Exhibit 10.27(b)
AMENDED AND RESTATED SEVERANCE AGREEMENT
THIS
AMENDED AND RESTATED SEVERANCE AGREEMENT
(this "Agreement"),
dated as of September 1, 2008, is by and between
Playboy Enterprises, Inc., a
Delaware corporation (the "Company"), and
____________, (the "Executive") and
is, effective as of January 1, 2008, hereby amending,
restating and superseding
that prior Severance Agreement between the parties dated
November 29, 2001, for
compliance with Section 409A of the Internal Revenue
Code of 1986, as amended
(the "Code").
WITNESSETH:
WHEREAS, the Executive is a senior executive or
key employee of the
Company and has made and is expected to continue to make
major contributions to
the short- and long-term profitability, growth
and financial strength of the
Company;
WHEREAS, the Company recognizes that,
as is the case for most
publicly-held companies, the possibility of a Change in Control
exists;
WHEREAS, the Company desires to assure
itself of both present and
future continuity of management and
desires to establish certain minimum
severance benefits for certain of its senior
executive officers and other key
employees, including the Executive,
applicable in the event of a Change in
Control;
WHEREAS, the Company wishes to ensure that its senior
executives and
other key employees are not practically disabled from
discharging their duties
in respect of a proposed or actual transaction
involving a Change in Control;
and
WHEREAS, the
Company desires to provide additional inducement for the
Executive to continue to remain in the ongoing employ of the
Company;
NOW,
THEREFORE, the Company and the Executive agree as follows:
1.
Certain Defined Terms: In addition to terms
defined elsewhere
herein, the following terms have the
following meanings when used in this
Agreement with initial capital letters:
(a) "Base Pay" means the Executive's annual base
salary at a rate
not less than the
Executive's annual fixed or base
compensation as in
effect for Executive
immediately prior to the occurrence of a Change in
Control or such higher rate as may
be determined from time to time by the
Board of Directors of the Company
(the "Board") or a Committee thereof.
(b) "Change in Control" means any of
the following occurrences
during the Term:
(i) Hugh M. Hefner directly or
as beneficial owner and
Christie Hefner cease collectively to hold over 50% of the
combined
voting power of the then-outstanding
securities entitled to vote
generally in the election of directors of
the Company ("Voting
Stock"); or
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(ii) except pursuant to a transaction described in the proviso
to Section 1(b)(iv) or (v), a sale, exchange or other
disposition of
PLAYBOY Magazine; or
(iii) except pursuant to a
transaction described in the
proviso to Section 1(b)(iv) or (v), the liquidation or
dissolution
of the Company; or
(iv) the Company is merged, consolidated or reorganized
into
or with another corporation or
other legal person; provided,
however, that no such merger, consolidation or
reorganization will
constitute a Change in Control if the
merger, consolidation or
reorganization is initiated by the Company and as a
result of such
merger, consolidation or reorganization not less than a
majority of
the combined voting power of the then-outstanding securities
of the
surviving, resulting or ultimate parent corporation, as the case
may
be, immediately after such transaction is held in the
aggregate by
persons who held not less than a majority of the
combined voting
power of the outstanding Voting Stock of the
Company immediately
prior to such transaction; or
(v) the Company sells or
otherwise transfers all or
substantially all of its assets to another
corporation or other
legal person; provided, however, that no such sale or
transfer will
constitute a Change in Control if the sale or transfer is
initiated
by the Company and as a result of such sale or
transfer not less
than a majority of the combined voting power of the
then-outstanding
securities of such corporation or other legal
person, as the case
may be, immediately after such sale
or transfer is held in the
aggregate by persons who held not
less than a majority of the
combined voting power of the outstanding Voting Stock of the
Company
immediately prior to such
sale or transfer; or
(vi) an equity or other investment in the Company, the
result
of which is that Christie Hefner ceases to serve
as the Company's
Chief Executive Officer or relinquishes upon request or is
divested
of any of the following responsibilities:
(A) functioning as the person primarily responsible for
establishing policy and direction for the Company; or
(B)
being the person to whom the senior executives
of
the Company report; or
(vii) the adoption by the Board of a
resolution that, for
purposes of this Agreement, a Change in Control has occurred.
For purposes of Section
1(b)(i), any Voting Stock beneficially owned (as
such term is defined under Rule
13d-3 or any successor rule or regulation
under the Securities
Exchange Act of 1934, as amended (the
"Exchange
Act")) by the Hugh M.
Hefner Foundation shall be deemed to be held
by
Christie Hefner if and so long
as she has sole voting power with respect
to such Voting Stock.
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(c) "Cause" means that, prior to any termination pursuant to
Section
3(b) hereof, the Executive shall
have:
(i) been convicted of a
criminal violation involving
dishonesty, fraud or breach of trust; or
(ii)
willfully engaged in misconduct in the
performance of
Executive's duties that materially injures the Company or any
entity
in which the Company directly or indirectly beneficially owns 50%
or
more of the voting securities (a "Subsidiary").
(d) "Disability" means a condition whereby the Executive:
(i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment
which can be expected to result in death or can be expected
to last
for a continuous period of not less than 12 months; or
(ii) is, by reason of any medically determinable
physical or
mental impairment which can be
expected to result in death or can be
expected to last for a continuous period of not less than 12
months,
receiving income replacement benefits for a period of not
less than
3 months under an accident and health plan covering employees of
the
Executive's employer.
(e) "Employee Benefits" means the perquisites, benefits and
service
credit for benefits as
provided under any and all employee
retirement
income and welfare benefit
policies, plans, programs or arrangements in
which Executive is entitled to
participate, including without limitation
any stock option, stock
purchase, stock appreciation, savings,
pension,
supplemental executive
retirement, or other retirement income or welfare
benefit, deferred
compensation, incentive compensation, group or
other
life, health,
medical/hospital or other insurance
(whether funded by
actual insurance or
self-insured by the Company), disability,
salary
continuation,
executive protection, expense reimbursement
and other
employee benefit
policies, plans, programs or arrangements that may
now
exist or any
equivalent successor policies,
plans, programs or
arrangements that may be
adopted hereafter by the Company,
providing
perquisites, benefits and service
credit for benefits at least as great in
the aggregate as are provided
thereunder immediately prior to a Change in
Control.
(f) "Incentive Pay" means bonus, incentive or other payments of
cash
compensation, in
addition to Base Pay, made or to be made in regard
to
services rendered
pursuant to any bonus, incentive,
profit-sharing,
performance, discretionary pay or
similar agreement, policy, plan, program
or arrangement (whether
or not funded) of the Company, or any successor
thereto providing
benefits at least as great as the benefits
provided
thereunder immediately prior to a
Change In Control.
(g) "Potential Change in Control" shall be deemed to
have occurred
if the event set forth in any one of
the following subsections shall have
occurred:
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(i) the Company enters into an agreement, the consummation
of
which would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces an intention
to take or to consider taking actions which, if
consummated, would
constitute a Change in Control; or
(iii) the Board adopts a resolution to the effect
that, for
purposes of this Agreement, a
Potential Change in Control has
occurred.
(h) "Potential Change in Control Period" shall commence
upon
the occurrence of a Potential Change in Control and shall lapse
upon
the
occurrence of a Change in Control or, if earlier:
(i) with respect to a Potential Change in Control
occurring
pursuant to Section l(f)(i), immediately upon
the abandonment or
termination of the applicable agreement;
(ii) with respect to a Potential Change in Control
occurring
pursuant to Section l(f)(ii), immediately upon a public
announcement
by the applicable party that such party has abandoned its
intention
to take or consider taking actions which if consummated would
result
in a Change in Control; or
(iii) with respect to a Potential Change in Control
occurring
pursuant to Section l(f)(iii), upon the one year anniversary
of the
occurrence of a Potential Change in Control (or such earlier date
as
may be determined by the Board).
(i) "Severance Period" means the period of time
commencing on the
date of each occurrence of a
Change in Control and continuing until the
earliest of:
(i) eighteen months following the occurrence of the Change
in
Control; or
(ii) the Executive's death;
provided, however, that
commencing on each anniversary of the Change in
Control, the
Severance Period will automatically be
extended for an
additional eighteen months
unless, not later than 120 calendar days prior
to such date, either the Company or
the Executive shall have given written
notice to the other that the
Severance Period is not to be so extended.
(j) "Term" means the period commencing as of the
date hereof and
expiring as of the later of:
(i)
the close of business on December 31, 2008; or
(ii) the expiration of the Severance Period;
provided, however, that
the term of this Agreement will automatically be
extended each year for an additional
year unless, not later than September
30 of the immediately
preceding year,
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the Company or the
Executive shall have given notice that it
or the
Executive, as the case may
be, does not wish to have the Term extended.
Notwithstanding the
foregoing, if, prior to a Change in
Control, the
Executive ceases for any
reason to be an employee of the Company or any
Subsidiary, thereupon without
further action, the Term shall be deemed to
have expired and this
Agreement will immediately terminate and be of no
further effect. For purposes of this
Section 1(i), the Executive shall not
be deemed to
have ceased to be an employee of
the Company or any
Subsidiary by reason of the transfer
of Executive's employment between the
Company and any Subsidiary, or among
any Subsidiaries.
(k) "Targeted Bonus" shall mean the targeted bonus for
Executive's
position as set forth in the
Company's Executive Incentive Compensation
Plan ("EICP") established for the
then applicable fiscal year, which shall
be equal to fifty percent (50%)
times the maximum amount which Executive
could earn under the EICP with
respect to established quantifiable and
objective financial goals.
2.
Operation of Agreement: This Agreement will
be effective and
binding immediately upon its execution, but, anything in this
Agreement, to the
contrary notwithstanding, will not be
operative unless and until a Change in
Control occurs, whereupon without further
action this Agreement shall become
immediately operative.
3.
Termination Following a Change in Control:
(a) In the event of the occurrence of a
Change in Control, the
Executive's employment
may be terminated by the Company
during the
Severance Period and the
Executive shall not be entitled to the benefits
provided by
Section 4 only upon the occurrence of one
or more of the
following events:
(i) The Executive's death;
(ii) The Executive's Disability; or
(iii) Cause.
If, during the Severance Period, the
Executive's employment is terminated
by the Company other
than pursuant to Section 3(a)(i),
3(a)(ii) or
3(a)(iii), the
Executive will be entitled to the benefits
provided by
Section 4 hereof.
(b) In the event of the occurrence of a
Change in Control, the
Executive may terminate
employment with the Company and any Subsidiary
during the Severance Period
with the right to severance compensation as
provided in Section 4 upon the
occurrence of one or more of the following
"Good Reason" events
(regardless of whether any other reason, other than
Cause as
hereinabove provided, for such
termination exists or has
occurred, including
without limitation other employment) which
occur
without the Executive's consent:
(i) the Executive is not elected to, or is removed
from, any
elected office of the Company and/or Subsidiary, as the case may
be,
which the Executive held immediately prior to the Change of
Control;
or
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(ii) the Executive is not
re-nominated by the Board as a
Director of the Company (or any successor thereto) if the
Executive
shall have been a Director of the Company immediately
prior to the
Change in Control; or
(iii) the assignment to
the Executive of any duties
inconsistent in any respect
with the Executive's position,
authority, duties or responsibilities which
the Executive held
immediately prior to the Change of Control, or any
other action by
the Company which 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 and which is remedied by the Company promptly after receipt
of
notice thereof given by the Executive; or
(iv) any failure by the Company to
comply with any of the
provisions of this Agreement, other than an isolated,
insubstantial
and inadvertent failure not occurring
in bad faith and which is
remedied by the Company promptly after receipt of
notice thereof
given by the Executive; or
(v) a material reduction in the aggregate of the
Executive's
Base Pay and
Incentive Pay payable to the Executive by the Company
and any Subsidiary; or
(vi) the failure of a successor/tranferee
organization to
assume all duties and obligations
of the Company under this
Agreement pursuant to Section 10(a)
following the liquidation,
dissolution, merger, consolidation or reorganization of the
Company
or transfer of all or substantially all of
its business and/or
assets, and where the
Executive has no
employee/employer
relationship with such successor/transferee
organization following
the Change of Control; or
(vii) The Company or any of its
Subsidiaries requires the
Executive regularly to perform Executive's
duties of employment
beyond a materially different geographic radius from the location
of
Executive's employment immediately prior to the Change in Control
or
requires the Executive to travel away from Executive's office in
the
course of discharging
Executive's responsibilities or duties
hereunder at least 50% more (in terms
of aggregate days in any
calendar year or in any calendar
quarter when annualized for
purposes of comparison to any prior year)
than was required of
Executive in any of the three full years
immediately prior to the
Change of Control.
(c) A termination by the Company pursuant to Section 3(a) or 3(d)
or
by the Executive
pursuant to Section 3(b) or 3(d) will not affect
any
rights or benefits which the
Executive may have pursuant to any agreement,
policy, plan, program or
arrangement of the Company providing Employee
Benefits (an "Other
Arrangement"), which rights and benefits
shall be
governed by the terms thereof,
including, without limitation, rights to
payments under the
Company's bonus and incentive plans for prior
fiscal
years which
have been earned but not
yet paid to Executive.
Notwithstanding the
foregoing, if the Executive has
any rights to
severance compensation upon
termination of employment under any employment
agreement Executive may
have with the Company or any Other Arrangement,
such rights shall, during the
Severance Period, be completely superseded
by this Agreement; for the
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avoidance of doubt,
Executive can only receive severance
compensation
under this Agreement or under the
Other Arrangement, not both.
(d) For purposes of this Agreement, a termination
of Executive's
employment during a Potential Change
in Control Period: (
(i) by the Company other than pursuant to the events described
in Section 3(a)(i), 3(a)(ii) or 3(a)(iii); or
(ii) by Executive following the
occurrence of one of the
events described in Section 3(b)(i) through (vii),
shall be deemed to be a termination
of Executive's employment during the
Severance Period entitling Executive
to benefits provided by Section 4.
4. Severance
Compensation:
(a) If, following the occurrence of a Change in Control, the
Company
terminates the Executive's
employment during the Severance Period other
than pursuant to Section 3(a), or if
the Executive terminates Executive's
employment pursuant to Section 3(b),
the Company will pay to the Executive
the following:
(i) an amount (the "Severance Payment") equal to three
times
the sum of:
(A) Base Pay, plus
(B) the greater of:
(I) the average actual bonus
earned by the
Executive pursuant to any annual bonus or incentive plan
maintained by the Company in respect of the three fiscal
years ending immediately prior to the
fiscal year in
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