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Exhibit 10.62
Executive Employment Agreement
This
Executive Employment Agreement (“Agreement”)
between Freeport-McMoRan Copper & Gold Inc., a Delaware
corporation (the “Company”), and Kathleen L. Quirk
(the “Executive”) is dated effective as of January
29, 2008 (the “Agreement Date”).
W I T N E S S E T H:
WHEREAS,
the Executive currently serves as an officer of the
Company;
WHEREAS,
pursuant to the terms of this Agreement, the Company desires
to retain the services of the Executive and the Executive
desires to continue to provide services to the
Company;
WHEREAS,
during the course of providing services to the Company, the
Executive has or will have received extensive and unique
knowledge of, experience in and access to resources involving,
the Mining Business (as defined below) at a substantial cost
to the Company, which Executive acknowledges has enhanced or
substantially will enhance Executive’s skills and
knowledge in such business;
WHEREAS,
during the course of providing services to the Company,
Executive has had and will continue to have access to valuable
oral and written information, knowledge and data relating to
the business and operations of the Company and its
subsidiaries that is non-public, confidential or proprietary
in nature and is particularly useful in the Mining Business;
and
WHEREAS,
in view of the opportunities provided by the Company to
Executive, the cost thereof to the Company, and the need for
the Company to be protected against disclosures by Executive
of the Company’s and its subsidiaries’ trade
secrets and other non-public, confidential or proprietary
information, the Company and Executive desire, among other
things, to prohibit Executive from disclosing or utilizing,
outside the scope of his employment with the Company, any
non-public, confidential or proprietary information, knowledge
and data relating to the business and operations of the
Company or its subsidiaries received by Executive during the
course of his employment, and to restrict the ability of
Executive to compete with the Company or its subsidiaries for
a limited period of time.
NOW,
THEREFORE, for and in consideration of the continued
employment of Executive by the Company and the payment of
salary, benefits and other compensation to Executive by the
Company, the parties hereto agree as follows:
Article I
Employment Capacity
1.
Capacity and Duties of Executive. The Executive
is employed by the Company to render services on behalf of the
Company as Executive Vice President and Chief Financial
Officer. The Executive will perform such duties as are
assigned to the individual holding the title or titles held by him
from time to time in the Company’s By-laws and such other
duties as may be prescribed from time to time by the Chairman of
the Board or the Company’s Board of Directors (the
“Board”) , or the Chief
Executive Officer, which duties shall be consistent with the
position of Executive Vice President and Chief Financial
Officer.
2.
Term. The term of this Agreement (the
“Employment Term”) will commence on the Agreement Date
and will expire January 1, 2012; subject to extension as provided
in Article V, Section 3(a) in the event of a Change of Control (as
defined in Article V, Section 2), and subject to any earlier
termination of Executive’s employment pursuant to this
Agreement. Commencing on January 1, 2012, and each
January 1 st
thereafter, the Employment Term will automatically be extended for
one additional year unless not later than August 1 of the
immediately preceding year, the Corporate Personnel Committee has
given written notice to the Executive that it does not wish to
extend this Agreement.
3.
Devotion to Responsibilities. The Executive will
devote significant business time to the business of the Company,
will use his best efforts to perform faithfully and efficiently his
duties under this Agreement, and will not engage in or be employed
by any other business; provided, however, that nothing herein will
prohibit the Executive from (a) serving as an officer and director
of McMoRan Exploration Co. (“McMoRan”), FM Services
Company or any of their affiliates or successors, (b) serving as a
member of the board of directors, board of trustees or the like of
any for-profit or non-profit entity that does not compete with the
Company, or performing services of any type for any civic or
community entity, whether or not the Executive receives
compensation therefor, (c) investing his assets in such form or
manner as will require no more than nominal services on the part of
the Executive in the operation of the business of the entity in
which such investment is made, or (d) serving in various capacities
with, and attending meetings of, industry or trade groups and
associations, as long as the Executive’s activities permitted
by clauses (a), (b), (c) and (d) above do not materially and
unreasonably interfere with the ability of the Executive to perform
the services and discharge the responsibilities required of him
under this Agreement. Notwithstanding clause (c) above,
the Executive may not, without the approval of the Corporate
Personnel Committee of the Board, beneficially own 5% or more of
the equity interests of a business organization required to file
periodic reports with the Securities and Exchange Commission under
the Securities Exchange Act of 1934 (the “Exchange
Act”) other than the Company or McMoRan, and the Executive
may not beneficially own more than 2% of the equity interests of
any business organization that competes with the
Company. For purposes of this paragraph,
“beneficially own” has the meaning ascribed to that
term in Rule 13d-3 under the Exchange Act.
Article II
Compensation and Benefits
1.
Salary. The Company will pay the Executive a
salary (“Base Salary”) at an annual rate per fiscal
year of the Company (“Fiscal Year”) of $650,000, which
will be payable to the Executive in equal semi-monthly
installments. Base Salary may be remitted to the
Executive on behalf of the Company by an affiliate of the
Company.
2.
Bonus. The Executive will be eligible to receive
an annual incentive bonus (the “Bonus”), payable, if at
all, only with respect to services that the Executive provides to
the Company. Any Bonus will be determined, accrued and
paid in accordance with the terms of the Company’s 2005
Annual Incentive Plan, as amended, or any incentive or bonus
compensation plan that is a successor or substitute therefor, that
covers certain individuals designated by the Corporate Personnel
Committee of the Board (the
“Committee”). The Executive acknowledges and
agrees that this Section 2 imposes no obligation on the Company to
award any bonus to the Executive.
3.
Award of Restricted Stock Units. Effective on
the Agreement Date or as otherwise provided by resolution of the
Corporate Personnel Committee of the Company’s Board of
Directors approving such grant, Executive shall receive 75,000
restricted stock units on the terms and conditions set forth in a
restricted stock unit agreement entered into between the Company
and the Executive, the form of which is attached hereto as Exhibit
A.
4.
Equity Awards and Long-Term Performance Units.
The Executive will continue to be eligible to
participate in all short-term and long-term equity and non-equity
incentive plans in which the Executive currently participates or
which may be offered in the future to the most senior executives of
the Company.
5.
Vacation. The Executive will be entitled to paid
vacation and holidays as provided to executives of the Company
generally.
6.
Indemnification and Insurance. In accordance
with the Company’s Certificate of Incorporation, the Company
will indemnify the Executive, to the fullest extent permitted by
applicable the law, for any and all claims brought against him
arising out his services to the Company and its
subsidiaries. In addition, the Company will continue to
maintain a directors’ and officers’ insurance policy
covering the Executive substantially in the form of the policy in
existence as of the Agreement Date to the extent such policy
remains available at reasonable commercial terms.
7.
Other Benefits. The Executive will continue to
be entitled to all benefits and perquisites presently provided to
him or generally to the most senior executives of the Company and
be eligible to participate in and receive all benefits under
welfare benefit plans, practices, policies and programs (including,
without limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel accident
insurance plans and programs) available generally to the most
senior executives of the Company.
8.
Expenses. The Executive will be entitled to
receive prompt reimbursement for all reasonable business expenses
(including food, transportation, entertainment and
lodging)
incurred
from time to time on behalf of the Company in the performance of
his duties, upon the presentation of such supporting invoices,
documents and forms as the Company reasonably
requests.
Article III
Termination of Employment
1.
Death. The Executive’s status as an
officer and employee will terminate immediately and automatically
upon the Executive’s death.
2.
Disability. The Company may terminate
Executive’s status as an officer and employee for
“Disability” as follows:
(a)
If
the Executive has a disability that entitles him to receive
benefits under the Company’s long-term disability insurance
policy in effect at the time either because he is Totally Disabled
or Partially Disabled, as such terms are defined in the
Company’s policy in effect as of the Agreement Date or as
similar terms are defined in any successor policy, then the Company
may terminate Executive’s status as an officer and employee
effective on the first day on which the Executive receives a
payment under such policy (or on the first day that he would be so
eligible, if he had applied timely for such payments).
(b)
If
the Company has no long-term disability plan in effect, and if (i)
because of physical or mental illness the Executive is rendered
incapable of satisfactorily discharging his duties and
responsibilities under this Agreement for a period of 90
consecutive days and (ii) a duly qualified physician chosen by the
Company and reasonably acceptable to the Executive or his legal
representatives so certifies in writing, the Board will have the
power to determine that the Executive has become
disabled. If the Board makes such a determination, the
Company will have the continuing right and option, during the
period that such disability continues, and by notice given in the
manner provided in this Agreement, to terminate the status of
Executive as an officer and employee. Any such
termination will become effective 30 days after such notice of
termination is given, unless within such 30-day period, the
Executive becomes capable of rendering services of the character
contemplated hereby (and a physician chosen by the Company and
reasonably acceptable to the Executive or his legal representatives
so certifies in writing) and the Executive in fact resumes such
services.
(c)
The
“Disability Effective Date” will mean the date on which
termination of Executive’s status as an officer and employee
becomes effective due to Disability.
3.
Cause. The Company may terminate the
Executive’s status as an officer and employee for
“Cause,” which is defined as follows:
(a)
The
Executive’s willful and continued failure to perform
substantially the Executive’s duties with the Company or 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,
which specifically identifies the manner in which the Board
believes that the Executive has not substantially performed the
Executive’s duties;
(b)
The
Executive’s material breach of this Agreement after a written
demand is delivered to the Executive by the Board, which
specifically identifies the manner in which the Board believes that
the Executive has materially breached this Agreement;
(c)
The
final conviction of the Executive or an entering of a guilty plea
or a plea of no contest by the Executive to a felony;
(d)
Unauthorized
acts or omissions by the Executive that could reasonably be
expected to cause material financial harm to the Company or
materially disrupt Company operations;
(e)
The
Executive’s commission of an act of dishonesty (even if not a
crime) resulting in the enrichment of the Executive at the expense
of the Company; or
(f)
The
Executive’s knowing falsification or knowing attempted
falsification of financial records of the Company in violation of
SEC Rule 13b2-1.
For
purposes of this provision, no act or failure to act, on the
part of the Executive, will be considered
“willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without a reasonable
belief that the act or omission was in the best interests of
the Company or its affiliates. Any act, or failure
to act, based on authority given pursuant to a resolution duly
adopted by the Board, the instructions of a more senior
officer of the Company or the advice of counsel to the Company
or its affiliates will 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 or its
affiliates. The termination of employment of the
Executive will not be deemed to be for Cause unless and until
there has been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less
than three-quarters of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to
be heard before the Board), finding that, in the good faith
opinion of the Board, the Executive has engaged in any of the
conduct described in subparagraphs (a) through (f) above, and
specifying the particulars of such conduct.
4.
Good Reason. The Executive may terminate his
status as an officer and employee for “Good Reason,”
which is defined as follows:
(a)
Any
failure by the Company or its affiliates to comply with any of the
provisions of this Agreement (including, but not limited to, the
failure to provide the Executive with the position set forth in
Article I, Section 1 and, at a minimum, the Base Salary set forth
in Article II, Section 1), other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith that is remedied
within 10 days after receipt by the Company of written notice
thereof from the Executive; or
(b)
The
assignment to the Executive of any duties inconsistent in any
material respect with Executive’s position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by this Agreement, or any other
action that results in a diminution in such position, authority,
duties or responsibilities, excluding for this
purpose
an isolated, insubstantial and inadvertent action not taken in bad
faith that is remedied within 10 days after receipt by the Company
of written notice thereof from the Executive.
(c)
Following
a Change of Control, as defined in Article V hereof, “Good
Reason” will also include:
(i)
Any
failure of the Company to provide the Executive with the position,
authority, duties and responsibilities at least commensurate in all
material respects with the most significant of those held,
exercised and assigned at any time during the 120-day period
immediately preceding the Change of
Control. Executive’s position, authority, duties
and responsibilities after a Change of Control shall not be
considered commensurate in all material respects with
Executive’s position, authority, duties and responsibilities
prior to a Change of Control unless after the Change of Control the
Executive holds an equivalent position in the Company;
(ii)
The
Company or its affiliates requiring the Executive to be based at
any office or location other than the office or location where
Executive was employed immediately preceding the Change of Control,
or requiring the Executive to travel on business to a substantially
greater extent than required immediately prior to a Change of
Control; or
(iii)
Any
failure by the Company to comply with and satisfy Article VIII,
Sections 1(c) and (d) of this Agreement.
Any
determination of “Good Reason” made by the
Executive in good faith and based upon his reasonable belief
and understanding shall be conclusive.
5.
Termination by the Company. In addition to
termination for death, Disability or Cause, the Company may at any
time terminate the Executive’s status as an officer and
employee for any reason or for no reason at all.
6.
Retirement. In addition to termination for death
or Good Reason, the Executive may at any time retire and terminate
his status as an officer and
employee. “Retirement” (and variants
thereof) for purposes of this Agreement is defined as the
Executive’s voluntary termination of his status as an officer
and employee at any time after reaching age 54, but shall not
include a termination for Good Reason.
7.
Notice of Termination; Termination Date.
(a)
Other
than as a result of the death of Executive, any termination of
Executive’s status as an officer and employee shall be
communicated to the other party by Notice of Termination given in
accordance with Article VIII, Section 2 of this
Agreement. For purposes of this Agreement, a
“Notice of Termination” means a written notice that (i)
indicates the specific termination provision in this Agreement on
which the party relies, (ii) to the extent applicable,
sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination under the provisions so
indicated and (iii) if the Termination Date (as defined below) is
other than the date of receipt of such notice, specifies the
Termination Date. The Company’s failure to set
forth in the Notice of Termination any fact or circumstance that
contributes to a showing of Disability or Cause will not negate the
effect of the notice nor waive
any
right of the Company or preclude the Company from asserting such
fact or circumstance in enforcing the Company’s
rights.
(b)
“Termination
Date” means, if Executive’s status as an officer and
employee is terminated (i) by reason of Executive’s death,
the date of Executive’s death, (ii) by reason of Disability,
the Disability Effective Date, (iii) by the Company other than by
reason of death or Disability, the date of delivery of the Notice
of Termination or any later date specified in the Notice of
Termination, which date will not be more than 30 days after the
giving of the notice, or (iv) by the Executive other than by reason
of death, the date of delivery of the Notice of Termination or any
later date specified in the Notice of Termination, which date will
not be more than 30 days after the giving of the
notice.
Article IV
Obligations upon Termination
1.
Separation from Service. No payments or benefits
provided herein that are paid because of a termination of
employment under circumstances described herein shall be paid,
unless such termination of employment also constitutes a
“separation from service” within the meaning of Section
409A of the Internal Revenue Code of 1986, as amended (the
“Code”) and the regulations and guidance issued
thereunder (“Section 409A”).
2.
Death, Disability, or Retirement. If (A) the
Executive’s status as an officer and employee is terminated
by reason of the Executive’s death or Retirement, or (B) the
Company terminates the Executive’s status as an officer and
employee by reason of Executive’s Disability then, subject to
the six-month delay set forth in Article VIII, Section 14, if
applicable,:
(a)
The
Company will pay the Executive or his legal representatives the
amount of the Executive’s Base Salary earned through the
Termination Date to the extent not previously paid (the
“Accrued Obligations”);
(b)
No
later than sixty (60) days following the end of the fiscal quarter
during which the Termination Date occurs, the Company will pay to
the Executive or his legal representatives a pro rata bonus in an
amount determined by calculating the bonus that the Executive would
receive for the Fiscal Year in which the Termination Date occurs
based upon the level of achievement of the applicable performance
goals through the end of the fiscal quarter in which the
Termination Date occurs, annualized as if such level of performance
had continued throughout the entire Fiscal Year and then
multiplying such bonus amount by the fraction obtained by dividing
the number of days in the year through the Termination Date by 365
(the “Pro Rata Bonus”);
(c)
The
Company will pay or deliver, as appropriate, all other benefits due
to Executive pursuant to any employee benefit plans and
incentive plans maintained by the Company or its subsidiaries with
respect to services rendered by the Executive prior to the
Termination Date; and
(d)
In
the case of Executive’s Retirement, for a period commencing
on the Termination Date and ending on the earlier of (i)
the third anniversary of the Termination Date, or (ii) the date
that the Executive accepts new employment (the “Continuation
Period”), the
Company
will at its expense maintain and administer for the continued
benefit of Executive all insurance and welfare benefit plans in
which Executive was entitled to participate as an employee of the
Company as of the Termination Date, except medical reimbursement
benefits under the Company’s flex plans, provided that
Executive’s continued participation is possible under the
general terms and provisions of such plans and all applicable
laws. If the Executive is a “specified
employee” governed by Article VIII, Section 14, to the extent
that any benefits provided to the Executive under this Article IV,
Section 2(d) are taxable to the Executive, then, with the exception
of nontaxable medical insurance benefits, the value of the
aggregate amount of such taxable benefits provided to the Executive
pursuant to this Article IV, Section 2(d) during the six month
period following the Termination Date shall be limited to the
amount specified by Section 402(g)(1)(B) of Code for the year in
which the termination occurred. The Executive shall pay
the cost of any benefits that exceed the amount specified in the
previous sentence during the six month period following the date of
termination, and shall be reimbursed in full by the Company during
the seventh month after the Termination Date. The
coverage and benefits (including deductibles and costs) provided
under any such benefit plan in accordance with this paragraph
during the Continuation Period will be no less favorable to
Executive than the most favorable of such coverages and benefits as
of the Termination Date. If Executive’s
participation in any such benefit plan is barred or any such
benefit plan is terminated, the Company will use commercially
reasonable efforts to provide Executive with compensation or
benefits substantially similar or comparable in value to those
Executive would otherwise have been entitled to receive under such
plans. At the end of the Continuation Period, the
Executive will have the option to have assigned to him, at no cost
and with no apportionment of prepaid premiums, any assignable
insurance owned by the Company that relates specifically to the
Executive. Subject to the general terms and provisions
of the plans and all applicable laws, the Executive will be
eligible for coverage under the Company’s retiree medical
plan or the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”) at the end of the Continuation Period or
earlier cessation of the Company’s obligation under the
foregoing provisions of this paragraph.
To
the extent that the amounts payable under this Article IV,
Section 2(d) are reimbursements and other separation payments
described under Treasury Regulations Section
1.409A-1(b)(9)(v), such payments do not provide for the
deferral of compensation. If they do constitute
deferral of compensation governed by Section 409A, they shall
be deemed to be reimbursements or in-kind benefits governed by
Treasury Regulations Section 1.409A-3(i)(1)(iv). If
the previous sentence applies, (i) the amount of expenses
eligible for reimbursement or in-kind benefits provided during
the Executive’s taxable year shall not affect the
expenses eligible for reimbursement or in-kind benefits in any
other taxable year, (ii) the reimbursement of an eligible
expense must be made on or before the last day of the
Executive’s taxable year following the taxable year in
which the expense was incurred and (iii) the right to
reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit.
3.
Cause. If the Company terminates the
Executive’s status as an officer and employee for Cause, the
Company will pay to the Executive the Accrued
Obligations. The Company will have no further obligation
to the Executive other than for obligations imposed by law and
obligations for any benefits due the Executive pursuant to any
employee benefit plans
and
incentive plans maintained by the Company or its subsidiaries with
respect to services rendered by the Executive prior to the
Termination Date.
4.
Termination by Executive for Good Reason or by Company for Reasons
other than Death, Disability or Cause. If the
Executive terminates his status as an officer and employee for Good
Reason or the Company terminates the Executive’s status as an
officer and employee other than for death, Disability or Cause,
then subject to the six-month delay set forth in Article VIII,
Section 14, if applicable:
(a)
The
Company will pay to the Executive the Accrued Obligations and the
Pro Rata Bonus;
(b)
Within
twenty (20) business days of the Termination Date, the Company will
pay to the Executive in a lump sum in cash an amount equal to three
times the sum of (i) the Executive’s Base Salary in effect at
the Termination Date and (ii) average of the Bonuses paid to the
Executive for the immediately preceding three Fiscal Years
, not
including any premium received in connection with Executive’s
participation in any restricted stock program offered by the
Company;
(c)
All
stock options will become immediately exercisable as of the
Termination Date and will remain exercisable until the expiration
date specified in the applicable notice of grant of nonqualified
stock option;
(d)
All
restricted stock units granted to the Executive, except the
restricted stock units granted pursuant to Article II, Section 3
herein, will vest as of the Termination Date to the extent not
previously vested and will convert to common stock of the Company,
provided any applicable performance conditions have been met as of
the Termination Date;
(e)
The
Executive’s performance units under the Company’s
Long-Term Performance Incentive Plan will be credited with the
annual earnings per share or net loss per share (as defined in the
plan) for the Fiscal Year in which the Termination Date occurs and
all amounts credited to the Executive’s performance unit
account will be fully vested and will be paid out within 60 days of
the end of the Fiscal Year in which the Termination Date
occurs;
(f)
The
Company will pay or deliver, as appropriate, all other benefits due
the Executive pursuant to any employee benefit plans maintained by
the Company or its subsidiaries with respect to services rendered
by the Executive prior to the Termination Date; and
(g)
For
the Continuation Period, the Company shall at its expense maintain
and administer for the continued benefit of Executive the benefits
provided for under Article IV, Section 2(d).
5.
Resignation from Boards of Directors. If
Executive is a director of the Company and his employment is
terminated for any reason other than death, the Executive will, if
requested by the Company, immediately resign as a director of the
Company and its subsidiaries. If such resignation is not
received within 20 business days after the Executive actually
receives written notice from the Company requesting the
resignations, the Executive will forfeit any right to receive any
payments pursuant to this Agreement.
Article V
Change of Control
1.
Applicability. In the event that a Change of
Control occurs during the Employment Term, then the provisions of
this Article V shall be applicable.
2.
Definition of Change of Control.
(a)
“Change
of Control” means (capitalized terms not otherwise defined
will have the meanings ascribed to them in paragraph (b)
below):
(i)
the
acquisition by any Person together with all Affiliates of such
Person, of Beneficial Ownership of the Threshold Percentage or
more; provided, however, that for purposes of this Article V,
Section 2(a)(i), the following will not constitute a Change of
Control:
(A)
any
acquisition (other than a “Business Combination,” as
defined below, that constitutes a Change of Control under Article
V, Section 2(a)(iii) hereof) of Common Stock directly from the
Company,
(B)
any
acquisition of Common Stock by the Company or its
subsidiaries,
(C)
any
acquisition of Common Stock by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation or other entity controlled by the Company,
or
(D)
any
acquisition of Common Stock pursuant to a Business Combination that
does not constitute a Change of Control under Article V, Section
2(a)(iii) hereof; or
(ii)
individuals
who as of the effective date of this Agreement, 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 effective
date of this Agreement 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 will be considered a member of the Incumbent Board, unless
such individual’s 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 any other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Incumbent Board; or
(iii)
the
consummation of a reorganization, merger or consolidation
(including a merger or consolidation of the Company or any direct
or indirect subsidiary of the Company), or sale or other
disposition of all or substantially all of the assets of the
Company (a “Business Combination”), in each case,
unless, immediately following such Business
Combination:
(A)
the
individuals and entities who were the Beneficial Owners of the
Company Voting Stock immediately prior to such Business Combination
have direct or indirect Beneficial Ownership of more than 50% of
the then outstanding shares of common stock, and more than 50% of
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, of the
Company, and
(B)
no
Person together with all Affiliates of such Person (excluding the
Company and any employee benefit plan or related trust of the
Company or any subsidiary of the Company) Beneficially Owns 30% or
more of the then outstanding shares of common stock of the Company
or 30% or more of the combined voting power of the then outstanding
voting securities of the Company, and
(C)
at
least a majority of the members of the board of directors of the
Company were members of the Incumbent Board at the time of the
execution of the initial agreement, and of the action of the Board,
providing for such Business Combination; or
(iv)
approval
by the shareholders of the Company of a complete liquidation or
dissolution of the Company.
(b)
As
used in this Section 2 and elsewhere in this Agreement, the
following terms have the meanings indicated:
(i)
Affiliate: “Affiliate”
means a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, another specified Person.
(ii)
Beneficial
Owner: “Beneficial Owner” (and variants
thereof), with respect to a security, means a Person who, directly
or indirectly (through any contract, understanding, relationship or
otherwise), has or shares (A) the power to vote, or direct the
voting of, the security, and/or (B) the power to dispose of, or to
direct the disposition of, the security.
(iii)
Company
Voting Stock: “Company Voting Stock” means
any capital stock of the Company that is then entitled to vote for
the election of directors.
(iv)
Majority
Shares: “Majority Shares” means the number
of shares of Company Voting Stock that could elect a majority of
the directors of the Company if all directors were to be elected at
a single meeting.
(v)
Person: “Person”
means a natural person or entity, and will also mean the group or
syndicate created when two or more Persons act as a syndicate or
other group (including without limitation a partnership, limited
partnership, joint venture or other joint undertaking) for the
purpose of acquiring, holding, or disposing of a security, except
that “Person” will not include an underwriter
temporarily holding a security pursuant to an offering of the
security.
(vi)
Threshold
Percentage: “Threshold Percentage” means 30%
of all then outstanding Common Stock.
3.
Effect.
Upon
a Change of Control, the Employment Term and the benefits
provided by Article II hereof shall automatically continue
following such Change of Control for a period equal to the
then remaining Employment Term or three years from
the Change of Control, whichever period is longer, subject to
any earlier termination of Executive’s status as an
employee pursuant to this Agreement.
4.
Obligations upon Termination Following a Change of
Control.
(a)
Death, Disability or Retirement . If, after a
Change of Control and during the Employment Term, (i) the
Executive’s status as an officer and employee is terminated
by reason of the Executive’s death, (ii) the Company
terminates the Executive’s status as a
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