Exhibit 10-8
GANNETT CO., INC.
TRANSITIONAL COMPENSATION PLAN
As Amended and Restated October 22, 2001
[Reflects all revisions through December 4, 2001]
GANNETT CO., INC.
TRANSITIONAL COMPENSATION PLAN
As Amended and Restated October 22, 2001
Table of Contents
1. Purpose of the Plan.....................................................1
2. Effective Date..........................................................2
3. Administration of the Plan..............................................2
(a) The Committee......................................................2
(b) Determinations by the Committee....................................2
(c) Delegation of Authority............................................3
4. Participation in the Plan...............................................3
(a) Designation of Participants........................................3
(b) Terminating Status as a Participant................................4
5. Change in Control.......................................................5
6. Eligibility for Benefits under the Plan.................................7
(a) General............................................................7
(b) Cause..............................................................8
(c) Good Reason........................................................8
(d) Certain Terminations Prior to a Change in Control.................11
(e) No Waiver.........................................................11
(f) Notice of Termination After a Change in Control...................11
(g) Date of Termination...............................................12
7. Obligations of the Company upon Termination............................12
(a) Cause; Other than for Good Reason.................................12
(b) Termination Without Cause; Good Reason or Window Period
Terminations......................................................13
(c) Timing of Payments................................................19
8. Mitigation.............................................................20
9. Resolution of Disputes.................................................21
10. Legal Expenses and Interest............................................21
11. Funding................................................................22
12. No Contract of Employment..............................................23
13. Non-exclusivity of Rights..............................................23
(a) Future Benefits under Company Plans...............................23
(b) Benefits of Other Plans and Agreements............................23
14. Successors; Binding Agreement..........................................24
15. Transferability and Enforcement........................................25
16. Notices................................................................25
17. Amendment or Termination of the Plan...................................26
18. Waivers................................................................27
19. Validity...............................................................27
20. Governing Law..........................................................27
21. Headings...............................................................27
GANNETT CO., INC.
TRANSITIONAL COMPENSATION PLAN
As Amended and Restated October 22, 2001
1. Purpose of the Plan. The Board of Directors (the "Board") of Gannett Co.,
Inc. (the "Company") considers the establishment and maintenance of a
strong and vital management to be essential to protecting and enhancing the
best interests of the Company and its stockholders.
As is the case with most publicly held corporations, the possibility
of a Change in Control (as defined below) of the Company exists, and that
possibility, and the uncertainty and questions which it may raise among key
executives concerning future employment, may result in the departure or
distraction of key executives, to the detriment of the Company and its
stockholders.
The purpose of the Plan (as defined below) is to assure the Company
that it will have the continued dedication of, and the availability of
objective advice and counsel from, key executives of the Company and its
affiliates (as defined below) notwithstanding the possibility, threat or
occurrence of a Change in Control.
In the event that the Company or its stockholders receive any proposal
from a third party concerning a possible business combination with the
Company or an acquisition of the Company's equity securities, the Board
believes it imperative that the Company and the Board be able to rely upon
key executives to continue in their positions and be available for advice,
if requested, without concern that those individuals might be distracted by
the personal uncertainties and risks created by such a proposal.
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Should the Company receive any such proposal, in addition to their
regular duties, such key executives may be called upon to assist in the
assessment of such proposal, advise management and the Board as to whether
such proposal would be in the best interest of the Company and its
stockholders, and to take such other actions as the Board might determine
to be appropriate.
Therefore, in order to accomplish these objectives, the Board has
adopted the Plan.
2. Effective Date. The Transitional Compensation Plan, as amended and restated
(the "Plan"), shall become effective on October 22, 2001.
3. Administration of the Plan.
(a) The Committee. The Plan shall be administered (i) by such committee of
non-employee directors as the Board shall appoint (the "Committee"),
or (ii) in the absence of such Committee or if the Committee is unable
to act, by the Board. The members of the Committee shall be entitled
to all of the rights to indemnification and payment of expenses and
costs set forth in Article II, Section 17 (or its successor provision)
of the Bylaws of the Company. In no event may the protection afforded
the Committee members in this Section 3(a) be reduced in anticipation
of or following a Change in Control.
(b) Determinations by the Committee. Subject to the express provisions of
the Plan and to the rights of the Participants (as defined below)
pursuant to such provisions, the Committee shall have the authority to
adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall, from time to time, deem
advisable; to designate persons to be covered by the Plan; to revoke
such designations;
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to interpret the terms and provisions of the Plan (and any notices or
agreements relating thereto); and otherwise to supervise the
administration of the Plan in accordance with the terms hereof. Prior
to a Change in Control, all decisions made by the Committee pursuant
to the Plan shall be made in its sole discretion and shall be final
and binding on all persons, including the Company and Participants.
The Committee's determinations need not be uniform, and may be made
selectively among eligible employees and among Participants, whether
or not they are similarly situated. Notwithstanding any provision in
the Plan to the contrary, however, following a Change in Control, any
act, determination or decision of the Company or the Committee, as
applicable, with regard to the administration, interpretation and
application of the Plan must be reasonable, as viewed from the
perspective of an unrelated party and with no deference paid to the
actual act, determination or decision of the Company or the Committee,
as applicable. Furthermore, following a Change in Control, any
decision by the Company or the Committee, as applicable, shall not be
final and binding on a Participant. Instead, following a Change in
Control, if a Participant disputes a decision of the Company or the
Committee relating to the Plan and pursues legal action, the court
shall review the decision under a "de novo" standard of review.
(c) Delegation of Authority. The Committee may delegate to one or more
officers or employees of the Company such duties in connection with
the administration of the Plan as it deems necessary, advisable or
appropriate.
4. Participation in the Plan.
(a) Designation of Participants. The Committee shall from time to time
select the employees who are to participate in the Plan (the
"Participants") from among those
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management or highly compensated employees of the Company and its
affiliates it determines to be appropriate to include as Participants,
given the purposes of the Plan and the potential effects on the
employee of a Change in Control. The Company shall notify each
Participant in writing of his or her participation in the Plan. For
purposes of the Plan, the term "affiliate" has the meaning set forth
in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
includes any partnership or joint venture of which the Company or any
of its affiliates are general partners or co-venturers.
(b) Terminating Status as a Participant. A person shall cease to be a
Participant upon (i) the termination of his or her employment by the
Company and any affiliate for any reason prior to a Change in Control,
or (ii) the date that the Company notifies the Participant in writing
that such individual's status as a Participant has been revoked.
Except as specifically provided herein, the Committee shall have
absolute discretion in the selection of Participants and in revoking
their status as Participants. Notwithstanding the foregoing, no
revocation by the Committee of any person's designation as a
Participant shall be effective if made (i) on the day of, or within 24
months after, a Change in Control, (ii) prior to a Change in Control,
but at the request of any third party participating in or causing the
Change in Control or (iii) otherwise in connection with, in relation
to, or in anticipation of a Change in Control. In any litigation
related to this issue, whether it is the plaintiff or the defendant,
the Company shall have the burden of proof that the revocation of
status as a Participant was not at the request of any third party
participating in or causing the Change in Control or otherwise in
connection with, in relation to, or in anticipation of a Change in
Control.
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5. Change in Control. For purposes of the Plan, "Change in Control" means the
first to occur of the following:
(a) the acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") 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 voting securities of the Company entitled to
vote generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that, for purposes of this
Section, the following acquisitions shall not constitute a Change in
Control: (A) any acquisition directly from the Company, (B) any
acquisition by the Company, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or one of its affiliates or (D) any acquisition pursuant to a
transaction that complies with Sections 5(c)(i), 5(c)(ii) and
5(c)(iii);
(b) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming
a director subsequent to the date hereof whose election or nomination
for election by the Company's stockholders was approved by a vote of
at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the
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election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board;
(c) consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company
or any of its subsidiaries, a sale or other disposition of all or
substantially all of the assets of the Company, or the acquisition of
assets or stock of another entity by the Company or any of its
subsidiaries (each, a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of
the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding
shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation or
entity resulting from such Business Combination (including, without
limitation, a corporation or entity that, as a result of such
transaction, owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership immediately
prior to such Business Combination of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities, as the case may
be, (ii) no Person (excluding any employee benefit plan (or related
trust) of the Company or any corporation or entity resulting from such
Business Combination) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then-outstanding shares of common stock
of the corporation or entity resulting from such
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Business Combination or the combined voting power of the
then-outstanding voting securities of such corporation or entity,
except to the extent that such ownership existed prior to the Business
Combination, and (iii) at least a majority of the members of the board
of directors of the corporation or entity resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board
providing for such Business Combination; or
(d) approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company. No Participant in this Plan who
participates in any group conducting a management buyout of the
Company under the terms of which the Company ceases to be a public
company may claim that such buyout is a Change in Control under this
Plan and no such Participant shall be entitled to any payments or
other benefits under this Plan as a result of such buyout.
6. Eligibility for Benefits under the Plan.
(a) General. If a Change in Control shall have occurred, each person who
is a Participant on the date of the Change in Control shall be
entitled to the compensation and benefits provided in Section 7(b)
upon the subsequent termination of the Participant's employment,
provided that such termination occurs prior to the second anniversary
of the Change in Control, unless such termination is (i) because of
the Participant's death or disability (as determined under the
Company's Long Term Disability Plan in effect immediately prior to the
Change in Control), (ii) by the Company or its affiliate for Cause, or
(iii) by the Participant other than (A) for Good Reason or
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(B) during the Window Period. For purposes of the Plan, "Window
Period" means the 30-day period immediately following the first
anniversary of the Change in Control.
(b) Cause. For purposes of the Plan, "Cause" means:
(i) any material misappropriation of funds or property of the Company
or its affiliate by the Participant;
(ii) unreasonable and persistent neglect or refusal by the Participant
to perform his or her duties which is demonstrably willful and
deliberate on the Participant's part, which is committed in bad
faith or without reasonable belief that such breach is in the
best interests of the Company and which is not remedied in a
reasonable period of time after receipt of written notice from
the Company specifying such breach; or
(iii) conviction of the Participant of a felony involving moral
turpitude.
Notwithstanding the foregoing provisions of this Section 6(b), the
Participant shall not be deemed to have been terminated for Cause after a
Change in Control unless and until there shall have been delivered to the
Participant a copy of a resolution duly adopted by the affirmative vote of
not less than three quarters of the entire membership of the Board at a
meeting of the Board (after reasonable notice to the Participant and an
opportunity for Participant, together with his or her counsel, to be heard
before the Board), finding that, in the good faith opinion of the Board,
the Participant was guilty of conduct set forth above in this Section 6(b)
and specifying the particulars thereof in detail.
(c) Good Reason. For purposes of the Plan, "Good Reason" means the
occurrence after a Change in Control of any of the following
circumstances without
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the Participant's express written consent, unless such circumstances
are fully corrected prior to the Date of Termination (as defined
below) specified in the Notice of Termination (as defined below) given
in respect thereof:
(i) the assignment to the Participant of any duties inconsistent in
any respect with his or her position (including status, offices,
titles and reporting requirements), authority or responsibilities
immediately prior to the Change in Control, or any other
diminution in such position, authority or responsibilities,
(whether or not occurring solely as a result of the Company
becoming a subsidiary or a division of another entity or ceasing
to be a publicly traded entity), excluding for this purpose an
isolated, insubstantial and inadvertent action not taken in bad
faith and that is remedied by the Company or its affiliate
promptly after receipt of notice thereof given by the
Participant;
(ii) a reduction by the Company or its affiliate in the Participant's
compensation and/or other benefits or perquisites as in effect on
the date immediately prior to the Change in Control;
(iii) the relocation of the Participant's office from the location at
which the Participant is principally employed immediately prior
to the date of the Change in Control to a location 20 or more
miles farther from the Participant's residence immediately prior
to the Change in Control, or the Company's requiring the
Participant to be based anywhere other than the Company's offices
at such location, except for required travel on the Company's
business to an extent substantially consistent with the
Participant's business travel obligations prior to the Change in
Control;
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(iv) the failure by the Company or its affiliate to pay to the
Participant any portion of the Participant's compensation or to
pay to the Participant any deferred compensation due under any
deferred compensation or similar program of the Company or its
affiliate within seven days of the date such payment is due;
(v) the failure by the Company or its affiliate to continue in effect
any compensation, benefit or perquisite plan or policy in which
the Participant participated immediately prior to the Change in
Control, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan or policy) has been made with
respect to such plan or policy, or the failure by the Company or
its affiliate to continue the Participant's participation therein
(or in such substitute or alternative plan or policy), in each
case, on a basis not materially less favorable, both in terms of
the amount of benefits provided and the level of the
Participant's participation relative to other participants, as
existed at the time of the Change in Control;
(vi) (A) the failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform the Plan, as
contemplated in Section 14, or, (B) if the business of the
Company for which the Participant's services are principally
performed is sold at any time within 24 months after a Change in
Control, the purchaser shall fail to provide the Participant with
the same or a comparable position, duties, salary, bonus,
benefits and perquisites as provided to the Participant by the
Company immediately prior to the Change in Control;
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(vii) any refusal by the Company (or its affiliate) to continue to
allow the Participant to attend to matters or engage in
activities not directly related to the business of the Company
that, prior to the Change in Control, the Participant was
permitted to attend to or engage in; or
(viii) any purported termination of the Participant's employment that
is not effected pursuant to a Notice of Termination satisfying
the requirements of the Plan. For purposes of this Section 6(c),
and notwithstanding the provisions of Section 3(b), any good
faith determination of "Good Reason" made by the Participant
shall be conclusive.
(d) Certain Terminations Prior to a Change in Control. Anything in the
Plan to the contrary notwithstanding, if a Change in Control occurs
and if the Participant's employment with the Company terminated prior
to the date on which the Change in Control occurs, and if it is
reasonably demonstrated by the Participant that such termination of
employment (i) was at the request of any third party participating in
or causing the Change in Control or (ii) otherwise arose in connection
with, in relation to, or in anticipation of a Change in Control, then
the Participant shall be entitled to all payments and benefits under
the Plan as though the Participant had terminated his or her
employment for Good Reason on the day after the Change in Control.
(e) No Waiver. The Participant's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any circumstance
constituting Good Reason hereunder.
(f) Notice of Termination After a Change in Control. Any termination by
the Company, or by the Participant without any reason during the
Window Period or for
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Good Reason, shall be communicated by Notice of Termination given in
accordance with the Plan. For purposes of the Plan, a "Notice of
Termination" means a written notice that (i) indicates the specific
termination provision in the Plan relied upon, and (ii) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Participant's employment under the provision so indicated. The failure
by the Participant or the Company to set forth in the Notice of
Termination any fact or circumstance that contributes to a showing of
Good Reason or Cause shall not waive any right of the Participant or
the Company hereunder or preclude the Participant or the Company from
asserting such fact or circumstance in enforcing the Participant's or
the Company's rights hereunder.
(g) Date of Termination. For purposes of the Plan, "Date of Termination"
means (i) if the Participant's employment is terminated by the Company
for Cause, or by the Participant during the Window Period, the date on
which the Notice of Termination is given or any later date specified
therein (which, however, shall not be more than 15 days later), (ii)
if the Participant's employment is terminated by the Participant for
Good Reason, the date specified therein (which, however, shall not be
less than seven days or more than 15 days later), or (iii) if the
Participant's employment is terminated by the Company other than for
Cause, the date on which the Company notifies the Participant of such
termination.
7. Obligations of the Company upon Termination.
(a) Cause; Other than for Good Reason. If the Participant's employment
shall be terminated for Cause, or if the Participant terminates his or
her employment other than for Good Reason and other than during the
Window Period, the Company shall
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pay the Participant his or her annual salary through the Date of
Termination, to the extent not already paid, at the rate in effect at
the time Notice of Termination is given, plus all other amounts to
which the Participant is entitled under any compensation, benefit or
other plan or policy of the Company at the time such amounts are due,
and the Company shall have no further obligations to the Participant
under the Plan.
(b) Termination Without Cause; Good Reason or Window Period Terminations.
Any Participant who becomes eligible for compensation and benefits
pursuant to Section 6(a) shall be paid or provided the following:
(i) to the extent not already paid, the sum of (A) the Participant's
annual salary through the Date of Termination at the higher of
the rate in effect immediately prior to the Change in Control or
on the Date of Termination, (B) the pro rata bonus (based upon
the portion of the fiscal year elapsed prior to the Date of
Termination) under the Company's Executive Incentive Plan or
successor bonus plan, assuming that the bonus amount with respect
to the full fiscal year would be equal to the highest bonus he or
she earned with respect to the three fiscal years immediately
prior to such fiscal year, and (C) all compensation previously
deferred by the Participant, accrued and unpaid vacation pay and
all other amounts to which the Participant is entitled through
the Date of Termination under any compensation or benefit plan
(other than amounts under the 1978 Executive Long Term Incentive
Plan, the 2001 Omnibus Incentive Compensation Plan or any
comparable or successor plan (collectively, the "Incentive
Compensation Plan") or the Company's retirement and 401(k) Plans,
payment
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under which plans shall continue to be made in accordance with
their terms) of the Company;
(ii) as severance pay and in lieu of any further salary or bonus for
the period following the Date of Termination, the Participant
shall receive a lump sum payment equal to his or her "Monthly
Compensation" (as defined below) multiplied by the number of
months in the Participant's "Severance Period" (as defined
below).
For purposes of the Plan, "Severance Period" means a number of
whole months equal to the Participant's months of continuous
service with the Company or its affiliates divided by 3.33,
provided, however, that in no event shall the Participant's
Severance Period be less than 24 months or more than 36 months,
regardless of the Participant's actual length of service.
For purposes of the Plan, "Monthly Compensation" means one
twelfth of the sum of (A) the Participant's annual salary at the
highest rate of salary during the 12-month period immediately
prior to the Date of Termination or, if higher, during the
12-month period immediately prior to the Change in Control (in
each case, as determined without regard for any reduction for
deferred compensation, 401(k) Plan contributions and similar
items but by adding the amount of the Company's contribution
under the 401(k) Plan, or comparable plan, for the 12 months
preceding the Date of Termination and other amounts included in
the Participant's income for income tax purposes for the 12
months preceding the Date of Termination, but excluding income
attributable to awards made under the Incentive Compensation Plan
and income attributable to payments received under any Company
deferred compensation plan or arrangement),
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and (B) the higher of (1) the highest bonus the Participant
earned with respect to the three fiscal years immediately prior
to the fiscal year in which the Change in Control occurs and (2)
the highest bonus the Participant earned with respect to any
fiscal year during the period between the Change in Control and
the Date of Termination under the Company's Executive Incentive
Plan or successor bonus plan;
(iii) for the remainder of the Severance Period the Company shall
continue to provide the Participant and/or the Participant's
dependents with life insurance and medical benefits that are at
least equal to, and at no greater cost to the Participant and the
Participant's dependents than, those that would have been
provided to them in accordance with those employee benefit
programs if the Participant's employment had not been terminated,
in accordance with the most favorable programs of the Company and
its affiliates as in effect and applicable generally to other
peer executives and their dependents during the 90-day period
immediately preceding the Change in Control or, if more favorable
to the Participant, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its
affiliates and their dependents, provided, however, that if the
Participant becomes reemployed with another employer and is
eligible to receive life insurance or medical benefits under
another employer provided plan, the life insurance and medical
benefits provided for herein shall be offset by those provided
under such other plan. With regard to the continuation of medical
benefits during the Severance Period, a Participant shall become
entitled to COBRA rights at the end of the Severance Period. If,
at the end of the Severance Period, the Participant is not
receiving equivalent benefits from a new
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employer, the Company shall arrange to enable the Participant to
convert the Participant's and/or his or her dependents coverage
under such programs to individual policies or programs upon the
same terms as peer executives of the Company may apply for such
conversions;
(iv) for purposes of determining eligibility of the Participant for
retiree benefits pursuant to the life insurance and medical
benefit programs, the Participant shall be considered to have
attained the age and service credit that the Participant would
have attained had the Participant remained employed until the end
of the Severance Period and to have retired on the last day of
such period. Such retiree benefits shall continue to be available
to Participants and the Participant's dependents on a basis at
least equal to, and at no greater cost to the Participant and the
Participant's dependents than, those retiree benefits provided to
peer executives of the Company and its affiliates and their
dependents upon such peer executive's retirement in accordance
with the most favorable programs of the Company and its
affiliates as in effect during the 90-day period immediately
preceding the Change in Control or, if more favorable to the
Participant, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its
affiliates and their dependents.
(v) payment by the Company to Participant of a monthly amount
(calculated as a single life annuity) equal to the difference
between (A) the monthly annuity payable under the Company's
Retirement Plan and the Company's Supplemental Retirement Plan as
of (1) the date of the Change in Control, or (2) the Date of
Termination, whichever monthly annuity amount may
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be higher, and (B) that which would have been paid under such
plan(s) had the Participant remained in the employ of the Company
through the end of the Severance Period and continued to receive
the same level of salary and bonus which the Participant received
with respect to the fiscal year of the Company immediately
preceding (1) the date of the Change in Control, or (2) the Date
of Termination, whichever level may be higher. The Company shall
pay such benefit at the same time as and along with the benefit
due to the Participant from the Company's Supplemental Retirement
Plan using the same payment method and the same actuarial
equivalency as would be used under that plan, unless the
Participant and the Company shall agree that the Participant will
receive the amount described in the preceding sentence in a
single lump-sum payment payable at such time as the parties shall
mutually agree. If the Participant would not otherwise be vested
and if no benefit would therefore be payable under one or more of
the Company retirement plans, then the entire benefit (i.e., the
otherwise non-vested benefit plus the benefit hereunder) shall be
deemed vested and shall be paid pursuant to the Plan, based on
the relevant plan formula and employee facts, at the time and in
the manner it would have been paid (if vested) under the relevant
plan, unless the Participant and the Company agree to a single
payment payable at an agreed upon time; and
(vi) in addition to the amounts or benefits specified elsewhere in the
Plan, if any payment or distribution by the Company to or for the
benefit of the Participant (whether paid or payable or
distributed or distributable pursuant to the Plan or any other
plan, arrangement or agreement of the Company, any person
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whose actions result in a Change in Control, or any person
affiliated with the Company or such person, but determined
without regard to any payments under this Section 7(b)(vi)) (a
"Payment") would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the
"Code") or any similar federal, state or local tax that may
hereafter be imposed, or any interest or penalties are incurred
by the Participant with respect to any such excise tax (such
excise tax, together with any such interest or penalties,
collectively, the "Excise Tax") the Company shall pay to the
Participant an amount (the "Gross-Up Payment") such that the net
amount retained by the Participant out of the Gross-Up Payment,
after payment of all taxes on the Gross-Up Payment (including
federal, state and local income taxes, employment taxes, Excise
Tax, and interest and penalties imposed on any such taxes), will
equal the Excise Tax imposed on the Payment. All determinations
required to be made under this Section 7(b)(vi), including
whether and when a Gross-Up Payment is required, the amount of
such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by
PricewaterhouseCoopers LLP, or, if PricewaterhouseCoopers LLP is
not the Company's nationally recognized independent accounting
firm immediately prior to the Change in Control, such other
nationally recognized accounting firm serving as the Company's
independent accounting firm (the "Accounting Firm"). The
Accounting Firm shall provide detailed supporting calculations
both to the Company and the Participant within 10 business days
of the Company's receipt of notice from the Participant that
there has been a Payment or at such earlier
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time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, the
Participant may appoint another nationally recognized accounting
firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall be
borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 7(b)(vi), shall be paid by the Company
to the Participant within 5 days of the receipt of the Accounting
Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Company and the Participant. As a
result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments
that will not have been made by the Company should have been made
(the "Underpayment"), consistent with the calculations required
to be made hereunder. In the event the Participant thereafter is
required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company
to or for the benefit of the Participant. The Company may
withhold from any payments due to the Participant under the Plan
such amounts as its independent public accountants may determine
are required to be withheld under applicable federal, state and
local tax laws.
(c) Timing of Payments. All payments under Sections 7(b)(i) and 7(b)(ii)
shall be due and payable in a lump sum within 15 days after the Date
of Termination.
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Payment under Sections 7(b)(v) and 7(b)(vi) shall be made as provided
therein. If the amount of any payment due under the Plan cannot be
finally determined on or before its due date, the Company shall pay to
the Participant on such due date an estimate, as determined in good
faith by the Company (or, in the case of a payment due under Section
7(b)(vi), as determined pursuant to that Section), of the minimum
amount of such payment and shall pay the remainder of such payment
(together with interest from the due date to the date of actual
payment at the rate provided in Section 10(b)) as soon as the amount
thereof can be determined (but, in the case of payments due under
Sections 7(b)(i) and 7(b)(ii), in no event later than the 30th day
after the Date of Termination). If the amount of any payment, whether
estimated or not, exceeds the amount subsequently determined to have
been due, such excess shall constitute a loan by the Company to the
Participant, payable on the fifth day after demand by the Company
(together with interest from the date of receipt by the Participant to
the date of repayment by the participant at the rate provided in
Section l274(b)(2)(B) of the Code); if the amount of any payment,
whether estimated or not, is less than the amount subsequently
determined to have been due, the Company shall pay the deficiency
(together with interest from the due date to the date of actual
payment at the rate provided in Section 10(b) within five days after
demand by the Participant
8. Mitigation. Except as provided in Sections 7(b)(iii) and 13(b), the
Participant shall not be required to mitigate the amount of any payment
provided for in the Plan by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in the Plan be
reduced by any compensation earned by the Participant as a result of
employment by another employer, by retirement benefits,
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by offset against any amount claimed to be owed by the Participant to the
Company, or otherwise.
9. Resolution of Disputes. If there shall be any dispute between the Company
and the Participant (a) in the event of any termination of the
Participant's employment by the Company, as to whether such termination was
for Cause, or (b) in the event of any termination of employment by the
Participant, as to whether Good Reason existed, then, unless and until
there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination by the Company was for Cause
or that the determination by the Participant of the existence of Good
Reason was not made in good faith, the Company shall pay all amounts, and
provide all benefits, to the Participant and/or the Participant's family or
other beneficiaries, as the case may be, that the Company would be required
to pay or provide pursuant to the Plan as though such termination were by
the Company without Cause or by the Participant with Good Reason; provided,
however, that the Company shall not be required to pay any disputed amount
pursuant to this Section except upon receipt of a written undertaking by or
on behalf of the Participant to repay all such amounts to which the
Participant is ultimately adjudged by such court not to be entitled.
10. Legal Expenses and Interest.
(a) If, with respect to any alleged failure by the Company to comply with
any of the terms of the Plan or any dispute between the Company and
the Participant with respect to the Participant's rights under the
Plan, a Participant in good faith hires legal counsel with respect
thereto or institutes any negotiations or institutes or responds to
legal action to assert or defend the validity of, to interpret,
enforce his or her rights
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under, or recover damages for violation of the terms of the Plan, then
(regardless of the outcome) the Company shall pay, as they are
incurred, the Participant's actual expenses for attorneys' fees and
disbursements, together with such additional payments, if any, as may
be necessary so that the net after tax payments to the Participant
equal such fees and disbursements.
(b) To the extent permitted by law, the Company shall pay to the
Participant on demand a late charge on any amount not paid in full
when due after a Change in Control under the terms of the Plan. Except
as otherwise specifically provided in the Plan, the late charge shall
be computed by applying to the sum of all delinquent amounts a late
charge rate. The late charge rate shall be a fixed rate per year that
shall equal the sum of 3% plus the "prime rate" of Morgan Guaranty
Trust Company of New York or successor institution ("Morgan") publicly
announced by Morgan to be in effect on the Date of Termination, or if
Morgan no longer publicly announces a prime rate on such date, any
substantially equivalent rate announced by Morgan to be in effect on
such date (provided, however, that such rate shall not exceed any
applicable legally permissible rate).
11. Funding. The Company may, in its discretion, establish a trust to fund any
of the payments which are or may become payable to Participant under the
Plan, but nothing included in the Plan shall require that the Company
establish such a trust or other funding arrangement. Whether or not the
Company sets any assets aside for the purposes of the Plan, such assets
shall at all times prior to payment to Participants remain the assets of
the Company subject to the claims of its creditors. Neither the
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Company nor the Board nor the Committee shall be deemed to be a trustee or
fiduciary with respect to any amount to be paid under the Plan.
12. No Contract of Employment. The Participant and the Company acknowledge
that, except as may otherwise be provided under any written agreement
between the Participant and the Company, the employment of the Participant
by the Company is "at will" and, subject to such payments as may become due
under the Plan, such employment may be terminated by either the Participant
or the Company at any time and for any reason.
13. Non-exclusivity of Rights.
(a) Future Benefits under Company Plans. Nothing in the Plan shall prevent
or limit the Participant's continuing or future participation in any
plan, program, policy or practice of the Company or any of its
affiliates, nor shall anything herein limit any rights or reduce any
benefits the Participant may have under any agreement or arrangement
with the Company or any of its affiliates. Amounts that are vested
benefits or that the Participant is otherwise entitled to receive
under any plan, policy, practice or program of or any agreement or
arrangement with the Company or any of its affiliates at or subsequent
to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or agreement or arrangement except
as explicitly modified by the Plan.
(b) Benefits of Other Plans and Agreements. If the Participant becomes
entitled to receive compensation or benefits under the terms of the
Plan, such compensation or benefits will be reduced by other severance
benefits payable under any plan, program, policy or practice of or
agreement or other arrangement between the
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Participant and the Company (not including payments or distributions
under the Incentive Compensation Plan). It is intended that the Plan
provide compensation or benefits that are supplemental to severance
benefits and that are actually received by the Participant pursuant to
any plan, program, policy or practice of or agreement or arrangement
between the Participant and the Company, such that the net effect to
the Participant of entitlement to any similar benefits that are
contained both in the Plan and in any other existing plan, program,
policy or practice of or agreement or arrangement between the
Participant and the Company will be to provide the Participant with
the greater of the benefits under the Plan or under such other plan,
program, policy, practice, or agreement or arrangement. This Plan is
not intended to modify, amend, terminate or otherwise affect the
Incentive Compensation Plan, which shall remain a fully independent
and separate plan.
14. Successors; Binding Agreement. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform the Plan in the same
manner and to the same extent that the Company would be required to perform
it if no such succession had taken place. Failure of the Company to obtain
such express assumption and agreement at or prior to the effectiveness of
any such succession shall be a breach of the Plan and shall entitle the
Participant to compensation from the Company in the same amount and on the
same terms to which the Participant would be entitled hereunder if the
Participant terminated his or her employment for Good Reason following a
Change in Control, except that for purposes of implementing the foregoing,
the date on which any such
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succession becomes effective shall be deemed the Date of Termination. As
used in the Plan, "Company" means the Company as herein defined and any
successor to its business and/or assets which assumes and agrees to perform
the Plan, by operation of law or otherwise.
15. Transferability and Enforcement.
(a) The rights and benefits of the Company under the Plan shall be
transferable, but only to a successor of the Company, and all
covenants and agreements hereunder shall inure to the benefit of and
be enforceable by or against its successors and assigns. The rights
and benefits of Participant under the Plan shall not be transferable
other than by the laws of descent and distribution.
(b) The Company intends the Plan to be enforceable by Participants. The
rights and benefits under the Plan shall inure to the benefit of and
be enforceable by any Participant and the Participant's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Participant should die
while any amount would still be payable to the Participant hereunder
had the Participant continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms
of the Plan to the Participant's devisee, legatee or other designee
or, if there is no such designee, to the Participant's estate.
16. Notices. Any notices referred to herein shall be in writing and shall be
deemed given if delivered in person or by facsimile transmission, telexed
or sent by U.S. registered or certified mail to the Participant at his or
her address on file with the Company (or to such other address as the
Participant shall specify by notice), or to the Company at its principal
executive office, Attn: Secretary.
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17. Amendment or Termination of the Plan. The Board reserves the right to
amend, modify, suspend or terminate the Plan at any time; provided that:
(a) without the written consent of the Participant, no such amendment,
modification, suspension or termination shall adversely affect the
benefits or compensation due under the Plan to any Participant whose
employment has terminated prior to such amendment, modification,
suspension or termination and is entitled to benefits and compensation
under Section 7(b); and
(b) no such amendment, modification, suspension or termination that has
the effect of reducing or diminishing the right of any Participant to
receive any payment or benefit under the Plan will become effective
prior to the first anniversary of the date on which written notice of
such amendment, modification, suspension or termination was provided
to the Participant, and if such amendment, modification, suspension or
termination was effected (i) on the day of or subsequent to the Change
in Control, (ii) prior to the Change in Control, but at the request of
any third party participating in or causing a Change in Control or
(iii) otherwise in connection with, in relation to, or in anticipation
of a Change in Control, such amendment, modification, suspension or
termination will not become effective until the second anniversary of
the Change in Control. In any litigation related to this issue,
whether it is the plaintiff or the defendant, the Company shall have
the burden of proof that such amendment, modification, suspension or
termination was not at the request of any third party participating in
or causing the Change in Control or otherwise in connection with, in
relation to, or in anticipation of a Change in Control.
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18. Waivers. The Participant's or the Company's failure to insist upon strict
compliance with any provision of the Plan or the failure to assert any
right the Participant or the Company may have hereunder, including, without
limitation, the right of the Participant to terminate employment for Good
Reason, shall not be deemed to be a waiver of such provision or right or
any other provision or right under the Plan.
19. Validity. The invalidity or unenforceability of any provision of the Plan
shall not affect the validity or enforceability of any other provision of
the Plan, and such other provisions shall remain in full force and effect
to the extent permitted by law.
20. Governing Law. To the extent not preempted by federal law, all questions
pertaining to the construction, regulation, validity and effect of the
provisions of the Plan shall be determined in accordance with the laws of
the State of Delaware without regard to the conflict of laws principles
thereof.
21. Headings. The headings and paragraph designations of the Plan are included
solely for convenience of reference and shall in no event be construed to
affect or modify any provisions of the Plan.
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