EXHIBIT 99.04
SEVERANCE AGREEMENT
THIS AGREEMENT is entered into as of March 24, 2003 (the "Effective
Date"), by and between CHRISTINE M. MARX (the "Employee") and THE ST. JOE
Company, a Florida corporation (the "Company").
1. TERM OF AGREEMENT
This Agreement shall become effective on the Effective Date and, except
to the extent provided in Section 9.6, shall terminate five (5) years
after the Effective Date; provided, however, that if a Qualifying
Termination of Employment occurs prior to the expiration of such five
(5) year period, this Agreement shall remain in effect until the
Company has met all of its obligations hereunder.
2. DEFINITIONS
2.1. Cause means negligence, misconduct, a material breach of this
Agreement, conviction following final disposition of any
available appeal of a felony, or pleading guilty or no contest
to a felony.
2.2 Change in Control means the occurrence of any of the following
events after the date of this Agreement:
a) The consummation of a merger or consolidation of the
Company with or into another entity or any other
corporate reorganization if 50% or more of the
combined voting power, directly or indirectly, of the
continuing or surviving entity's securities
outstanding immediately after such merger,
consolidation or other reorganization is owned by
persons who were not stockholders of the Company
immediately prior to such merger, consolidation or
other reorganization;
b) The sale, transfer, exchange or other disposition of
all or substantially all of the Company's assets;
c) The liquidation or dissolution of the Company; or
d) Any transaction as a result of which any person is
the "beneficial owner" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of securities of
the Company representing 25% or more of the total
voting power represented by the Company's then
outstanding voting securities. For purposes of this
Paragraph, the term "person" shall have the same
meaning as when used in sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, but shall
exclude (1) a trustee or other fiduciary holding
securities under an employee benefit plan
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of the Company or a parent or subsidiary of the
Company, (2) a corporation owned directly or
indirectly by the stockholders of the Company in
substantially the same proportions as their ownership
of the common stock of the Company, (3) the Alfred I.
duPont Testamentary Trust, and (4) the Nemours
Foundation.
A transaction shall not constitute a Change in Control if its
sole purpose is to change the state of the Company's
incorporation or to create a holding company that will be
owned in substantially the same proportions by the persons who
held the Company's securities immediately before such
transaction. Furthermore, the Company's purchase of Company
stock from the Alfred I. duPont Testamentary Trust shall in no
event be deemed to result in a Change in Control.
2.3 Continuation Period means the period commencing on the date
of the Employee's Qualifying Termination of Employment and
ending on the earlier of:
a) The date thirty-six (36) months after the Qualifying
Termination of Employment; or
b) The date of the Employee's death.
2.4 Disability means the Employee's disability which constitutes
a long-term disability under the Company's long-term
disability plan then in effect.
2.5 Good Reason means
a) The Employee has experienced a demotion in title with
the Company from that in effect immediately prior to
the Change in Control which demotion results in a
substantial and material reduction in duties or
responsibilities with the Company, except that
placement in any meaningful transition role for a
period of up to one (1) year following a Change in
Control shall not constitute Good Reason;
b) The Employee has incurred a 10% or more reduction in
his total compensation as an employee of the Company
(consisting of annual base salary and target bonus
percentage);
c) The Employee has been notified that his principal
place of work as an employee of the Company will be
relocated, without his permission, by more than fifty
(50) miles; or
d) A successor to the Company fails to comply with
Section 10.1.
A termination of employment by the Employee for one of the
reasons set forth above shall not be deemed a termination for
Good Reason unless, within the six
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(6) month period immediately following the occurrence of such
Good Reason event, the Employee has given written notice to
the Company specifying the event or events relied upon for
such termination and the Company has not remedied such event
or events within sixty (60) days of the receipt of such
notice.
The Company and the Employee, upon mutual written agreement,
may waive any of the foregoing provisions with respect to an
event that otherwise would constitute Good Reason.
2.6. Qualifying Termination of Employment means a termination of
the Employee's employment under any of the following
circumstances:
a) The Employee resigns for Good Reason (as that term
is defined in Section 2.5); or
b) The Company terminates the Employee's employment for
any reason other than Cause (as that term is defined
in Section 2.1), death or Disability (as that term
is defined in Section 2.4).
The determination of whether the Employee's employment has
terminated shall be made without regard to whether the
Employee continues to provide services to the Company as a
member of its Board of Directors or otherwise in the capacity
of an independent contractor. A transfer of the Employee's
employment from the Company to a successor of the Company
shall not be considered a termination of employment if such
successor complies with the requirements of Section 10.1.
3. AMOUNT OF SEVERANCE PAY
Within thirty (30) business days after a Qualifying Termination of
Employment, the Company shall pay the Employee as follows:
3.1 If the Qualifying Termination of Employment occurs within the
first twenty-four (24) months after the occurrence of a
Change in Control, a lump sum equal to the product of two (2)
times the sum of:
a) The Employee's base salary at the greater of (1) the
annual rate in effect on the date when the
Qualifying Termination of Employment is effective,
or (2) the annual rate in effect on the date of the
Change in Control; plus
b) The Employee's annual target bonus amount for the
most recent year completed prior to the date when
the Qualifying Termination of Employment is
effective.
3.2 If the Qualifying Termination of Employment does not meet the
requirements of Section 3.1 above, a lump sum equal to the
product of one (1) times the sum of:
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a) The Employee's base salary at the annual rate in
effect on the date when the Qualifying Termination
of Employment is effective; plus
b) The Employee's annual target bonus amount for the
most recent year completed prior to the date when
the Qualifying Termination of Employment is
effective.
For purposes of determining the Employee's annual base salary
and annual target bonus under Sections 3.1 and 3.2 above, any
reduction in annual base salary or annual target bonus that
would constitute Good Reason under this Agreement shall be
deemed not to have occurred.
4. GROUP INSURANCE AND OUTPLACEMENT SERVICES
4.1 Group Insurance. In the event of a Qualifying Termination of
Employment, during the Continuation Period the Employee (and,
where applicable, the Employee's dependents) shall be entitled
to medical and dental benefits under the Company's welfare
benefit plans (as that term is defined in Subsection 3(1) of
the Employee Retirement Income Security Act of 1974, as
amended) other than the Company's retiree medical plan, as if
the Employee were still employed during such period. Such
medical and dental benefits shall be provided at the same
level and at the same after-tax cost to the Employee as is
generally available to similar Company executives. The
Employee's salary, for purposes of such plans, shall be
determined using the method set forth in Section 3.1 or 3.2,
whichever is applicable. To the extent the Company is unable
or does not wish to cover the Employee under its plans during
the Continuation Period, the Company shall provide the
Employee with substantially equivalent benefits on an
individual basis at no additional after-tax cost to the
Employee. The foregoing notwithstanding, in the event the
Employee becomes eligible for comparable insurance coverage in
connection with new employment, the coverage provided by the
Company under this Section shall terminate immediately. Any
medical or dental coverage provided pursuant to this Section
shall be applied, to the extent permitted by law, to reduce
the Company's group health continuation coverage
responsibilities under the Consolidated Omnibus Budget
Reconciliation Act of 1985.
4.2 Outplacement Services. In the event of a Qualifying
Termination of Employment, the Employee shall be entitled to
senior executive level outplacement services at the Company's
expense. Such services shall be provided by a firm selected by
the Employee from a list compiled by the Company.
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5. EXCISE TAXES
5.1 No Gross-Up Payment. In the event it shall be determined by an
Accounting Firm (within the meaning of Section 5.2 below) that
any payment or distribution by the Company to or for the
benefit of the Employee, whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (or any successor thereto) or
comparable state or local tax or any interest or penalties
with respect to such excise tax or comparable state or local
tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the amount of the Payment due to the
Employee shall be reduced (but not below zero) to the extent
necessary that no portion thereof shall be subject to the
Excise Tax and no gross-up payment shall be made. If the
Accounting Firm determines that the total Payments are to be
reduced under the preceding sentence, then the Company shall
promptly give the Employee notice to that effect and a copy of
the detailed calculation thereof. The Employee may then elect,
in the Employee's sole discretion, which and how much of the
total Payments are to be eliminated or reduced (as long as
after such election no Excise Tax will be payable) and shall
advise the Company in writing of the Employee's election
within ten (10) days of receipt of notice. If no such election
is made by the Employee within such ten (10) day period, then
the Company may elect which and how much of the total Payments
are to be eliminated or reduced (as long as after such
election, no Excise Tax will be payable) and shall notify the
Employee promptly of such election. No additional payments by
the Company or return of payments by the Employee shall be
required or made if a late determination based on case law, an
IRS holding, or otherwise, would result in a recalculation of
the Excise Tax implications.
5.2 Determination by Accountant. All determinations and
calculations required to be made under this Section shall be
made by an independent accounting firm selected by the Company
from among the largest six accounting firms in the United
States (the "Accounting Firm"), which shall provide its
determination (the "Determination"), together with detailed
supporting calculations both to the Company and the Employee
within fourteen (14) days of the Qualifying Termination of
Employment. Any Determination by the Accounting Firm shall be
binding upon the Company and the Employee, absent manifest
error.
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6. TERMINATION UPON DEATH
In the event of the Employee's death prior to termination of
employment, this Agreement shall terminate and the Company shall only
be obligated to (a) pay to the Employee's estate or legal
representative the annual base salary to the extent earned by the
Employee prior to the Employee's death, and (b) pay any other benefits
to the extent required by the Company's retirement and benefits plans.
The Company may, however, pay the estate or legal representative a
bonus that the Employee has earned prior to his death. After making
such payment(s) and providing such benefits, the Company shall have no
further obligations under this Agreement. If the Employee dies after
termination of employment but before receiving all payments to which he
has become entitled hereunder, payment shall be made to the estate of
Employee.
7. DISABILITY
In the event of the Employee's Disability (as defined in Section 2.4),
the Company shall have the right, at its option, to terminate the
Employee's employment. Unless and until so terminated, during any
period of Disability during which the Employee is unable to perform the
services required of him, the Employee's salary shall be payable to the
extent of, and subject to, the Company's policies and practices then in
effect with regard to sick leave and disability benefits. In the event
of the Employee's termination due to the Employee's Disability, the
Company shall only be obligated to (a) pay to the Employee or his
personal representative the Employee's annual base salary to the extent
earned by the Employee prior to the termination of employment, (b) pay
any disability benefits as provided under the Company's long-term
disability plan then in effect, and (c) pay any other benefits to the
extent required by the Company's retirement and benefits plans. After
making such payment(s) and providing such benefits, the Company shall
have no further obligations under this Agreement; provided, however,
that nothing contained in this Section shall restrict the Employee's
eligibility to receive disability and other related benefits offered
pursuant to the Company's plans, policies, or programs.
8. TERMINATION FOR CAUSE OR WITHOUT GOOD REASON.
In the event that the Company terminates the Employee's employment for
Cause (as defined in Section 2.1) or the Employee terminates his
employment without Good Reason (as defined in Section 2.5), the Company
shall only be obligated to pay to the Employee the Employee's annual
base salary to the extent earned by the Employee prior to the
termination of employment. After making such payment, the Company shall
have no further obligations under this Agreement.
9 RESTRICTIVE COVENANTS
9.1 Confidential Information. During the period of his employment,
the Employee shall hold in a fiduciary capacity for the
benefit of the Company and its affiliates all trade secrets,
proprietary or confidential information, knowledge or data
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relating to the Company, its affiliates, and/or their
respective businesses, which shall have been obtained by the
Employee. Trade secret information includes, but is not
limited to, customer lists, pricing information, sales
reports, financial and marketing data, reserves estimation
processes or procedures, techniques, or processes that: (a)
derive independent economic value, actual or potential, from
not being generally known to the public or to persons who can
obtain economic value from their disclosure or use, and (b)
are the subject of reasonable efforts under the circumstances
to maintain their secrecy. After termination of the Employee's
employment with the Company, Employee shall not, without the
prior written consent of the Company, use, communicate or
divulge any such information, knowledge or data to anyone at
any time.
9.2 Solicitation of Customers by the Employee. Unless waived in
writing by the Company, the Employee agrees that he will not,
directly or indirectly, during the course of employment and
for two (2) years after termination of his employment, solicit
the trade or patronage of any of the customers of the Company
or its affiliates, regardless of the location of such
customers with respect to any services, products, or other
matters in which the Company or its affiliates are active.
9.3 Solicitation of Company Employees. Unless waived in writing by
the Company, the Employee further agrees that he will not,
directly or indirectly, during the course of employment and
for two (2) years after termination of his employment, solicit
or attempt to entice away from the Company or its affiliates
any director, agent or employee of the Company or its
affiliates.
9.4 Return of Property. Upon termination of the employment
period, the Employee will surrender to the Company all
property belonging to the Company or its affiliates.
9.5 Compliance with Business Ethics and Conflict of Interest
Policy. During the Employee's employment with the Company, the
Employee shall comply in all respects with the Company's
Business Ethics and Conflict of Interest Policy attached
hereto as exhibit "A," and as may be amended from time to
time.
9.6 Survival; Injunctive Relief. The Employee agrees that Sections
9.1 through 9.5 shall survive the termination of this
Agreement and the period of his employment hereunder. The
Employee acknowledges that the Company and its affiliates have
no adequate remedy at law and would be irreparably harmed if
Employee breaches or threatens to breach any of the provisions
of this Section and, therefore, agrees that the Company and
its affiliates shall be entitled to injunctive relief to
prevent any such breach or threatened breach thereof and to
specific performance of the terms of this Section (in addition
to any other legal or equitable remedy the Company or the
affiliate may have). The Employee further agrees that the
Employee shall not, in any equity proceeding relating to the
enforcement of this Section, raise the defense that the
Company or the affiliate has an adequate
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remedy at law. Nothing in this Agreement shall be construed
as prohibiting the Company or any affiliate from pursuing any
other remedies at law or in equity that it may have under and
in respect of this Agreement or any other agreement.
10. SUCCESSORS
10.1 Company's Successors. The Company shall require any successor
(whether direct or indirect by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or
substantially all of the Company's business or assets, by an
agreement in substance and form satisfactory to the Employee,
to assume this Agreement and to agree expressly to perform
this Agreement in the same manner and to the same extent as
the Company would be required to perform it in the absence of
a succession. For all purposes under this Agreement, the term
"Company" shall include any successor to the business or
assets of the Company which executes and delivers the
assumption agreement described in this Section 10.1 or which
becomes bound by this Agreement by operation of law.
10.2 Employee's Successors. This Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal
representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.
11. LIQUIDATED DAMAGES
The payments and benefits provided in this Agreement are intended to be
liquidated damages for a termination of the Employee's employment by
the Company or for the actions of the Company and its affiliates
leading to a termination of the Employee's employment by the Employee
for Good Reason, and shall be the sole and exclusive remedy therefor.
12. RELEASE
Notwithstanding any provision herein to the contrary, the Company may
require that, prior to payment of any amount or provision of any
benefit under this Agreement, the Employee shall have executed a
complete release of the Company and its successors, affiliates and
related parties in such form as is reasonably acceptable to both
parties and any waiting periods contained in such release shall have
expired.
13. MISCELLANEOUS PROVISIONS
13.1 Notice. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or when mailed by
U.S. registered or certified mail, return receipt requested
and postage prepaid. In the case of the Employee, mailed
notices shall be addressed to the Employee at the home address
that the Employee most
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recently communicated to the Company in writing. In the case
of the Company, mailed notices shall be addressed to its
corporate headquarters, and all notices shall be directed to
the attention of its Secretary.
13.2 Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or
discharge is agreed to in writing and signed by the Employee
and by an authorized officer of the Company (other than the
Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement
by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision
at another time.
13.3 Other Agreements; Amendment. This Agreement does not supersede
the Employee's employment agreement (if any) or any stock
option, restricted stock or other equity-based incentive
compensation agreement between the Employee and the Company,
except to the extent that the benefits provided by this
Agreement are greater than the severance pay and similar
benefits provided by such agreements. In no event shall the
Employee be entitled to severance pay both under this
Agreement and under any employment agreement following a
termination of employment. This Agreement may be amended only
in writing, by an instrument executed by both parties.
13.4 No Setoff; Withholding Taxes. There shall be no right of
setoff or counterclaim, with respect to any claim, debt or
obligation, against payments to the Employee under this
Agreement. All payments made or benefits provided under this
Agreement shall be subject to reduction to reflect taxes
required to be withheld by law. The payments received under
this Agreement shall be in lieu of, and not in addition to,
any payments or benefits received in connection with the
Company's general severance policy then in effect. Should any
payment be made or benefits be provided under any such
severance policy, the payments and benefits provided hereunder
shall be correspondingly reduced by such payments and/or
benefits.
13.5 Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws
of the State of Florida, except its choice-of-law provisions.
13.6 Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the
validity or enforceability of any other provision hereof,
which shall remain in full force and effect.
13.7 Arbitration of Disputes and Related Claims. Any good faith
dispute or controversy arising under or in connection with
this Agreement shall be settled by binding arbitration, which
shall be the sole and exclusive method of resolving any
questions, claims or other matters arising under this
Agreement or, to the extent permitted by applicable law, any
claim that the Company has in any way violated
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the non-discrimination and/or other provisions of Title VII
of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act of 1967, as amended; the
Americans with Disabilities Act; the Family and Medical Leave
Act, as amended; the Employee Retirement Income Security Act
of 1974, as amended; and, in general, any federal law or
state laws. Such proceeding shall be conducted in
Jacksonville, Florida, by final and binding arbitration
before a panel of one or more arbitrators in accordance with
the laws and rules of the American Arbitration Association in
effect at the time the arbitration is commenced, and as
subsequently amended while the arbitration is pending, and
under the administration of the American Arbitration
Association. The Federal and state courts located in the
United States of America are hereby given jurisdiction to
render judgment upon, and to enforce, each arbitration award,
and the parties hereby expressly consent and submit to the
jurisdiction of such courts. Notwithstanding the foregoing,
in the event that a violation of this Agreement would cause
irreparable injury, the Company and the Employee agree that
in addition to the other rights and remedies provided in this
Agreement (and without waiving their rights to have all other
matters arbitrated as provided above) the other party may
immediately take judicial action to obtain injunctive relief.
13.8 Legal Fees. In the event of any controversy or claim arising
out of or relating to this Agreement, or the breach thereof,
the Company shall pay (on an as-incurred basis) the reasonable
fees and costs of the Employee's attorneys attributable to
such controversy or claim (the "Legal Fees"); provided that,
the Employee shall reimburse the Company for all such Legal
Fees if the Employee does not prevail on at least one material
issue arising in such controversy or claim.
13.9 Not Compensation for Other Plans. The amounts paid and
benefits provided hereunder are not to be considered
compensation, earnings or wages for purposes of any employee
benefit plan of the Company or its successors, affiliates, or
related parties, including but not limited to the SERP, DCAP,
and qualified retirement plans.
13.10 No Assignment. Except to the extent provided in Section 10,
the rights of any person to payments or benefits under this
Agreement shall not be made subject to option or assignment,
either by voluntary or involuntary assignment or by operation
of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor's process, and any
action in violation of this Section shall be void.
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PLEASE READ CAREFULLY. BY SIGNING BELOW, EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE
HAS READ, AND HAS HAD THE OPPORTUNITY TO CONSULT WITH AN ATTORNEY BEFORE
SIGNING, THIS AGREEMENT.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.
EMPLOYEE THE ST. JOE COMPANY
By /s/ Christine M. Marx By /s/ Rachelle Gottlieb
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Title General Counsel Title Vice President
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Date March 24, 2003 Date March 24, 2003
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