EXHIBIT 99(e)(5)
AMENDED AND RESTATED EMPLOYMENT CONTINUATION AGREEMENT
THIS AGREEMENT is between XXXX COMPANY, a Delaware corporation (the
"Company"), and Xxxx X. Xxxxxxxx (the "Executive"), dated as of this 27th day of
March, 2000.
WHEREAS, the Company has entered into the Agreement and Plan of Merger
(the "Merger Agreement") dated as of March 26, 2000 among the Company,
Forvaltnings AB Ratos, a Swedish corporation and Ratos Acquisition Corp., a
Delaware corporation.
WHEREAS, the Company and the Executive have entered into an Employment
Continuation Agreement dated February 15, 2000.
WHEREAS, in connection with the Merger Agreement, the Company and the
Executive agree to amend and restate such Employment Continuation Agreement in
its entirety as set forth in this Amended and Restated Employment Continuation
Agreement (this "Agreement").
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Executive as follows:
1. EFFECTIVE DATE. The effective date of this Agreement (the
"Effective Date") shall be the Effective Time of the merger of Ratos Acquisition
Corp. with and into Xxxx Company, as defined in the Merger Agreement.
2. EMPLOYMENT PERIOD. Subject to Section 5 of this Agreement, the
Company agrees to continue the Executive in its employ, and the Executive agrees
to remain in the employ of the Company, for the period (the "Employment Period")
commencing on the Effective Date and ending on December 31, 2003.
3. NO REDUCTION IN POSITION. During the Employment Period, the
Executive's position, authority and responsibilities shall be at least
commensurate with those held, exercised and assigned immediately prior to the
Effective Date. The Executive's services shall be performed at the location
where the Executive was employed immediately preceding the Effective Date, or at
another location within 75 miles of it.
4. COMPENSATION. (a) BASE SALARY. During the Employment Period, the
Executive shall receive a base salary at a rate at least equal to $204,000. The
Executive's base salary, as it may be increased from time to time, shall
hereafter be referred to as "Base Salary". Neither the Base Salary nor any
increase in Base Salary after the Effective Date shall serve to limit or reduce
any other obligation of the Company hereunder.
(b) ANNUAL BONUS. During the Employment Period, in addition to the
Base Salary, for each fiscal year of the Company ending during the Employment
Period or partial year beginning during the Employment Period, the Executive
shall participate in an annual bonus plan on the same terms and conditions as
the annual bonus plan the Executive had participated in during the fiscal year
ended immediately prior to the Effective Date, the Executive's annual bonus
hereunder to be calculated in accordance with the April 27, 1999, summary of the
plan attached hereto as Exhibit A (the "Annual Bonus") provided that: (i) the
yearly target operating income shall be established pursuant to the four year
plan forecast contained in the January, 2000 Management Presentation of Xxxx
Company prepared by Xxxxxx Xxxxxxx Xxxxxx Gull (ii) the Executive's
participation level in connection with the annual bonus plan shall be 100% of
the Base Salary (the "Target Incentive Payment"); and (iii) the maximum Annual
Bonus that may be earned by the Executive in any year should Xxxx Company exceed
its target operating profit under the annual bonus plan shall be 180% of the
Target Incentive Payment.
(c) BENEFIT PLANS. During the Employment Period, the Executive (and,
to the extent applicable, his dependents) shall be entitled to participate in or
be covered under any pension, retirement deferred compensation, savings,
medical, dental, health, disability, group life, accidental death and travel
accident insurance plans and programs of the Company for which Executive is
eligible at a level that is commensurate with the Executive's participation in
such plans immediately prior to the Effective Date, or, if more favorable to the
Executive, at the level made available to the Executive or other similarly
situated officers at any time thereafter.
(d) PERQUISITES AND FRINGE BENEFITS. During the Employment Period, the
Executive shall be entitled to perquisites and fringe benefits at a level that
is commensurate with the perquisites and fringe benefits available to the
Executive immediately prior to the Effective Date, or, if more favorable to the
Executive, at the level made available from time to time to the Executive or
other similarly situated officers at any time thereafter.
(e) INDEMNIFICATION. During and after the Employment Period, to the
extent permitted by law and under the Certificate of Incorporation and By-laws
of the Company, the Company shall indemnify the Executive and hold the Executive
harmless from and against any claim, loss or cause of action arising from or out
of the Executive's performance as an officer, director or employee of the
Company or any of its Subsidiaries or in any other capacity, including any
fiduciary capacity, in which the Executive serves at the request of the Company.
5. TERMINATION. (a) DEATH, DISABILITY OR RETIREMENT. This Agreement
shall terminate automatically upon the Executive's death or termination due to
"Disability". For purposes of this Agreement, Disability shall mean the
Executive's inability to perform the duties of his position, as determined in
accordance with the policies and procedures applicable with respect to the
Company's long-term disability plan, as in effect immediately prior to the
Effective Date or its equivalent.
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(b) VOLUNTARY TERMINATION. Notwithstanding anything in this Agreement
to the contrary, the Executive may, upon not less than 30 days' written notice
to the Company, voluntarily terminate employment for any reason (including early
retirement under the terms of any of the Company's retirement plans as in effect
from time to time), PROVIDED THAT any termination by the Executive pursuant to
Section 5(d) on account of Good Reason (as defined therein) shall not be treated
as a voluntary termination under this Section 5(b).
(c) CAUSE. The Company may terminate the Executive's employment for
Cause. For purposes of this Agreement, "Cause" means (I) the Executive's
conviction of a felony or the entering by the Executive of a plea of non
contendere to a felony charge, (II) the Executive's gross neglect, willful
malfeasance or willful gross misconduct in connection with his employment
hereunder which has had a significant adverse effect on the business of the
Company and its subsidiaries, unless the Executive reasonably believed in good
faith that such act or nonact was in or not opposed to the best interests of the
Company, (III) the Executive's repeated failure to substantially perform his
duties hereunder following receipt by Executive of written notice specifying the
nature of such unsatisfactory performance, or (IV) use of alcohol or drugs to an
extent determined by the board of directors in its sole discretion to be
excessive.
(d) GOOD REASON. During the Employment Period, the Executive may
terminate his employment for Good Reason. For purposes of this Agreement, "Good
Reason" means the occurrence of any of the following, without the express
written consent of the Executive:
(i) (A) the assignment to the Executive of any duties inconsistent in
any material adverse respect with the Executive's position, authority or
responsibilities as contemplated by Section 3 of this Agreement, or (B) any
other material adverse change in such position (not including changes in
title), authority or responsibilities, provided, however, that Good Reason
shall not be deemed to occur upon a change in duties or responsibilities
that is solely a result of the Company no longer being a publicly traded
entity and does not involve any other event set forth in this paragraph (d);
(ii) any failure by the Company to comply with any of the provisions of
Section 4 of this Agreement, other than an insubstantial or inadvertent
failure remedied by the Company promptly after receipt of notice thereof
given by the Executive;
(iii) the Company's requiring the Executive to be based at any office or
location more than 75 miles from that location at which he performed his
services specified under the provisions of Section 3 immediately prior to
the Effective Date;
(iv) any other material breach of this Agreement by the Company; or
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(v) any failure by the Company to obtain the assumption and agreement
to perform this Agreement by a successor as contemplated by Section 11(b).
For purposes of this Section 5(d), no action or inaction shall give rise
to the right of Executive to terminate the Employment Period and Executive's
employment hereunder for Good Reason unless a written notice is given by
Executive to the Company, within ninety (90) days after Executive has actual
knowledge of the occurrence of the event giving rise to Executive's right to
terminate pursuant to this Section 5(e), and such event has not been cured
within fifteen (15) days after such notice. Executive's continued employment
during the ninety (90) day period referred to above in this Section 5(d) shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.
(e) NOTICE OF TERMINATION. Any termination by the Company for Cause or
by the Executive for Good Reason shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 12(e). For purposes
of this Agreement, a "Notice of Termination" means a written notice given within
a reasonable time after the event or action believed to constitute the reason
for giving notice.
(f) DATE OF TERMINATION. For purposes of this Agreement, the term
"Date of Termination" means (I) in the case of a termination for which a Notice
of Termination is required, the date of receipt of such Notice of Termination,
or if later, the date specified therein up to 30 days after receipt, as the case
may be, and (II) in all other cases, the actual date on which the Executive's
employment terminates during the Employment Period.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) DEATH OR
DISABILITY. If the Executive's employment is terminated during the Employment
Period by reason of the Executive's death or Disability, this Agreement shall
terminate without further obligations to the Executive or the Executive's legal
representatives under this Agreement other than those obligations accrued
hereunder at the Date of Termination, and the Company shall pay to the Executive
(or his beneficiary or estate) (I) the Executive's full Base Salary through the
Date of Termination (the "Earned Salary"), (II) any vested amounts or vested
benefits owing to the Executive under the Company's otherwise applicable
employee benefit plans and programs, including any compensation previously
deferred by the Executive (together with any accrued earnings thereon) and not
yet paid by the Company (the "Accrued Obligations") which in each instance under
this Agreement shall be paid in accordance with the terms of the applicable
plan, program or arrangement, and (III) any other benefits payable due to the
Executive's Death or Disability under the Company's plans, policies or programs
(the "Additional Benefits").
(b) CAUSE AND VOLUNTARY TERMINATION. If, during the Employment Period,
the Executive's employment shall be terminated for Cause or voluntarily
terminated by the Executive, the Company shall pay the Executive (A) the Earned
Salary in cash in a single lump sum as soon
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as practicable, but in no event more than 10 days, following the Date of
Termination, and (B) the Accrued Obligations.
(c) TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE AND TERMINATION BY
THE EXECUTIVE FOR GOOD REASON.
(i) PAYMENTS. If, during the Employment Period, the Company terminates
the Executive's employment other than for Cause, or the Executive terminates
his employment for Good Reason, the Company shall pay to the Executive the
following amounts: (A) the Executive's Earned Salary; (B) a cash amount (the
"Severance Amount") equal to two times the sum of (X) the Executive's annual
Base Salary and (Y) an amount equal to the last Annual Bonus earned by the
Executive during the full year preceding the Effective Date; and (C) the
Accrued Obligations.
The Earned Salary shall be paid in accordance with the Company's regular
payroll practices. The Severance Amount shall be paid in fifty-two (52)
equal payments at dates concurrent with the Company's regular payroll cycle
commencing with the next payroll cycle following the Date of Termination.
(ii) CONTINUATION OF BENEFITS. If, during the Employment Period, the
Company terminates the Executive's employment other than for Cause, the
Executive terminates his employment for Good Reason, the Executive (and, to
the extent applicable, his dependents) shall be entitled, after the Date of
Termination until the second anniversary of the Date of Termination (the
"End Date") to continue participation in any medical, health, dental, group
life and group disability insurance plans in which executive participated
prior to his termination (the "Benefit Plans"). To the extent any such
benefits cannot be provided under the terms of the applicable plan, policy
or program, the Company shall provide a comparable benefit under another
plan or from the Company's general assets. The Executive's participation in
the Benefit Plans will be on the same terms and conditions (including
required contributions by the Executive) that would have applied had the
Executive continued to be employed by the Company through the End Date.
(d) DISCHARGE OF THE COMPANY'S OBLIGATIONS. Except as expressly
provided in the last sentence of this Section 6(d), the amounts payable to the
Executive pursuant to this Section 6 (whether or not reduced pursuant to Section
6(e)) following termination of his employment shall be in full and complete
satisfaction of the Executive's rights under this Agreement and any other claims
he may have in respect of his employment by the Company or any of its
Subsidiaries. Such amounts shall constitute liquidated damages with respect to
any and all such rights and claims and, upon the Executive's receipt of such
amounts, the Company shall be released and discharged from any and all liability
to the Executive in connection with this Agreement or otherwise in connection
with the Executive's employment with the Company and
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its Subsidiaries. Nothing in this Section 6(d) shall be construed to release the
Company from its commitment to indemnify the Executive pursuant to Section 4(e).
(e) LIMIT ON PAYMENTS BY THE COMPANY.
(i) APPLICATION OF SECTION 6(e). In the event that any amount or
benefit paid or distributed to the Executive pursuant to this Agreement,
taken together with any amounts or benefits otherwise paid or distributed to
the Executive by the Company or any affiliated company (collectively, the
"Covered Payments"), would be an "excess parachute payment" as defined in
Section 280G of the Code and would thereby subject the Executive to the tax
(the "Excise Tax") imposed under Section 4999 of the Code (or any similar
tax that may hereafter be imposed), the provisions of this Section 6(e)
shall apply to determine the amounts payable to Executive pursuant to this
Agreement.
(ii) CALCULATION OF BENEFITS. Immediately following delivery
of any Notice of Termination, the Company shall notify the Executive of the
aggregate present value of all termination benefits to which he would be
entitled under this Agreement and any other plan, program or arrangement as
of the projected Date of Termination, together with the projected maximum
payments, determined as of such projected Date of Termination that could be
paid without the Executive being subject to the Excise Tax.
(iii) IMPOSITION OF PAYMENT CAP. If the aggregate value of all
compensation payments or benefits to be paid or provided to the Executive
under this Agreement and any other plan, agreement or arrangement with the
Company exceeds the amount which can be paid to the Executive without the
Executive incurring an Excise Tax, then the amounts payable to the Executive
under this Section 6 shall be reduced (but not below zero) to the maximum
amount which may be paid hereunder without the Executive becoming subject to
such an Excise Tax (such reduced payments to be referred to as the "Payment
Cap"). In the event that the Executive receives reduced payments and
benefits hereunder, the Executive shall have the right to designate which of
the payments and benefits otherwise provided for in this Agreement that he
will receive in connection with the application of the Payment Cap.
(iv) APPLICATION OF SECTION 280G. For purposes of determining whether
any of the Covered Payments will be subject to the Excise Tax and the amount
of such Excise Tax,
(A) (X) whether Covered Payments are "parachute payments" within the
meaning of Section 280G of the Code, and (Y) whether there are
"parachute payments" in excess of the "base amount" (as defined
under Section 280G(b)(3) of the Code) shall be determined in good
faith by the Company's independent certified public accountants
appointed prior to the
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Effective Date (the "Accountants") or tax counsel selected by such
Accountants, and
(B) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with
the principles of Section 280G of the Code.
(v) ADJUSTMENTS IN RESPECT OF THE PAYMENT CAP. If the Executive
receives reduced payments and benefits under this Section 6(e) (or this
Section 6(e) is determined not to be applicable to the Executive because the
Accountants conclude that Executive is not subject to any Excise Tax) and it
is established pursuant to a final determination of a court or an Internal
Revenue Service proceeding (a "Final Determination") that, notwithstanding
the good faith of the Executive and the Company in applying the terms of
this Agreement, the aggregate "parachute payments" within the meaning of
Section 280G of the Code paid to the Executive or for his benefit are in an
amount that would result in the Executive's being subject to an Excise Tax,
then any amounts actually paid to or on behalf of the Executive which are
treated as excess parachute payments shall be deemed for all purposes to be
a loan to the Executive made on the date of receipt of such excess payments,
which the Executive shall have an obligation to repay to the Company on
demand, together with interest on such amount at the applicable Federal rate
(as defined in Section 1274(d) of the Code) from the date of the payment
hereunder to the date of repayment by the Executive. If the Executive
receives reduced payments and benefits by reason of this Section 6(e) and it
is established pursuant to a Final Determination that the Executive could
have received a greater amount without exceeding the Payment Cap, then the
Company shall promptly thereafter pay the Executive the aggregate additional
amount which could have been paid without exceeding the Payment Cap,
together with interest on such amount at the applicable Federal rate (as
defined in Section 1274(d) of the Code) from the original payment due date
to the date of actual payment by the Company.
7. NON-EXCLUSIVITY OF RIGHTS. Except as expressly provided herein,
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 for which the Executive may qualify, nor shall anything
herein limit or otherwise prejudice such rights as the Executive may have under
any other agreements with the Company, including employment agreements or stock
option agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company or any of
its affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan or program.
8. NO MITIGATION OR OFFSET. The Executive shall have no obligation to
seek other employment and there shall be no offset against amounts due to
Executive under the Agreement on account of any remuneration attributable to
subsequent employment that he may
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obtain or on account of other claims. 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 set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others whether by reason of the
subsequent employment of the Executive or otherwise.
9. LEGAL FEES AND EXPENSES. If the Executive asserts any claim in any
contest (whether initiated by the Executive or by the Company) as to the
validity, enforceability or interpretation of any provision of this Agreement,
the Company shall pay the Executive's legal expenses (or cause such expenses to
be paid) including, without limitation, his reasonable attorney's fees, on a
quarterly basis, upon presentation of proof of such expenses in a form
acceptable to the Company, PROVIDED THAT the Executive shall reimburse the
Company for such amounts, plus simple interest thereon at the 90-day United
States Treasury Xxxx rate as in effect from time to time, compounded annually,
if the Executive shall not prevail, in whole or in part, as to any material
issue as to the validity, enforceability or interpretation of any provision of
this Agreement.
10. CONFIDENTIAL INFORMATION; COMPANY PROPERTY. By and in
consideration of the salary and benefits to be provided by the Company
hereunder, including the severance arrangements set forth herein, the Executive
agrees that:
(a) CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, (I) obtained by the Executive during his
employment by the Company or any of its affiliated companies and (II) not
otherwise public knowledge (other than by reason of an unauthorized act by the
Executive). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company,
unless compelled pursuant to an order of a court or other body having
jurisdiction over such matter, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.
(b) COMPANY PROPERTY. Except as expressly provided herein, promptly
following the Executive's termination of employment, the Executive shall return
to the Company all property of the Company and all copies thereof in the
Executive's possession or under his control, except that the Executive may
retain his personal notes, diaries, Rolodexes, calendars and correspondence.
(c) NON-COMPETE. During the Employment Period and during the period
that Executive is receiving payments in respect of the Severance Amount or is
participating in any continued benefit plans in accordance with Section
6(c)(ii), Executive shall not directly or indirectly own, manage, control,
participate in, consult with render services for or otherwise engage in any
business (including as an employee, agent, or partner by himself or through any
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other entity that is in competition with the business of the Company. Nothing
herein shall prohibit the Executive from being a passive owner of not more than
2% of the outstanding stock or other equity interests of a corporation or other
entity which is publicly traded, so long as the Executive has no active
participation in the business of such corporation.
11. SUCCESSORS. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) 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
direct or indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, by an agreement in form and substance satisfactory to the Executive,
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.
12. MISCELLANEOUS. (a) APPLICABLE LAW. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
applied without reference to principles of conflict of laws.
(b) ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be resolved by binding arbitration. The
arbitration shall be held in the county of Los Angeles, California and except to
the extent inconsistent with this Agreement, shall be conducted in accordance
with the Expedited Employment Arbitration Rules of the American Arbitration
Association (or such other voluntary arbitration rules applicable to employment
contract disputes) in effect at the time of the arbitration, supplemented, as
necessary, by those principles which would be applied by a court of law or
equity. The arbitrator shall be acceptable to both the Company and the
Executive. If the parties cannot agree on an acceptable arbitrator, the dispute
shall be heard by a panel of three arbitrators, one appointed by each of the
parties and the third appointed by the other two arbitrators.
(c) AMENDMENTS. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(d) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the matters referred to herein. No
other agreement relating to the terms of the Executive's employment by the
Company, oral or otherwise, shall be binding between the parties unless it is in
writing and signed by the party against whom enforcement is sought. There are no
promises, representations, inducements or statements
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between the parties other than those that are expressly contained herein. The
Executive acknowledges that he is entering into this Agreement of his own free
will and accord, and with no duress, that he has read this Agreement and that he
understands it and its legal consequences.
(e) 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 home address of the Executive noted
on the records of the Company
If to
the Company: XXXX COMPANY with a copy to: Xxxx X. Xxxxxxxxx, Esq.
0000 Xxxx Xxxxx 00000 Xxx Xxxxxxxx
X0 Xxxxxxx, Xxxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxx 00000
Attn.: Chief Financial Officer
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(f) TAX WITHHOLDING. The Company shall 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.
(g) SEVERABILITY: REFORMATION. In the event that one or more of the
provisions of this Agreement shall become invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby. In the event that any
of the provisions of any of Section 11(a) are not enforceable in accordance with
its terms, the Executive and the Company agree that such Section shall be
reformed to make such Section enforceable in a manner which provides the Company
the maximum rights permitted at law.
(h) WAIVER. Waiver by any party hereto of any breach or default by the
other party of any of the terms of this Agreement shall not operate as a waiver
of any other breach or default, whether similar to or different from the breach
or default waived. No waiver of any provision of this Agreement shall be implied
from any course of dealing between the parties hereto or from any failure by
either party hereto to assert its or his rights hereunder on any occasion or
series of occasions.
(i) COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
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(j) CAPTIONS. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf, and
its corporate seal to be hereunto affixed and attested by its Secretary, all as
of the day and year first above written.
XXXX COMPANY
By:
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WITNESSED Name:
Title:
EXECUTIVE:
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WITNESSED: Xxxx X. Xxxxxxxx
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EXHIBIT A
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