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EXHIBIT 10.3
WOLVERINE WORLD WIDE, INC
EXECUTIVE SEVERANCE AGREEMENT
THIS AGREEMENT is entered
into as of the _________ day of ___________, _____ (the "Effective
Date"), by and between Wolverine World Wide, Inc., a Delaware
corporation ("Wolverine"), and ______________________
("Executive").
W I T N E S S E T H:
WHEREAS, Executive currently
serves as a key employee of Wolverine and/or its subsidiaries and
his/her services and knowledge are valuable to Wolverine in
connection with the management of one or more of Wolverine's
principal operating facilities, divisions, or subsidiaries; and
WHEREAS, Wolverine considers
the establishment and maintenance of a sound and vital management
to be essential to protecting and enhancing the best interests of
Wolverine and its stockholders; and
WHEREAS, the Board has
determined that it is in the best interests of Wolverine and its
stockholders to secure Executive's continued services and to ensure
Executive's continued dedication and objectivity in the event of
any threat or occurrence of, or negotiation or other action that
could lead to, or create the possibility of, a Change in Control
(as hereafter defined) of Wolverine, without concern as to whether
Executive might be hindered or distracted by personal uncertainties
and risks created by any such possible Change in Control, and to
encourage Executive's full attention and dedication to Wolverine
and/or its subsidiaries, the Board has authorized Wolverine to
enter into this Agreement.
NOW, THEREFORE, WOLVERINE AND
EXECUTIVE AGREE AS FOLLOWS:
1.
Definitions. As used in
this Agreement, the following terms shall have the respective
meanings set forth below:
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(a)
"Board" means the Board of Directors of the
Company.
(b)
"Cause" means (1) the willful and continued failure
by Executive to substantially perform his or her duties with
Company (other than any such failure resulting from Executive's
incapacity due to physical or mental illness, or any such actual or
anticipated failure resulting from Executive's termination for Good
Reason) after a demand for substantial performance is delivered to
Executive by the Board and/or its Chairman (which demand shall
specifically identify the manner in which the Board and/or its
Chairman believes that Executive has not substantially performed
his or her duties); or (2) the willful engaging by Executive in
gross misconduct materially and demonstrably injurious to the
Company. For purposes of this Section, no act or failure to act on
the part of Executive shall be considered "willful" unless done or
omitted to be done by Executive not in good faith and without
reasonable belief that his or her action(s)
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or omission(s) was in the best interests of the Company. In
addition, no termination of Executive's employment shall be for
Cause unless the Company shall have provided to Executive written
notice of its intent to terminate Executive's employment for Cause
that includes a description of the events constituting Cause, and
Executive shall not have cured such purported Cause (to the extent
it is curable) to the reasonable satisfaction of the Board within
ten (10) days after receipt of such notice. Notwithstanding the
foregoing, Executive shall not be deemed to have been terminated
for Cause unless and until the Company provides Executive with a
copy of a resolution adopted by an 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 the purpose (after
reasonable notice to Executive and an opportunity for Executive,
with counsel, to be heard before the Board), finding that in the
good faith opinion of the Board the Executive has been guilty of
conduct set forth in subsections (1) or (2) above, setting forth
the particulars in detail. A determination of Cause by the Board
shall not be binding upon or entitled to deference by any finder of
fact in the event of a dispute, it being the intent of the parties
that such finder of fact shall make an independent determination of
whether the termination was for "Cause" as defined in (1) and (2)
above.
(c)
"Change in Control" means:
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(1) the acquisition by any
individual, entity, or group (a "Person"), including any "person"
within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
of beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act, of 20% or more of either (i)
the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting
power of the then outstanding securities of the Company entitled to
vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change in Control: (a) any
acquisition by the Company, (b) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, (c) any
acquisition by any corporation pursuant to a reorganization,
merger, or consolidation involving the Company, if, immediately
after such reorganization, merger, or consolidation, each of the
conditions described in clauses (i), (ii), and (iii) of subsection
(3) shall be satisfied, or (d) any acquisition by the Executive or
any group of persons including the Executive; and provided further
that, for purposes of clause (a), if any Person (other than the
Company or any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
Company) shall become the beneficial owner of 20% or more of the
Outstanding Company Common Stock or 20% or more of the Outstanding
Company Voting Securities by reason of an acquisition by the
Company and such Person shall, after such acquisition by the
Company, become the beneficial owner of any additional shares of
the Outstanding Company
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Common Stock or any additional Outstanding Voting Securities,
such additional beneficial ownership shall constitute a Change in
Control;
(2)
individuals who, as of the date hereof, constitute
the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board; provided, however,
that any individual who becomes a director of the Company
subsequent to the date hereof whose election, or nomination for
election by the Company's stockholders, was approved by the vote of
at least three-quarters of the directors then comprising the
Incumbent Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a
nominee for director, without objection to such nomination) shall
be deemed to have been a member of the Incumbent Board; and
provided further, that no individual who was initially elected as a
director of the Company as a result of an actual or threatened
election contest, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act, or any other
actual or threatened solicitation of proxies or consents by or on
behalf of any Person other than the Board, shall be deemed to have
been a member of the Incumbent Board;
(3)
approval by the stockholders of the Company of a
reorganization, merger, or consolidation unless, in any such case,
immediately after such reorganization, merger, or consolidation,
(i) more than 50% of the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger, or
consolidation and more than 50% of the combined voting power of the
then outstanding securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals or entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such
reorganization, merger, or consolidation and in substantially the
same proportions relative to each other as their ownership,
immediately prior to such reorganization, merger, or consolidation,
of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be, (ii) no Person (other than
the Company, any employee benefit plan (or related trust) sponsored
or maintained by the Company or the corporation resulting from such
reorganization, merger, or consolidation (or any corporation
controlled by the Company), or any Person which beneficially owned,
immediately prior to such reorganization, merger, or consolidation,
directly or indirectly, 20% or more of the Outstanding Company
Common Stock or the Outstanding Company Voting Securities, as the
case may be) beneficially owns, directly or indirectly, 20% or more
of the then outstanding shares of common stock of such corporation
or 20% or more of the combined voting power of the then outstanding
securities of such corporation entitled to vote generally in the
election of directors, and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
reorganization, merger, or consolidation were members of the
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Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such reorganization,
merger, or consolidation; or
(4)
approval by the stockholders of the Company of (i) a
plan of complete liquidation or dissolution of the Company or (ii)
the sale or other disposition of all or substantially all of the
assets of the Company other than to a corporation with respect to
which, immediately after such sale or other disposition, (a) more
than 50% of the then outstanding shares of common stock thereof and
more than 50% of the combined voting power of the then outstanding
securities thereof entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities
immediately prior to such sale or other disposition and in
substantially the same proportions relative to each other as their
ownership, immediately prior to such sale or other disposition, of
the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be,(b) no Person (other than the
Company, any employee benefit plan (or related trust) sponsored or
maintained by the Company or such corporation (or any corporation
controlled by the Company), or any Person which beneficially owned,
immediately prior to such sale or other disposition, directly or
indirectly, 20% or more of the Outstanding Company Common Stock or
the Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 20% or more of the then
outstanding shares of Common stock thereof or 20% or more of the
combined voting power of the then outstanding securities thereof
entitled to vote generally in the election of directors and (c) at
least a majority of the members of the board of directors thereof
were members of the Incumbent Board at the time of the execution of
the initial agreement or action of the Board providing for such
sale or other disposition.
Notwithstanding anything contained in this Agreement to the
contrary, if Executive's employment is terminated prior to a Change
in Control and Executive reasonably demonstrates that such
termination was at the request of or in response to a third party
who has indicated an intention or taken steps reasonably calculated
to effect a Change in Control (a "Third Party") who effectuates a
Change in Control, then for all purposes of this Agreement, the
date of a Change of Control shall mean the date immediately prior
to the date of such termination of Executive's employment.
(d)
"Code" means the Internal Revenue Code of 1986, as
amended.
(e)
"Common Stock" means the common stock of the Company,
$1 par value per share.
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(f)
"Company" means Wolverine World Wide, Inc., a
Delaware corporation, and any corporation or other entity in which
Wolverine World Wide, Inc. has a direct or indirect ownership
interest of 50% or more of the total combined voting power of the
then outstanding securities of such corporation or other entity
entitled to vote generally in the election of directors.
(g)
"Date of Termination" means the effective date on
which Executive's employment by the Company terminates in a manner
constituting a "Separation from Service" as that term is defined by
Section 409A of the Code as specified in a Notice of Termination by
the Company or Executive, as the case may be. Notwithstanding the
previous sentence, (i) if the Executive's employment is terminated
for Disability, as defined in Section 1(h), then such Date of
Termination shall be no earlier than thirty (30) days following the
date on which a Notice of Termination is received, and (ii) if the
Executive's employment is terminated by the Company other than for
Cause, then such Date of Termination shall be no earlier than
thirty (30) days following the date on which a Notice of
Termination is received.
(h)
"Disability" means Executive's failure to
substantially perform his/her duties with the Company on a
full-time basis for at least one hundred eighty (180) consecutive
days as a result of Executive's incapacity due to mental or
physical illness.
(i)
"Good Reason" means, without Executive's express
written consent, the occurrence of any of the following events:
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(1)
(i) the assignment
to Executive of any duties inconsistent in any material adverse
respect with Executive's position(s), duties, responsibilities, or
status with the Company immediately prior to such Change in
Control, (ii) a material adverse change in Executive's reporting
responsibilities, titles or offices with the Company as in effect
immediately prior to such Change in Control, (iii) any removal or
involuntary termination of Executive by the Company otherwise than
as expressly permitted by this Agreement (including any purported
termination of employment which is not effected by a Notice of
Termination), or (iv) any failure to re-elect Executive to any
position with the Company held by Executive immediately prior to
such Change in Control;
(2)
a reduction by the Company in Executive's rate of
annual base salary as in effect immediately prior to such Change in
Control or as the same may be increased from time to time
thereafter;
(3)
any requirement of the Company that Executive (i) be
based anywhere other than the facility where Executive is located
at the time of the Change in Control or reasonably equivalent
facilities within Kent County, Michigan or (ii) travel for the
business of the Company to an extent substantially more burdensome
than the travel obligations of Executive immediately prior to such
Change in Control;
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(4)
the failure of the Company to continue the Company's
executive incentive plans or bonus plans in which Executive is
participating immediately prior to such Change in Control or a
reduction of the Executive's target incentive award opportunity
under the Company's Amended and Restated Executive Long-Term
Incentive Plan (3-Year Bonus Plan) and Amended and Restated
Executive Short-Term Incentive Plan (Annual Bonus Plan)
(collectively, annual bonus plans) or other bonus plan adopted by
the Company, unless Executive is permitted to participate in other
plans providing Executive with substantially comparable benefits or
receives compensation as a substitute for such plans providing
Executive with a substantially equivalent economic benefit;
(5)
the failure of the Company to (i) continue in effect
any employee benefit plan or compensation plan in which Executive
is participating immediately prior to such Change in Control,
unless Executive is permitted to participate in other plans
providing Executive with substantially comparable benefits or
receives compensation as a substitute for such plans providing
Executive with a substantially equivalent economic benefit, or the
taking of any action by the Company which would adversely affect
Executive's participation in or materially reduce Executive's
benefits under any such plan, (ii) provide Executive and
Executive's dependents with welfare benefits (including, without
limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) in accordance with the most
favorable plans, practices, programs, and policies of the Company
in effect for Executive immediately prior to such Change in
Control, (iii) provide fringe benefits in accordance with the most
favorable plans, practices, programs, and policies of the Company
in effect for Executive immediately prior to such Change in
Control, or (iv) provide Executive with paid vacation in accordance
with the most favorable plans, policies, programs and practices of
the Company as in effect for Executive immediately prior to such
Change in Control;
(6)
the failure of the Company to pay any amounts owed
Executive as salary, bonus, deferred compensation or other
compensation;
(7)
the failure of the Company to obtain an assumption
agreement from any successor as contemplated in Section 9(b);
(8)
any purported termination of Executive's employment
which is not effected pursuant to a Notice of Termination which
satisfies the requirements of a Notice of Termination; or
(9)
any other material breach by Company of its
obligations under this Agreement.
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For purposes of this Agreement, any good faith determination of
Good Reason made by Executive shall be conclusive on the parties;
provided, however, that an isolated and insubstantial action taken
in good faith and which is remedied by the Company within ten (10)
days after receipt of notice thereof given by Executive shall not
constitute Good Reason. Any event or condition described in this
Section 1(g) which occurs prior to a Change in Control, but which
Executive reasonably demonstrates was at the request of or in
response to a Third Party who effectuates a Change in Control or
who has indicated an intention or taken steps reasonably calculated
to effect a Change in Control, shall constitute Good Reason
following a Change in Control for purposes of this Agreement
notwithstanding that it occurred prior to the Change in
Control.
(j)
"Nonqualifying Termination" means a termination of
Executive's employment (1) by the Company for Cause, (2) by
Executive for any reason other than for Good Reason with Notice of
Termination, (3) as a result of Executive's death, (4) by the
Company due to Executive's Disability, unless within thirty (30)
days after Notice of Termination is provided to Executive after
such Disability Executive shall have returned to substantial
performance of Executive's duties on a full-time basis, or (5) as a
result of Executive's Retirement. For purposes of this Agreement,
termination by the Company shall not include a transfer of
employment between subsidiaries of Wolverine or between Wolverine
and its subsidiaries. The terms of such transfer, however, may
serve as the basis for termination of employment by Executive for
Good Reason.
(k)
"Notice of Termination" means a written notice by the
Company or Executive, as the case may be, to the other, which (1)
indicates the specific reason for Executive's termination, (2) to
the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of
Executive's employment, and (3) specifies the termination date. The
failure by Executive or the Company to set forth in such notice any
fact or circumstance which contributes to a showing of Good Reason
or Cause shall not waive any right of Executive or the Company
hereunder or preclude Executive or the Company from asserting such
fact or circumstance in enforcing Executive's or the Company's
rights hereunder.
(l)
"Positive Spread" means the spread between the
exercise price of the options held by Executive under the 1993,
1995, 1997, 1999, 2001, 2003 or 2005 Stock Incentive Plan or any
other stock option plan now or subsequently adopted by the Company,
and the higher of (1) the closing price of the Common Stock as
reported on the Termination Date on the New York Stock Exchange, or
if the New York Stock Exchange is closed on that date, the last
preceding date on which the New York Stock Exchange was open and on
which shares of Common Stock were traded, or (2) the highest price
per share paid in connection with the Change in Control.
(m)
"Retirement" means termination of employment by
either the Executive or the Company on or after the Executive's
normal retirement date under the terms of retirement plans of the
Company, but not earlier than the age of 65.
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2.
Term of Agreement. This
Agreement shall commence on the Effective Date and shall continue
in effect through the third
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