EXHIBIT 10.2
EMPLOYMENT AGREEMENT
AGREEMENT by and between WCB Holding Corp., a Delaware
corporation (the "Company"), and J. Wayne Leonard (the "Executive"), dated
as of _________, 200__.
WHEREAS, the Executive is currently serving as Chief Executive
Officer of Entergy Corporation, a Delaware corporation ("E Corp"); and
WHEREAS, the Company, E Corp, FPL Group, Inc., a Florida
corporation ("F Corp"), Ring Acquisition Corp., a Delaware corporation and
a wholly-owned subsidiary of the Company ("E Acquisition Corp") and Ranger
Acquisition Corp., a Florida corporation and a wholly-owned subsidiary of
the Company ("F Acquisition Corp") have entered into an Agreement and Plan
of Merger, dated as of July 30, 2000 (the "Merger Agreement"), pursuant to
which E Acquisition Corp and F Acquisition Corp will merge with and into E
Corp and F Corp, respectively; and
WHEREAS, the Company wishes to provide for the orderly succes
sion of the management of the Company, E Corp, F Corp and their affiliates
following the Effective Time (as defined in the Merger Agreement); and
WHEREAS, the Executive is willing to commit himself to be
employed by the Company on the terms and conditions herein set forth; and
WHEREAS, the parties desire to enter into this Agreement setting
forth the terms and conditions for the employment relationship of the
Executive with the Company during the Employment Period (as hereinafter
defined),
NOW, THEREFORE, IN CONSIDERATION of the mutual pre mises,
covenants and agreements set forth below, it is hereby agreed as follows:
1. General.
(a) Employment. The Company agrees to employ the Executive, and
the Executive agrees to be employed by the Company, in accordance with the
terms and provisions of this Agreement during the Employment Period.
(b) Term. The term of the Executive's employment under this
Agreement (the "Employment Period") shall commence at the Effective Time
and shall continue until the third anniversary thereof; provided, however,
that on the first anniversary of the Effective Time and each subsequent
anniversary thereof (each of such first and subsequent anniversaries, an
"Extension Date"), the Employment Period shall automatically be extended
for one additional year unless, at least three months prior to the
applicable Extension Date, the Company or the Executive shall have given
written notice not to extend the Employment Period. Notwithstanding
anything herein to the contrary, if the Merger Agreement is
terminated, then as of the time of such termination this Agreement shall be
deemed canceled and of no force or effect.
2. Duties and Powers of the Executive.
(a) Position, Duties and Reporting.
(i) During the period beginning on the first day of the
Employment Period and ending on the earlier of (A) the first
anniversary thereof or (B) the date on which the individual serving as
the Company's Executive Chairman as of the Effective Time (the
"Executive Chairman") ceases to so serve (the "Initial Period"), the
Executive shall serve as President and Chief Executive Officer of the
Company and shall report directly to the Executive Chairman. During
the Initial Period, the Executive shall have all of the powers, duties
and responsibilities typically associated with the positions of
President and Chief Executive Officer, including but not limited to
direct charge of and general supervision over the business affairs of
the Company, interaction with and presentation of matters to the Board
of Directors of the Company (the "Board") and such other duties,
rights and responsibilities which may be assigned to him by the Board.
Notwithstand ing the foregoing, during the Initial Period, the
Executive shall have input into, but shall not have primary
responsibility with respect to, transition and integration matters
relating to the transactions contemplated by the Merger Agreement, the
primary responsibility for which matters shall be the respon sibility
of the Executive Chairman. During the Initial Period, all Company
officers shall report to the Executive.
(ii) During the remaining portion of the Employment Period
(the "Secondary Period"), the Executive shall serve as President and
Chief Executive Officer of the Company and shall report directly to
the Board. During the Secondary Period, the Executive shall have all
of the powers, duties and responsibilities typically associated with
the positions of President and Chief Executive Officer, including but
not limited to direct charge of and general supervision over the
business affairs of the Company, interaction with and presentation of
matters to the Board and such other duties, rights and
responsibilities which may be assigned to him by the Board. During the
Secondary Period, all Company officers shall report to the Executive.
(b) Board Membership. The Executive shall be a member of the
Board commencing as of the first day of the Employment Period, and the
Board shall propose the Executive for re-election to the Board throughout
the Employment Period. At the end of the Employment Period, the Executive
may continue as a member of the Board and may be considered for nomination
for reelection to the Board thereafter on the same basis as the other
non-employee directors.
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(c) Other Positions. During the Employment Period, the Execu tive
agrees to serve, if elected, at no additional compensation in the position
of officer or director of any subsidiary or affiliate of the Company;
provided, however, that such position shall be of no less status relative
to such subsidiary or affiliate as the position that the Executive holds
pursuant to subsection (a) is relative to the Company.
(d) Attention. During the Employment Period, and excluding any
periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote full attention and time during normal business
hours to the business and affairs of the Company and to use the his
reasonable best efforts to perform such responsibilities in a professional
manner. It shall not be a violation of this Agree ment for the Executive to
(i) serve on corporate, civic or charitable boards or committees, (ii)
deliver lectures, fulfill speaking engagements or teach at educational
institutions and (iii) manage personal investments, so long as such
activities do not significantly interfere with the performance of the
Executive's responsibilities as an officer of the Company in accordance
with this Agreement.
(e) Location. During the Employment Period, the Company's
headquarters shall be located in Juno Beach, Florida, and the Executive
shall be employed at such headquarters except for reasonably required
travel on the Com pany's business. The Executive shall establish a
principal residence in the general area of Juno Beach, Florida. The Company
shall assure that the Executive suffers no financial loss on the sale of
the principal residence presently maintained by the Executive in the New
Orleans metropolitan area (including a gross-up payment for the additional
income taxes payable by the Executive as a result of such payment for any
such loss). The Company shall reimburse the Executive for all of his moving
expenses incurred in relocating to the Juno Beach, Florida area. During the
period from the first day of the Employment Period and the date of such
relocation, the Company shall provide the Executive with an apartment in
the Juno Beach, Florida area and reimburse him for reasonable expenses
while in the Juno Beach, Florida area and travel between the Juno Beach,
Florida area and his principal residence, provided in each case that the
Executive complies with the policies, practices and procedures of the
Company for relocation benefits for senior executives of the Company, and
for submission of expense reports, receipts, or similar documentation of
such expenses.
(f) By-laws of the Company. At all times from the Effective Time
through the respective periods set forth in Sections 2.11 and 3.03 of the
Company's By-laws, as in effect as of the date hereof (the "By-laws"), such
Sections of the By-laws shall remain in effect unless amended by the
affirmative vote of at least two-thirds of the Board (a "Qualified
Majority").
3. Compensation.
(a) Base Salary. The annual rate of base salary payable to the
Executive from and after the Effective Time (the "Annual Base Salary") will
be
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determined by the compensation committee of the Board (the
"Compensation Committee") at or before the Effective Time (subject to
annual reviews and in creases thereafter) based on competitive practices
for the chief executive officers of companies of comparable size and
standing, but in no event shall such base salary during the Initial Period
be less than the base salary payable to the Executive Chairman. The Annual
Base Salary shall be payable in accordance with the Company's regular
payroll practice for its senior executives, as in effect from time to time.
During the Employment Period, the Annual Base Salary shall be reviewed by
the Compensation Committee for possible increase at least annually. The
Annual Base Salary shall not be reduced after any such increase, and the
term "Annual Base Salary" shall thereafter refer to the Annual Base Salary
as so increased.
(b) Annual Incentive Compensation. The Executive shall be
eligible to earn such annual incentive compensation as is determined by the
Com pensation Committee at or before the Effective Time (subject to annual
reviews and increases thereafter) based on competitive practices for the
chief executive officers of companies of comparable size and standing. The
annual incentive compensation paid to the Executive with respect to the
Initial Period shall not be less than the annual incentive compensation
paid to the Executive Chairman with respect to the Initial Period and the
Executive's annual incentive compensation opportunity during the Secondary
Period shall be on terms and conditions no less favorable than those made
available to any other senior officer of the Company.
(c) Long-Term Incentives. The Executive shall be eligible to earn
such long-term incentive compensation as is determined by the Compensation
Committee at or before the Effective Time (subject to annual reviews and
increases thereafter) based on competitive practices for the chief
executive officers of compa nies of comparable size and standing. Such
opportunities may, in the discretion of the Compensation Committee, include
stock options, stock appreciation rights, restricted stock or stock units,
performance stock or units and/or other types of long- term incentive
awards. The long-term incentive compensation awarded to the Executive with
respect to performance periods commencing on or after the Effective Time
during the Initial Period shall be on terms and conditions no less
favorable than the long-term incentive compensation awarded to the
Executive Chairman with respect to the Initial Period and the Executive's
long-term incentive compensation opportunity with respect to performance
periods commencing on or after the Effective Time during the Secondary
Period shall be on terms and conditions no less favorable than those made
available to any other senior officer of the Company.
(d) Employee Benefit Programs. During the Employment Period, (i)
the Executive shall be eligible to participate in all savings and
retirement plans, practices, policies and programs on at least as favorable
a basis as any other senior executive of the Company and, during the
Initial Period, at least as favorable a basis as the Executive Chairman and
(ii) the Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs provided by the
Company, other than severance plans, practices, policies and programs but
includ-
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ing, without limitation, medical, prescription, dental, disability,
salary continuance, employee life insurance, group life insurance,
accidental death and travel accident insurance plans and programs, and,
upon retirement, all applicable retirement benefit plans to the same extent
and subject to the same terms, conditions, cost-sharing requirements and
the like, as any other senior executive of the Company and, during the
Initial Period, as the Executive Chairman, as such plans may be amended
from time to time.
(e) Supplemental Retirement Benefits. During the Employment
Period, the Executive shall participate in one or more supplemental
executive retirement plans, agreements and arrangements ("SERPs") such that
the aggregate value of the retirement benefits that he and his
beneficiaries will receive at the end of the Employment Period under all
pension benefit plans, agreements and arrange ments of the Company and its
affiliates (whether qualified or not) will be not less than the benefits he
would have received had he continued, through the end of the Employment
Period, to participate in all pension benefit plans, agreements and
arrangements of E Corp and its affiliates in which he participates on the
date hereof, including but not limited to the letter agreement between the
Executive and Entergy Services Inc. dated as of March 13, 1998.
(f) Expenses. The Executive is authorized to incur reasonable
expenses in carrying out his duties and responsibilities under this
Agreement and the Company shall promptly reimburse him for all such
expenses, subject to documenta tion in accordance with reasonable policies
of the Company in effect from time to time.
(g) Fringe Benefits. During the Employment Period, the Execu tive
shall be furnished with such fringe benefits and perquisites as are
customary for the President and Chief Executive Officer of a corporation of
the size and nature of the Company and shall participate in all fringe
benefits and perquisites available to any other senior executive of the
Company and, during the Initial Period, to the Executive Chairman.
(h) Vacation. During the Employment Period. the Executive shall
be entitled to paid vacation on at least as favorable a basis as any other
senior executive of the Company and, during the Initial Period, as the
Executive Chairman.
(i) Compensation Review. Prior to the end of the Initial Period,
the Compensation Committee shall undertake, with the aid of an independent,
nationally-recognized compensation consultant, a comprehensive review of
all components of the Executive's compensation and shall adjust the
Executive's compensation, effective as of the first day of the Secondary
Period, in a manner consistent with the results of such review; provided,
however, that in no event shall any component of the Executive's
compensation be reduced or otherwise adversely affected without the
Executive's consent.
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4. Termination of Employment.
(a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment
Period. If the Company determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive
written notice in accordance with Section 4(b) of this Agreement of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the
30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability" means that
(i) the Executive has been unable, for the period, if any, specified in the
Company's disability plan for senior executives, but not less than a period
of 180 consecutive days, to perform the Executive's duties under this
Agreement and (ii) a physician selected by the Com pany or its insurers,
and reasonably acceptable to the Executive or the Executive's legal
representative, has determined that the Executive is disabled within the
meaning of the applicable disability plan for senior executives.
(b) By the Company.
(i) The Company may terminate the Executive's employment during
the Employment Period for Cause or without Cause. For purposes of this
Agreement, "Cause" shall mean (A) willful and continued failure by the
Executive to substantially perform his duties under this Agreement or
(B) the conviction of, or the entering of plea of nolo contendere by,
the Executive of a felony. For purposes of the foregoing, (1) no act
or failure to act on the part of the Executive shall be considered
"willful" unless it is done, or omitted to be done, by the Executive
in bad faith or without reasonable belief that the Executive's action
or omission was in the best interests of the Company and (2) any act
or failure to act that is based upon authority given pursuant to a
resolution duly adopted by the Board, or the advice of counsel for the
Company, shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the
Com pany. The Company expressly acknowledges that Cause will not exist
merely because of a failure of the Company or its affiliates to meet
budgeted results.
(ii) A termination of the Executive's employment for Cause shall
be effected only in accordance with the following procedures. The
Company shall give the Executive written notice ("Notice of
Termination for Cause") of its intention to terminate the Executive's
employment for Cause, setting forth in reasonable detail the specific
conduct of the Executive that it consid ers to constitute Cause and
the specific provision(s) of this Agreement on which it relies. The
Executive shall have 30 days after receiving the Notice of Termination
for Cause in which to cure such act or failure. If the Execu tive
fails to cure such act or failure to the reasonable satisfaction of
the
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Board, the Company shall give the Executive a second written notice
stating the date, time and place of a special meeting of the Board
called and held specifically for the purpose of considering the
Executive's termination for Cause, which special meeting shall take
place not less than ten and not more than twenty business days after
the Executive receives notice thereof. The Executive shall be given an
opportunity, together with counsel, to be heard at the special meeting
of the Board. The Executive's termination for Cause shall be effective
when and if a resolution is duly adopted at such special meeting by
the affirmative vote of at least 2/3 of the Board stating that in the
good faith opinion of the Board, the Executive is guilty of the
conduct described in the Notice of Termination for Cause and that such
conduct constitutes Cause under this Agreement.
(iii) Any termination of the Executive's employment without Cause
shall be approved, for so long as the By-laws contain the provision
described in Section 2(f) above, by at least a Qualified Majority of
the Board and, at all other times, by at least a majority of the full
membership of the Board. Termination without Cause shall be
communicated to the Executive by written notice specifying the
effective date of termination, which date shall be not less than 30
days after the delivery of such notice, and that such termination is
without Cause for purposes of this Agreement.
(c) Good Reason.
(i) The Executive may terminate his employment for Good Reason or
without Good Reason. For purpose of this Agreement, "Good Reason"
shall mean:
(A) any adverse change in the Executive's titles, authority,
duties, responsibilities and reporting lines as specified in
Section 2(a) of this Agreement or the assignment to the Executive
of any duties or responsibilities inconsistent in any respect
with those customarily associated with the position to be held by
the Executive pursuant to this Agreement;
(B) the failure by the Board to nominate the Executive for
reelection to the Board at any annual meeting of the Company's
shareholders during the Employment Period at which the
Executive's term as a director is scheduled to expire;
(C) except as otherwise expressly provided herein, the
appointment at any time during the Employment Period of any
person other than the Executive to (x) the position of Chief
Executive Offi cer, or (y) any other position or title conferring
similar status or authority;
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(D) the failure by the Company to maintain the provisions of
the By-laws specified in Section 2(f) for the respective periods
specified in the By-laws as of the date hereof;
(E) any failure by the Company to comply with any provision
of Section 3 of this Agreement;
(F) any requirement by the Company that the Executive's
services be rendered primarily at a location or locations other
than that provided for in Section 2(e);
(G) any purported termination of the Executive's employ ment
by the Company for a reason or in a manner not expressly
permitted by this Agreement;
(H) any failure by the Company to comply with Section 10(c)
of this Agreement; or
(I) any other material breach of this Agreement by the
Company that either is not taken in good faith or, even if taken
in good faith, is not remedied by the Company promptly after
receipt of notice thereof from the Executive.
Following a Change in Control, the Executive's determination that an
act or failure to act constitutes Good Reason shall be presumed to be
valid unless such determination is deemed to be unreasonable by an
arbitrator.
(ii) A termination of employment by the Executive for Good Reason
shall be effectuated by giving the Company written notice ("Notice of
Termination for Good Reason") of the termination, setting forth in
reason able detail the specific acts or omissions of the Company that
constitute Good Reason and the specific provision(s) of this Agreement
on which the Executive relies. The Company shall have 30 days from the
receipt of such Notice of Termination for Good Reason to cure the
conduct cited therein. A termination of employment by the Executive
for Good Reason shall be effective on the final day of such 30-day
cure period unless prior to such time the Company has cured the
specific conduct asserted by the Executive to constitute Good Reason
to the reasonable satisfaction of the Executive (unless the notice
sets forth a later date (which date shall in no event be later than 30
days after the notice is given) as of which such termination shall be
effective).
(iii) A termination of the Executive's employment by the Execu
tive without Good Reason shall be effected by giving the Company
written notice specifying the effective date of termination and that
such termination is without Good Reason for purposes of this
Agreement.
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(d) Date of Termination. The "Date of Termination" means the date
of the Executive's death, the Disability Effective Date, the date on which
the termination of the Executive's employment by the Company for Cause or
without Cause or by the Executive for Good Reason is effective, or the
effective date specified in a notice of a termination of employment without
Good Reason from the Executive to the Company, as the case may be.
5. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause. If, during the Employ ment
Period, the Company shall terminate the Executive's employment other than
for Cause, death or Disability, or the Executive shall terminate his
employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in
cash, within 10 days after the Date of Termination, the aggregate
of the amounts set forth in clauses A, B and C below:
(A) The sum of:
(1) the Executive's Annual Base Salary through the
Date of Termination to the extent not there tofore
paid;
(2) the product of (x) the greater of (i) the highest
annual bonus paid or payable to the Executive by
the Company and its affiliated companies,
including by reason of any deferral, in respect of
the three fiscal years immediately preceding the
fiscal year in which occurs the Date of Ter
mination or (ii) the "target" annual bonus as in
effect under the Company's annual incentive plan
for the fiscal year in which occurs the Date of
Termination (the "Highest Bonus") and (y) a
fraction, the numerator of which is the number of
days in the current calendar year through the Date
of Termination, and the de nominator of which is
365; and
(3) any accrued vacation pay;
in each case to the extent not theretofore paid (the
sum of the amounts described in clauses (1), (2)
and (3) shall be hereinafter referred to as the
"Accrued Obligations");
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(B) the amount equal to the product of (1) three and
(2) the sum of (x) the Executive's Annual Base
Salary and (y) the Highest Bonus; and
(C) an amount equal to the excess of
(1) the actuarial equivalent of the benefit under
the Company's applicable qualified defined
benefit retirement plan in which the Executive
is participating immediately prior to his Date
of Termination (the "Retirement Plan")
(utilizing the rate used to determine lump sums
and, to the extent applicable, other actuarial
assumptions no less favorable to the Executive
than those in effect under E Corp's tax-
qualified defined benefit pension plan
immediately prior to the Effective Time) and
any SERPs in which the Executive participates
which the Executive would receive if the
Executive's employment continued for three
additional years beyond the Date of Termination
(or, if later, until the Ex ecutive attains
age 55), assuming for this pur pose that
all accrued benefits are fully vested, and,
assuming that the Executive's compensation for
such deemed additional period was the
Executive's Annual Base Salary as in effect
immediately prior to the Date of Termination
and assuming a bonus in each year during such
deemed additional period equal to the Highest
Bonus, over
(2) the actuarial equivalent of the Executive's
actual benefit (paid or payable), if any, under
the Retirement Plan and the SERPs as of the
Date of Termination (utilizing the rate used
to deter mine lump sums and, to the extent
applicable, other actuarial assumptions no
less favorable to the Executive than those in
effect under E Corp's tax-qualified defined
benefit pension plan immediately prior to the
Effective Time);
(ii) any stock awards, stock options, stock appreciation rights
or other equity-based awards that were outstanding immediately prior
to the Date of Termination ("Prior Stock Awards") shall vest and/or
become exercisable, as the case may be, as of the Date of Termination,
and the Executive shall have the right to exercise any such stock
option, stock appreciation right or other exercisable equity-based
award until the earlier of
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(A) three years from the Date of Termination (or such longer period as
may be provided under the terms of any such stock option, stock
appreciation right or other equity-based award) and (B) the normal
expiration date of such stock option, stock appreciation right or
other equity-based award;
(iii) for three years after the Executive's Date of Termination
or such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company shall
continue benefits to the Executive and/or the Executive's family at
least equal to those which would have been provided to them in
accordance with the welfare plans, programs, practices and policies
described in Section 3(d) of this Agreement if the Executive's
employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect
to other peer executives of the Company and its affiliated companies
and their families, provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical or
dental benefits under another employer provided plan, the medical and
dental benefits described herein shall be secondary to those provided
under such other plan during such applicable period of eligibility.
For purposes of determining eligibility (but not the time of
commencement of benefits) of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the Execu
tive shall be considered to have remained employed until three years
after the date of Termination and to have retired on the last day of
such period; and
(iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive is
entitled to receive under any plan, program, policy, practice,
contract or agreement of the Company and its affiliated companies
(such other amounts and benefits shall be hereinafter referred to as
the "Other Benefits").
(b) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, or
if the Executive voluntarily terminates employment during the Employment
Period, excluding a resignation for Good Reason, this Agreement shall
terminate without further obligations to the Executive other than for
amounts described in Sections 5(a)(i)(A)(1) and 5(a)(i)(A)(3), which
amounts shall be paid to the Executive in a lump sum within 30 days of the
Date of Termination, and the payment or provision of Other Benefits in
accordance with their terms.
(c) Death. If the Executive's employment terminates by reason of
the Executive's death during the Employment Period, the Company shall pay
or provide, as applicable, to the Executive's estate or beneficiary, as
applicable, (i) all amounts and benefits that would have been paid or
provided to or on behalf of the Executive had the Executive terminated his
employment for Good Reason on the Date of Termination and (ii) all Accrued
Obligations as of the Date of Termination
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in a lump sum in cash within 30 days of the Date of Termination, and the Execu
tive's estate or beneficiary shall be entitled to any Other Benefits in
accordance with their terms. Any Prior Stock Awards shall vest and/or become
exercisable, as the case may be, as of the Date of Termination and the
Executive's estate or beneficiary, as the case may be, shall have the right to
exercise any such stock option, stock appreciation right or other exercisable
equity-based award until the earlier of (A) one year from the Date of
Termination (or such longer period as may be provided under the terms of any
such stock option, stock appreciation right or other equity-based award) and (B)
the normal expiration date of such stock option, stock appreciation right or
other equity-based award.
(d) Disability. If the Executive's employment is terminated by
reason of Disability during the Employment Period, the Company shall pay or
provide, as applicable, to the Executive (i) all amounts and benefits that
would have been paid or provided to or on behalf of the Executive had the
Executive terminated his employment for Good Reason on the Date of
Termination and (ii) all Accrued Obligations as of the Date of Termination
in a lump sum in cash within 30 days of the Date of Termination, and the
Executive shall be entitled to any Other Benefits in accordance with their
terms. Any Prior Stock Awards shall vest immediately and/or become
exercisable, as the case may be, and the Executive shall have the right to
exercise any such stock option, stock appreciation right or other
exercisable equity- based award until the earlier of (A) one year from the
Date of Termination (or such longer period as may be provided under the
terms of any such stock option, stock appreciation right or other
equity-based award) and (B) the normal expiration date of such stock
option, stock appreciation right or other equity-based award.
(e) Retirement. If the Executive's employment terminates at the
expiration of the Employment Period, the Executive shall be paid the
Accrued Obligations in a lump sum in cash within 30 days of the Date of
Termination and the Executive shall be entitled to any Other Benefits in
accordance with their terms.
6. Change in Control.
(a) Benefits Upon a Change in Control. The Executive's rights
upon a termination of employment that occurs following a Change in Control
shall be as specified in Section 5 generally for termination of employment.
In addition, notwithstanding anything else in this Agreement, a termination
by the Executive for any reason during the 30-day period immediately
following the first anniversary of the occurrence of the Change in Control
shall be deemed to be a termination for Good Reason for all purposes of
this Agreement.
(b) Definition. For purposes of this Agreement, a "Change in
Control" shall mean the occurrence of any of the following events after the
Effective Time:
(i) the purchase or other acquisition by any person, entity
or group of persons, acting in concert within the meaning of Sections
13(d)
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or 14(d) of the Securities Exchange Act of 1934, or any comparable
succes sor provisions, of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Act) of twenty-five percent (25%) or
more of either the shares of common stock outstanding immediately
following such acquisi tion or the combined voting power of the
Company's voting securities entitled to vote generally and outstanding
immediately following such acquisition, other than any such purchase
or acquisition in connection with a Non-CIC Merger (defined in
subsection (ii) below);
(ii) the consummation of a merger or consolidation of the
Company, or any direct or indirect subsidiary of the Company with any
other corporation, other than a Non-CIC Merger, which shall mean a
merger or consolidation immediately following which the individuals
who comprise the Board of Directors immediately prior thereto
constitute at least a majority of the Board of Directors, or the board
of directors of the entity surviving such merger or consolidation, or
the board of directors of any parent thereof;
(iii) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the Company of
all or substan tially all of the Company's assets; or
(iv) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, at the Effective Time, constitute the Board of
Directors and any new director (other than a director whose initial
assumption of office is in connec tion with an actual or threatened
election contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose
appointment or election by the Board of Directors or nomination for
election by the Company's stockholders was approved or recommended by
a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the Effective Time or whose
appointment, election or nomination for election was previously so
approved or recommended, cease for any reason to constitute at least a
majority thereof.
Notwithstanding the foregoing, no Change in Control shall be deemed to
occur solely by virtue of the consummation of any transaction or
series of integrated transactions immediately following which the
record holders of the common stock of the Company immediately prior to
such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which owns
all or substantially all of the assets of the Company immediately
following such transaction or series of transactions.
7. Confidential Information.
The 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 the Executive during the 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 the Executive or
representatives of the Executive in violation of this Agreement). After
termination of the Executive's employment with the Company, the Executive shall
not, without the prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it,
except (x) otherwise publicly available information, or (y) as may be necessary
to enforce his rights under this Agreement or necessary to defend himself
against a claim asserted directly or indirectly by the Company or its
affiliates.
8. Full Settlement.
(a) No Duty to Mitigate; No Reduction. The Company's obliga tion
to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoup ment, defense or other claim, right or action which
the Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as specifi cally provided in
Section 5(a)(iii) with respect to certain medical and dental benefits, such
amounts shall not be reduced whether or not the Executive obtains other
employment.
(b) Non-exclusivity of Rights. Nothing in the Agreement shall
prevent or limit the Executive's continuing or future participation in any
plan, program, policy or practice provided by the Company or any of its
affiliated companies for which the Executive may qualify, nor, subject to
Section 12(h), shall anything in this Agreement limit or otherwise affect
such rights as the Executive may have under any contract or agreement with
the Company or any of its affiliated companies. Vested benefits and other
amounts that the Executive is otherwise entitled to receive under any plan,
policy, practice or program of, or any contract of agreement with, the
Company or any of its affiliated companies on or after the Date of
Termination shall be payable in accordance with the terms of each such
plan, policy, practice, program, contract or agreement, as the case may be,
except as explicitly modified by this Agreement.
9. Disputes
Any dispute about the validity, interpretation, effect or alleged
violation of this Agreement shall be resolved by binding confidential
arbitration to be held in Palm Beach, Florida, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.
Judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereover. The Company shall pay all costs and
expenses incurred by the Executive or the Execu tive's beneficiaries in
connection with any such controversy or dispute, including without
limitation reasonable attorney's fees as such fees and expenses are
incurred, except that the Executive shall be responsible for any such costs
and expenses incurred in connection with any claim determined by the
arbitrator(s) to have been brought in bad faith. The Company shall bear its
own costs and expenses incurred in connection with any such controversy or
dispute. The Executive shall be entitled to interest at the applicable
Federal rate provided for in Section 7872 (f) (2)(A) of the Internal
Revenue Code of 1986, as amended (the "Code"), on any delayed payment which
the arbitrator(s) determine he was entitled to under this Agreement.
10. Successors.
(a) No Assignment by Executive. This Agreement is personal to the
Executive and without the prior written consent of the Company shall not be
assignable by the Executive otherwise than by will or the laws of descent
and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
(b) Successors to the Company. This Agreement shall inure to the
benefit of and be binding upon the Company and its successors and assigns.
(c) Performance by a Successor to the Company. The Company will
require any successor (whether direct or indirect, by purchase, merger,
consoli dation or otherwise) to all or substantially all of the business
and/or assets of the Company, contemporaneously with such succession, to
assume expressly and agree to perform this Agreement 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. As used in this Agreement, "Company" shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
11. Certain Additional Payments by the Company.
(a) If any of the payments or benefits received or to be received
by a Participant in connection with a Change in Control or the
Participant's termina tion of employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with a System
Company) (all such payments and benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the "Total Payments") will be subject to
any excise tax imposed under Section 4999 of the Code ("Excise Tax"), the
Employer shall pay to the Participant an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Participant, after
deduction of any Excise Tax on the Total Payments and any federal, state
and local income and employment taxes and Excise Tax upon the Gross-Up
Payment, shall be equal to the Total Payments.
(b) For purposes of determining whether any of the Total Pay
ments will be subject to the Excise Tax and the amount of such Excise Tax,
(1) all of
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the Total Payments shall be treated as "parachute payments" (within the
meaning of Section 280G(b)(2) of the Code) unless, in the opinion of tax
counsel ("Tax Counsel") reasonably acceptable to the Participant and
selected by the accounting firm which was, immediately prior to the Change
in Control Period, the Company's independent auditor (the "Auditor"), such
payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Section 280G(b)(4)(A) of the Code; (2) all
"excess parachute payments" (within the meaning of Section 280G(b)(1) of
the Code shall be treated as subject to the Excise Tax unless, in the
opinion of Tax Counsel, such excess parachute payments (in whole or in
part) represent reasonable compensation for services actually rendered
(within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the
"Base Amount" (within the meaning of Section 280G(b)(3) of the Code)
allocable to such reasonable compensation, or are otherwise not subject to
the Excise Tax; and (3) the value of any noncash benefits or any deferred
payment or benefit shall be determined by the Auditor in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Participant shall be
deemed to pay federal income tax at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Participant's residence on the
Date of Termination (or if there is no Date of Termination, then the date
on which the Gross-Up Payment is calculated for purposes of this Section
4.03(c)), net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes.
(c) In the event that the Excise Tax is finally determined to
exceed the amount taken into account hereunder in calculating the Gross-Up
Payment (including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment), the
Employer shall make additional Gross-Up Payment in respect of such excess
(plus any interest, penalties or additions payable by the Participant with
respect to such excess) within five (5) business days following the time
that the amount of such excess is finally determined. The Participant and
the Employer shall each reasonably cooperate with the other in connection
with any administrative or judicial proceedings concerning the existence or
amount of liability for Excise Tax with respect to the Total Pay ments.
(d) The payments provided in this subsection 4.03(c) shall be
made not later than the 5th day following the Date of Termination;
provided, how ever, that if the amounts of such payments cannot be finally
determined on or before such day, the Employer shall pay to the Participant
on such day an estimate, in accordance with this subsection 4.03(c), of the
minimum amount of such payments to which the Participant is clearly
entitled and shall pay the remainder of such payments (together with
interest on the unpaid remainder (or on all such payments to the extent the
Employer fails to make such payments when due) at 120% of the rate provided
in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
15
determined but in no event later than the thirtieth (30th) day after the
Date of Termination.
12. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida applicable to
agree ments executed and performed entirely therein. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) Notices. All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed to such address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) Invalidity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provi sion of this Agreement. If any provision of this
Agreement shall be held invalid or unenforceable in part, the remaining
portion of such provision, together with all other provisions of this
Agreement, shall remain valid and enforceable and continue in full force
and effect to the fullest extent consistent with law.
(d) Tax Withholding. Notwithstanding any other provision of this
Agreement, the Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
(e) Failure to Assert Rights. The Executive's or the Company's
failure to insist upon strict compliance with any provisions of, or to
assert any right under, this Agreement shall not be deemed to be a waiver
of such provision or right or of any other provision of or right under this
Agreement.
(f) No Alienation. The rights and benefits of the Executive under
this Agreement may not be anticipated, assigned, alienated or subject to
attachment, garnishment, levy, execution or other legal or equitable
process except as required by law. Any attempt by the Executive to
anticipate, alienate, assign, sell, transfer, pledge, encumber or charge
the same shall be void. Payments hereunder shall not be considered assets
of the Executive in the event of insolvency or bankruptcy.
(g) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and said
counterparts shall constitute but one and the same original.
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(h) Other Agreements. This Agreement supercedes any other
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which have been made by either party.
IN WITNESS WHEREOF, the Executive and, pursuant to due
authorization from its Board of Directors, the Company have caused this
Agreement to be executed as of the day and year first above written.
EXECUTIVE
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COMPANY
By:
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