EXHIBIT 10.12
JOHN BEAN TECHNOLOGIES
CORPORATION
Executive Severance
Agreement
THIS AGREEMENT
is made and entered into as of the
day of
, 200 , by and between JOHN BEAN
TECHNOLOGIES CORPORATION (hereinafter referred to as the
“Company”) and
(hereinafter referred to as the
“Executive”).
WHEREAS, the Board has approved the Company’s
entering into severance agreements with certain key executives of
the Company;
WHEREAS, the Executive is a key executive of the
Company;
WHEREAS, should the possibility of a Change in Control of
the Company arise, the Board believes it is imperative that the
Company and the Board should be able to rely upon the Executive to
continue in the Executive’s position, and that the Company
should be able to receive and rely upon the Executive’s
advice, if requested, as to the best interests of the Company and
its shareholders without concern that the Executive might be
distracted by the personal uncertainties and risks created by the
possibility of a Change in Control;
WHEREAS, should the possibility of a Change in Control
arise, in addition to the Executive’s regular duties, the
Executive may be called upon to assist in the assessment of such
possible Change in Control, advise management and the Board as to
whether such Change in Control would be in the best interests of
the Company and its shareholders, and to take such other actions as
the Board might determine to be appropriate; and
NOW THEREFORE,
to assure the Company that it will
have the continued dedication of the Executive and the availability
of the Executive’s advice and counsel notwithstanding the
possibility, threat, or occurrence of a Change in Control of the
Company, and to induce the Executive to remain in the employ of the
Company, and for other good and valuable consideration, the Company
and the Executive agree as follows:
Article 1. Establishment, Term,
and Purpose
This Agreement will commence on the
Effective Date and will continue in effect for a three
(3) year term, until the third anniversary of the Effective
Date. Upon each anniversary of the Effective Date, the term of this
Agreement will be extended automatically for one
(1) additional year, unless the Committee delivers written
notice six (6) months prior to such anniversary to the
Executive that this Agreement will not be extended. In such case,
this Agreement will terminate at the end of the term, or extended
term, then in progress.
However, in the event a Change in
Control occurs during the original or any extended term, this
Agreement will remain in effect for the longer of:
(i) twenty-four (24) months beyond the month in which
such Change in Control occurred; and (ii) until all
obligations of the Company hereunder have been fulfilled, and until
all benefits required hereunder have been paid to the
Executive.
Article 2.
Definitions
Whenever used in this Agreement, the
following terms will have the meanings set forth below and, when
the meaning is intended, the initial letter of the word is
capitalized.
2.1. Base Salary means the
salary of record paid to an Executive as annual salary, excluding
amounts received under incentive or other bonus plans, whether or
not deferred.
2.2. Beneficiary means the
persons or entities designated or deemed designated by the
Executive pursuant to Section 12.2 herein.
2.3. Board means the Board of
Directors of the Company.
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2.4. Cause means:
(a) the Executive’s willful
and continued failure to substantially perform the
Executive’s employment duties in any material respect (other
than any such failure resulting from physical or mental incapacity
or occurring after issuance by the Executive of a Notice of
Termination for Good Reason), after a written demand for
substantial performance is delivered to the Executive that
specifically identifies the manner in which the Company believes
the Executive has failed to perform the Executive’s duties,
and after the Executive has failed to resume substantial
performance of the Executive’s duties on a continuous basis
within thirty (30) calendar days of receiving such
demand;
(b) the Executive’s willfully
engaging in conduct which breaches Section 10 of this
Agreement or any other conduct (other than conduct covered under
(a) above) that is demonstrably and materially injurious to
the Company or an affiliate; or
(c) the Executive’s having
been convicted of, or pleading guilty or nolo contendere to, a
felony under federal or state law.
2.5. Change in Control means
either a “Change in Ownership,” a “Change in
Effective Control,” or a “Change in Ownership of a
Substantial Portion of Assets,” as defined below:
“Change in
Ownership” : A
Change in Ownership of the Company occurs on the date that any one
person, or more than one Person Acting as a Group (as defined
below), acquires ownership of stock of the Company that, together
with stock held by such person or group, constitutes more than 50%
of the total fair market value or total voting power of the stock
of the Company. However, if any one person or more than one Person
Acting as a Group, is considered to own more than 50% of the total
fair market value or total voting power of the stock of the
Company, the acquisition of additional stock by the same person or
persons is not considered to cause a Change in Ownership of the
Company (or to cause a Change in Effective Control of the Company).
An increase in the percentage of stock owned by any one person, or
Persons Acting as a Group, as a result of a transaction in which
the Company acquires its stock in exchange for property will be
treated as an acquisition of stock. This applies only when there is
a transfer of stock of the Company (or issuance of stock of the
Company) and stock in the Company remains outstanding after the
transaction.
Persons Acting as a
Group : Persons will not
be considered to be acting as a group solely because they
(i) purchase or own stock of the same corporation at the same
time, or as a result of the same public offering, or
(ii) purchase assets of the same corporation at the same time.
However, persons will be considered to be acting as a group if they
are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock or assets, or
similar business transaction with the Company. If a person,
including an entity, owns stock in both corporations that enter
into a merger, consolidation, purchase or acquisition of stock or
assets, or similar transaction, such shareholder is considered to
be acting as a group with other shareholders in a corporation only
with respect to the ownership in that corporation prior to the
transaction giving rise to the change and not with respect to the
ownership interest in the other corporation.
“Change in Effective
Control” : A Change
in Effective Control of the Company occurs on the date that either
–
(i) Any one person, or more than one
Person Acting as a Group, acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition
by such person or persons) ownership of stock of the Company
possessing 30% or more of the total voting power of the stock of
the Company; or
(ii) a majority of members of the
Board is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or
election.
A Change in Effective Control will
have occurred only if the Participant is employed by the Company or
an Employer upon the date of the Change in Effective Control or the
Company is liable for the payment of the benefits hereunder and no
other corporation is a majority shareholder of the Company.
Further, in the absence of an event described in paragraph
(i) or (ii), a Change in Effective Control of the Company will
not have occurred.
Acquisition of additional control:
If any one person, or more than one Person Acting as a Group, is
considered to effectively control the Company, the acquisition of
additional control of the Company by the same person or persons is
not considered to cause a Change in Effective Control of the
Company (or to cause a Change in Ownership of the
Company).
“Change in Ownership of a
Substantial Portion of Assets”: A Change in Ownership of a
Substantial Portion of Assets occurs on the date that any one
person, or more than one Person Acting as a Group, acquires (or has
acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value equal to or more
than 40% of the total gross fair market value of all of the assets
of the Company immediately prior to such acquisition or
acquisitions. For this purpose, gross fair market value means the
value of the assets of the Company, or the value of the assets
being disposed of, determined without regard to any liabilities
associated with such assets.
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Transfers to a related person: There is no
Change in Control when there is a transfer to an entity that is
controlled by the shareholders of the Company immediately after the
transfer. A transfer of assets by the Company is not treated as a
Change of Ownership of a Substantial Portion of Assets if the
assets are transferred to –
(i) A shareholder of the Company
(immediately before the asset transfer) in exchange for or with
respect to its stock;
(ii) An entity, 50% or more of the
total value or voting power of which is owned, directly or
indirectly, by the Company;
(iii) A person, or more than one
Person Acting as a Group, that owns, directly or indirectly, 50% or
more of the total value or voting power of all the outstanding
stock of the Company; or
(iv) An entity, at least 50% of the
total value or voting power of which is owned, directly or
indirectly, by a person described in paragraph (iii).
A person’s status is
determined immediately after the transfer of the assets. For
example, a transfer to a corporation in which the Company has no
ownership interest before the transaction, but which is a
majority-owned subsidiary of the Company after the transaction is
not treated as a Change in Ownership of a Substantial Portion of
Assets of the Company.
2.6. Code means the Internal
Revenue Code of 1986, as amended from time to time, and any
successor thereto.
2.7. Committee means the
Compensation Committee of the Board or any other committee of the
Board appointed to perform the functions of the Compensation
Committee.
2.8. Company means John Bean
Technologies Corporation, a Delaware corporation, or any successor
thereto as provided in Article 11 herein.
2.9. Disability means
complete and permanent inability by reason of illness or accident
to perform the duties of the occupation at which the Executive was
employed when such disability commenced.
2.10. Effective Date means
the date of this Agreement set forth above.
2.11. Effective Date of
Termination means the date on which a Qualifying Termination
occurs which triggers the payment of Severance Benefits
hereunder.
2.12 Exchange Act means the
Securities Exchange Act of 1934, as amended from time to time, and
any successor thereto.
2.13 Good Reason means,
without the Executive’s express written consent, the
occurrence of any one or more of the following:
(a) The assignment of the Executive
to duties materially inconsistent with the Executive’s
authorities, duties, responsibilities, and status (including,
without limitation, offices, titles and reporting requirements) as
an employee of the Company (including, without limitation, any
material change in duties or status as a result of the stock of the
Company ceasing to be publicly traded or of the Company becoming a
subsidiary of another entity, or any material change in the
Executive’s reporting relationship, such as the chairman or
chief executive officer ceasing to report to the Board of Directors
of a publicly traded company), or a material reduction or
alteration in the nature or status of the Executive’s
authorities, duties, or responsibilities from the greatest of
(i) those in effect on the Effective Date; (ii) those in
effect during the fiscal year immediately preceding the year of the
Change in Control; and (iii) those in effect immediately
preceding the Change in Control;
(b) The Company’s requiring
the Executive to be based at a location which is at least fifty
(50) miles further from the Executive’s then current
primary residence than is such residence from the office where the
Executive is located at the time of the Change in Control, except
for required travel on the Company’s business to an extent
substantially consistent with the Executive’s business
obligations as of the Effective Date or as the same may be changed
from time to time prior to a Change in Control;
(c) A material reduction by the
Company in the Executive’s Base Salary as in effect on the
Effective Date or as the same may be increased from time to
time;
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(d) A material reduction in the
Executive’s level of participation in any of the
Company’s short- and/or long-term incentive compensation
plans, or employee benefit or retirement plans, policies,
practices, or arrangements in which the Executive participates from
the greatest of the levels in place: (i) on the Effective
Date; (ii) during the fiscal year immediately preceding the
fiscal year of the Change in Control; and (iii) on the date
immediately preceding the date of the Change in Control;
or
(e) The failure of the Company to
assume and agree to perform this Agreement in all material
respects, as contemplated in Article 11 herein.
The existence of Good Reason will
not be affected by the Executive’s temporary incapacity due
to physical or mental illness not constituting a Disability. The
Executive’s continued employment will not constitute a waiver
of the Executive’s rights with respect to any circumstance
constituting Good Reason. Notwithstanding the above to the
contrary, “Good Reason” for Executive’s
separation from employment will exist only if (i) the
Executive provides written notice to the Company within ninety
(90) days of the occurrence of any of the above listed events,
(ii) the Company fails to cure the event within thirty
(30) days following the Company’s receipt of the
Executive’s written notice, and (iii) the Executive
separates from employment with the Company effective not later than
sixty (60) days after the end of the Company’s cure
period.
2.14 Notice of Termination
means a written notice which indicates the specific termination
provision in this Agreement relied upon, and sets 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.
2.15 Person has the meaning
ascribed to such term in Section 3(a)(9) of the Exchange Act
and used in Sections 13(d) and 14(d) thereof, including a
“group” as provided in Section 13(d).
2.16 Qualifying Termination
means any of the events described in Section 3.2 herein, the
occurrence of which triggers the payment of Severance Benefits
hereunder.
2.17 Severance Benefits means
the payment of severance compensation as provided in
Section 3.3 herein.
2.18 Trust means the Company
grantor trust to be created pursuant to Article 5 of this
Agreement.
Article 3. Severance
Benefits
3.1. Right to Severance
Benefits . The Executive will be entitled to receive from the
Company Severance Benefits, as described in Section 3.3
herein, if there has been a Change in Control of the Company and
if, within twenty-four (24) calendar months following the
Change in Control, a Qualifying Termination of the Executive has
occurred.
The Executive will not be entitled
to receive Severance Benefits if the Executive’s employment
is terminated (i) for Cause, (ii) due to a voluntary
termination without Good Reason, or (iii) due to death or
Disability.
3.2. Qualifying Termination .
The occurrence of any one or more of the following events will
trigger the payment of Severance Benefits to the Executive under
this Agreement:
(a) An involuntary termination of
the Executive’s employment by the Company for reasons other
than Cause, Disability or death within twenty-four
(24) calendar months following the month in which a Change in
Control of the Company occurs;
(b) A voluntary termination by the
Executive for Good Reason within twenty-four (24) calendar
months following the month in which a Change in Control of the
Company occurs pursuant to a Notice of Termination delivered to the
Company by the Executive; or
(c) The Company or any successor
company breaches any of the material provisions of this
Agreement.
3.3. Description of Severance
Benefits . In the event the Executive becomes entitled to
receive Severance Benefits, as provided in Sections 3.1 and 3.2
herein, the Company will pay to the Executive (or in the event of
the Executive’s death, the Executive’s Beneficiary) and
provide him with the following:
(a) An amount equal to [two (2)]
[three (3)] times the highest rate of the Executive’s
annualized Base Salary in effect at any time up to and including
the Effective Date of Termination.
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(b) An amount equal to [two (2)]
[three (3)] times the greater of (i) the Executive’s
highest annualized target total cash Management Incentive Award
granted under the John Bean Technologies Corporation Incentive
Compensation and Stock Plan for any plan year up to and including
the plan year in which the Executive’s Effective Date of
Termination occurs, and (ii) the average of the actual total
cash Management Incentive Awards paid (or payable) to the Executive
for the two plan years immediately preceding the Effective Date of
Termination, or for such lesser number of such plan years for which
the Executive was eligible to earn a cash Management Incentive
Award, annualized for any year that the Executive was not employed
by the Company for the entire plan year. For purposes of
determining actual total cash Management Incentive Awards under the
preceding sentence, any amounts the Executive deferred will be
treated as if they had been paid to the Executive, rather than
deferred.
(c) An amount equal to the
Executive’s unpaid Base Salary, and unused and accrued
vacation pay, earned or accrued through the Effective Date of
Termination.
(d) An amount equal to the target
total cash Management Incentive Award established for the plan year
in which the Executive’s Effective Date of Termination
occurred, prorated through the Effective Date of
Termination.
(e) Subject to applicable law and
regulation as of the Effective Date of Termination, a continuation
of the Company’s welfare benefits of health care, life and
accidental death and dismemberment, and disability insurance
coverage for eighteen (18) months after the Effective Date of
Termination. These benefits will be provided to the Executive (and
to the Executive’s covered spouse and dependents) at the same
premium cost, and at the same coverage level, as in effect as of
the date of the Change in Control. The continuation of these
welfare benefits will be discontinued prior to the end of the
eighteen (18) month period if the Executive has available
substantially similar benefits at a comparable cost from a
subsequent employer, as determined by the Committee. In addition,
the Company will make available for purchase by the Executive
continued health care, life and accidental death and dismemberment,
and disability insurance coverage at the same coverage level as in
effect as of the date of the Change in Control for a period of
eighteen (18) months beginning immediately upon the end of the
coverage period provided under the foregoing provisions of this
Section 3.3(e).
Awards granted under the John Bean
Technologies Corporation Incentive Compensation and Stock Plan, and
other incentive arrangements adopted by the Company will be treated
pursuant to the terms of the applicable plan and award
agreement.
Any restrictions imposed by Company
stock ownership guidelines applicable to the sale of the
Company’s Common Stock by executive officers will not apply
to any Awards granted to the Executive prior to a Change of
Control under the John Bean Technologies Corporatio
