Execution Version
Exhibit 10.5(A)
Employment
Agreement
This Employment Agreement (the
“ Agreement ”), entered into as of
August 22, 2006, with employment effective as of
September 8, 2006 (the “ Effective Date ”),
is made by and among David L. Calhoun (the “ Executive
”) and Valcon Acquisition Holding (Luxembourg) S.à r.l.,
a private limited company incorporated under the laws of Luxembourg
(“ Lux Holdco ”) and Lux Holdco’s indirect
subsidiary, VNU, Inc., a Delaware corporation (the “ U.S.
Entity ” and, together with Lux Holdco, the “
Company ”).
RECITALS
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A.
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It is the
desire of the Company to assure itself of the services of the
Executive by engaging the Executive to perform services under the
terms hereof.
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B.
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The Executive
desires to provide services to the Company on the terms herein
provided.
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AGREEMENT
NOW, THEREFORE, in consideration of
the foregoing and of the respective covenants and agreements set
forth below the parties hereto agree as follows:
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(a)
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“ 2006
Prior Bonus ” shall mean the annual cash incentive bonus
that the Executive is eligible to earn from the Prior Employer in
respect of 2006.
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(b)
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“
Accountants ” shall have the meaning set forth in
Section 10(e) .
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(c)
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“
Additional Make Whole Payment ” shall have the meaning
set forth in Section 3(e) .
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(d)
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“
Affiliate ” shall mean, with respect to any Person,
any other Person directly or indirectly controlling, controlled by,
or under common control with, such Person where
“control” shall have the meaning given such term under
Rule 405 of the Securities Act; provided that, with respect
to the Company, Affiliate shall not include any Principal
Stockholder or any portfolio companies of the relevant Principal
Stockholder.
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(e)
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“
Agreement ” shall have the meaning set forth in the
preamble hereto.
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(f)
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“
Annual Base Salary ” shall have the meaning set forth
in Section 3(a) .
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(g)
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“
Annual Bonus ” shall have the meaning set forth in
Section 3(b) .
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(h)
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“ Base
Amount ” shall have the meaning set forth in
Section 10(b) .
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(i)
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“ Base
Price ” shall mean the per share purchase price paid by
the Principal Stockholders for their shares of the Common Stock, or
the economic equivalent thereof.
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(j)
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“
BV ” shall mean VNU Group B.V., a private company with
limited liability incorporated under the laws of the Netherlands (
besloten vennootschap met beperkte aansprakelijkheid
).
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(k)
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“ Cash
Payment ” shall have the meaning set forth in
Section 10(c) .
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(l)
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The Company
shall have “ Cause ” to terminate the
Executive’s employment hereunder upon:
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(i)
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The
Executive’s willful misconduct with regard to the Company
that results in a significant adverse impact on the Company;
provided that no act or failure to act on the
Executive’s part will be considered “willful”
unless done, or omitted to be done, by the Executive not in good
faith or without reasonable belief that his action or omission was
in the best interests of the Company;
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(ii)
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The Executive
being indicted for, convicted of, or pleading nolo
contendere to, a felony or intentional crime involving material
dishonesty other than, in any case, vicarious liability or traffic
violations;
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(iii)
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The
Executive’s conduct involving the use of illegal drugs in the
workplace;
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(iv)
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The
Executive’s failure to attempt in good faith to follow a
lawful directive of the Supervisory Board within ten (10) days
after written notice of such failure; and/or
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(v)
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The Executive’s breach of
Sections 6 or 7(a) , gross breach of Section 8 ,
or breach of the Executive’s management stockholders’
agreement or the Executive’s other agreements with the
Company, which continues beyond ten (10) days after written
demand for substantial performance is delivered to the Executive by
the Company (to the extent that, in the reasonable judgment of the
Supervisory Board, such breach can be cured by the Executive), so
long as the breach (which shall be deemed to refer to all breaches
in this paragraph) is (A) material and (B) results in a
significant adverse impact on the Company; provided that the
foregoing reference to other agreements shall not apply to any
agreement, policy or similar standard agreement that is utilized by
the Company on a basis beyond an individually negotiated agreement
with the Executive. The parties hereto agree that the
Executive’s initial equity documents and management
stockholders’ agreement to be executed in connection with his
hire hereunder shall not, without the consent of the Executive
(which consent the Executive shall not be required to give),
provide for additional
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restrictive covenants or
additional equity or severance forfeiture provisions imposed by the
Company beyond those provided herein including the terms set forth
in Exhibit B attached hereto.
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The Executive shall not be
terminated for “Cause” unless reasonable notice is
provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the
Supervisory Board, and thereafter whether or not an event giving
rise to “Cause” has occurred will be determined by the
Supervisory Board reasonably and in good faith; provided
that any such determination by the Supervisory Board shall be
subject to de novo review by the arbitrator pursuant to
Section 22 based on the facts thereof.
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(m)
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“
Change in Control ” shall mean any transaction
(including, without limitation, any merger, consolidation or sale
of assets or equity interests, or any acquisition of stock in the
open market or otherwise) the result of which is that any Person or
“group” (as defined within the meaning of Rules 13d-3
and 13d-5 of the Exchange Act), other than any of the Principal
Stockholders or their Affiliates, obtains (i) direct or
indirect beneficial ownership of more than fifty (50) percent
of the voting rights of Lux Holdco, or any entity which is
wholly-owned, directly or indirectly, by Lux Holdco and which has
materially the same direct or indirect ownership of all direct and
indirect subsidiaries of Lux Holdco as does Lux Holdco, or
(ii) all or substantially all of the assets of the Group
(excluding, for the avoidance of doubt, a transaction or series of
transactions involving the sale of only (A) the assets of the
entities comprising the Business Information division of the Group,
in combination with (B) the assets of either (x) the
entities comprising the Marketing Information division of the Group
or (y) the entities comprising the Media Measurement and
Information division of the Group, in each case as such applicable
division is constituted from time to time).
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(n)
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“
Code ” shall mean the Internal Revenue Code of 1986,
as amended.
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(o)
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“ Common Stock
” shall mean ordinary shares of [Dutch Bidco],
1
par
value [EUR 1,000.00] per share.
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(p)
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“
Company ” shall have the meaning set forth in the
preamble hereto.
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(q)
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“
Company SERP ” shall have the meaning set forth in
Section 3(g) .
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(r)
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“
Compensation Committee ” means the compensation
committee of the Supervisory Board, or if no such committee exists,
the Supervisory Board or its Executive Committee.
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1
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To the extent that
optimal tax and investment performance will be attained by
structuring the investment of the Executive and of all other
members of management in an entity other than Dutch Bidco and/or in
other securities in addition to common stock, the Supervisory Board
will structure such investment to allow for economic treatment
substantially equivalent to an investment in the common stock of
the Dutch Bidco.
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(s)
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“
Competitive Entity ” shall have the meaning set forth
in Section 6(a)(i) .
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(t)
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“ Date
of Termination ” shall mean the date on which the
Executive’s employment with the Company ceases in accordance
with the terms of this Agreement.
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(u)
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“
Delay Period ” shall have the meaning set forth in
Section 11(b) .
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(v)
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“
Directors and Officers Insurance ” shall have the
meaning set forth in Section 13 .
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(w)
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A “
Disability ” shall have occurred when the Executive
has been unable to perform his material duties because of physical
or mental incapacity for a period of at least 180 consecutive days,
as determined by a medical doctor mutually agreed upon by the
parties hereto.
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(x)
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“
Documentation Date ” shall have the meaning set forth
in Section 3(f)(i) .
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(y)
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“
Dutch Bidco ” shall mean Valcon Acquisition B.V., a
private company with limited liability incorporated under the laws
of the Netherlands ( besloten vennootschap met beperkte
aansprakelijkheid ).
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(z)
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“
Effective Date ” shall have the meaning set forth in
the preamble hereto.
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(aa)
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“
Equity ” shall mean the Executive’s Options, the
shares of Common Stock issued upon the exercise of such Options,
and any other shares of Common Stock acquired by the Executive,
which shares shall be subject to a stockholders’ agreement
that will provide for certain rights and restrictions, including,
without limitation, customary tag-along and piggyback registration
rights on behalf of the Executive, customary drag-along and other
rights on behalf of the Company and/or the Principal Stockholders,
and restrictions concerning voting rights and transferability,
which restrictions may lapse based on duration of employment with
the Company, Company performance and individual performance, as
described in more detail in the summary of terms and conditions
attached hereto as Exhibit B .
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(bb)
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“
Equity Plan ” shall mean the equity incentive plan to
be established (as amended from time to time) with respect to the
Common Stock. Lux Holdco agrees, or agrees to cause Dutch Bidco or
such other applicable member of the Group, to use its reasonable
best efforts to establish the Equity Plan, in such form as
determined by the Supervisory Board after good faith consultation
with the Executive and reasonably consistent with the applicable
terms set forth in this Agreement, on or prior to
September 30, 2006.
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(cc)
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“
Exchange Act ” shall mean the Securities Exchange Act
of 1934, as amended from time to time.
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(dd)
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“
Excise Tax ” shall have the meaning set forth in
Section 10(a) .
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(ee)
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“
Executive ” shall have the meaning set forth in the
preamble hereto.
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(ff)
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“
Executive Board ” shall mean the Executive Board of
Directors of the BV.
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(gg)
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“
Extension Date ” shall have the meaning set forth in
Section 3(f)(i) .
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(hh)
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“
Extension Term ” shall have the meaning set forth in
Section 2(b) .
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(ii)
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“
Forfeited Options ” shall mean any Prior Vested
Options that, in connection with the Executive’s termination
of employment with the Prior Employer, the Prior Employer does not
permit the Executive to exercise, or the Executive cannot both
exercise and sell the stock underlying, prior to the expiration
thereof, because of applicable Prior Employer securities law
purchase and sale limitations.
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(jj)
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The Executive
shall have “ Good Reason ” to resign his
employment upon the occurrence of any of the following:
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(i)
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Failure of the
Company to continue the Executive in the positions of Chief
Executive Officer and Chairman of the Executive Board (or, if
applicable and consistent with Section 2(c)(ii) , of
the Supervisory Board) or any other failure to elect or to continue
the Executive in any position contemplated by
Section 2(c)(iii) ; provided that failure to
elect or appoint the Executive, or to continue the
Executive’s election or appointment, as Chairman of the
Supervisory Board shall not constitute “Good Reason” if
prohibited by, or impracticable under, law or prevailing corporate
practice;
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(ii)
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A material
diminution in the nature or scope of the Executive’s
responsibilities, duties or authority;
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(iii)
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The
Company’s material breach of the employment agreement or
other agreements with the Executive which results in a significant
adverse impact upon the Executive;
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(iv)
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The Executive
is not elected or appointed to (or not re-elected to or
re-appointed to or removed from) the Executive Board (or, if
applicable and consistent with Section 2(c)(ii) , the
Supervisory Board); provided that failure to elect or
appoint the Executive, or to continue the Executive’s
election or appointment, as Chairman of the Supervisory Board shall
not constitute “Good Reason” if prohibited by, or
impracticable under, law or prevailing corporate
practice;
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(v)
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The relocation
by the Company of the Executive’s primary place of employment
with the Company to a location outside of New York City,
Westchester, New York or Fairfield County, Connecticut;
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(vi)
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The failure of
the Company to obtain the assumption in writing delivered to the
Executive of its obligation to perform this Agreement by any
successor to all or substantially all of the assets of the Company;
or
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(vii)
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The failure of
the Company to timely pay to the Executive any significant amounts
due under the terms of this Agreement;
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in any case of the foregoing, that
remains uncured after ten (10) business days after the
Executive has provided the Company written notice that the
Executive believes in good faith that such event giving rise to
such claim of Good Reason has occurred, so long as such notice is
provided within ninety (90) days after such event has first
occurred.
Notwithstanding the foregoing, a
termination of employment by the Executive for any reason pursuant
to a Notice of Termination given during the thirty (30) day
period immediately following the first anniversary of the
occurrence of a Change in Control shall be deemed to be a
termination of employment for Good Reason.
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(kk)
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“
Gross-Up Payment ” shall have the meaning set forth in
Section 10(a) .
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(ll)
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“
Group ” shall mean Lux Holdco and any of its direct
and indirect subsidiaries and Affiliates (including, without
limitation, the U.S. Entity), together with any successor
thereto.
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(mm)
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“
Initial Term ” shall have the meaning set forth in
Section 2(b) .
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(nn)
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“ Lux
Holdco ” shall have the meaning set forth in the
preamble.
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(oo)
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“ Make
Whole Payment ” shall have the meaning set forth in
Section 3(d) .
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(pp)
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“ New
Business ” shall have the meaning set forth in
Section 6(a)(i) .
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(qq)
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“
Notice of Termination ” shall have the meaning set
forth in Section 4(b) .
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(rr)
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“
Option ” shall mean an option to purchase shares of
the Common Stock pursuant to the Equity Plan.
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(ss)
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“
Parachute Payment ” shall have the meaning set forth
in Section 10(a) .
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(tt)
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“
Person ” shall mean an individual, partnership,
corporation, limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever
nature.
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(uu)
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“
Prior Employer ” shall mean the Executive’s
current employer, as of the date hereof.
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(vv)
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“
Prior SERP ” shall mean the supplemental executive
retirement plan provided by the Prior Employer for the benefit of
the Executive.
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(ww)
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“
Prior Vested Options ” shall mean the
Executive’s vested in-the-money stock options granted by the
Prior Employer, which are outstanding on the date hereof and do not
otherwise expire by their terms prior to the date of the
Executive’s termination of employment with the Prior Employer
(other than by reason of the termination of the Executive’s
employment with the Prior Employer).
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(xx)
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“
Principal Stockholders ” shall mean each of the
“Investors” (as defined in the Shareholders’
Agreement), but in any event shall include each of AlpInvest
Partners, The Blackstone Group, The Carlyle Group,
Hellman & Friedman, Kohlberg Kravis Roberts & Co,
and Thomas H. Lee Partners, or their successors, so long as they
remain investors under the Shareholders’
Agreement.
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(yy)
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“
Proprietary Information ” shall have the meaning set
forth in Section 7 .
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(zz)
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“
Pro-Rate Factor ” shall mean a fraction, (i) the
numerator of which is equal to the number of days that the
Executive is employed by the Prior Employer or the Company, as
applicable, during the calendar year in which the Executive’s
employment with such employer commences or terminates, as
applicable, and (ii) the denominator of which is the number of
days in such calendar year.
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(aaa)
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“
Reduced Payment ” shall have the meaning set forth in
Section 10(c) .
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(bbb)
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“
Related Agreements ” shall have the meaning set forth
in Section 18 .
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(ccc)
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“
Restricted Stock ” shall mean restricted shares of the
Common Stock granted pursuant to the Equity Plan.
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(ddd)
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“
Securities Act ” shall mean the Securities Act of
1933, as amended from time to time.
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(eee)
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“
Severance Period ” shall mean the period beginning on
the Date of Termination and ending on the earlier to occur of
(i) the second anniversary of the Date of Termination, or
(ii) the first date of the Executive’s violation of any
covenant contained in Sections 6 or 7(a) or gross violation
of any covenant contained in Section 8 , which
violation is (A) material and (B) results in a
significant adverse impact on the Company and has not been
corrected within ten (10) days of receipt of written notice by
the Executive.
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(fff)
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“
Shareholders’ Agreement ” shall mean that
certain Shareholders’ Agreement Regarding VNU Group B.V., to
be entered into by and among Lux Holdco, Valcon Acquisition Holding
B.V., Dutch Bidco, and the other parties thereto.
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(ggg)
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“
Signing Bonus ” shall have the meaning set forth in
Section 3(c) .
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(hhh)
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“
Signing Bonus Installment ” shall have the meaning set
forth in Section 3(c) .
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(iii)
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“
Stock Purchase Amount ” shall have the meaning set
forth in Section 3(f)(i) .
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(jjj)
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“
Supervisory Board ” shall mean the Board of
Supervisory Directors of the BV.
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(kkk)
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“
Term ” shall have the meaning set forth in
Section 2(b) .
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(lll)
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“
Total Payment ” shall have the meaning set forth in
Section 10(e) .
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(mmm)
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“ U.S.
Entity ” shall have the meaning set forth in the preamble
hereto.
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(a)
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The Company
shall employ the Executive and the Executive shall enter the employ
of the Company, for the period set forth in
Section 2(b) , in the position set forth in
Section 2(c) , and upon the other terms and conditions
herein provided.
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(b)
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The initial
term of employment under this Agreement (the “ Initial
Term ”) shall be for the period beginning on the
effective date of this Agreement and ending on December 31,
2011, unless earlier terminated as provided in
Section 4 . The employment term hereunder shall
automatically be extended for successive one-year periods (each, an
“ Extension Term ” and, collectively with the
Initial Term, the “ Term ”) unless either party
gives notice of non-extension to the other no later than ninety
(90) days prior to the expiration of the then-applicable
Term.
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(c)
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Position and
Duties .
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(i) The Executive shall serve as
Chief Executive Officer of the Company with the responsibilities,
duties and authority customarily associated with such positions in
a company the size and nature of the Company and such other
responsibilities, duties and authority commensurate with such
positions, as may from time to time be assigned to the Executive by
the Supervisory Board. Such duties, responsibilities and authority
may include services as chairman or chief executive officer for one
or more members of the Group. The Executive shall report to the
Supervisory Board. The Executive shall devote substantially all of
his working time and efforts to the business and affairs of the
Company, and the Executive shall not serve on any corporate,
industry or civic boards or committees without the prior consent of
the Supervisory Board; provided that the Executive shall be
permitted to continue to serve in the positions set forth on
Exhibit A attached hereto, and on any charitable board, so
long as such service on any such corporate, industry, civic or
charitable board, does not meaningfully interfere with the
Executive’s duties hereunder or violate any covenant
contained in Section 6, 7 or 8 .
(ii) As of the Effective Date, the
Principal Stockholders shall cause the Executive to be appointed or
elected as Chairman of the Executive Board. During the Term, the
Executive Board shall propose the Executive for re-election to the
Executive Board, and cause the Principal Stockholders to cause
Dutch Bidco to vote all of its shares of Common Stock in favor of
such re-election. The Executive shall serve as a member and
Chairman of the Supervisory Board, in the event of a change in
current Dutch corporate governance practice or the Company’s
relocation to another jurisdiction, such that the Executive’s
service in such positions is permissible, and not impracticable, in
the applicable corporate governance context.
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(iii) It is the intent of this
Agreement (which intent shall be effected by the Company) that if
the Company becomes a public entity, the Executive shall become the
chairman and chief executive officer of such resulting public
entity (other than as otherwise prohibited by law or, with regard
to the position of chairman, impracticable under prevailing
corporate practice) and that prior to any such public status, the
Executive shall be chairman and chief executive officer of each of
the senior operating companies of the Group (other than as
otherwise prohibited by law or, with regard to the position of
chairman, impracticable under prevailing corporate
practice).
(iv) The Executive’s principal
place of employment shall be the offices of VNU, Inc. in New York,
New York.
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3.
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Compensation and Related
Matters
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(a)
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Annual Base
Salary . During the Term,
the Executive shall receive a base salary at a rate of $1,500,000
per annum, which shall be paid in accordance with the customary
payroll practices of the Company (as increased from time to time,
the “ Annual Base Salary ”). The rate of the
Annual Base Salary shall be reviewed annually by the Compensation
Committee and may be increased, but not decreased, upon such
review.
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(b)
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Annual
Bonus . With respect to
each of the Company’s fiscal years that end during the Term,
the Executive shall be eligible to receive an annual cash bonus
(the “ Annual Bonus ”) ranging from zero to 200%
of the Annual Base Salary, with a target Annual Bonus equal to 100%
of the Annual Base Salary (the “ Target Bonus
”), based on the achievement of annual performance targets to
be determined by the Supervisory Board in good faith after
consultation with the Executive. The Annual Bonus shall be paid on
or before March 15 (or as soon as practicable thereafter
within the same calendar year) of the year following the year to
which the Annual Bonus relates, in accordance with the percentages
set forth below:
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Percentage Achievement of
Annual
Performance Target
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Annual Bonus (expressed as a
percentage of Annual Base Salary)
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< 95%
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To be
determined in the sole
discretion of the Supervisory Board
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95%
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50%
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100%
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100%
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110%
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200%
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*
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The percentages
of Annual Base Salary set forth above will be interpolated on a
straight line basis if achievement of the applicable annual
performance target is between 95% and 110%.
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Notwithstanding the foregoing, the
Annual Bonus for the calendar year 2006 shall be guaranteed at no
less than the applicable Target Bonus, and the amount of such
Annual Bonus shall be multiplied by the Pro-Rate Factor (as
applicable to the Executive’s employment with the
Company).
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(c)
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Signing
Bonus . The Executive
shall receive a signing bonus of $10,613,699 (the “
Signing Bonus ”), paid in installments (each, a
“ Signing Bonus Installment ”) on the last day
of each of the calendar years 2006 through 2011, subject, except as
set forth below, to the Executive’s continuous employment
with the Company through the applicable payment date.
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(i)
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Each Signing
Bonus Installment shall be an amount equal to $10,613,699,
multiplied by a fraction, (A) the numerator of which is equal
to the number of days during the applicable calendar year that the
Executive is employed by the Company, and (B) the denominator
of which is equal to the total number of days from the Effective
Date through December 31, 2011; provided that the
amount of the Signing Bonus Installment paid on December 31,
2006, shall be offset by any amount in excess of $1,513,562 that is
received by the Executive from the Prior Employer in respect of his
2006 Prior Bonus.
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(ii)
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Upon a
termination of the Executive’s employment hereunder prior to
an applicable payment date, (A) the Executive shall receive an
amount equal to the Signing Bonus Installment due on the next
applicable payment date, multiplied by a fraction, (1) the
numerator of which is equal to the number of days that the
Executive is employed by the Company during the year in which such
termination occurs, and (2) the denominator of which is 365,
and (B) any remaining unpaid portion of the Signing Bonus
shall thereupon be forfeited.
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(d)
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Make Whole
Payment . In respect of
the Executive’s outstanding long-term incentive, restricted
stock unit and stock option awards granted by the Prior Employer,
the Executive shall receive a cash lump sum payment of $20,000,000
(the “ Make Whole Payment ”), paid on the date
of, and just prior to, the Executive’s investment of the
Stock Purchase Amount (as described in Section 3(f)(i)
); provided that the amount of the Make Whole Payment shall
be offset by the amount of any payments made by the Prior Employer
in connection with the Executive’s termination of employment
with the Prior Employer (excluding any such payments in respect of
the Executive’s deferred incentive compensation, deferred
salary, the Prior Vested Options, the 2006 Prior Bonus or the Prior
SERP (as defined below)).
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(e)
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Additional
Make Whole Payment . In
respect of the Executive’s 2006 Prior Bonus and any Prior
Vested Options that become Forfeited Options, the Company shall pay
to the Executive a cash payment (the “ Additional Make
Whole Payment ”) on the date of, and just prior to, the
Executive’s investment of the Stock Purchase Amount (as
described in Section 3(f)(i) ), having a value equal to
the sum of:
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(i)
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the positive
excess of (A) $2,175,000, multiplied by the Pro-Rate Factor
(as applicable to the Executive’s employment with the Prior
Employer), over (B) the amount that is received by the
Executive from the Prior Employer in respect of his 2006 Prior
Bonus; and
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(ii)
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the positive
excess of (A) the aggregate fair market value on the date of
the termination of the Executive’s employment with the Prior
Employer of the shares of stock underlying such Forfeited Options,
over (B) the aggregate exercise price of such Forfeited
Options; provided that, to the extent that the Executive
realizes any value from the Forfeited Options, the Executive shall
promptly pay such value to the Company;
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provided , further , that the value of the
Additional Make Whole Payment shall not exceed
$5,000,000.
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(f)
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Equity
Participation .
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(i)
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The Executive
shall invest $20,000,000 in cash (the “ Stock Purchase
Amount ”) (of which $10,000,000 is intended to be
obtained from the after-tax proceeds from the Make Whole Payment)
in shares of the Common Stock at the Base Price, subject to the
terms and conditions attached hereto as Exhibit B . The
Executive shall make such investment on or prior to
October 31, 2006 (the “ Documentation Date
”); provided that, if the Equity Plan has not yet been
established prior to such date, the Documentation Date shall be
automatically extended until the seventh day following the date on
which the Equity Plan is established and the Company has given the
Executive written notice thereof (the “ Extension Date
”); provided , further , that, the Extension
Date shall in no event be later than the last day of calendar year
2007. For the avoidance of doubt, the Executive’s investment
of the Stock Purchase Amount shall be made on or prior to the later
of the Documentation Date or the applicable Extension Date (if
any).
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(ii)
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As of date of
the investment of the Stock Purchase Amount , and as a
function of the amount thereof, the Executive shall be granted
Options, subject to the terms and conditions attached hereto as
Exhibit B . The Options shall be granted pursuant to an
option agreement to be entered into by and between the Company and
the Executive, substantially in the form attached hereto as
Exhibit C . In the event that the Executive is required to
make any filing under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, by reason of the grant of any Equity or
exercise of his rights thereunder, the Company shall promptly
provide any necessary information and shall pay any filing and
reasonable legal fees in connection therewith, and, to the extent
that the Company is required to make any filing under such Act, it
shall make such filing in a timely manner.
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(g)
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SERP .
In respect of the Executive’s accrued benefits under the
Prior SERP, the Executive shall be entitled to receive a
supplemental retirement benefit from the Company (the “
Company SERP ”). The Company SERP shall provide a
benefit in an amount equal to $14,500,000, together with interest
from December 31, 2006, at the rate of 5.05% per annum,
less the actuarial equivalent (determined on the same basis as the
foregoing $14,500,000 amount) with regard to any amount that the
Executive receives or is entitled to receive in the future pursuant
to the Prior SERP. Subject to Section 11 , the
Executive’s benefit under the Company SERP shall be paid in a
cash lump sum on the earlier to occur of January 1, 2012, or
the Executive’s termination of employment hereunder. The
Executive will be fully vested at all times in his benefits under
the Company SERP.
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(h)
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Benefits . During the Term, the Executive (and his
eligible dependents) shall be entitled to participate in employee
benefit plans, programs, practices and arrangements of the Company
(including, without limitation, retirement, health insurance, sick
leave and other benefits) consistent with the terms thereof, as in
effect from time to time.
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(i)
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Vacation . During the Term, the Executive shall be
entitled to paid vacation in accordance with the Company’s
vacation policies applicable to senior executives of the Company,
but in no event less than five (5) weeks per year. Any
vacation shall be taken at the reasonable and mutual convenience of
the Company and the Executive.
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(j)
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Expenses . During the Term, the Company shall reimburse
the Executive for all reasonable travel and other business expenses
incurred by him in the performance of his duties to the Company in
accordance with the Company’s expense reimbursement policy,
which shall provide for travel and entertainment at a level
commensurate with the Executive’s position.
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(k)
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Legal
Fees . The Company shall
pay all reasonable attorneys’ fees and disbursements incurred
by the Executive in connection with the negotiation of
(i) this Agreement, up to a maximum of $75,000, and
(ii) the negotiation of any other agreements documenting the
Executive’s initial equity arrangements with the Company and
concomitant revisions of this Agreement. To the extent that the
foregoing payments are treated as taxable income to the Executive,
the Company shall provide the Executive with a payment in an amount
such that the Executive has no after tax cost for such
payments.
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The Executive’s employment
hereunder may be terminated by the Company or the Executive, as
applicable, without any breach of this Agreement only under the
following circumstances:
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(i)
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Death . The Executive’s employment hereunder
shall terminate upon his death.
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(ii)
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Disability
. If the Executive
has incurred a Disability, the Company may give the Executive
written notice of its intention to terminate the Executive’s
employment, in which case the Executive’s employment with the
Company shall terminate effective on the thirtieth (30
th
) day after the
receipt of such notice by the Executive; provided that prior
to the effective date of such termination, the Executive shall not
have returned to full-time performance of his duties;
provided , further , that until such termination, the
Executive shall continue to receive his full compensation and
benefits.
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(iii)
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Termination
for Cause . The Company
may terminate the Executive’s employment for
Cause.
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(iv)
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Termination
without Cause . The
Company may terminate the Executive’s employment without
Cause.
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(v)
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Resignation
for Good Reason . The
Executive may resign his employment for Good Reason.
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(vi)
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Resignation
without Good Reason . The
Executive may resign his employment without Good Reason upon not
less than forty-five (45) days advance written notice to the
Supervisory Board.
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(vii)
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Non-extension of Term by the Company
. The Company may give notice of
non-extension to the Executive pursuant to Section 2(b)
. Such non-extension by the Company shall constitute termination by
the Company without Cause as of the end of the then-applicable
Term.
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(viii)
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Non-extension of Term by the
Executive . The Executive
may give notice of non-extension to the Company pursuant to
Section 2(b) .
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(b)
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Notice of
Termination . Any
termination of the Executive’s employment by the Company or
by the Executive under this Section 4 (other than
termination pursuant to Section 4(a)(i) (Death)) shall
be communicated by a written notice to the other party hereto
indicating the specific termination provision in this Agreement
relied upon, setting 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
specifying a Date of Termination which, if submitted by the
Executive, shall be at least forty-five (45) days in the case
of a termination by the Executive without Good Reason, or fifteen
(15) days in the case of a termination by the Executive for
Good Reason, following the date of such notice (a “ Notice
of Termination ”); provided , however ,
that the Company may, in its sole discretion, accelerate the Date
of Termination to any date following the Company’s receipt of
the Notice of Termination from the Executive by written notice to
the Executive. A Notice of Termination
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submitted by the Company may
provide for a Date of Termination on the date the Executive
receives the Notice of Termination, or any date within thirty
(30) days thereafter elected by the Company in its sole
discretion. The failure by the Executive or the Company to set
forth in the Notice of Termination (which Notice of Termination
asserts a bona fide, good faith claim of Cause or Good Reason, as
the case may be) any fact or circumstance which contributes to a
showing of unrelated Cause or Good Reason shall not waive any right
of the Executive or the Company hereunder or preclude the Executive
or the Company from asserting in good faith such fact or
circumstance in enforcing the Executive’s or the
Company’s rights hereunder; provided , however
, that such fact or circumstance was unknown to the notifying party
(which, in the case of the Company, shall mean the Supervisory
Board) at the time of the giving of such Notice of
Termination.
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(c)
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Company
Obligations upon Termination (including due to death or
Disability) . Subject to
Section 11 , upon termination of the Executive’s
employment (including due to the Executive’s death or
Disability), the Executive (or the Executive’s estate) shall
be entitled to receive, and the Company shall promptly provide
(except as otherwise provided in this Agreement), (i) any
amount of the Executive’s Annual Base Salary through the Date
of Termination not theretofore paid, (ii) any expenses owed to
the Executive under Section 3(j) , (iii) any
accrued vacation pay owed to the Executive pursuant to
Section 3(i) , (iv) any accrued and unpaid Annual
Bonus for the immediately preceding year (except upon a termination
of the Executive’s employment by the Company for Cause or by
the Executive without Good Reason), (v) the portion of the
Signing Bonus owed to the Executive pursuant to
Section 3(c)(ii) , (vi) the SERP benefit owed to
the Executive pursuant to Section 3(g) , (vii) any
amount arising from the Executive’s participation in, or
benefits under any employee benefit plans, programs or arrangements
under Section 3(h) , which amounts shall be payable in
accordance with the terms and conditions of such employee benefit
plans, programs or arrangements including, where applicable, any
death and disability benefits, and (viii) any other payments,
continued benefits or rights specifically provided pursuant to
written agreement with the Company to continue following the
Executive’s termination of employment, including, but not
limited to, Sections 10, 11 and 13 .
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5. Severance Payments
. If the
Executive’s employment shall be terminated due to death
pursuant to Section 4(a)(i), due to Disability pursuant to
Section 4(a)(ii), by the Company without Cause pursuant to
Section 4(a)(iv), by the Executive’s resignation for
Good Reason pursuant to Section 4(a)(v), or due to the
Company’s non-extension of the Term pursuant to
Section 4(a)(vii), the Company shall, subject to the
Executive’s execution of a general waiver and release of
claims agreement substantially in the form attached hereto as
Exhibit D, and subject to Section 11, provide the
Executive:
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(a)
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a cash severance payment equal to
two times the sum of (i) the Executive’s Annual Base
Salary, as in effect for the year in which such termination occurs,
and (ii) $2,000,000; provided , however , that
such severance payment shall be in
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lieu of notice or any other
severance benefits to which the Executive might otherwise be
entitled. The cash severance payment shall be paid in equal
installments, in accordance with the normal payroll practices of
the Company, during the Severance Period;
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(b)
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the Annual
Bonus for the year in which such termination occurs (based on the
Company’s performance in relation to the applicable
performance targets, as determined in good faith by the
Compensation Committee), multiplied by the Pro-Rate Factor (as
applicable to the Executive’s employment with the Company)
and paid at such time as the Executive’s Annual Bonus would
otherwise have been paid; and
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(c)
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continuation of
the Executive’s coverage under the Company’s health and
welfare benefit plans and programs in which the Executive was
entitled to participate immediately prior to the Date of
Termination, to the extent p
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