LANCASTER COLONY CORPORATION Amended and Restated Key Employee Severance Agreement
Exhibit 10.2
| Xxxxx X. Xxxx | ||
| Name of Key Employee | ||
| December 3, 2008 | ||
| Date of Agreement | ||
LANCASTER COLONY CORPORATION
Amended and Restated Key Employee Severance Agreement
This Amended and Restated Key Employee Severance Agreement (“Agreement) is entered
into as of the date set forth above between Lancaster Colony Corporation (“LCC”) and the
undersigned key employee of LCC named above (“Key Employee”).
1. Severance Benefits. In the event there is a Termination of Employment of the Key
Employee within one (1) year following a Change in Control (i) by LCC other than for Cause, or (ii)
by the Key Employee for Good Reason, the Key Employee shall be entitled to and shall be paid and
provided the following severance benefits by LCC:
(a) Unpaid Base Salary. The amount of any unpaid base salary of the Key Employee
accruing through the date of Termination of Employment, determined at the base salary rate in
effect for the Key Employee at such date, shall be paid to the Key Employee in cash by LCC within
thirty (30) days following the date of Termination of Employment (provided that if such
thirty-(30-) day period begins in one calendar year and ends in another, the Key Employee shall not
have the right to designate the calendar year of payment).
(b) Severance Compensation. An amount equal to the lesser of (i) the
sum of (y) the Key Employee’s highest annual salary paid within the three full fiscal years prior
to the date of termination of employment, plus (z) the Key Employee’s highest total annual bonus
paid within the three full fiscal years prior to the date of Termination of Employment, or (ii) an
amount equal to twice the Key Employee’s annual compensation (salary plus bonus) paid for the full
fiscal year immediately preceding the date of Termination of Employment, shall be paid to the Key
Employee in cash by LCC within thirty (30) days following the date of termination of Employment
(provided that if such thirty-(30-) day period begins in one calendar year and ends in
another, the Key Employee shall not have the right to designate the calendar year of payment).
(c) Continuation of Benefits. In addition to the foregoing cash payments, the Key
Employee shall be entitled to continued coverage under such of LCC’s health, disability and life
insurance plans in which the Key Employee participated on the date of Termination of Employment, on
the same basis as in effect on such date of Termination of Employment (including required employee
contributions, if any), for a period of one year following the date of Termination of Employment.
2. Definitions. As used herein, the following terms shall have the meanings set forth
below.
“Cause” means the willful engaging by the Key Employee in malfeasance or felonious
conduct which in any material respect impairs the reputation, good will or business position of LCC
or involves misappropriation of LCC’s funds or other assets.
“Change in Control” means a change in control of LCC of a nature that would be
required to be reported in response to Item 1.01(a) or Item 5.01 of LCC’s Current Report on Form
8-K pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”); provided that, without limitation, such a Change
in Control shall be deemed to have occurred at such time as (i) any “person” within the meaning of
Section 14(d) of the Exchange Act, other than LCC; a subsidiary of LCC; Xxxx X. Xxxxxxx, Xx. or any
of their “affiliates” or “associates” (as such terms are defined in Rule 12b-2 under the Exchange
Act); or any employee benefit plan sponsored by LCC, becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of thirty percent (30%) or more of the
common stock of LCC or otherwise controls more than thirty percent (30%) of the outstanding shares
entitled to vote or (ii) individuals who constitute the Board of Directors of LCC as of the date
hereof (the “Incumbent Board”) or who are successor members to such Incumbent Board members
and whose appointment or nomination for election was approved by action of at least three-fourths
of (y) of such Incumbent Board (“Approved Successors”) or (z) by a board whose members can
trace their status as such to appointment or nomination for election which was approved by at least
three-fourths of Incumbent Board members or Approved Successors cease for any reason to constitute
at least a majority thereof; but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other than the Incumbent
Board (including Approved Successors).
“Code” means the Internal Revenue Code of 1986, as amended.
“Good Reason” means a material diminution of the Key Employee’s base salary, (ii) a
material diminution in the Key Employee’s authority, duties or responsibilities, (iii) a material
change in geographic location at which the Key Employee must perform services for LCC, or (iv) any
other action or inaction that constitutes a material breach of the terms of a written agreement
between LCC and the Key Employee; provided, however, that an event shall not
constitute “Good Reason” unless, within ninety (90) days of the initial existence of an event, the
Key Employee gives LCC at least thirty (30) days’ prior written notice of such event setting forth
a description of the circumstances constituting Good Reason and LCC fails to cure such within the
thirty (30)-day period following LCC’s receipt of such written notice.
“Section 409A” means Code Section 409A and all United States Department of Treasury
and Internal Revenue Service regulations, guidance, and other interpretative authority thereunder.
“Termination of Employment” means a termination of the Key Employee’s employment with
LCC that constitutes a “separation from service” as defined in Section 409A.
3. Disputes. If a dispute arises regarding a termination of the Key Employee’s
employment with LCC or the interpretation or enforcement of this Agreement and the Key Employee
obtains a final judgment in the Key Employee’s favor by a court of competent jurisdiction or the
Key Employee’s claim is settled by LCC prior to the rendering of a judgment by
such a court, all reasonable legal fees and expenses incurred by the Key Employee in
contesting or disputing any such termination or seeking to obtain or enforce any right,
compensation, or benefit provided for in this Agreement, or in otherwise pursuing the Key
Employee’s claim, shall be paid by LCC to the fullest extent permitted by law.
4. No Mitigation or Reduction of Benefits. The Key Employee is not required to
mitigate the amount of any benefits to be paid by LCC pursuant to this Agreement by seeking other
employment or otherwise, nor shall the amount of any benefits provided for in this Agreement be
reduced by any compensation earned by the Key Employee as the result of employment by another
employer after Termination of Employment.
5. No Employment Rights or Obligations Established. This Agreement does not establish
any rights on the part of the Key Employee to continued employment by LCC, nor does it establish
any obligations on the part of the Key Employee to continue the Key Employee’s employment with LCC,
it being understood and agreed that this Agreement relates solely to certain benefits to be
provided to the Key Employee in the event of Termination of Employment under certain circumstances
as provided herein.
6. Amendments. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto.
7. Other Agreements. This Agreement does not supersede or affect in any way, nor is
it affected in any way by, any other existing agreement, written or oral, between LCC and the Key
Employee; provided, however, this Agreement supersedes and replaces the Key
Employee Severance Agreement between LCC and the Key Employee. Further, no future agreement
between LCC and the Key Employee shall supersede or affect this Agreement, nor shall this Agreement
affect such future agreement, unless such future agreement specifically so provides and is executed
by both LCC and the Key Employee.
8. Successors and Assigns. This Agreement is personal to the Key Employee and may not
be assigned by him otherwise than by will or the laws of descent and distribution. This Agreement
shall be binding upon, inure to the benefit of and be enforceable by and against LCC and its
successors and assigns.
9. Governing Law. This agreement is made and is expected to be performed in Ohio, and
the various terms, provisions, covenants and agreements, and the performance thereof, shall be
construed, interpreted and enforced under and with reference to the laws of the State of Ohio.
10. Section 409A Compliance. To the extent applicable, LCC and the Key Employee
intend that this Agreement comply with Section 409A and that should any provision be found not in
compliance with Section 409A, the parties hereby agree to execute any and all amendments to this
Agreement deemed necessary and required by legal counsel for LCC to achieve compliance with Section
409A. In no event shall any payment required to be made pursuant to this Agreement that is
nonqualified deferred compensation within the meaning of Section 409A be made to the Key Employee
unless the Key Employee has incurred a Termination of Employment. In the event the Key Employee is
a “specified employee” (as defined in Section 409A) so that payments of nonqualified deferred
compensation cannot commence under Section 409A until the lapse of six (6) months after a
Termination of Employment, then (i) any such payments of nonqualified deferred compensation that
are required to be paid in a single lump sum shall not be made until the date which is six (6)
months and one (1) day after the Key Employee’s Termination of Employment, and (ii) the first six
(6) months of any such payments of nonqualified deferred compensation that are required to be paid
in installments shall be paid on the date which is six (6)
months and one (1) day following the Key Employee’s Termination of Employment (and all
remaining installment payments shall be made as would ordinarily have been made under the
provisions of this Agreement).
IN WITNESS WHEREOF, this Agreement is executed by the parties effective the date first set
forth above.
LCC:
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| Key Employee: | ||||
| LANCASTER COLONY CORPORATION | ||||
By:
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/s/ Xxxx X. Xxxxxxx, Xx. | |||
| (Signature) | ||||
| /s/ Xxxxx X. Xxxx | ||||
| (Signature) | ||||
| Xxxx X. Xxxxxxx, Xx., Chairman, CEO & President | Xxxxx X. Xxxx | |||
| (Name and Title) | (Name) | |||
