EXHIBIT E2
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is entered into as of the 22nd day of March, 1996 by and
between Brenco, Incorporated, a Virginia corporation (the "Company"), and J.
Craig Rice ("Executive").
RECITALS
I. Executive currently serves as a key employee member of management of
the Company and his services and knowledge are valuable to the Company.
II. The Board (as defined in Section 1) has determined that it is in the
best interests of the Company 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
defined in Section 1) of the Company, 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 the Company, the Board has authorized the Company to enter
into this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained, the Company and Executive hereby
agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall
have the respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause" means (1) a material breach by Executive of the duties
and responsibilities of Executive (other than as a result of incapacity due to
physical or mental illness) which is demonstrably willful and deliberate on
Executive'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 (2) the commission by Executive of a felony
involving moral turpitude.
Cause shall not exist unless and until the Company has delivered to Executive a
copy of a resolution duly adopted by three-quarters of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice to Executive
and an opportunity for Executive, together with his counsel, to be heard before
the Board), finding that in the good faith opinion of the Board the Executive
was guilty of the conduct set forth in this Section 1(b) and specifying the
particulars thereof in detail.
(c) "Change in Control" means:
(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 twenty percent (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
directly from the Company, (C) any acquisition by, or benefit distribution
from, an employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company, (D) any
acquisition pursuant to any compensatory stock option or stock purchase
plan for employees, (E) 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) of
this Section (1)(c) shall be satisfied, or (F) any acquisition by the
Executive or any group of persons including the Executive; or (G) the
acquisition by members of the Whitfield Family (as hereinafter defined),
individually or collectively, of any direct or indirect beneficial
ownership in addition to the individual or collective beneficial ownership
of members of the Whitfield Family which exists on the date hereof; 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 fifty percent (50%) or more of the
Outstanding Company
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Common Stock or fifty percent (50%) 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 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 a majority of the directors then comprising the Incumbent
Board 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 fifty percent (50%) of the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger or consolidation
and more than fifty percent (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
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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, twenty percent (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,
twenty percent (20%) or more of the then outstanding shares of common stock
of such corporation or twenty percent (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 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 fifty percent (50%) of the then
outstanding shares of common stock thereof and more than fifty percent
(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, twenty percent (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,
twenty percent (20%) or more of the then outstanding shares of common stock
thereof or twenty
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percent (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.
For purposes of Section 1(c)(1), "Whitfield Family" shall mean (I) Needham B.
Whitfield and members of his "immediate family" (as that term is defined in Rule
16a-1(e) under the Exchange Act), (ii) Anne Whitfield Kenny and members of her
immediate family, (iii) the Estate of Mildred F. Whitfield and (iv) and in each
of the foregoing instances, their respective personal or legal representatives,
executors, administrators, successors, heirs, distributees and legatees.
Notwithstanding anything contained in the Agreement to the contrary, it is
understood that the collective beneficial ownership of members of the Whitfield
Family as of the date hereof shall not constitute, or be construed or deemed to
constitute, a Change of Control.
Furthermore, 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 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
in Control shall mean the date immediately prior to the date of such termination
of Executive's employment.
(d) "Company" means Brenco, Incorporated, a Virginia corporation.
(e) "Date of Termination" means (1) the effective date on which
Executive's employment by the Company terminates as specified in a prior written
notice by the Company or Executive, as the case may be, to the other, delivered
pursuant to Section 11 or (2) if Executive's employment by the Company
terminates by reason of death, the date of death of Executive.
(f) "Good Reason" means, without Executive's express written consent,
the occurrence of any of the following events after a Change in Control:
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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 or (iii) any removal or
involuntary termination of Executive from the Company otherwise than as
expressly permitted by this Agreement or 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 has been increased thereafter;
(3) any requirement of the Company that Executive (i) be based
anywhere more than thirty-five miles from the facility where Executive is
located at the time of the Change in Control;
(4) 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 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 and its
affiliated companies 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 and
its affiliated companies 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 and its affiliated companies as in effect for Executive
immediately prior to such Change in Control; or
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(5) the failure of the Company to obtain the assumption
agreement from any successor as contemplated in Section 10(b).
In addition, a termination by Executive of his employment for any reason
during the 30-day period immediately following the first anniversary of the date
of commencement of the Termination Period shall be deemed to be termination by
Executive for Good Reason. For purposes of this Agreement, any good faith
determination of Good Reason made by Executive shall be conclusive; PROVIDED,
HOWEVER, that an isolated, insubstantial and inadvertent action taken in good
faith and which is remedied by the Company promptly after receipt of notice
thereof given by Executive shall not constitute Good Reason. Any event or
condition described in this Section 1(f)(1) through (5) which occurs prior to a
Change in Control, but was at the request of a Third Party who effectuates 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.
(g) "Nonqualifying Termination" means a termination of Executive's
employment (1) by the Company for Cause, (2) by Executive for any reason other
than a Good Reason, (3) as a result of Executive's death, (4) by the Company due
to Executive's absence from his duties with the Company on a full-time basis for
at least one hundred eighty consecutive days as a result of Executive's
incapacity due to physical or mental illness or (5) as a result of Executive's
lawful mandatory retirement or (6) Executive's voluntary retirement pursuant to
any retirement incentive plan of the Company. The parties hereto expressly
understand and agree that a termination by Executive of his employment in
accordance with the first sentence of the second paragraph of Section 1(f) shall
be deemed to be a termination by the Executive for Good Reason and thus shall
not be a Nonqualifying Termination.
(h) "Pension Plan" means the Company's defined benefit pension plan
currently known as the "Brenco Retirement Plan" or any successor plan and any
other employee benefit plans of the Company that require any minimum period of
employment as a condition to the receipt of retirement benefits thereunder.
(i) "Termination Period" means the period of time beginning with a
Change in Control and ending on the earliest to occur of (1) Executive's 62nd
birthday, (2) Executive's death, and (3) two years following such Change in
Control.
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2. OBLIGATIONS OF EXECUTIVE. Executive agrees that in the event any
person or group attempts a Change in Control, he shall not voluntarily leave the
employ of the Company without Good Reason (a) until such attempted Change in
Control terminates or (b) if a Change in Control shall occur, until ninety days
following such Change in Control. For purposes of the foregoing subsection (a),
Good Reason shall be determined as if a Change in Control had occurred when such
attempted Change in Control became known to the Board.
3. PAYMENTS UPON TERMINATION OF EMPLOYMENT.
(a) If during the Termination Period the employment of Executive
shall terminate, other than by reason of a Nonqualifying Termination, then the
Company shall pay to Executive (or Executive's beneficiary or estate) within
thirty days following the Date of Termination, as compensation for services
rendered to the Company:
(1) a lump-sum cash amount equal to the sum of (i) Executive's
full annual base salary from the Company and its affiliated companies
through the Date of Termination, to the extent not theretofore paid, (ii)
Executive's annual bonus in an amount at least equal to the greatest of (A)
the average bonus (annualized for any fiscal year consisting of less than
twelve full months or with respect to which Executive has been employed by
the Company for less than twelve full months) paid or payable, including by
reason of any deferral, to Executive by the Company and its affiliated
companies in respect of the three fiscal years of the Company (or such
portion thereof during which Executive performed services for the Company
if Executive shall have been employed by the Company for less than such
three fiscal year period) immediately preceding the fiscal year in which
the Change in Control occurs, or (B) 50% of Executive's target bonus for
the fiscal year in which the Change in Control occurs, or (C) 50% of
Executive's target bonus for the fiscal year in which Executive's Date of
Termination occurs, multiplied by (D) a fraction, the numerator of which is
the number of days in the fiscal year in which the Date of Termination
occurs through the Date of Termination and the denominator of which is
three hundred sixty-five or three hundred sixty-six, as applicable, and
(iii) any compensation previously deferred by Executive other than pursuant
to a tax-qualified plan (together with any interest
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and earnings thereon) and any accrued vacation pay, in each case to the
extent not theretofore paid; PLUS
(2) a lump-sum cash amount equal to (i) three times Executive's
highest annual rate of base salary from the Company and its affiliated
companies in effect during the twelve-month period prior to the Date of
Termination; PROVIDED, HOWEVER, that in the event there are fewer than
thirty-six whole months remaining from the Date of Termination to the date
of Executive's 62nd birthday, the amount payable under this Section 3(a)
(2) shall be calculated by multiplying the amount otherwise payable by a
fraction the numerator of which is the number of months, including a
partial month (with a partial month being expressed as a fraction the
numerator of which is the number of days remaining in such month and the
denominator of which is the number of days in such month), so remaining and
the denominator of which is thirty-six; PROVIDED FURTHER, that any amount
paid pursuant to this Section 3(a) (2) shall be paid in lieu of any other
amount of severance relating to salary or bonus compensation to be received
by Executive upon termination of employment of Executive under any
severance plan, policy, employment agreement or arrangement of the Company;
AND PROVIDED FURTHER that in the event of a termination of employment
during the 30-day period immediately following the first anniversary of the
date of commencement of the Termination Period in accordance with the last
paragraph of Section 1(f) hereof, the amount payable under this Section
3(a)(2) shall be reduced by one-half.
(b) (1) In addition to the payments to be made pursuant to
paragraph (a) of this Section 3, if on the Date of Termination other than
by reason of a Nonqualifying Termination, Executive shall not be fully
vested in his accrued benefit under the Pension Plan, the Company shall pay
to Executive within thirty days following the Date of Termination a lump
sum cash amount equal to the actuarial equivalent of his unvested accrued
benefit under the Brenco Retirement Plan as of such date. Such lump sum
cash amount shall be computed using the same actuarial methods and
assumptions then in use for purposes of computing benefits under the Brenco
Retirement Plan, provided that the interest rate used in making such
computation shall not be greater than the interest rate permitted under
Section 417(e) of the Internal Revenue Code of 1986, as amended (the
"Code").
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(2) In addition to the payments to be made pursuant to paragraph (a)
of this Section 3, if on the Date of Termination other than by reason of a
Nonqualifying Termination, Executive shall not be fully vested in the
employer contributions made on his behalf under any defined contribution
plan of the Company, the Company shall pay to Executive within thirty days
following the Date of Termination a lump sum cash amount equal to the value
of the unvested portion of such employer contributions; PROVIDED, HOWEVER,
that if any payment pursuant to this Section 3(b) (2) may or would result
in such payment being deemed a transaction which is subject to Section
16(b) of the Exchange Act, the Company shall make such payment so as to
meet the conditions for an exemption from such Section 16(b) as set forth
in the rules (and interpretative and no-action letters relating thereto)
under Section 16 of the Exchange Act. The value of any such unvested
employer contributions shall be determined as of the Date of Termination;
provided that for purposes of valuing common stock of the Company that may
be a part of any such plan, if the common stock of the Company is traded on
a national securities exchange or The Nasdaq National Market on the Date of
Termination, the value of a share of common stock of the Company shall be
the closing price on the national securities exchange or NASDAQ on the
Date of Termination or, if such date is not a trading day, on the
immediately preceding trading day.
(3) For a period of three years commencing on the Date of
Termination, the Company shall continue to keep in full force and effect
(or otherwise provide) all policies of medical, accident, disability and
life insurance with respect to Executive and his dependents with the same
level of coverage, upon the same terms and otherwise to the same extent as
such policies shall have been in effect immediately prior to the Date of
Termination (or, if more favorable to Executive, immediately prior to the
Change in Control), and the Company and Executive shall share the costs of
the continuation of such insurance coverage in the same proportion as such
costs were shared immediately prior to the Date of Termination.
(c) If during the Termination Period the employment of Executive
shall terminate by reason of a Nonqualifying Termination, then the Company shall
pay to Executive within thirty days following the Date of Termination, a cash
amount equal to the sum of (1) Executive's full annual base salary from the
Company through the Date of Termination, to the extent not theretofore paid and
(2) any compensation previously deferred by
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Executive other than pursuant to a tax-qualified plan (together with any
interest and earnings thereon) and any accrued vacation pay, in each case to the
extent not theretofore paid.
4. EXCISE TAX LIMITATION. (a) Notwithstanding anything contained in this
Agreement or any other agreement or plan to the contrary, the payments and
benefits provided to, or for the benefit of, Executive under this Agreement or
under any other plan or agreement which became payable or are taken into account
as a result of the Change in Control (the "Payments") shall be reduced (but not
below zero) to the extent necessary so that no payment to be made, or benefit to
be provided, to Executive or for his benefit under this Agreement or any other
plan or agreement shall be subject to the imposition of an excise tax under
Section 4999 of the Code (such reduced amount is hereinafter referred to as the
"Limited Payment Amount"). Unless Executive shall have given prior written
notice specifying a different order to the Company, the Company shall reduce or
eliminate the Payments to Executive by first reducing or eliminating those
payments or benefits which are not payable in cash and then by reducing or
eliminating cash payments, in each case in reverse order beginning with payments
or benefits which are to be paid the farthest in time from the Determination (as
hereinafter defined). Any notice given by Executive pursuant to the preceding
sentence shall take precedence over the provisions of any other plan,
arrangement or agreement governing Executive's rights and entitlements to any
benefits or compensation.
(b) All determinations required to be made under this Section 4 shall
be made by the Company's public accounting firm (the "Accounting Firm"). The
Accounting Firm shall provide its calculations, together with detailed
supporting documentation, both to the Company and Executive within fifteen days
after the receipt of notice from the Company that there has been a Payment (or
at such earlier times as is requested by the Company) and, with respect to any
Limited Payment Amount, a reasonable opinion to Executive that he is not
required to report any excise tax on his federal income tax return with respect
to the Limited Payment Amount (collectively, the "Determination"). In the event
that the Accounting Firm is serving as an accountant or auditor for the
individual, entity or group effecting the Change in Control, Executive shall
appoint another nationally recognized public accounting firm to make the
determination required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees, costs and expenses (including,
but not limited to, the costs of retaining experts) of the Accounting Firm shall
be borne by the Company. The Determination by the Accounting Firm shall be
binding upon the
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Company and Executive (except as provided in paragraph (c) below).
(c) If it is established pursuant to a final determination of a court
or an Internal Revenue Service (the "IRS") proceeding which has been finally and
conclusively resolved, that Payments have been made to, or provided for the
benefit of, Executive by the Company, which are in excess of the limitations
provided in Section 4 (hereinafter referred to as an "Excess Payment"), such
Excess Payment shall be deemed for all purposes to be a loan to Executive made
on the date Executive received the Excess Payment and Executive shall repay the
Excess Payment to the Company on demand, together with interest on the Excess
Payment at the applicable federal rate (as defined in Section 1274(d) of the
Code) from the date of Executive's receipt
of such Excess Payment until the date of such repayment. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
Determination, it is possible that Payments which will not have been made by the
Company should have been made (an "Underpayment"), consistent with the
calculations required to be made under this Section 4. In the event that it is
determined (i) by the Accounting Firm, the Company (which shall include the
position taken by the Company, or together with its consolidated group, on its
federal income tax return) or the IRS or (ii) pursuant to a determination by a
court, that an Underpayment has occurred, the Company shall pay an amount equal
to such Underpayment to Executive within ten days of such determination together
with interest on such amount at the applicable federal rate from the date such
amount would have been paid to Executive until the date of payment.
5. WITHHOLDING TAXES. The Company may withhold from all payments due to
Executive (or his beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local or other law, the Company is required to
withhold therefrom.
6. REIMBURSEMENT OF EXPENSES. If any contest or dispute shall arise
under this Agreement involving termination of Executive's employment with the
Company or involving the failure or refusal of the Company to perform fully in
accordance with the terms hereof, the Company shall reimburse Executive, on a
current basis, for all legal fees and expenses, if any, incurred by Executive in
connection with such contest or dispute, subject to the conditions set forth in
the following sentences, together with interest in an amount equal to the prime
rate of Crestar Bank from time to time in effect, but in no event higher than
the maximum legal rate permissible under applicable law, such interest to accrue
from the date the Company receives Executive's
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statement for such fees and expenses through the date of payment thereof. The
Company shall have no obligation to reimburse Executive for legal fees and
expenses pursuant to this Section 6 in the event that a court of competent
jurisdiction ultimately determines that Executive's position asserted in any
contest or dispute litigated by Executive was without merit. Executive hereby
agrees that, in the event of such a determination, Executive will repay the
Company the amount of any legal fees or expenses advanced by the Company to
Executive prior to such determination.
7. TERMINATION OF AGREEMENT. (a) This Agreement shall be effective on
the date hereof and shall continue until terminated by the Company as provided
in paragraph (b) of this Section 7; PROVIDED, HOWEVER, that this Agreement shall
terminate in any event upon the first to occur of (i) Executive's 62nd birthday,
(ii) Executive's death or (iii) termination of Executive's Employment with the
Company prior to a Change in Control (except as otherwise provided hereunder).
(b) The Company shall have the right prior to a Change in Control, in
its sole discretion, pursuant to action by the Board, to approve the termination
of this Agreement, which termination shall not become effective until the date
fixed by the Board for such termination, which date shall be at least one
hundred twenty days after notice thereunder is given by the Company to Executive
in accordance with Section 11; PROVIDED, HOWEVER, that no such action shall be
taken by the Board during any period of time when the Board has knowledge that
any person has taken steps reasonably calculated to effect a Change in Control
until, in the opinion of the Board, such person has abandoned or terminated its
efforts to effect a Change in Control; and PROVIDED, FURTHER, that in no event
shall this Agreement be terminated without the consent of Executive following a
Change in Control.
8. SCOPE OF AGREEMENT. Nothing in this Agreement shall be deemed to
entitle Executive to continued employment with the Company or its subsidiaries,
and if Executive's employment with the Company shall terminate prior to a Change
in Control, Executive shall have no further rights under this Agreement;
PROVIDED, HOWEVER, that any termination of Executive's employment during the
two-year period following a Change in Control shall be subject to all of the
provisions of this Agreement.
9. CONFIDENTIAL INFORMATION. Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the
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Company or any of its affiliated companies, and their respective businesses,
which shall have been obtained by Executive during Executive's employment by the
Company or any of its affiliated companies and which shall not be or become
public knowledge (other than by acts by Executive or representatives of
Executive in violation of this Agreement). After termination of Executive's
employment with the Company, Executive shall not, without the prior written
consent of the Company, communicate or divulge any such information, knowledge
or data to anyone other than the Company and those designated by it. In no
event shall an asserted violation of the provisions of this Section 9 constitute
a basis for deferring or withholding any amounts otherwise payable to Executive
under this Agreement.
10. SUCCESSORS; BINDING AGREEMENT.
(a) This Agreement shall not be terminated by any merger or
consolidation of the Company whereby the Company is or is not the surviving or
resulting corporation or as a result of any transfer of all or substantially all
of the assets of the Company. In the event of any such merger, consolidation or
transfer of assets, the provisions of this Agreement shall be binding upon the
surviving or resulting corporation or the person or entity to which such assets
are transferred.
(b) The Company agrees that concurrently with any merger,
consolidation or transfer of assets referred to in paragraph (a) of this Section
10, it will cause any successor or transferee unconditionally to assume, by
written instrument delivered to Executive (or his beneficiary or estate), all of
the obligations of the Company hereunder. Failure of the Company to obtain such
assumption prior to the effectiveness of any such merger, consolidation or
transfer of assets shall be a breach of this Agreement and shall constitute Good
Reason hereunder and shall entitle Executive to compensation and other benefits
from the Company in the same amount and on the same terms as Executive would be
entitled hereunder if Executive's employment were terminated following a Change
in Control other than by reason of a Nonqualifying Termination. For purposes of
implementing the foregoing, the date on which any such merger, consolidation or
transfer becomes effective shall be deemed the date Good Reason occurs, and
shall be the Date of Termination if requested by Executive.
(c) This Agreement shall inure to the benefit of and be enforceable
by Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive shall die
while any amounts
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would be payable to Executive hereunder had Executive continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to such person or persons appointed in writing by
Executive to receive such amounts or, if no person is so appointed, to
Executive's estate.
11. NOTICE. (a) For purposes of this Agreement, all notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered or five days after deposit in the
United States mail, certified and return receipt requested, postage prepaid,
addressed as follows:
If to Executive:
________________
________________
________________
________________
If to the Company:
Brenco, Incorporated
Suite 201
One Park West Circle
Midlothian, VA 23113
Attn: Corporate Secretary
or to such other address as either party may have furnished to the other in
writing in accordance therewith, except that notices of change of address shall
be effective only upon receipt.
(b) A written notice of Executive's Date of Termination by the
Company or Executive, as the case may be, to the other, shall (i) indicate the
specific termination provision in this Agreement relied upon, (ii) to the extent
applicable, set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the provision
so indicated and (iii) specify the Termination Date (which date shall be not
less than fifteen days after the giving of such notice). 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.
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12. FULL SETTLEMENT; RESOLUTION OF DISPUTES. (a) The Company's
obligation to make any payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take other action by way of mitigation of
the amounts payable to Executive under any of the provisions of this Agreement
and, such amounts shall not be reduced whether or not Executive obtains other
employment.
(b) If there shall be any dispute between the Company and Executive
in the event of any termination of Executive's employment, then, unless and
until there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause, that the
determination by Executive of the existence of Good Reason was not made in good
faith, or that the Company is not otherwise obligated to pay any amount or
provide any benefit to Executive and his dependents or other beneficiaries, as
the case may be, under paragraphs (a) and (b) of Section 3, the Company shall
pay all amounts, and provide all benefits, to Executive and his dependents or
other beneficiaries, as the case may be, that the Company would be required to
pay or provide pursuant to paragraphs (a) and (b) of Section 3 as though such
termination were by the Company without Cause or by Executive with Good Reason;
PROVIDED, HOWEVER, that the Company shall not be required to pay any disputed
amounts pursuant to this paragraph except upon receipt of an undertaking by or
on behalf of Executive to repay all such amounts to which Executive is
ultimately adjudged by such court not to be entitled.
13. EMPLOYMENT WITH SUBSIDIARIES. Employment with the Company for
purposes of this Agreement shall include employment with any corporation or
other entity in which the Company 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.
14. GOVERNING LAW; VALIDITY. The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the Commonwealth of Virginia without regard
to the principle of conflicts of laws. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of
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this Agreement, which other provisions shall remain in full force and effect.
15. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
16. MISCELLANEOUS. No provision of this Agreement may be modified or
waived unless such modification or waiver is agreed to in writing and signed by
Executive and by a duly authorized officer of the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Failure by Executive
or the Company to insist upon strict compliance with any provision of this
Agreement or to assert any right Executive or the Company may have hereunder,
including without limitation, the right of Executive 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 of this Agreement. The rights of, and benefits
payable to, Executive, his estate or his beneficiaries pursuant to this
Agreement are in addition to any rights of, or benefits payable to, Executives,
his estate or his beneficiaries under any other employee benefit plan or
compensation program of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
a duly authorized officer of the Company and Executive has executed this
Agreement as of the day and year first above written.
BRENCO, INCORPORATED
BY:
------------------------------------------
TITLE:
---------------------------------------
EXECUTIVE
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