Exhibit (10)(a)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made and entered into effective as of the 11/th/ day of
October, 2001, by and between World Fuel Services Corporation, a Florida
corporation (the "Company"), the parent company of Trans-Tec Services, Inc., a
Florida corporation ("Trans-Tec"), and Xxxxxxx X. Xxxxxx (the "Executive").
RECITALS. Executive currently is employed by the Company pursuant to an
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employment agreement dated January 3, 1995, as amended on June 10, 1997, that
expires December 31, 2002 (the "Prior Employment Agreement") as the Chairman of
Trans-Tec and the Chief Executive Officer of Trans-Tec, Trans-Tec Servicios
S.A., Trans-Tec Services (Singapore) Pte., Ltd., Trans-Tec Services (UK), Ltd.,
Norse Bunker A.S., Marine Energy Arabia Establishment Ltd., Pacific Horizon
Petroleum Services, Inc., Bunkerfuels Corporation, Bunkerfuels U.K. Ltd., and
all other subsidiaries and affiliates of the Company engaged in the marine and
related businesses, excluding aviation (the "Trans-Tec Group"). The Company and
the Executive now wish to amend and restate the Prior Employment Agreement in
its entirety.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree that the Prior Employment Agreement is hereby amended and restated in its
entirety to read as follows:
1. Employment. The Company hereby employs Executive pursuant to the terms
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and conditions of this Agreement for a term (the initial "Employment Term"),
commencing as of October 1, 2001 and ending on March 31, 2005. At least one (1)
year prior to each date on which the Employment Term otherwise would terminate,
the Company and the Executive shall notify each other in writing whether they
elect to extend the Employment Term for an additional year, and the Employment
Term shall not be so extended unless both parties so elect to extend the
Employment Term. If the Company is electing not to extend the Employment Term
for Cause, or the Executive is electing not to extend the Employment Term for
Good Reason, it or he shall so state in the notice. During the Employment Term,
the Executive shall serve as the Chairman of Trans-Tec, Chief Executive Officer
of the Trans-Tec Group, and Executive Vice President of the Company. The
Executive shall faithfully and diligently perform all services as may be
assigned to him by the President and Chief Operating Officer of the Company
consistent with his position, shall report solely to the President and Chief
Operating Officer of the Company (the "President and Chief Operating Officer")
and shall exercise such power and authority as may from time to time be
delegated to him by the President and Chief Operating Officer. The Executive
shall devote his full business time and attention to the business and affairs of
the Trans-Tec Group and the Company, render such services to the best of his
ability, and use his reasonable best efforts to promote the interests of the
Trans-Tec Group and the Company. Notwithstanding the foregoing or any other
provision of this Agreement, it shall not be a breach or violation of this
Agreement 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, or (iii) manage personal investments, so long
as such activities do not significantly interfere with or significantly detract
from the performance of the Executive's responsibilities to the Company in
accordance with this Agreement.
2. Compensation and Benefits. During the Employment Term, the Company shall
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pay Executive the compensation and other amounts set forth below.
2.1 Base Salary. The Company shall pay Executive an annual salary ("Base
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Salary") of Four Hundred and Thirty Seven Thousand Five Hundred Dollars
($437,500), payable in equal installments according to the Company's regular
payroll practices and subject to such deductions as may be required by law. The
Base Salary shall be reviewed, at least annually, for merit increases and may,
by action and in the discretion of the Board of Directors of the Company (the
"Board") or the Compensation Committee of the Board (the "Compensation
Committee"), be increased at any time or from time to time. Base Salary shall
not be decreased and, if increased, shall not thereafter be decreased for any
reason.
2.2 Bonus.
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(a) For the period from January 1, 2001 through December 31, 2001,
the Company shall pay Executive a bonus equal to 5% of the annual Pre-Tax
Earnings (as hereunder defined) of the Trans-Tec Group for the calendar year
2001 that exceed $4,000,000, payable on or before March 31, 2002. "Pre-Tax
Earnings of the Trans-Tec Group" shall be the consolidated pre-tax earnings of
the Company and its affiliates engaged in the marine and related business,
excluding aviation, managed by the Executive, determined in accordance with
generally accepted accounting principles, except that the following expenses
shall not be deducted for purposes of computing Pre-Tax Earnings: (i) interest
charged by World Fuel Services Corporation to the Trans-Tec Group on the
purchase price paid under the Acquisition Agreement for the Assets and the UK
Shares; (ii) the amortization of goodwill recognized by the Company related to
the acquisition of the Assets and UK Shares.
(b) (i) Subject to subsections (c), (e), (f), (g) and (h) below, the
Company shall pay Executive an annual bonus (the "Bonus") for the period
beginning January 1, 2002 and ending March 31, 2002, and unless otherwise agreed
to in writing by the Compensation Committee and the Executive, for each 12 month
period beginning each April thereafter (each a "Bonus Period") equal to a
percentage of the Executive's Base Salary as of the last day of the Bonus Period
for which the Bonus is being calculated, determined as follows based upon the
Growth in EPS for the Bonus Period:
Growth in EPS for Bonus Period Bonus as Percentage of Base Salary for Fiscal
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Year Ended
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Equal to or Greater Than But Less Than March 31, 2002 Each March 31 Thereafter
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10% 0 0
10% 12.5% 6.25% 25%
12.5% 15% 12.5% 50%
15% 17.5% 18.75% 75%
17.5% 25% 100%
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(ii) For purposes of the foregoing formula, "Growth in EPS"
for a Bonus Period shall mean the quotient obtained by dividing (x) the amount,
if any, by which (i) the EPS for the 12 month period that ends on the last day
of the Bonus Period exceeds (ii) the EPS for the 12 month period ending on the
March 31 immediately preceding the Bonus Period (the "Prior Year's EPS"), by (y)
the Prior Year's EPS. For purposes of the foregoing formula, EPS shall mean the
Company's basic earnings per share, computed in accordance with FASB Statement
128. However, the Compensation Committee has the right to adjust financial
results to eliminate the effect of certain accounting adjustments and other
one-time events, so that the bonus payouts reflect ongoing operating results and
are not artificially inflated, or deflated, due to unusual, one-time events.
(iii) After the Bonus Period ending March 31, 2002, the
Compensation Committee and the Executive shall review the bonus formula and make
such changes, if any, as they mutually agree in writing to be appropriate. If
the Compensation Committee and the Executive fail to come to such a mutual
agreement by June 30, 2002, then the bonus formula for each subsequent Bonus
Period shall be the formula as set forth in Section 2.2(b)(i) and (ii) hereof,
unless the Company notifies the Executive in writing by no later than July 15,
2002, of a different bonus formula that will apply for each subsequent Bonus
Period.
(c) The requirement that the Company achieve the Growth in EPS
goals under this Section 2.2 (the "Performance Goal") is intended as a
`performance goal" for Executive, as that term is used in Section 162(m)(4)(C)
of the Internal Revenue Code of 1986, as amended (the "Code") and Treasury
Regulations promulgated thereunder. The Company hereby represents and warrants
to Executive that such Performance Goal has been determined and approved by the
Compensation Committee, consisting solely of at least two (2) outside directors,
as required by Code (S) 162(m)(4)(C)(i) and Treasury Regulations promulgated
thereunder.
(d) Notwithstanding anything to the contrary contained herein,
in no event shall Executive receive any portion of his Bonus if and to the
extent that the Company could not reasonably deduct such portion solely by
operation of Code (S) 162(m). For purposes of this limitation: (i) no portion of
the Executive's compensation or benefits, the receipt or enjoyment of which
Executive shall have effectively waived in writing prior to the date of payment,
shall be taken into account; (ii) no portion of any compensation or benefits
shall be taken into account which, in the opinion of tax counsel selected by the
Company's independent auditors and acceptable to Executive, does not constitute
"applicable employee remuneration" within the meaning of Code (S)162(m) and
Treasury Regulations promulgated thereunder; and (iii) the value of any non-cash
benefit or any deferred payment or benefit included in the Executive's
remuneration shall be determined by the Company's independent auditors in
accordance with the Code. This subsection (d) shall not prohibit the payment of
any Bonus (or portion thereof) which is deferred in accordance with subsection
(g) below.
(e) At any time during the Employment Term, upon written request
of Executive, the Company shall submit the Performance Goal and other material
compensation terms provided herein for approval by the Company's shareholders so
as to comply with Code (S) 162(m)(4)(C)(ii) and Regulations promulgated
thereunder, and the Company shall use reasonable efforts to secure such
shareholder approval; provided, (i) the Company shall not be required to call a
special shareholders meeting for the sole purpose of complying with this
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section; and (ii) in order to have such approval sought at the Company's annual
shareholders meeting, Executive shall provide written notice thereof to the
Company no less than ninety (90) days prior to the scheduled date of the annual
meeting. If any executive officer of the Company requests that his Performance
Goal and compensation terms be submitted for shareholder approval pursuant to
this Agreement, the Company shall have the right to submit the Performance Goals
and compensation arrangements of all executive officers for shareholder approval
at the same meeting.
(f) If required to comply with Code (S)162(m)(4)(C)(iii), the
Company's Compensation Committee shall, before the payment of any Bonus, certify
in writing, if applicable, that the Performance Goal and any other material
terms hereof were satisfied, as necessary to comply with Code (S)
162(m)(4)(C)(iii).
(g) Unless the Company's shareholders have approved the Performance
Goal and other material compensation terms provided herein, the payment of any
portion of the Bonus causing Executive's compensation to exceed the limitation
under Section 162(m)(i) of the Code during any fiscal year of the Company (the
"Excess Amount") will be deferred until a fiscal year during the Employment Term
in which Executive earns less than the limitation under Section 162(m)(i) of the
Code; provided, however, that in the event of Executive's death, the termination
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of Executive for any reason, or the expiration of this Agreement, any Excess
Amount, including any interest earned thereon, shall be paid to Executive within
ten (10) days of such death, termination, or expiration. Any Excess Amount shall
earn interest at the prime rate as published in the Wall Street Journal until
such amount is paid to the Executive. The Company shall hold any Excess Amount,
including any interest earned thereon, in trust for Executive until such amount
is paid to Executive in accordance with the terms hereof; provided, that all
amounts held in trust for Executive shall be subject to the claims of the
creditors of the Company.
(h) The provisions of this Section 2.2 are intended, and shall be
interpreted, to comply with the requirements of Code (S) 162(m) so as to permit
the Company to deduct all payments of applicable employee remuneration made to
Executive pursuant to this Agreement.
2.3 Stock Options.
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(a) Upon the execution of this Agreement, the Company shall grant
to the Executive options (the "Initial Options") to purchase up to 55,000 shares
of common stock (the "Common Stock") of the Company under (and therefore subject
to all terms and conditions of) the World Fuel Services Corporation 1996
Employee Stock Option Plan and the 2001 Omnibus Plan, and any successor plan
thereto, and all rules of regulation of the Securities and Exchange Commission
applicable to stock option plans then in effect. The option price per share for
the Initial Options shall be $11.90. Those Initial Options that are incentive
Stock Options (as described below) become exercisable at the rate of one-third
per year commencing on the first anniversary of the date of grant, and those
Initial Options that are non-qualified stock options become exercisable in full
on the second anniversary of the date of grant. In addition to the Initial
Options, the Executive shall be eligible to receive additional option grants
under the 2001 Omnibus Plan in such number and on such terms and conditions as
shall be determined by the
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Board or the Compensation Committee of the Board. The options granted to the
Executive shall be incentive stock options, within the meaning of Section 422(b)
of the Internal Revenue Code of 1986 as amended (the "Code"), to the extent that
such options do not exceed the limitations imposed by Section 422(d) of the
Code, and the balance of the options granted to the Executive shall be
non-qualified stock options.
(b) The Initial Options shall become fully vested immediately in
the event that: (i) a Change of Control of the Company as defined in Section 3.1
hereof occurs, or (ii) the Executive terminates his employment with the Company
for Good Reason, as defined in Section 3.4 hereof, or (iii) the Company
terminates the Executive's employment with the Company, other than for Cause, as
defined in Section 3.2 hereof. In the event the Executive's employment
terminates for any of the reasons set forth in subsections (ii) or (iii) of this
Section 2.3, the Executive may exercise all vested rights under the Initial
Options at any time after vesting and until the earlier of: (1) the date that is
two (2) years after the date on which the Executive's employment terminates for
the reasons provided above, and (2) the Expiration Date for the options as
defined in the applicable option agreement.
2.4 Restricted Stock. Upon execution of this Agreement, the Company
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shall grant to the Executive 25,000 shares of restricted Common Stock of the
Company (the "Restricted Stock"), which shall vest 25% on October 1, 2002, 25%
on October 1, 2003, 25% on October 1, 2004, and 25% on March 31, 2005, and
subject to such terms and conditions as are set forth in a Restricted Stock
Agreement to be entered into by and between the Company and the Executive in the
form attached as Exhibit A hereto (the "Restricted Stock Agreement"). The
Executive's rights with respect to the Restricted Stock shall become fully
vested immediately in the event that (i) a Change or Control of the Company as
defined in Section 3.1 hereof occurs, or (ii) the Executive terminates his
employment with the Company for Good Reason, as defined in Section 3.4 hereof,
or (iii) the Company terminates the Executive's employment with the Company,
other than for Cause, as defined in Section 3.2 hereof.
2.5 Other Benefits. Executive: (i) shall be entitled to receive all
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medical, health, disability, life and dental insurance, and other similar
employee benefit programs, which may be provided by the Company to its executive
employees from time-to-time; (ii) shall be entitled to reimbursement for
reasonable and necessary out-of-pocket expenses incurred in the performance of
his duties hereunder, including but not limited to travel and entertainment
expenses (such expenses shall be reimbursed by the Company, from time to time,
upon presentation of appropriate receipts therefor); (iii) shall be paid an auto
allowance of $1,000.00 per month; (iv) shall be entitled to six (6) weeks paid
vacation each calendar year, and any vacation time not taken during any calendar
year shall be carried over into subsequent calendar years if and to the extent
such carried over vacation time does not exceed six (6) weeks; and (v) shall be
entitled to reimbursement from the Company for all of his legal fees and
expenses incurred in connection with the preparation of this Employment
Agreement.
3. Certain Definitions.
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3.1 Change of Control. For purposes of this Agreement, a "Change of
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Control" shall be deemed to have occurred if:
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(a) a third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), but excluding any employee benefit plan or plans of the Company and its
subsidiaries and affiliates, becomes the beneficial owner, directly or
indirectly, of twenty percent (20%) or more of the combined voting power of the
Company's outstanding voting securities ordinarily having the right to vote for
the election of directors of the Company; or
(b) the individuals who, as of the date hereof, constitute the
Board of Directors of the Company (the "Board" generally and as of the date
hereof the "Incumbent Board") cease for any reason to constitute at least
two-thirds (2/3) of the Board, or in the case of a merger or consolidation of
the Company, do not constitute or cease to constitute at least two-thirds (2/3)
of the board of directors of the surviving company (or in a case where the
surviving corporation is controlled, directly or indirectly by another
corporation or entity, do not constitute or cease to constitute at least
two-thirds (2/3) of the board of such controlling corporation or do not have or
cease to have at least two-thirds (2/3) of the voting seats on any body
comparable to a board of directors of such controlling entity, or if there is no
body comparable to a board of directors, at least two-thirds (2/3) voting
control of such controlling entity); provided that any person becoming a
director (or, in the case of a controlling non-corporate entity, obtaining a
position comparable to a director or obtaining a voting interest in such entity)
subsequent to the date hereof whose election, or nomination for election, was
approved by a vote of the persons comprising at least two-thirds (2/3) of the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest), shall be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent Board; or
(c) there is a liquidation or dissolution of the Company or all or
substantially all of the assets of the Company have been sold; or
(d) if the Company enters into an agreement or series of agreements
or the Board passes a resolution which will result in the occurrence of any of
the matters described in Subsections (a), (b) or (c), and the Executive's employ
is terminated subsequent to the date of execution of such agreement or series of
agreements or the passage of such resolution, but prior to the occurrence of any
of the matters described in Subsection (a), (b) or (c), then, upon the
occurrence of any of the matters described in Subsections (a), (b) or (c), a
Change of Control shall be deemed to have retroactively occurred on the date of
the execution of the earliest of such agreement(s) or the passage of such
resolution.
3.2 Cause. For purposes of this Agreement, "Cause" means (i) an act or
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acts of fraud, misappropriation, or embezzlement on the Executive's part which
result in or are intended to result in his personal enrichment at the expense of
the Company or its subsidiaries or affiliates, (ii) conviction of a felony, or
(iii) willful failure to report to work for more than thirty (30) continuous
days not attributable to eligible vacation or supported by a licensed
physician's statement.
3.3 Disability. For purposes of this Agreement, "Disability" means
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disability which after the expiration of more than twelve (12) months after its
commencement is determined to be total and permanent by an independent physician
mutually agreeable to the
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parties. Notwithstanding any disability of Executive, he shall continue to
receive all compensation and benefits provided under Section 2 until his
employment is actually terminated, by a Notice of Termination pursuant to
Section 4.2.
3.4 Good Reason. For purposes of this Agreement, "Good Reason" means:
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(a) any failure by the Company to comply with any of the provisions
of Section 2 of this Agreement other than an insubstantial and inadvertent
failure not occurring in bad faith and which is remedied by the Company within
five (5) business days after receipt of notice thereof given by the Executive;
(b) following a Change in Control, any failure by the Company
and/or its subsidiaries or affiliates to furnish the Executive and/or where
applicable, his family, with: (i) total annual cash compensation (including
annual bonus), (ii) total aggregate value of perquisites, (iii) total aggregate
value of benefits, or (iv) total aggregate value of long term compensation,
including but not limited to stock options, in each case at least equal to or
exceeding or otherwise comparable to in the aggregate, the highest level
received by the Executive from the Company and/or its subsidiaries or affiliates
during the six (6) month period (or the one (1) year period for compensation,
perquisites and benefits which are paid less frequently than every six (6)
months) immediately preceding the Change of Control, other than an insubstantial
and inadvertent failure remedied by the Company within five (5) business days
after receipt of notice thereof given by the Executive;
(c) the Company's and/or its subsidiaries' or affiliates' requiring
the Executive to be based or to perform services at any site or location more
than fifteen (15) miles from Miami, Florida, except for travel reasonably
required in the performance of the Executive's responsibilities (which does not
materially exceed the level of travel previously required of the Executive);
(d) any failure by the Company to obtain the assumption and
agreement to perform this Agreement by a successor as contemplated by Section 9;
(e) without the express prior written consent of the Executive
(which consent the Executive has the absolute right to withhold), (i) the
assignment to the Executive of any duties inconsistent in any material respect
with the Executive's position (including titles and reporting relationships),
authority, responsibilities or status, or (ii) any other material adverse change
in such position, authority, responsibility or status; or
(f) the Executive's termination of employment for any reason by no
later than August 15, 2002, in the event that the Company and the Executive fail
to mutually agree pursuant to Section 2.2(b)(iii) upon a bonus formula for
fiscal years ending after March 31, 2002, and the Executive does not accept a
formula selected by the Company that differs from the formula set forth in
Section 2.2(b).
For the purposes of this Section 3.4, any good faith interpretation by
the Executive of the foregoing definitions of "Good Reason" shall be conclusive
on the Company. No termination by
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Executive for Good Reason shall be deemed a voluntary termination by Executive
for purposes of any stock option, employee benefit or similar plan of the
Company.
3.5 Notice of Termination. For purposes of this Agreement, a "Notice
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of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(iii) if the Date of Termination is other than the date of receipt of such
notice, specifies the Date of Termination (which date shall be not more than
fifteen (15) days after the giving of such notice).
3.6 Date of Termination. Date of Termination means the date of
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receipt of the Notice of Termination or any later date specified therein, as the
case may be.
4. Termination.
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4.1 Events of Termination. The Executive may terminate his
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employment with the Company, for Good Reason, at any time, and may terminate his
employment with the Company without Good Reason upon thirty (30) days written
notice to the Company. The Company may terminate Executive's employment with the
Company at any time upon the occurrence of one or more of the events set forth
in subsections (a) through (c) below. The death or Disability of Executive shall
in no event be deemed a termination of employment by Executive.
(a) The death of Executive.
(b) The Disability of Executive.
(c) The discharge of Executive by the Company for Cause.
4.2 Notice of Termination. Any termination of the Executive's
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employment by the Executive for Good Reason or otherwise, or by the Company for
Cause or otherwise, shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 10(h).
5. Obligations Upon Termination.
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5.1 Voluntary Termination by Executive and Termination For Cause. If
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the Executive's employment with the Company is terminated (i) voluntarily by the
Executive, for any reason other than Good Reason, or (ii) by the Company for
Cause, the Company shall pay Executive, within five (5) business days after his
Date of Termination, his Base Salary, unused vacation entitlement and car
allowance through the Date of Termination (if not already paid), and the Company
shall have no further obligation to provide compensation or benefits to
Executive under this Agreement; except that, to the extent that the Company's
insurance, stock option and other benefit plans provide certain rights and
benefits after an employee's termination, Executive shall continue to receive
such rights and benefits in accordance with the terms of such plans.
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5.2 Termination for Death or Disability. If Executive's employment is
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terminated by the Company due to the Executive's death or Disability, the
Company shall pay Executive (or his heirs and/or personal representatives): (i)
Executive's Base Salary, unused vacation entitlement and car allowance through
the Date of Termination (if not already paid); and (ii) the Bonus payable under
Section 2.2, if any, for the fiscal year in which Executive's termination
occurred, as if Executive had been employed by the Company for the full fiscal
year; and the Company shall have no further obligation to provide compensation
or benefits to Executive under this Agreement; except that, to the extent that
the Company's insurance, stock option and other benefit plans provide certain
rights and benefits after an employee's termination, Executive shall continue to
receive such rights and benefits in accordance with the terms of such plans.
Amounts payable under subsection (i) of this Section 5.2 shall be paid within
five (5) business days after the Date of Termination, and the Bonus payable
under subsection (ii) shall be paid on or before May 15 of the fiscal year
following the fiscal year in which the termination occurred.
5.3 Termination by the Company in Default of Agreement; Termination of
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Employment by the Executive for Good Reason. If (i) the Executive's employment
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with the Company is terminated by the Company prior to, or more than three (3)
years after, a Change of Control for any reason other than the Executive's death
or Disability, and other than for Cause, or (ii) the Executive terminates
employment with the Company for Good Reason prior to, or more than three (3)
years after, a Change of Control, then the Company shall pay and provide
Executive:
(a) an amount equal to the cash payment described in Section I of
Exhibit A attached hereto and made a part hereof; plus
(b) the benefits described in Sections II through IV of Exhibit A.
The amounts payable under subsection (a) of this Section 5.3 shall be paid to
Executive by cashier's check within five (5) business days after his Date of
Termination. The payments and benefits paid and provided pursuant to this
Section 5.3 (the "Default Payments") shall be in lieu of all other compensation
and benefits payable to Executive under this Agreement, and as liquidated
damages and in full settlement of any and all claims by Executive against the
Company as a result of the Company's breach of this Agreement; except that, to
the extent that the Company's insurance, stock option and other benefit plans
provide certain rights and benefits after an employee's termination, Executive
shall continue to receive such rights and benefits in accordance with the terms
of such plans. Such Default Payments: (i) are not contingent on the occurrence
of any change in the ownership or effective control of the Company; (ii) are not
intended as a penalty; and (iii) are intended to compensate Executive for his
damages incurred by reason of the Company's breach of this Agreement, which
damages are difficult to ascertain.
5.4 Termination Following a Change in Control. In the event that (i) a
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Change in Control in the Company shall occur during the Employment Term, and
(ii) on or before the third anniversary of the Change of Control, either (x) the
Term of Employment is terminated by the Company without Cause (or the Term of
Employment expires because the Company has refused to extend the Term without
Cause), or (y) the Executive terminates the Term of Employment (or refuses to
extend the Term) for Good Reason, the Company shall pay
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and provide Executive, within five (5) business days after the Date of
Termination, as severance compensation, the cash amounts and benefits
(collectively, "Severance Benefits") payable to the Executive under Section 5.3
hereof. For this purpose, termination of employment by the Executive for any
reason during the 30 day period that begins 6-months after the Change in Control
occurs shall be deemed to be a termination by the Executive for Good Reason. The
Severance Benefits so paid and provided shall be in lieu of all other
compensation and benefits payable to Executive under this Agreement, and in full
settlement of any and all claims by Executive for such compensation or benefits;
except that, to the extent that the Company's insurance, stock option and other
employee benefit plans provide certain rights and benefits after an employee's
termination, Executive shall continue to receive such rights and benefits in
accordance with the terms of such plans. The Company agrees that following a
Change of Control, the Company shall not, without the Executive's consent, amend
any employee insurance or benefit plan or program of the Company or its
subsidiaries or affiliates in any manner that would adversely affect the
Executive's rights under such plan or program.
5.5 Termination Prior to a Change of Control as a Result of Company's
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Non-Extension of Employment Term Without Cause. If the Company elects not to
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extend the Employment Term pursuant to Section 1 hereof other than for Cause,
and the Employment Term expires prior to, or more than three (3) years after,
the date on which a Change of Control has occurred, then the Company shall pay
and provide to the Executive (a) Executive's Base Salary, unused vacation
entitlement and car allowance through the Date of Termination (if not already
paid), by cashier's check within five (5) business days after his Date of
Termination; (b) continue to pay for a period of one year after the Date of
Termination (the "Continuation Period"), an amount equal to the sum of (i) the
Executive's Base Salary as of the Date of Termination and (ii) the average of
the Executive's bonuses for each of the three (3) fiscal years of the Company
ending on or immediately before the Date of Termination, such sum to be payable
in twenty-six (26) consecutive bi-weekly installments commencing two weeks from
the Date of Termination; and (c) continue to provide the benefits described in
Sections (II) and (IV) of Exhibit A hereto through the end of the Continuation
Period. In addition, the Executive shall be entitled to exercise his Stock
Rights, as defined in Section III of Exhibit A hereto, for the period specified
in said Section III. The Company may discontinue the payment of any amounts and
provision of any benefits required under this Section 5.5 in the event that,
during the Continuation Period, either (i) the Executive fails to comply in any
material respect with any provision of Section 6 of this Agreement other than an
insubstantial and an inadvertent failure not occurring in bad faith and which is
remedied by the Executive within five (5) business days after receipt of notice
thereof given by the Company, or (ii) if requested by the Company to do so, the
Executive fails to provide up to ten hours per calendar month of consulting
services (including any travel time) to the Company as reasonably requested by
the Company, at such times and places as shall be mutually agreeable to the
Company and the Executive so as not to materially interfere with any other
obligations or commitments of the Executive and subject to the Company's
reimbursement to the Executive of his reasonable expenses incurred in providing
such consulting services.
5.6 Certain Additional Payments by the Company.
------------------------------------------
(a) Anything in this Agreement to the contrary notwithstanding,
in the event that a Change of Control occurs prior to January 1, 2003, and it
shall be determined that, as a result of such Change of Control, any payment,
distribution or other action by the Company to
10
or for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, including
any additional payments required under this Section 5.6) (a "Payment") would be
subject to an excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code"), or any interest or penalties are incurred by the
Executive with respect to any such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), the Company shall make a payment to the Executive (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any Excise Tax) imposed upon the Gross-Up Payment, the Executive
retains (or has had paid to the Internal Revenue Service on his behalf) an
amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed
upon the Payments and (y) the product of any deductions disallowed because of
the inclusion of the Gross-Up Payment in the Executive's adjusted gross income
and the highest applicable marginal rate of federal income taxation for the
calendar year in which the Gross-Up Payment is to be made. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
(i) pay federal income taxes at the highest marginal rates of federal income
taxation for the calendar year in which the Gross-Up Payment is to be made, and
(ii) pay applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-Up Payment is to be made, net
of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.
(b) Subject to the provisions of paragraph (c) of this Section
5.6, all determinations required to be made under this Section 5.6, including
whether and when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by Xxxxxx Xxxxxxxx & Co. (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and the Executive
within 15 business days of the receipt of notice from the Executive that there
has been a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Executive shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 5.6, shall be paid by the Company to the Executive within five days
of the receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 5.6 and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
11
(c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
no later than fifteen (15) business days after the Executive is informed in
writing of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid. The Executive shall
not pay such claim prior to the expiration of the 30-day period following the
date on which he gives such notice to the Company (or such shorter period ending
on the date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with contesting
such claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 5.6(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
12
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 5.6(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of Section 5.6(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 5.6(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
6. Covenant Against Unfair Competition.
-----------------------------------
(a) Executive agrees that while he is employed by the Company,
and for a period of three (3) years following any termination of his employment,
for any reason, he will not, for his own account or jointly with another,
directly or indirectly, for or on behalf of any individual, partnership,
corporation or other legal entity, as principal, agent or otherwise:
(i) own, control, manage, be employed by, consult with, or
otherwise participate in, a business (other than that of the Company) involved
within the Trade Area (as hereinafter defined) with any of the following
businesses (the "Businesses"): (1) the storage, handling, delivery, marketing,
sale, distribution or brokerage of aviation fuel, marine fuel or lubricants,
aviation flight services, or marine fuel services, or (2) any other service or
activity which is competitive with the services or activities which are or have
been performed by the Company or its subsidiaries or affiliates since January 1,
1995;
(ii) solicit, call upon, or attempt to solicit, the
patronage of any individual, partnership, corporation or other legal entity to
whom the Company or its subsidiaries or affiliates sold products or provided
services, or from whom the Company or its subsidiaries or affiliates purchased
products or services, at any time since January 1, 1995, for the purpose of
obtaining the patronage in any of the Businesses of any such individual,
partnership, corporation or other legal entity;
(iii) solicit or induce, or in any manner attempt to solicit
or induce, any person employed by the Company or its subsidiaries or affiliates
to leave such employment, whether or not such employment is pursuant to a
written contract and whether or not such employment is at will; or
(iv) use, directly or indirectly, on behalf of himself or
any other person or business entity, any trade secrets or confidential
information concerning the business activities of the Company or any of the
Company's subsidiaries or affiliates. Trade secrets and confidential information
shall include, but not be limited to, lists of names and addresses of customers
and suppliers, sources of leads and methods of obtaining new business, methods
of marketing and selling products and performing services, and methods of
pricing.
13
(b) As used herein, the term "Trade Area" shall mean: (i) the
States of Florida, Louisiana, Georgia, Delaware, Pennsylvania, New York,
California, Virginia, New Jersey, and Maryland, (ii) Xxxxxxxxx, Xxxxxx, Xxxxx
Xxxxx, Xxxxxxx and Costa Rica, and (iii) any airports or seaports throughout the
world which are or were serviced by the Company or its subsidiaries or
affiliates at any time since January 1, 1995.
(c) Executive recognizes the importance of the covenant contained
in this Section 6 and acknowledges that, based on his past experience and
training as an executive of the Company, the projected expansion of the
Company's business, and the nature of his services to be provided under this
Agreement, the restrictions imposed herein are: (i) reasonable as to scope, time
and area; (ii) necessary for the protection of the Company's legitimate business
interests, including without limitation, the Company's trade secrets, goodwill,
and its relationship with customers and suppliers; and (iii) not unduly
restrictive of Executive's rights as an individual. Executive acknowledges and
agrees that the covenants contained in this Section 6 are essential elements of
this Agreement and that but for these covenants, the Company would not have
agreed to enter into this Agreement.
(d) If Executive commits a breach or threatens to commit a breach
of any of the provisions of this Section 6, the Company shall have the right and
remedy, in addition to any others that may be available, at law or in equity, to
have the provisions of this Section 6 specifically enforced by any court having
equity jurisdiction, through injunctive or other relief, it being acknowledged
that any such breach or threatened breach will cause irreparable injury to the
Company, the amount of which will be difficult to determine, and that money
damages will not provide an adequate remedy to the Company.
(e) If any covenant contained in this Section 6, or any part
thereof, is hereafter construed to be invalid or unenforceable, the same shall
not affect the remainder of the covenants, which shall be given full effect,
without regard to the invalid portions, and any court having jurisdiction shall
have the power to reduce the duration, scope and/or area of such covenant and,
in its reduced form, said covenant shall then be enforceable.
(f) The provisions of this Section 6 shall survive the expiration
and termination of this Agreement, and the termination of Executive's employment
hereunder, for any reason.
7. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or
-------------------------
limit the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any of its
subsidiaries or affiliates and for which the Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as the Executive may have
under any employment, stock option or other agreements with the Company or any
of its subsidiaries or affiliates. In the event there are any amounts which
represent vested benefits or which the Executive is otherwise entitled to
receive under any other plan or program of the Company or any of its
subsidiaries or affiliates at or subsequent to the Date of Termination, the
Company shall pay or cause the relevant plan or program to pay such amounts, to
the extent not already paid, in accordance with the provisions of such plan or
program.
14
8. Full Settlement. Except as specifically provided otherwise in this
---------------
Agreement, the Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any circumstances, including, without limitation, any setoff,
counterclaim, recoupment, defense or other right which the Company may have
against the Executive or others. The Executive shall not be obligated to seek
other employment by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement. Except as expressly provided in
Section II of Exhibit A, the Severance Benefits shall not be reduced by any
compensation or benefits earned by the Executive as the result of employment by
another employer after the Date of Termination, or otherwise. The Company agrees
to pay all legal fees and expenses which the Executive may reasonably incur as a
result of any contest (regardless of the outcome thereof) by the Company or
others of the validity or enforceability of, or liability under any provision of
this Agreement or any guarantee of performance thereof, in each case plus
interest, compounded daily, on the total unpaid amount determined to be payable
under this Agreement, such interest to be calculated on the basis of two percent
(2%) over the base or prime rate announced by Bank of America in effect from
time to time during the period of such nonpayment, but in no event greater than
the highest interest rate permitted by law for such payments.
9. Successors. 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, executors, heirs and legatees This Agreement shall inure to the
benefit of and be binding upon the Company and its successors. The Company shall
require any successor to all or substantially all of the business and/or assets
of the Company, whether directly or indirectly, by purchase, merger,
consolidation, acquisition of stock, or otherwise, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent as the
Company would be required to perform if no such succession had taken place, by a
written agreement in form and substance reasonably satisfactory to the
Executive, delivered to the Executive within five (5) business days after such
succession.
10. Miscellaneous.
-------------
(a) Modification and Waiver. Any term or condition of this
-----------------------
Agreement may be waived at any time by the party hereto that is entitled to the
benefit thereof; provided, however, that any such waiver shall be in writing and
signed by the waiving party, and no such waiver of any breach or default
hereunder is to be implied from the omission of the other party to take any
action on account thereof. A waiver on one occasion shall not be deemed to be a
waiver of the same or of any other breach on a future occasion. This Agreement
may be modified or amended only by a writing signed by all of the parties
hereto.
(b) Governing Law. The validity and effect of this Agreement
-------------
shall be governed by and construed and enforced in accordance with the laws of
the State of Florida. In any action or proceeding arising out of or relating to
this Agreement (an "Action"), each of the parties hereby irrevocably submits to
the non-exclusive jurisdiction of any federal or state court sitting in Miami,
Florida, and further agrees that any Action may be heard and determined in such
federal court or in such state court. Each party hereby irrevocably waives, to
the fullest
15
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of any action in Miami, Florida.
(c) Tax Withholding. The payments and benefits under this
---------------
Agreement may be compensation and as such may be included in either the
Executive's W-2 earnings statements or 1099 statements. The Company may withhold
from any amounts payable under this Agreement such federal, state or local taxes
as shall be required to be withheld pursuant to any applicable law or
regulation, as well as any other deductions consented to in writing by the
Executive.
(d) Section Captions. Section and other captions contained in
----------------
this Agreement are for reference purposes only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
(e) Severability. Every provision of this Agreement is intended
------------
to be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of this Agreement.
(f) Integrated Agreement. This Agreement constitutes the entire
--------------------
understanding and agreement among the parties hereto with respect to the subject
matter hereof, and supersedes any other employment agreements executed before
the date hereof. There are no agreements, understandings, restrictions,
representations or warranties among the parties other than those set forth
herein or herein provided for.
(g) Interpretation. No provision of this Agreement is to be
--------------
interpreted for or against any party because that party or that party's legal
representative drafted such provision. For purposes of this Agreement: "herein",
"hereby", "hereunder", "herewith", "hereafter" and "hereinafter" refer to this
Agreement in its entirety, and not to any particular subsection or paragraph.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, and all of which shall constitute one and the same
instrument.
(h) 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 as follows:
If to the Executive: at the Executive's last address appearing in the
-------------------
payroll/personnel records of the Company.
If to the Company:
-----------------
World Fuel Services Corporation
000 X. Xxxxx Xxxxxxxxx Xxxx.
Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by addressee.
16
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
seals the day and year first above written.
WITNESSES: WORLD FUEL SERVICES CORPORATION
_____________________________ By: /s/ Xxxx Xxxxxxxx
------------------
_____________________________ Title: President and Chief Operating Officer
_____________________________ /s/ Xxxxxxx X. Xxxxxx
---------------------
_____________________________ Xxxxxxx X. Xxxxxx
Executive
17
EXHIBIT A
SEVERANCE BENEFITS
------------------
(I) Cash Payment. The Company shall pay to the Executive the aggregate
------------
of the amounts determined pursuant to clauses (A) through (C) below:
(A) if not already paid, the Executive's Base Salary, unused
vacation entitlement and car allowance through the Date of Termination; and
(B) an amount equal to the annual Base Salary (the "Base Amount")
payable to the Executive immediately prior to the Date of Termination,
multiplied by three (3) if the termination is pursuant to Section 5.4 hereof on
or before the third anniversary following a Change of Control, or otherwise
multiplied by two (2);
(C) an amount equal to the product of (x) the average annual
bonus payable to the Executive for the three (3) fiscal years beginning on or
after April 1, 2001 (or such lesser number of full fiscal years as shall have
been completed after April 1, 2001) immediately preceding the fiscal year of
termination, multiplied by (y) three (3) if the termination is pursuant to
Section 5.4 hereof on or before the third anniversary following a Change of
Control, or otherwise multiplied by two (2); provided, however, that for these
purposes, the bonus payable by the Company to the Executive for the fiscal year
ending March 31, 2002 shall be equal to the sum of (i) 75% of the bonus payable
to the Executive pursuant to Section 2.2(a) for the calendar year 2001 plus the
bonus payable by the Company to the Executive under Section 2.2(b) for the
period from January 1, 2002 through March 31, 2002 and provided further that if
the Date of Termination occurs prior to April 1, 2002, the amount payable
pursuant to this clause (C) shall be $500,000.
The Company shall pay to the Executive the aggregate of the
amounts determined pursuant to clauses (A) through (C) above in a lump sum by
cashier's check within five (5) business days after the Executive's Date of
Termination.
(II) Medical, Dental, Disability, Life Insurance and Other Similar
-------------------------------------------------------------
Plans and Programs. Until the earlier to occur of (i) the last day of the
------------------
Severance Period, (ii) the date on which the Executive becomes eligible for the
designated or comparable coverage as an employee of another employer which
provides or offers such coverage to its employees, or (iii) in the case of
benefits requiring employee contributions, the date the Executive fails to make
such contributions pursuant to the Company's or the plan's instructions (which
instructions shall be reasonable and given to the Executive by the Company
within five (5) business days following the Executive's Date of Termination) or
otherwise cancels his coverage in accordance with plan provisions, the Company
shall continue to provide all benefits which the Executive and/or his family is
or would have been entitled to receive under all medical, dental, disability,
supplemental life, group life, accidental death and executive accident
insurance, and other similar plans and programs of the Company and/or its
subsidiaries or affiliates not otherwise provided for in this Agreement, in each
case on a basis providing the Executive and/or his family with the opportunity
to receive benefits at least equal to the greatest level of benefits provided by
18
the Company and/or its subsidiaries or affiliates for the Executive under such
plans and programs as in effect at any time during the six (6) month period
immediately preceding the Notice of Termination. The benefits will be paid for
by the Company and, to the extent applicable, will be provided in accordance
with the provisions of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"). If the Executive's participation in any such plan or
program is barred by COBRA or for any other reason, the Company shall pay or
provide for payment of such benefits or substantially similar benefits to the
Executive and/or his family.
(III) Stock Options and Rights. If the Executive is a participant in
------------------------
any stock option or stock purchase plan of the Company, or if the Executive is
the holder of any options, warrants or rights to acquire capital stock of the
Company (collectively "Stock Rights"), the Executive shall have all of the
rights set forth in the relevant plans and Stock Rights.
(IV) Deferred Compensation. The Company shall pay to the Executive the
---------------------
Executive's salary or incentive compensation awards that have been previously
deferred, if any, in accordance with the terms of the Executive's individual
deferred compensation agreement(s) or the applicable plan(s), as appropriate.
The last day of the Severance Period will be considered to be the Executive's
termination date for purposes of such agreement(s).
(V) Definition of Severance Period. For purposes of this Exhibit A,
------------------------------
the term "Severance Period" shall mean the three (3) year period immediately
following the Date of Termination, if the termination is pursuant to Section 5.4
of the Agreement following a Change of Control, or the two (2) year period
immediately following the Date of Termination in the case of any other
termination.
(VI) Taxes. Notwithstanding anything in the foregoing to the contrary,
-----
if (x) a Change of Control occurs on or after January 1, 2003, and (y) the
Executive's employment with the Company terminates on or before the third
anniversary of such Change of Control, then the Company shall not be obligated
to pay any portion of the amounts otherwise payable to the Executive pursuant to
Section 5.4 of this Agreement (the "Section 5.4 Severance Benefits"), on account
of such termination, if and only to the extent that the Company could not
reasonably deduct such portion solely by operation of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"). For purposes of this
limitation: (i) no portion of the Section 5.4 Severance Benefits, the receipt or
enjoyment of which the Executive shall have effectively waived in writing prior
to the date of payment, shall be taken into account; (ii) no portion of any
Section 5.4 Severance Benefits shall be taken into account which, in the opinion
of tax counsel selected by the Company's independent auditors and acceptable to
the Executive, does not constitute a "parachute payment" within the meaning of
Section 280G(b)(2) of the Code; (iii) the Section 5.4 Severance Benefits to the
Executive shall be reduced only to the extent necessary so that the total
Section 5.4 Severance Benefits (other than those referred to in clause (i) or
(ii) ) in their entirety constitute reasonable compensation for services
actually rendered within the meaning of Section 280G(b) (4) of the Code, in the
opinion of the tax counsel referred to in clause (ii); and (iv) the value of any
non-cash benefit or any deferred payment or benefit included in the Section 5.4
Severance Benefits shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
19
Dated as of the 11th day of October, 2001.
/s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
WORLD FUEL SERVICES CORPORATION
By: /s/ Xxxx Xxxxxxxx
-----------------
Title: President and Chief Operating Officer
20
