EXHIBIT 10.10
The following persons have Executive Severance Agreements with the
Company in the form filed herewith with the names or amounts set forth
below inserted in the blanks identified by the following column headings.
(I) (II) (III)
Xxxxxxxx X. Xxxxx 3 36
Xxxxxxx X. X'Xxxxxxx 3 36
Xxxxxx X. Xxxxx 3 36
Xxxxxxx X. Xxxxx, Xx. 3 36
Xxxxx X. Xxxxxxx 3 36
Xxxx X. Xxxxxxxx 2 24
Xxxx X. Xxxxxx 2 24
Xxxxxxx X. X. Xxxxx 2 24
Xxxxxx X. Xxxxx 2 24
Xxxxxxx X. XxXxxxxx 2 24
Xxxx Xxxx 2 24
Xxxxx X. Xxxxxx 2 24
V. Xxxx Xxxxx 2 24
Xxxxxx X. Xxxxx 2 24
Xxxxxxxx X. Xxxxxxxxx 2 24
Xxxxxx X. Xxxxxxxxx 2 24
WOLVERINE WORLD WIDE, INC
EXECUTIVE SEVERANCE AGREEMENT
THIS AGREEMENT is entered into as of the __ day of ___, 199__ (the
"Effective Date"), by and between Wolverine World Wide, Inc., a Delaware
corporation ("Wolverine"), and _______(I)_________ ("Executive").
W I T N E S S E T H:
WHEREAS, Executive currently serves as a key employee of Wolverine
and/or its subsidiaries and his/her services and knowledge are valuable to
Wolverine in connection with the management of one or more of Wolverine's
principal operating facilities, divisions, or subsidiaries; and
WHEREAS, Xxxxxxxxx considers the establishment and maintenance of a
sound and vital management to be essential to protecting and enhancing the best
interests of Wolverine and its stockholders; and
WHEREAS, the Board has determined that it is in the best interests of
Wolverine and its stockholders to secure Executive's continued services and to
ensure Executive's continued dedication and objectivity in the event of any
threat or occurrence of, or negotiation or other action that could lead to, or
create the possibility of, a Change in Control (as hereafter defined) of
Wolverine, without concern as to whether Executive might be hindered or
distracted by personal uncertainties and risks created by any such
possible Change in Control, and to encourage Executive's full attention and
dedication to Xxxxxxxxx and/or its subsidiaries, the Board has authorized
Wolverine to enter into this Agreement.
NOW, THEREFORE, XXXXXXXXX AND EXECUTIVE AGREE AS FOLLOWS:
1. DEFINITIONS. As used in this Agreement, the following terms shall
have the respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause" means (1) the willful and continued failure by Executive
to substantially perform his or her duties with Company (other than any
such failure resulting from Executive's incapacity due to physical or
mental illness, or any such actual or anticipated failure resulting from
Executive's termination for Good Reason) after a demand for substantial
performance is delivered to Executive by the Board and/or its Chairman
(which demand shall specifically identify the manner in which the Board
and/or its Chairman believes that Executive has not substantially performed
his or her duties); or (2) the willful engaging by Executive in gross
misconduct materially and demonstrably injurious to the Company. For
purposes of this Section, no act or failure to act on the part of Executive
shall be considered "willful" unless done or omitted to be done by
Executive not in good faith and without reasonable belief that his or her
action(s) or omission(s) was in the best interests of the Company.
Notwithstanding the foregoing, Executive shall not be deemed to
have been terminated for Cause unless and until the Company provides
Executive with a copy of a resolution adopted by an affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting
of the Board called and held for the purpose (after reasonable notice to
Executive and an opportunity for Executive, with counsel, to be
heard before the Board), finding that in the good faith opinion of the
Board the Executive has been guilty of conduct set forth in subsections (1)
or (2) above, setting forth the particulars in detail. A determination of
Cause by the Board shall not be binding upon or entitled to deference by
any finder of fact in the event of a dispute, it being the intent of the
parties that such finder of fact shall make an independent determination of
whether the termination was for "Cause" as defined in (1) and (2) above.
(c) "Change in Control" means:
(1) the acquisition by any individual, entity, or group (a
"Person"), including any "person" within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), of beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act, of
20% or more of either (i) the then outstanding shares of common stock
of the Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that the
following acquisitions shall not constitute a Change in Control:
(a) any acquisition by the Company, (b) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, (c) any acquisition by
any corporation pursuant to a reorganization, merger, or consolidation
involving the Company, if, immediately after such reorganization,
merger, or consolidation, each of the conditions described in
clauses (i), (ii), and (iii) of subsection (3) shall be satisfied, or
(d) any acquisition by the Executive or any group of persons including
the Executive; and provided further that, for purposes of clause (a),
if any Person (other than the Company or any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company) shall become the beneficial
owner of 20% or more of the Outstanding Company Common Stock or 20% or
more of the Outstanding Company Voting Securities by reason of an
acquisition by the Company and such Person shall, after such
acquisition by the Company, become the beneficial owner of any
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additional shares of the Outstanding Company Common Stock or any
additional Outstanding Voting Securities, such additional beneficial
ownership shall constitute a Change in Control;
(2) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of such Board; provided, however, that any individual who
becomes a director of the Company subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders, was
approved by the vote of at least three-quarters of the directors then
comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is
named as a nominee for director, without objection to such nomination)
shall be deemed to have been a member of the Incumbent Board; and
provided further, that no individual who was initially elected as a
director of the Company as a result of an actual or threatened election
contest, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act, or any other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other
than the Board, shall be deemed to have been a member of the Incumbent
Board;
(3) approval by the stockholders of the Company of a
reorganization, merger, or consolidation unless, in any such case,
immediately after such reorganization, merger, or consolidation, (i)
more than 50% of the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger, or
consolidation and more than 50% of the combined voting power of the
then outstanding securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals
or entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior or such reorganization, merger, or
consolidation and in substantially the same proportions relative to
each other as their ownership, immediately prior to such
reorganization, merger, or consolidation, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case
may be, (ii) no Person (other than the Company, any employee
benefit plan (or related trust) sponsored or maintained by the Company
or the corporation resulting from such reorganization, merger, or
consolidation (or any corporation controlled by the Company), or any
Person which beneficially owned, immediately prior to such
reorganization, merger, or consolidation, directly or indirectly, 20%
or more of the Outstanding Company Common Stock or the
Outstanding Company Voting Securities, as the case may be) beneficially
owns, directly or indirectly, 20% or more of the then outstanding
shares of common stock of such corporation or 20% or more of the
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combined voting power of the then outstanding securities of such
corporation entitled to vote generally in the election of
directors, and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such reorganization,
merger, or consolidation were members of the Incumbent Board at the
time of the execution of the initial agreement or action of the Board
providing for such reorganization, merger, or consolidation; or
(4) approval by the stockholders of the Company of (i) a plan of
complete liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of the
Company other than to a corporation with respect to which, immediately
after such sale or other disposition, (a) more than 50% of the then
outstanding shares of common stock thereof and more than 50% of the
combined voting power of the then outstanding securities thereof
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all
of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such sale or
other disposition and in substantially the same proportions relative to
each other as their ownership, immediately prior to such sale or other
disposition, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be,(b) no
Person (other than the Company, any employee benefit plan (or related
trust) sponsored or maintained by the Company or such corporation (or
any corporation controlled by the Company), or any Person which
beneficially owned, immediately prior to such sale or other
disposition, directly or indirectly, 20% or more of the Outstanding
Company Common Stock or the Outstanding Company Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 20% or
more of the then outstanding shares of Common stock thereof or 20% or
more of the combined voting power of the then outstanding securities
thereof entitled to vote generally in the election of directors and (c)
at least a majority of the members of the board of directors thereof
were members of the Incumbent Board at the time of the execution
of the initial agreement or action of the Board providing for such sale
or other disposition.
Notwithstanding anything contained in this Agreement to the contrary,
if Executive's employment is terminated prior to a Change in Control
and Executive reasonably demonstrates that such termination was at the
request of or in response to a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change in
Control (a "Third Party") who effectuates a Change in Control, then
for all purposes of this Agreement, the date of a Change of Control
shall mean the date immediately prior to the date of such termination
of Executive's employment.
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(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Common Stock" means the common stock of the Company, $1 par
value per share.
(f) "Company" means Wolverine World Wide, Inc., a Delaware
corporation, and any corporation or other entity in which Wolverine World
Wide, Inc. has a direct or indirect ownership interest of 50% or more of
the total combined voting power of the then outstanding securities of such
corporation or other entity entitled to vote generally in the election of
directors.
(g) "Date of Termination" means the effective date on which
Executive's employment by the Company terminates as specified in a Notice
of Termination by the Company or Executive, as the case may be.
Notwithstanding the previous sentence, (i) if the Executive's employment is
terminated for Disability, as defined in Section 1(h), then such
Date of Termination shall be no earlier than thirty (30) days following the
date on which a Notice of Termination is received, and (ii) if the
Executive's employment is terminated by the Company other than for Cause,
then such Date of Termination shall be no earlier than thirty (30) days
following the date on which a Notice of Termination is received.
(h) "Disability" means Executive's failure to substantially perform
his/her duties with the Company on a full-time basis for at least one
hundred eighty (180) consecutive days as a result of Executive's incapacity
due to mental or physical illness.
(i) "Good Reason" means, without Executive's express written consent,
the occurrence of any of the following events in connection with a Change
in Control:
(1) (i) the assignment to Executive of any duties inconsistent
in any material adverse respect with Executive's position(s), duties,
responsibilities, or status with the Company immediately prior to
such Change in Control, (ii) a material adverse change in Executive's
reporting responsibilities, titles or offices with the Company as in
effect immediately prior to such Change in Control, (iii) any removal
or involuntary termination of Executive by the Company otherwise than
as expressly permitted by this Agreement (including any purported
termination of employment which is not effected by a Notice of
Termination), or (iv) any failure to re-elect Executive to any
position with the Company held by Executive immediately prior to
such Change in Control;
(2) a reduction by the Company in Executive's rate of annual
base salary as in effect immediately prior to such Change in Control
or as the same may be increased from time to time thereafter;
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(3) any requirement of the Company that Executive (i) be based
anywhere other than the facility where Executive is located at the
time of the Change in Control or reasonably equivalent facilities
within Kent County, Michigan or (ii) travel for the business of the
Company to an extent substantially more burdensome than the travel
obligations of Executive immediately prior to such Change in Control;
(4) the failure of the Company to continue the Company's
executive incentive plans or bonus plans in which Executive is
participating immediately prior to such Change in Control or a
reduction of the Executive's target incentive award opportunity under
the Company's Executive Long-Term Incentive Plan (three-year
bonus plan), Executive Short-Term Incentive Plan and the Executive
Short-Term Individual Bonus Plan (annual bonus plans) or other bonus
plan adopted by the Company, unless Executive is permitted to
participate in other plans providing Executive with substantially
comparable benefits or receives compensation as a substitute for such
plans providing Executive with a substantially equivalent economic
benefit;
(5) the failure of the Company to (i) continue in effect any
employee benefit plan or compensation plan in which Executive is
participating immediately prior to such Change in Control, unless
Executive is permitted to participate in other plans providing
Executive with substantially comparable benefits or receives
compensation as a substitute for such plans providing Executive with
a substantially equivalent economic benefit, or the taking of any
action by the Company which would adversely affect Executive's
participation in or materially reduce Executive's benefits under any
such plan, (ii) provide Executive and Executive's dependents with
welfare benefits (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and
programs) in accordance with the most favorable plans, practices,
programs, and policies of the Company in effect for Executive
immediately prior to such Change in Control, (iii) provide fringe
benefits in accordance with the most favorable plans, practices,
programs, and policies of the Company in effect for Executive
immediately prior to such Change in Control, or (iv) provide
Executive with paid vacation in accordance with the most favorable
plans, policies, programs and practices of the Company as in effect
for Executive immediately prior to such Change in Control;
(6) the failure of the Company to pay any amounts owed Executive
as salary, bonus, deferred compensation or other compensation;
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(7) the failure of the Company to obtain an assumption agreement
from any successor as contemplated in Section 9(b);
(8) any purported termination of Executive's employment which is
not effected pursuant to a Notice of Termination which satisfies the
requirements of a Notice of Termination; or
(9) any other material breach by Company of its obligations
under this Agreement.
For purposes of this Agreement, any good faith determination of Good
Reason made by Executive shall be conclusive on the parties; provided,
however, that an isolated and insubstantial action taken in good faith and
which is remedied by the Company within ten(10) days after receipt of
notice thereof given by Executive shall not constitute Good Reason.
Any event or condition described in this Section 1(g) which occurs prior to
a Change in Control, but which Executive reasonably demonstrates was at the
request of or in response to a Third Party who effectuates a Change in
Control or who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control, shall constitute Good Reason
following a Change in Control for purposes of this Agreement
notwithstanding that it occurred prior to the Change in Control.
(j) "Nonqualifying Termination" means a termination of Executive's
employment (1) by the Company for Cause, (2) by Executive for any reason
other than for Good Reason with Notice of Termination, (3) as a result of
Executive's death, (4) by the Company due to Executive's Disability, unless
within thirty (30) days after Notice of Termination is provided to
Executive after such Disability Executive shall have returned to
substantial performance of Executive's duties on a full-time basis, or (5)
as a result of Executive's Retirement. For purposes of this Agreement,
termination by the Company shall not include a transfer of employment
between subsidiaries of Wolverine or between Wolverine and its
subsidiaries. The terms of such transfer, however, may serve as the basis
for termination of employment by Executive for Good Reason.
(k) "Notice of Termination" means a written notice by the Company or
Executive, as the case may be, to the other, which (1) indicates the
specific reason for Executive's termination, (2) to the extent applicable,
sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment, and
(3) specifies the termination date. The failure by Executive or the
Company to set forth in such notice any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right
of Executive or the Company hereunder or preclude Executive or the Company
from asserting such fact or circumstance in enforcing Executive's or the
Company's rights hereunder.
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(l) "Positive Spread" means the spread between the exercise price of
the options held by Executive under the 1993 Stock Incentive Plan, the 1995
Stock Incentive Plan, the 1997 Stock Incentive Plan or any other stock
option plan now or subsequently adopted by the Company, and the higher of
(1) the closing price of the Common Stock as reported on the Termination
Date on the New York Stock Exchange, or if the New York Stock Exchange is
closed on that date, the last preceding date on which the New York Stock
Exchange was open and on which shares of Common Stock were traded, or (2)
the highest price per share paid in connection with the Change in Control.
(m) "Retirement" means termination of employment by either the
Executive or the Company on or after the Executive's normal retirement date
under the terms of retirement plans of the Company, but not earlier than
the age of 65.
(n) "Termination Period" means the period of time beginning with a
Change in Control and ending on the earliest to occur of Executive's death
and ______(II)______ years following such Change in Control.
2. TERM OF AGREEMENT. This Agreement shall commence on the Effective
Date and shall continue in effect through the third anniversary of the Effective
Date. However, on the first anniversary of the Effective Date, and on each such
anniversary thereafter, the term of this Agreement will be extended
automatically for one (1) year (to a total of three (3) years) unless, not later
than six (6) months prior to such anniversary date, the Company gives Executive
written notice that it has elected not to extend this Agreement; provided that
(a) no such action shall be taken by the Company during any period of time when
the Board has knowledge that any person has taken steps reasonably calculated to
effect a Change in Control until, in the opinion of the Board, such person has
abandoned or terminated its efforts to effect a Change in Control, and (b) this
Agreement shall continue in effect for at least _______(III)______ months
following the occurrence of a Change in Control. Notwithstanding anything in
this Section 2 to the contrary, this Agreement shall terminate upon termination
of Executive's employment with the Company prior to a Change in Control (except
as otherwise provided hereunder).
3. OBLIGATIONS OF EXECUTIVE. Executive agrees that in the event any
person or group attempts a Change in Control, he/she shall not voluntarily leave
the employ of the Company (other than as a result of Disability or upon
Retirement) without Good Reason until the earlier of (a) the termination of
such attempted Change in Control or (b) the occurrence of a Change in Control.
For purposes of this Section 3, Good Reason shall be determined as if a Change
in Control had occurred when such attempted Change in Control became known to
the Board. Termination of employment by Executive without Good Reason, however,
shall not entitle Executive to benefits under Section 4 unless he/she is
entitled to such benefits under another provision of this Agreement.
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4. SEVERANCE BENEFITS. If the employment of Executive shall terminate
during the Termination Period, other than by reason of a Nonqualifying
Termination, then Executive shall receive the following severance benefits as
compensation for services rendered:
(a) LUMP SUM CASH PAYMENT. Within five (5) days after the Date of
Termination, Executive shall receive a lump sum cash payment in an amount
equal to the sum of the following:
(1) Executive's unpaid base salary from the Company through the
Date of Termination at the rate in effect (without taking into
account any reduction of base salary constituting Good Reason), just
prior to the time a Notice of Termination is given plus any benefit
awards (including both the cash and stock components) and bonus
payments which pursuant to the terms of any plans have been earned or
become payable, to the extent not theretofore paid;
(2) As payment in lieu of a bonus to be paid under the Executive
Short-Term Incentive Plan and the Executive Short-Term Individual
Bonus Plan (annual bonus plans) or comparable plans for the time
Executive was employed by the Company in the year of termination, an
amount equal to the number of days Executive was employed by the
Company prior to the Date of Termination in the year of termination
divided by the number of days in the year multiplied by 100% of the
greater of either (a) the bonus awarded to Executive under the
Executive Short-Term Incentive Plan for the immediately preceding
year, or (b) the average bonus paid to Executive over the preceding
two-year period under the Executive Short-Term Incentive Plan;
(3) As payment in lieu of bonuses that would have been paid
under each Executive Long-Term Incentive (Three Year) Plan ("Three
Year Plan") or other comparable plan(s) in which the Executive was
eligible to participate on the Date of Termination, the Executive
shall receive an amount based on the earnings per share goals under
each of the Three Year Plans. The earnings per share for each Three
Year Plan will be calculated in the following manner:
(a) for any year prior to the year of termination, the earnings
per share will equal the actual earnings per share attained in that
year;
(b) for the year of termination, the earnings per share will
equal the projected earnings per share based upon the latest internal
company projection for such year;
(c) for any year subsequent to the year of termination, the
earnings per share will equal the earnings per share required to
attain the maximum goal under the Three Year Plan for that year.
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After attaining the total earnings per share for all three years
of each Three Year Plan, the payment made for each Three Year Plan
will equal the bonus the Executive would have received under the
Three Year Plan using the earnings per share determinations above,
multiplied by the number of days the Executive participated in the
Three Year Plan prior to the Date of Termination, divided by the
total number of days in the Three Year Plan.
(4) ______(II)________ times the sum of the following:
(a) Executive's highest annual rate of base salary from the
Company in effect during the 12-month period prior to the Date of
Termination, plus (b) the greater of the average amount earned by
Executive during the previous two (2) years or for the previous year
under the Executive Short Term Incentive Plan and the Executive
Short-Term Individual Bonus Plan (or other annual bonus plans), plus
(c) the greater of the average amount earned by Executive during the
previous two (2) years or for the previous year under each of the
Executive Long-Term Incentive (Three Year) Plans(or other similar
plans), in which Executive participates at the Date of Termination.
(5) 100% of the Positive Spread for any options held by
Executive, whether vested or not vested, which are not incentive
stock options as defined under Section 422 of the Code payable upon
surrender by Executive of such options; and
(6) 100% of the Positive Spread for any options held by
Executive, whether vested or not vested, which are incentive stock
ptions as defined under Section 422 of the Code payable upon
surrender by Executive of such options.
(b) LOANS. Any loans that the Executive had outstanding under
the loan program of the Company shall remain payable according to the
terms of such program.
(c) BENEFITS. Excepting any retirement plans covered by
Subsection 4(d) below, the Company shall maintain in full force and
effect for the benefit of Executive all employee benefit plans,
programs and arrangements that the Executive was entitled to
participate in immediately prior to the Date of Termination for the
longer of six (6) months after the Date of Termination or the date
upon which the Executive receives comparable benefits from a new
employer. The Company, however, need not maintain such benefit
plans, programs or arrangements after one(1) year following the Date
of Termination. If the Executive's participation in any such plan
or program is barred, the Company shall arrange to provide comparable
benefits substantially similar to those which the Executive received
under such plans and programs.
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(d) RETIREMENT BENEFITS. In addition to the benefits the
Executive is entitled to receive under any retirement plans in which
the Executive participates on the Date of Termination, the Company
shall pay the Executive a cash payment at the Executive's normal
retirement age, as defined by such plan, (except to the extent
benefits are payable at an earlier date under the terms of that plan)
of an amount equal to the actuarial equivalent of any additional
benefit the Executive would have been entitled to receive under the
terms of the plan or program without regard to any vesting or minimum
service requirements under the plan had the Executive received three
(3) additional years of service following the Date of Termination,
subject to any maximum years of service limitations under any
retirement plan. The earnings for those three (3) additional years of
services shall equal the Executive's annualized earnings at the Date
of Termination (with earnings calculated the same as "Earnings" are
defined in the Company's Supplemental Executive Retirement Plan
("SERP")) and without taking into account any reduction of base salary
constituting Good Reason. For purposes of this Subsection, retirement
plans" shall be deemed to include, without limitation, the Company's
Pension Plan and the Company's SERP.
(e) ADJUSTMENTS. If Executive is entitled to receive a Payment
equal to or between one hundred percent (100%) and one hundred fifteen
percent (115%) of the amount that would trigger application of the
Excise Tax (as hereafter defined), meaning Executive will receive no
Gross-Up Payment with respect to the Payment in accordance with
Section 5, the Company shall determine whether the Executive would
receive a greater after-tax net amount if the Payment is reduced by an
amount sufficient to make the Excise Tax inapplicable to the Payment
rather than paying the applicable Excise Tax. If the Company
determines that the Executive will receive a greater after-tax net
amount by reducing the Payment, such determination shall be final, and
the Company shall reduce the Payment by an amount sufficient to make
the Excise Tax inapplicable to the Payment otherwise due to
Executive.
The Company may retain the Accounting Firm (as hereafter defined) to
assist with any calculations required under this Subsection (e) and
Executive agrees to furnish such tax and financial information as may
reasonably be required for calculations under this Subsection (e). In
the event the Company reduces any Payment to an Executive under this
Subsection (e), the Executive shall be entitled to determine which
elements or benefits, or combination thereof, constituting the Payment
will be reduced or deferred, subject to confirmation by the Company
that the reduction or deferral elected by Executive will exempt the
Payment from any Excise Tax.
(f) OUT-PLACEMENT SERVICES. The Company shall provide the
Executive with executive out-placement services by entering into a
contract with a company chosen by the Executive specializing in such
services.
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5. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding, if
any payment or distribution by the Company to or for the benefit of
Executive (whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise, but determined without regard
to any additional payments required under this Section 5 (a "Payment"))
that exceeds one hundred fifteen percent (115%) of the amount that would
trigger application of the excise tax imposed by Section 4999 of the Code,
or any successor Code provision (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), or any interest or penalties are incurred by Executive with
respect to Excise Tax on such amount, then Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes) including, without
limitation, any income and employment taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax, imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments. The Company shall not be obligated
to make any Gross-Up Payment to Executive with respect to any Payment equal
to or less than one hundred fifteen percent (115%) of the amount that would
trigger application of the Excise Tax.
(b) Subject to the provisions of Section 5(c), all determinations
required to be made under this Section 5, 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 the public accounting firm that is retained by the Company as of
the date immediately prior to the Change in Control (the "Accounting Firm")
which shall provide detailed supporting calculations both to the Company
and Executive within fifteen (15) business days of the receipt of notice
from Executive that there has been a Payment, or such earlier time as is
requested by the Company or Executive (collectively, the "Determination").
In the event that the Accounting Firm is serving as accountant or auditor
for the individual, entity, or group affecting the Change in Control,
Executive shall appoint another nationally recognized public 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, shall be paid
by the Company to Executive within five (5) days of the receipt of the
Determination. If the Accounting Firm determines that no Excise Taxes are
payable by Executive, it shall furnish Executive with a written opinion
that failure to report the Excise Tax on Executive's applicable federal
income tax return would not result in the imposition of a negligence or
similar penalty. If the Accounting Firm determines that Excise Taxes are
payable and that the associated Payment does not exceed one hundred fifteen
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percent (115%) of the amount that would trigger application of the Excise
Tax, the Accounting Firm shall notify Executive that Executive is
responsible for payment of the Excise Tax. The Determination by the
Accounting Firm shall be binding upon the Company and Executive; however,
as a result of the uncertainty in the application of Section 4999 of the
Code at the time of the Determination, it is possible that 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(c) and Executive thereafter is required to make payment of any
Excise Tax that qualifies for a Gross-Up Payment in accordance with this
Section 5, 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 Executive.
(c) 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 a Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten(10) business days after 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. Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which Executive 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
Executive in writing prior to the expiration of such period that it desires
to contest such claim, Executive shall:
(1) give the Company any information reasonably requested by the
Company relating to such claim,
(2) 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,
(3) cooperate with the Company in good faith in order
effectively to contest such claim, and
(4) permit the Company to participate in any proceeding 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 Executive
harmless, on an after-tax basis, for any Excise Tax or income or employment
tax (including interest and penalties with respect thereto) imposed as a
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result of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 5(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 Executive to pay
the tax claimed and sue for a refund or contest the claim in any
permissible manner, and 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 further, that if the Company directs Executive to pay
such claim and sue for a refund, the Company shall advance the amount of
such payment to Executive on an interest-free basis and shall indemnify and
hold Executive harmless, on an after-tax basis, from any Excise Tax or
income or employment 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 provided further, that any
extension of the statute of limitations relating to payment of taxes for
the taxable year of 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 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.
(d) If, after the receipt by Executive of an amount advanced by the
Company pursuant to Section 5, Executive becomes entitled to receive, and
receives, any refund with respect to such claim, Executive shall (subject
to the Company's complying with the requirements of Section 5) 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 Executive of an amount advanced by the Company pursuant to
Section 5, a determination is made that Executive shall not be entitled to
any refund with respect to such claim and the Company does not notify
Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty (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. WITHHOLDING TAXES. The Company may withhold from all payments due to
Executive (or his/her beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local, or other law, the Company is required to
withhold therefrom.
7. REIMBURSEMENT OF EXPENSES. If any contest or dispute shall arise
under or related to this Agreement involving termination of Executive's
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employment with the Company or involving the failure or refusal of the Company
to perform fully in accordance with the terms hereof, the Company shall
reimburse Executive, on a current basis, for all legal fees and expenses, if
any, incurred by Executive in connection with such contest or dispute regardless
of the result thereof.
8. SCOPE OF AGREEMENT. Nothing in this Agreement shall be deemed to
entitle Executive to continued employment with the Company.
9. SUCCESSORS; BINDING AGREEMENT.
(a) This Agreement shall not be terminated by any merger or
consolidation of the Company whereby the Company is or is not the surviving
or resulting corporation or as a result of any transfer of all or
substantially all of the assets of the Company. In the event of
any such merger, consolidation, or transfer of assets, the provisions of
this Agreement shall be binding upon the surviving or resulting corporation
or the person or entity to which such assets are transferred.
(b) The Company agrees that concurrently with any merger,
consolidation or transfer of assets referred to in this Section 9, it will
cause any successor or transferee unconditionally to assume, by written
instrument delivered to Executive (or his/her beneficiary or estate), all
of the obligations of the Company hereunder. Failure of the Company to
obtain such assumption prior to the effectiveness of any such merger,
consolidation, or transfer of assets shall be a breach of this Agreement
and shall constitute Good Reason hereunder and shall entitle Executive to
compensation and other benefits from the Company in the same amount and on
the same terms as Executive would be entitled hereunder if Executive's
employment were terminated following a Change in Control other than by
reason of a Nonqualifying Termination. For purposes of implementing the
foregoing, the date on which any such merger, consolidation, or transfer
becomes effective shall be deemed the date Good Reason occurs, and shall be
the Date of Termination if requested by Executive.
(c) This Agreement shall inure to the benefit of and be enforceable
by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive shall die while any amounts would be payable to Executive
hereunder had Executive continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to such person or persons appointed in writing by Executive
to receive such amounts or, if no person is so appointed, to Executive's
estate.
10. NOTICE. For purposes of this Agreement, all notices and other
communications required or permitted hereunder shall be in writing and shall be
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deemed to have been duly given when delivered or received by facsimile
transmission or five (5) days after deposit in the United States mail, certified
and return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
________________________
________________________
________________________
________________________
If to the Company:
General Counsel
Wolverine World Wide, Inc.
0000 Xxxxxxxxx Xxxxx, X.X.
Rockford, Michigan 49351
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
11. FULL SETTLEMENT; RESOLUTION OF DISPUTES.
(a) The Company's obligation to make any payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against Executive or
others. In no event shall Executive be obligated to seek other employment
or take other action by way of mitigation of the amounts payable to
Executive under any of the provisions of this Agreement and, such amounts
shall not be reduced whether or not Executive obtains other employment.
(b) If there shall be any dispute between the Company and Executive
in the event of any termination of Executive's employment then, until there
is a final, nonappealable, determination pursuant to arbitration declaring
that such termination was for Cause, that the determination by Executive of
the existence of Good Reason was not made in good faith, or that the
Company is not otherwise obligated to pay any amount or provide any benefit
to Executive and his/her dependents or other beneficiaries, as the case may
be, under Section 4, the Company shall pay all amounts, and provide all
benefits, to Executive and his/her dependents or other beneficiaries, as
the case may be, that the Company would be required to pay or provide
pursuant to Section 4 as though such termination were by the Company
without Cause or by Executive with Good Reason; provided, however, that the
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Company shall not be required to pay any disputed amounts pursuant to this
Section 11 except upon receipt of an undertaking by or on behalf of
Executive to repay all such amounts to which Executive is ultimately
determined by the arbitrator not to be entitled.
12. GOVERNING LAW; VALIDITY. The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Delaware without regard to the
principle of conflicts of laws. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which other provisions shall remain in
full force and effect.
13. ARBITRATION. Any dispute or controversy under this Agreement shall be
settled exclusively by arbitration in Rockford, Michigan, in accordance with the
rules of the American Arbitration Association then in effect; provided, however,
that Executive shall be entitled to seek specific performance of his/her right
to be paid pursuant to Section 11(b) during a dispute. Judgment may be entered
on the arbitration award in any court having jurisdiction. The Company shall
bear all costs and expenses arising in connection with any arbitration
proceeding pursuant to this Section 13.
14. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
15. MISCELLANEOUS. No provision of this Agreement may be modified or
waived unless such modification is agreed to in writing and signed by Executive
and by a duly authorized officer of the Company, or such waiver is signed by the
waiving party. No waiver by either party hereto at any time of any breach by
the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. Failure by Executive or the Company to insist upon strict
compliance with any provision of this Agreement or to assert any right Executive
or the Company may have hereunder, including without limitation, the right of
Executive to terminate employment for Good Reason, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement. The rights of, and benefits payable to, Executive, his/her estate,
or his/her beneficiaries pursuant to this Agreement are in addition to any
rights of, or benefits payable to, Executive, his/her estate, or his/her
beneficiaries under any other employee benefit plan or compensation
program of the Company, except that no benefits pursuant to any other employee
plan or compensation program that become payable or are paid in accordance with
this Agreement shall be duplicated by operation of this Agreement. No
agreements or representations, oral or otherwise, express or implied, with
regard to the subject matter hereof have been made by either party which are not
expressly set forth in this Agreement.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized officer of the Company. Executive has executed
this Agreement as of the day and year written below.
WOLVERINE WORLD WIDE, INC.
By: ______________________________________
Its: ______________________________________
"Company"
AGREED TO THIS ___ DAY OF _______, 199__.
/s/_________________(I)___________________
"Executive"
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