LTIP as then in
effect.
6.7 Termination by Executive for
Good Reason.
(a) Executive may terminate his
employment hereunder at any time during the Employment Period for
“Good Reason” (as hereinafter defined) by providing the
Company with written notice of termination within ninety
(90) days after Executive knows, or should have known, that an
event constituting “Good Reason” has occurred. Such
notice of termination shall state the Effective Date of
Termination, which effective date shall not be less than thirty
(30) days nor more than ninety (90) days after the date
of such notice, except in the case of (i) any event described
in subparagraph 6.7(b)(ii) below, in which case such termination
shall be effective immediately upon delivery of such notice and
(ii) any event described in subparagraph 6.7(b)(ix) below, in
which case such termination shall be effective ninety
(90) days after the date of such notice. If Executive
terminates his employment under this Section 6.7 for Good
Reason (a “Termination for Good Reason”), and a Change
in Control has not occurred within the twenty-four (24) month
period preceding the Effective Date of Termination, Executive shall
receive the same payments and benefits Executive would be entitled
to receive under Section 6.5 following a termination of
employment by the Company without Cause, subject to providing a
release of claims as described therein. If Executive terminates his
employment under this Section 6.7 for Good Reason and a Change
in Control has occurred within the twenty-four (24) month
period preceding the Effective Date of Termination, Executive shall
receive the payments and benefits described in
Section 6.8.
(b) “Good Reason” shall
mean the occurrence of any one or more of the following events
without the express written consent of Executive; provided,
however, that any of the events described in subparagraph
6.7(b)(ii) below shall only constitute Good Reason if the Company
shall have failed to correct or remedy such event within thirty
(30) days following receipt of written notice from Executive
describing in reasonable detail such event and demanding correction
or remedy; and provided further that any of the events described
in
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subparagraphs (b)(vii), (b)(viii) and (b)(ix)
below shall only be treated as a Good Reason event if such event
occurs within twenty-four (24) months following a Change in
Control:
(i) the relocation of
Executive’s principal office to a location that is more than
fifty (50) miles from the Company’s current or future
Washington, D.C. area headquarters;
(ii) a failure by the Company to pay
or provide for any earned Base Salary, earned Annual Bonus, earned
LTIP Award or any other material earned compensation or benefits
required to be paid or provided for under this Agreement, in each
case when due;
(iii) a reduction by the Company in
Executive’s Base Salary except as part of a salary reduction
program approved by the Board of Directors that is generally
applicable to executives of the Company in the same or similar
positions to that of Executive;
(iv) except as part of a benefit
reduction program approved by the Board of Directors that is
generally applicable to executives of the Company in the same or
similar positions to that of Executive, a material reduction in the
terms of Executive’s eligibility for benefits under any of
the Company’s incentive compensation plans or health or
welfare benefit plans from the terms that were in effect on the
Effective Date or a material modification to, or termination of,
any such plans as such plans were in effect on the Effective Date
(the “Existing Plans”) without replacement of such
modified or terminated plans with one or more plans offering to
Executive eligibility for benefits at least as favorable to
Executive as those offered by the Existing Plans;
(v) a material diminution in
Executive’s responsibilities or position not related to
Executive’s individual performance or as a result of any
organizational change or restructuring approved by the Board of
Directors that involves two or more employees;
(vi) the failure of the Company to
obtain a satisfactory agreement from any successor to the Company
to assume and perform the obligations of the Company hereunder, as
contemplated by Section 10.1;
(vii) the assignment to Executive of
duties materially inconsistent with Executive’s authorities,
duties, responsibilities and status (including offices, titles and
reporting requirements) as an officer of the Company (or its
successor), or a material reduction or alteration in the nature or
status of Executive’s authority, duties or responsibilities
from those in effect immediately prior to the effective date of the
Change in Control;
(viii) a reduction by the Company
(or its successor) in Executive’s Base Salary from the Base
Salary that was in effect with respect to Executive immediately
prior to the effective date of the Change in Control or a material
reduction in the terms of Executive’s eligibility for
benefits under any of the Company’s incentive compensation
plans or health or welfare benefit plans from the terms that were
in effect immediately prior to the effective date of the Change in
Control or a material modification to, or termination of, any such
plans as such plans were in effect immediately prior to the
effective date of the Change in Control (the “Pre-Change
in
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Control Existing Plans”)
without replacement of such modified or terminated plans with one
or more plans offering to Executive eligibility for benefits at
least as favorable to Executive as those offered by the Pre-Change
in Control Existing Plans; or
(ix) if the Company’s common
stock ceases to be registered under the Securities Exchange Act of
1934, as amended.
Executive shall also be entitled to
voluntarily terminate his employment with the Company for any
reason by giving not less than five (5) days’ advance
written notice to the Company of his intention to terminate his
employment within the thirty (30)-day period commencing on the
first anniversary of the effective date of a Change in Control of
the Company and any such termination shall be considered a
termination for Good Reason after a Change in Control for purposes
of this Agreement. The continued employment of Executive after an
event constituting Good Reason shall not constitute consent to, or
a waiver of rights with respect to, any circumstance constituting
Good Reason, until the passage of ninety (90) days after
Executive knew or should have known that an event constituting Good
Reason has occurred without delivery by Executive of a written
notice of termination for Good Reason, as provided above. With
respect to Executive, the foregoing definition of Good Reason shall
supersede the definition of Good Reason set forth in, and shall be
used for purposes of, the 2004 Plan, the LTIP Guidelines and the
PIP Guidelines and any awards or grants under the 2004 Plan, the
LTIP Guidelines and the PIP Guidelines.
6.8 Termination after a Change in
Control.
(a) If during the Employment Period
(i) the Company terminates Executive’s employment for
reasons other than death, Disability or Cause or
(ii) Executive timely terminates his employment for Good
Reason, and either (i) or (ii) occurs within twenty-four
(24) months after a Change in Control, then, from and after
the Effective Date of Termination, the Company shall have no
further obligation to pay any Base Salary to Executive and, in lieu
of any severance amounts payable under Section 6.5 or 6.7,
whichever would otherwise apply, Executive shall be entitled to the
payments and benefits described in paragraph (b) below,
contingent upon executing and returning to the Company (and not
revoking) a release of claims in substantially the form attached
hereto as Exhibit A within the time permitted by the Company (which
permitted time period shall not be less than twenty-one
(21) days).
(b) Within the later of
(x) fifteen (15) days following the Effective Date of
Termination and (y) eight (8) days after Executive
provides an executed release of claims as described above, as long
as such release of claims is not revoked by Executive during the
seven (7) day period following its execution by Executive),
the Company shall pay to Executive a lump sum cash payment equal to
(i) two (2) times the sum of (A) Executive’s
Base Salary in effect as of the Effective Date of Termination and
(B) Executive’s Target Annual Bonus for the year in
which the termination occurs and (ii) a pro rata cash payment
equal to Executive’s Target Annual Bonus for the year of
termination based on service from the commencement of the
applicable bonus year through the Effective Date of Termination. In
addition, vesting and all other rights with respect to stock
options and other equity-based compensation awards not covered by
Section 6.1 above (other than LTIP Awards) will be treated in
accordance with the equity incentive plan under which the relevant
grant was made and any applicable grant agreements; provided,
however, that Executive shall be considered for such purpose to
have been employed at the end of the calendar year in which the
termination occurred. Any LTIP Awards not covered by
Section 6.1 hereof will be treated in accordance with the LTIP
as then in effect; provided that if the Company terminates
Executive’s employment for reasons other than
death,
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Disability or Cause or Executive timely
terminates his employment for Good Reason, and such termination
occurs during the Employment Period and within twenty-four
(24) months after a Change in Control, notwithstanding Section
VI.D. of the LTIP Guidelines currently in effect (or any comparable
provisions in any subsequently adopted LTIP Guidelines), Executive
will be entitled to payment of the full amount (without pro ration)
of any unvested LTIP Awards that have been made to Executive for
any Performance Period that has commenced, payable in cash and/or
equity, as previously determined by the Executive Compensation
Committee with respect to the applicable Performance Period,
calculated in accordance with the LTIP Guidelines; provided that
for purposes of calculating the LTIP Award for any Performance
Period that has commenced (1) for any completed calendar year
in which actual performance by the Company and/or Executive against
corporate Performance Targets (as defined in the LTIP Guidelines)
or individual performance goals, as applicable, has been measured,
and such measurement has been ratified by the Company’s
Executive Compensation Committee prior to the effec
