|
Exhibit
10.10
Severance
Agreement
This Severance Agreement dated as of
March 1, 2004 (the “Agreement”) is made by and between
Horizon Lines, LLC, a Delaware Limited Liability Company, (together
with any successor thereto, the “Company”) and Robert
S. Zuckerman, (the “Executive”).
RECITALS
| A. |
It is the desire of the Company to provide incentives to the
Executive to continue to perform his/her duties as an at will
employee of the Company during a time when the Company may be
undergoing a “Liquidity Event”, as defined
herein. |
AGREEMENT
NOW, THEREFORE, in
consideration of the foregoing and of the respective covenants and
agreements set forth below, the Parties hereto agree as
follows:
| |
a) |
“Affiliate” means, 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. |
| |
b) |
“Annual Base Salary” means the base salary of the
Executive as shown on the Company’s payroll records on the
“Date of Termination”, as defined herein, of the
Executive. |
| |
c) |
“Board” shall mean the Board of Directors of the
Company. |
| |
d) |
The Company shall have “Cause” to terminate the
Executive’s employment hereunder upon the occurrence of any
one of the following: |
i. the Board’s
determination that the Executive failed to substantially perform
his/her duties;
ii. the Board’s
determination that the Executive failed to carry out, or comply
with, in any material respect, any lawful and reasonable directive
of the Board;
iii. the Executive’s
conviction, plea of no contest, plea of nolo contendere, or
imposition of unadjudicated probation of any felony or crime
involving moral turpitude;
iv. the Executive’s
unlawful use (including being under the influence) or possession of
illegal drugs on the Company’s premises or while performing
the Executive’s duties and responsibilities; or
v. the Executive’s
commission of an act of fraud, embezzlement, misappropriation,
willful misconduct, or breach of fiduciary duty against the
Company.
| |
e) |
“Company” shall have the meaning set forth in the
preamble hereto. |
| |
f) |
“Date of Termination” shall mean the last day of
the Executive’s employment on the Company’s active
payroll. |
| |
g) |
“Executive” shall have the meaning set forth in the
preamble hereto. |
| |
h) |
“Liquidity Event” shall mean the first occurrence
after the date of this agreement of the following: consummation of
the sale, transfer, conveyance or other disposition in one or a
series of related transactions, of the equity securities of the
Company or its successor held by the Principal Stockholder(s) in
exchange for currency such that immediately following such
transaction (or transactions), (i) any Person and/or its
Affiliates, other than a Principal Stockholder, acquires more than
50% of the outstanding voting securities of the Company or (ii) the
Principal Stockholders cease to hold at least 30% of the
outstanding voting securities of the Company and any Person and its
Affiliates (other than the Principal Stockholder(s)) holds more
voting securities of the Company than the Principal
Stockholders. |
| |
i) |
“Person” means a corporation, partnership, limited
liability company, individual or other entity capable under law of
owning an interest in the Company. |
| |
j) |
“Principal Stockholder(s)” means Carlyle-Horizon
Partners, L.P. or any of its Affiliates to which (a)
Carlyle-Horizon Partners, L.P. or any other Person transfers common
stock or (b) the Company issues common stock. |
If the Executive’s
employment is terminated by the Company for other than Cause within
24 months following a Liquidity Event (as defined herein), the
Company shall pay the Executive the sum of (a) and (b)
below.
| |
a) |
In accordance with the Company’s regular payroll
practice, the Executive’s Annual Base Salary that the
Executive would have been entitled to receive if the Executive had
continued his/her employment hereunder for a period of one year
following the Date of Termination (the “Severance
Payment”). This Severance Payment shall be made in addition
to any other payment due to the Executive under a change in control
agreement, severance agreement or other similar such agreement
maintained and sponsored by the Company, provided that the sum of
the Severance Payment and all other severance payments (the
“Total Severance Payment”) does not exceed an amount
equal to two years of Annual Base Salary. To the extent that the
Total Severance Payment exceeds two years of Annual Base Salary,
the Severance Payment shall be reduced by such amount that is
necessary in order for the Total Severance Payment to equal two
years of Annual Base Salary. |
| |
b) |
Provide the Executive with continuation of any attendant
medical benefits during the severance period, to run concurrent
with COBRA, at a cost to the Executive equal to the cost paid by
current employees of the Company under the terms of the
Company’s severance pay plan. |
| |
c) |
Notwithstanding the foregoing, the Executive’s receipt of
the payments or benefits under this Section 2 is conditioned
upon the
|
| |
execution by the Executive of
a binding general waiver and release of claim in a form agreed upon
by the parties.
|
| 3. |
Nondisclosure of Proprietary Information
. |
| |
a) |
Except as required by applicable law or the faithful
performance of the Executive’s duties, the Executive shall,
in perpetuity, maintain in confidence and shall not directly,
indirectly or otherwise, use, disseminate, disclose or publish, or
use for his/her benefit or the benefit of any person, firm,
corporation or other entity any confidential or proprietary
information or trade secrets of or relating to the Company,
including, without limitation, information with respect to the
Company’s operations, processes, products, inventions,
business practices, finances, principals, vendors, suppliers,
customers, potential customers, marketing methods, costs, prices,
contractual relationships, regulatory status, compensation paid to
employees or other terms of employment, or deliver to any person,
firm, corporation or other entity any document, record, notebook,
computer program or similar repository of or containing any such
confidential or proprietary information or trade secrets. The
parties hereby stipulate and agree that as between them the
foregoing matters are important, material and confidential
proprietary information and trade secrets and affect the successful
conduct of the businesses of the Company (and any successor or
assignee of the Company). |
| |
b) |
Upon termination of the Executive’s employment with the
Company for any reason, the Executive will promptly deliver to the
Company all correspondence, drawings, manuals, letters, notes,
notebooks, reports, programs, plans, proposals, financial
documents, or any other documents concerning the Company’s
customers, business plans, marketing strategies, products or
processes. |
| |
c) |
The Executive may respond to a lawful and valid subpoena or
other legal process but shall give the Company the earliest
possible notice thereof, shall, as much in advance of the return
date as possible, make available to the Company and its counsel the
documents and other information sought and shall assist such
counsel in resisting or otherwise responding to such
process. |
| |
d) |
As used in this Section 3 , the term
“Company” shall include the Company, its parent,
related entities, and any of its direct or indirect subsidiaries
and affiliates. |
| |
a) |
The Executive shall not, at any time during the [24 month
period] following the Date of Termination directly or indirectly
engage in, have any equity interest in, or manage or operate any
person, firm, corporation, partnership or business (whether as
director, officer, employee, agent, representative, partner,
security holder, consultant or otherwise) that engages in any
containerized shipping business in the Jones Act trade which
competes with any business of the Company or any entity owned by
the Company anywhere in the world provided, however , that
the Executive shall be permitted to acquire a passive stock or
equity interest in such a business provided the stock or other
equity interest acquired is not more than five percent of the
outstanding interest in such business. |
| |
b) |
During the term set forth in Section 4( |
|
