CFW COMMUNICATIONS COMPANY FORM 10-K
Exhibit 10.4
Form of Management Continuity Agreement
THIS AGREEMENT, dated _________ ___, 1999, is between __________________
("Executive") and CFW COMMUNICATIONS COMPANY, a VIRGINIA corporation (the
"Company"), and provides as follows.
RECITALS
The Company considers it essential to the best interests of its
shareholders to foster the continuing employment of its key management
personnel.
The Company recognizes that the possibility of a Change in Control
exists and that such possibility, and the uncertainty and questions that it may
raise among management may result in the departure or distraction of management
personnel to the detriment of the Company and its shareholders.
Executive will continue to serve the Company in reliance upon the
undertakings of the Company contained herein.
In consideration of the premises and the mutual covenants herein
contained, the Company and Executive agree as follows:
1. Term. The Term of this Agreement is the period beginning on January
1, 2000 and ending on December 31, 2001. The Term of this Agreement shall be
extended for an additional twelve months unless the Company, at least four
months before the expiration of the Term of this Agreement, provides written
notice to Executive that the Term of this Agreement will not be extended. The
preceding sentence shall first be effective to extend the Term of this Agreement
until December 31, 2002 unless written notice to the contrary is provided to
Executive by the Company before September 1, 2000.
2. Entitlement. Subject to Executive's compliance with paragraph 7,
Executive will be entitled to receive the benefits described in this Agreement
if there is a Change in Control during the Term of this Agreement and either of
the following applies:
(a) Executive's employment is terminated without Cause prior to
the fifth anniversary of the Control Change Date (even if such
termination occurs after the Term of this Agreement);
(b) Executive resigns with Good Reason prior to the fifth
anniversary of the Control Change Date (even if such resignation
occurs after the Term of this Agreement);
For purposes of this Agreement, the date of a termination of Executive's
employment as described in subparagraphs (a) or (b) above is Executive's
"Termination Date."
3. Severance Pay. If Executive's Termination Date occurs within
twenty-four months after the Control Change Date, Executive will receive a
severance benefit equal to two years' Compensation. If Executive's Termination
Date occurs more than twenty-four months after the Control Change Date, but
before the expiration of sixty months after the Control Change Date, Executive
will receive a severance benefit equal to one year's Compensation.
Notwithstanding the preceding sentences, in lieu of the severance pay described
CFW COMMUNICATIONS COMPANY FORM 10-K
in the preceding sentences of this paragraph 3, Executive shall receive a
severance benefit equal to the severance benefit available to employees of the
Company (or its successor and any of its affiliates) who are similarly situated
to the Executive on the Executive's Termination Date if the value of such
benefit is greater than the value of the benefit described in this paragraph.
Executive's severance benefit, less applicable withholding taxes, shall be paid
in equal monthly installments in accordance with the Company's regular payroll
policies and the period in which such amount is payable is referred to an
Executive's "Severance Period."
4. Benefit Reduction. The severance pay payable under paragraph 3 to
Executive during any month shall be reduced by the amount of any cash
compensation paid to Executive by another employer or business for services
rendered by Executive after Executive's Termination Date; provided, however that
this paragraph 4 shall not apply with respect to cash compensation paid to
Executive for services of a similar nature that Executive rendered to such other
employer or business prior to Executive's Termination Date.
5. Welfare Benefits. If Executive satisfies the requirements of
paragraph 2, Executive and Executive's dependents will be entitled to continued
participation in the "employee welfare benefit plans" (as defined in Section
3(1) of the Employee Retirement Income Security Act of 1974) in which Executive
participated on his Termination Date during the Severance Period. In lieu of
such continued coverage, Executive will be reimbursed, on a net after-tax basis,
for the cost of individual insurance coverage for Executive and Executive's
dependents under a policy or policies that provide benefits not less favorable
than the benefits provided under such employee welfare benefit plans. The
coverage provided under this paragraph shall be secondary to any coverage
provided to Executive and Executive's dependents by another employer of
Executive.
6. Other Benefits. Executive will receive all of the benefits that
Executive is entitled to receive under the terms of the benefit plans, programs
and arrangements in which Executive currently participates, including, by way of
example and not of limitation, any pension, "401(k)" plan, "401(k)" restoration
plan, supplemental pension plan or retiree welfare benefit plan, regardless of
whether the requirements of paragraph 2 are satisfied.
7. Confidentiality and Non-Competition. Executive agrees to comply with
his Confidentiality and Non-Competition Agreement with the Company and that if
Executive breaches such agreement, the Company shall, in addition to other
available remedies, be entitled to injunctive relief and shall not be required
to provide any benefit to Executive pursuant to this Agreement.
8. Excise Taxes. Executive agrees that the amounts payable and the
benefits to be provided under this Agreement shall be reduced if such amounts or
benefits or any amount or benefit provided under any plan, program, arrangement
or agreement with the Company is subject to excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended, or any successor provision. In that
event, such payments or benefits shall be reduced to the maximum amount that may
be provided to or on behalf of Executive without liability for such excise tax.
Any reduction required by the preceding sentence shall first come from cash
payable under this Agreement, next from cash payable under other plans,
programs, arrangements or agreements and finally from noncash benefits.
9. Definitions. For purposes of this Agreement, the following
definitions will apply:
a. Cause. the term "Cause" means that (i) Executive has been
convicted of a felony that involves the misappropriation of
Company assets or that materially injures the business reputation
of the Company or (ii) the Company's Board of Directors has
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CFW COMMUNICATIONS COMPANY FORM 10-K
determined in good faith that there has been a willful and
continuing failure on the part of Executive to perform a material
duty or responsibility and that such failure has not been
corrected within ninety days after written notice to Executive.
b. Change in Control. A "Change in Control" shall be deemed to
have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan
of the Company, or any company owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), is
or becomes the owner or "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly,
of Company securities representing more than 30% of the
combined voting power of the then outstanding securities;
(ii) during any period of two consecutive years (not
including any period prior to the execution of this
Agreement), individuals who at the beginning of such period
constitute the Company's board of directors (the "Board"),
and any new director (other than a director designated by a
person who has entered into an agreement with the Company to
effect a transaction described in clause (i), (iii) or (iv)
of this Section) whose election by the Board or nomination
for election by the Company's stockholders was approved by a
vote of a majority of the directors then still in office who
either (l) were directors at the beginning of such period or
(2) were so elected or nominated with such approval, cease
for any reason to constitute at least a majority of the
Board;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other Company and such
merger or consolidation is consummated, other than (l) a
merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the combined voting
power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no "person" (as hereinabove defined)
acquires more than 30% of the combined voting power of the
Company's then outstanding securities; or
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CFW COMMUNICATIONS COMPANY FORM 10-K
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially
all of the Company's assets and such liquidation or sale of
assets is consummated.
c. Compensation. "Compensation" means the sum of (i) Executive's
annual salary as in effect on Executive's Termination Date and
(ii) Executive's target annual incentive payments for the year
that includes Executive's Termination Date.
d. Control Change Date. "Control Change Date" means the date on
which a Change in Control occurs. If a Change in Control occurs
on account of a series of events, the "Control Change Date" shall
be the date on which the last of such events occurs.
e. Good Reason. The "Good Reason" means that (i) Executive's
total compensation (the sum of base salary and target annual
incentive payment, based on objectives comparable to those
applicable to similarly situated Company executives) is reduced,
(ii) Executive's job duties and responsibilities are diminished,
(iii) Executive is required to relocate to a facility more than
fifty miles from Waynesboro, Virginia, (iv) Executive does not
receive any previously deferred compensation when the payment of
such deferral is due, (v) Executive is not provided benefits
(e.g., health insurance) that are comparable in all material
respects to those provided to Executive on the Control Change
Date, (vi) Executive is directed by the Board of Directors or an
officer of the Company or an affiliate (or the Company's
successor or an affiliate thereof) to engage in conduct that is
unethical, illegal or contrary to the Company's (or its
successor's) good business practices or (vii) Executive is
directed by the Board of Directors or an officer of the Company
or an affiliate (or the Company's successor or an affiliate
thereof) to refrain from acting and the failure to act is
unethical, illegal or contrary to the Company's (or its
successor's) good business practices.
10. Governing Law. This Agreement will be governed by the laws of the
Commonwealth of Virginia except to the extent to the extent that they would
Trequire the application of the laws of another State.
IN WITNESS WHEREOF, Executive has signed this Agreement and the Company
has caused this Agreement to be signed by its duly authorized officer.
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[Executive's Name]
CFW COMMUNICATIONS COMPANY
By________________________________
Title:______________________________