Exhibit 10.27(a)
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
which occurs such Change in Control (or,
such lesser number of years during which
the Executive was employed
by the
Company and annualized in the case of
