Exhibit 10.1
AMENDED AND RESTATED
WRIGHT EXPRESS CORPORATION
2005 EQUITY AND INCENTIVE PLAN
Initially adopted on February 16, 2005
Amended and Restated on May 16, 2008
Amended and Restated on December 31, 2008
Exhibit 10.1
WRIGHT EXPRESS CORPORATION
2005 EQUITY AND INCENTIVE PLAN
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Section
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Page
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1. Purpose; Types of Awards; Construction.
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1
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2. Definitions.
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3. Administration.
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5
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4. Eligibility.
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6
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5. Stock Subject to the Plan.
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7
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6. Specific Terms of Awards.
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7
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7. Change in Control Provisions.
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13
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8. General Provisions.
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1
Exhibit 10.1
WRIGHT EXPRESS CORPORATION
2005 EQUITY AND INCENTIVE PLAN
1.
Purpose; Types of Awards; Construction
.
The purposes of the Wright Express Corporation 2005 Equity and Incentive Plan (the “Plan”) are
to afford an incentive to non-employee directors, selected officers and other employees, advisors
and consultants of Wright Express Corporation (the “Company”), or any Parent or Subsidiary of the
Company that now exists or hereafter is organized or acquired, to continue as non-employee
directors, officers, employees, advisors or consultants, as the case may be, to increase their
efforts on behalf of the Company and its Subsidiaries and to promote the success of the Company’s
business. The Plan provides for the grant of Options (including “incentive stock options” and
“nonqualified stock options”), stock appreciation rights, restricted stock, restricted stock units
and other stock- or cash-based awards. The Plan is designed so that Awards granted hereunder
intended to comply with the requirements for “performance-based compensation” under Section 162(m)
of the Code may comply with such requirements, and the Plan and Awards shall be interpreted in a
manner consistent with such requirements.
2.
Definitions
.
For purposes of the Plan, the following terms shall be defined as set forth below:
(a) “Annual Incentive Program” means the program described in Section 6(c) hereof.
(b) “Award” means any Option, SAR, Restricted Stock, Restricted Stock Unit or Other
Stock-Based Award or Other Cash-Based Award granted under the Plan.
(c) “Award Agreement” means any written agreement, contract, or other instrument or
document evidencing an Award.
(d) “Board” means the Board of Directors of the Company.
(e) “Cendant” means Cendant Corporation, a Delaware corporation.
(f) “Cendant Award” shall have the meaning set forth in Section 6(b)(v).
(g) “Change in Control” means a change in control of the Company, which will be deemed to have
occurred if:
(i) any “person,” as such term is used in Sections 13(d) and 14(d) of the
Exchange Act
(other than (A) the Company, (B) any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, and (C) any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as their ownership
of Stock), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the
1
Exhibit 10.1
Company representing 30% or more of the combined voting power of the Company’s then
outstanding voting securities (excluding any person who becomes such a beneficial owner in
connection with a transaction immediately following which the individuals who comprise the
Board immediately prior thereto constitute at least a majority of the Board, the board of
the entity surviving such transaction or, if the Company or the entity surviving the
transaction is then a subsidiary, the board of the ultimate parent thereof);
(ii) the following individuals cease for any reason to constitute a majority of
the
number of directors then serving: individuals who, on the Effective Date, constitute the
Board and any new director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company’s
stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on the Effective Date or whose
appointment, election or nomination for election was previously so approved or recommended;
(iii) there is consummated a merger or consolidation of the Company or any direct
or
indirect subsidiary of the Company with any other corporation, other than a merger or
consolidation immediately following which the individuals who comprise the Board immediately
prior thereto constitute at least a majority of the Board, the board of the entity surviving
such merger or consolidation or, if the Company or the entity surviving such merger is then
a subsidiary, the board of the ultimate parent thereof; or
(iv) the stockholders of the Company approve a plan of complete liquidation of the
Company or there is consummated an agreement for the sale or disposition by the Company of
all or substantially all of the Company’s assets (or any transaction having a similar
effect), other than a sale or disposition by the Company of all or substantially all of the
Company’s assets to an entity, immediately following which the individuals who comprise the
Board immediately prior thereto constitute at least a majority of the board of directors of
the entity to which such assets are sold or disposed of or, if such entity is a subsidiary,
the board of the ultimate parent thereof.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred by virtue
of (x) a Public Offering or (y) the consummation of any transaction or series of integrated
transactions immediately following which the holders of the Stock immediately prior to such
transaction or series of transactions continue to have substantially the same proportionate
ownership in an entity which owns all or substantially all of the assets of the Company immediately
following such transaction or series of transactions.
(h) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the
rules and regulations promulgated thereunder.
(i) “Committee” means the committee established by the Board to administer the Plan, the
composition of which shall at all times satisfy the provisions of Rule 16b-3 and Section 162(m) of
the Code.
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Exhibit 10.1
(j) “Company” means Wright Express Corporation, a corporation organized under the laws of the
State of Delaware, or any successor corporation.
(k) “Conversion Option” means an NQSO granted under Section 6(b)(v).
(l) “Conversion Stock” means an Award of Stock granted under Section 6(b)(v).
(m) “Covered Employee” shall have the meaning set forth in Section 162(m)(3) of the Code.
(n) “Effective Date” means February
16
, 2005, the date that the Plan was originally
adopted by the Board.
(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,
and the rules and regulations promulgated thereunder.
(p) “Fair Market Value” means, with respect to Stock or other property, the fair market value
of such Stock or other property determined by such methods or procedures as shall be established
from time to time by the Committee. Unless otherwise determined by the Committee in good faith, the
per share Fair Market Value of Stock as of a particular date shall mean (i) the mean between the
highest and lowest reported sales price per share of Stock on the national securities exchange on
which the Stock is principally traded, for the last preceding date on which there was a sale of
such Stock on such exchange, or (ii) if the shares of Stock are then traded in an over-the-counter
market, the average of the closing bid and asked prices for the shares of Stock in such
over-the-counter market for the last preceding date on which there was a sale of such Stock in such
market, or (iii) if the shares of Stock are not then listed on a national securities exchange or
traded in an over-the-counter market, such value as the Committee, in its sole discretion, shall
determine.
(q) “Grantee” means a person who, as a Non-Employee Director, officer or other employee of, or
as a person providing services to, the Company or a Parent or Subsidiary of the Company, has been
granted an Award under the Plan.
(r) “ISO” means any Option intended to be and designated as an incentive stock option
within the meaning of Section 422 of the Code.
(s) “Long Term Incentive Program” means the program described in Section 6(b) hereof.
(t) “Non-Employee Director” means any director of the Company who is not also employed by the
Company or any of its Subsidiaries.
(u) “NQSO” means any Option that is not designated as an ISO.
(v) “Option” means a right, granted to a Grantee under Section 6(b)(i) or 6(b)(v), to
purchase shares of Stock. An Option may be either an ISO or an NQSO, provided that ISOs may
be granted only to employees of the Company or a Parent or Subsidiary of the Company.
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Exhibit 10.1
(w) “Other Cash-Based Award” means cash awarded under the Annual Incentive Program or the Long
Term Incentive Program, including cash awarded as a bonus or upon the attainment of Performance
Goals or otherwise as permitted under the Plan.
(x) “Other Stock-Based Award” means a right or other interest granted to a Grantee under the
Annual Incentive Program or the Long Term Incentive Program that may be denominated or payable in,
valued in whole or in part by reference to, or otherwise based on, or related to, Stock, including
but not limited to (i) unrestricted Stock awarded as a bonus or upon the attainment of Performance
Goals or otherwise as permitted under the Plan, and (ii) a right granted to a Grantee to acquire
Stock from the Company containing terms and conditions prescribed by the Committee.
(y) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.
(z) “Performance Goals” means performance goals based on one or more of the following
criteria, determined in accordance with generally accepted accounting principles where applicable:
(i) pre-tax income or after-tax income; (ii) income or earnings including operating income,
earnings before or after taxes, earnings before or after interest, depreciation, amortization, or
extraordinary or special items; (iii) net income excluding amortization of intangible assets,
depreciation and impairment of goodwill and intangible assets and/or excluding charges attributable
to the adoption of new accounting pronouncements; (iv) earnings or book value per share (basic or
diluted); (v) return on assets (gross or net), return on investment, return on capital, or return
on equity; (vi) return on revenues; (vii) cash flow, free cash flow, cash flow return on investment
(discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of
capital; (viii) economic value created; (ix) operating margin or profit margin; (x) stock price or
total stockholder return; (xi) income or earnings from continuing operations; (xii) cost targets,
reductions and savings, expense management, productivity and efficiencies; and (xiii) strategic
business criteria, consisting of one or more objectives based on meeting specified market
penetration or market share, geographic business expansion, customer satisfaction, employee
satisfaction, human resources management, supervision of litigation, information technology, and
goals relating to divestitures, joint ventures and similar transactions. Where applicable, the
Performance Goals may be expressed in terms of attaining a specified level of the particular
criterion or the attainment of a percentage increase or decrease in the particular criterion, and
may be applied to one or more of the Company or a Parent or Subsidiary of the Company, or a
division or strategic business unit of the Company, all as determined by the Committee. The
Performance Goals may include a threshold level of performance below which no payment will be made
(or no vesting will occur), levels of performance at which specified payments will be paid (or
specified vesting will occur), and a maximum level of performance above which no additional payment
will be made (or at which full vesting will occur). Each of the foregoing Performance Goals shall
be evaluated in accordance with generally accepted accounting principles, where applicable, and
shall be subject to certification by the Committee. The Committee shall have the authority to make
equitable adjustments to the Performance Goals in recognition of unusual or non-recurring events
affecting the Company or any Parent or Subsidiary of the Company or the financial statements of the
Company or any Parent or
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Exhibit 10.1
Subsidiary of the Company, in response to changes in applicable laws or regulations, or to
account for items of gain, loss or expense determined to be extraordinary or unusual in nature or
infrequent in occurrence or related to the disposal of a segment of a business or related to a
change in accounting principles.
(aa) “Plan” means this Wright Express Corporation 2005 Equity and Incentive Plan, as
amended from time to time.
(bb) “Plan Year” means a calendar year.
(cc) “Public Offering” means an offering of securities of the Company that is registered with
the Securities and Exchange Commission.
(dd) “Restricted Stock” means an Award of shares of Stock to a Grantee under Section
6(b)(iii) that may be subject to certain restrictions and to a risk of forfeiture.
(ee) “Restricted Stock Unit” or “RSU” means a right granted to a Grantee under Section
6(b)(iv) or 6(b)(v) to receive Stock or cash at the end of a specified period, which right
may be conditioned on the satisfaction of specified performance or other criteria.
(ff) “Rule 16b-3” means Rule 16b-3, as from time to time in effect promulgated by the
Securities and Exchange Commission under Section 16 of the Exchange Act, including any successor to
such Rule.
(gg) “Securities Act” means the Securities Act of 1933, as amended from time to time, and the
rules and regulations promulgated thereunder.
(hh) “Stock” means shares of the common stock, par value $0.01 per share, of the Company.
(ii) “Stock Appreciation Right” or “SAR” means the right, granted to a Grantee under Section
6(b)(ii), to be paid an amount measured by the appreciation in the Fair Market Value of Stock from
the date of grant to the date of exercise of the right.
(jj) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as
defined in Section 424(f) of the Code.
(kk) “409A Award” means any Award that constitutes a deferral of compensation
subject to Code Section 409A and the Treasury Regulations thereunder. Although the Committee
retains authority under the Plan to grant Options and Stock Appreciation Rights on terms that will
cause those Awards to be 409A Awards, Options and SARs are not intended to be 409A Awards unless
otherwise expressly specified by the Committee.
3.
Administration
.
The Plan shall be administered by the Board or by such Committee that the Board may appoint
for this purpose. If a Committee is appointed to administer the Plan, all references herein
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Exhibit 10.1
to the “Committee” shall be references to such Committee. If no Committee is appointed by the
Board to administer the Plan, all references herein to the “Committee” shall be references to the
Board. The Committee shall have the authority in its discretion, subject to and not inconsistent
with the express provisions of the Plan, to administer the Plan and to exercise all the powers and
authorities either specifically granted to it under the Plan or necessary or advisable in the
administration of the Plan, including, without limitation, the authority to grant Awards; to
determine the persons to whom and the time or times at which Awards shall be granted; to determine
the type and number of Awards to be granted, the number of shares of Stock to which an Award may
relate and the terms, conditions, restrictions and performance criteria relating to any Award; to
determine Performance Goals no later than such time as required to ensure that an underlying Award
which is intended to comply with the requirements of Section 162(m) of the Code so complies; and to
determine whether, to what extent, and under what circumstances an Award may be settled, cancelled,
forfeited, exchanged, or surrendered; to make adjustments in the terms and conditions of, and the
Performance Goals (if any) included in, Awards; to construe and interpret the Plan and any Award;
to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms
and provisions of the Award Agreements (which need not be identical for each Grantee); and to make
all other determinations deemed necessary or advisable for the administration of the Plan.
Notwithstanding the foregoing, neither the Board, the Committee nor their respective delegates
shall have the authority to reprice (or cancel and regrant) any Option or, if applicable, other
Award at a lower exercise, base or purchase price without first obtaining the approval of the
Company’s stockholders.
The Committee may appoint a chairperson and a secretary and may make such rules and
regulations for the conduct of its business as it shall deem advisable, and shall keep minutes of
its meetings. All determinations of the Committee shall be made by a majority of its members either
present in person or participating by conference telephone at a meeting or by written consent. The
Committee may delegate to one or more of its members or to one or more agents such administrative
duties as it may deem advisable, and the Committee or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with respect to any responsibility the
Committee or such person may have under the Plan. All decisions, determinations and interpretations
of the Committee shall be final and binding on all persons, including but not limited to the
Company, any Parent or Subsidiary of the Company or any Grantee (or any person claiming any rights
under the Plan from or through any Grantee) and any stockholder.
No member of the Board or Committee shall be liable for any action taken or determination made
in good faith with respect to the Plan or any Award granted hereunder.
4.
Eligibility
.
Awards may be granted to Non-Employee Directors, officers and other employees, advisors or
consultants of the Company or any Parent or Subsidiary of the Company, selected in the discretion
of the Committee. In determining the persons to whom Awards shall be granted and the type of any
Award (including the number of shares to be covered by such Award), the Committee shall take into
account such factors as the Committee shall deem relevant in connection with accomplishing the
purposes of the Plan.
6
Exhibit 10.1
5.
Stock Subject to the Plan
.
The maximum number of shares of Stock reserved for the grant of Awards under the Plan shall be
3,200,000, including all shares to be issued pursuant to Conversion Options or Conversion Stock,
subject to adjustment as provided herein. No more than 500,000 shares of Stock may be made subject
to Options (other than Conversion Options) or SARs granted to a single individual in a single Plan
Year, subject to adjustment as provided herein, and no more than 500,000 shares of Stock may be
made subject to stock-based awards other than Options or SARs (including Restricted Stock and
Restricted Stock Units (but other than Conversion Stock) or Other Stock-Based Awards denominated in
shares of Stock) granted to a single individual in a single Plan Year, in either case, subject to
adjustment as provided herein. Determinations made in respect of the limitations set forth in the
immediately preceding sentence shall be made in a manner consistent with Section 162(m) of the
Code. Such shares may, in whole or in part, be authorized but unissued shares or shares that shall
have been or may be reacquired by the Company in the open market, in private transactions or
otherwise. If any shares subject to an Award are forfeited, cancelled, exchanged or surrendered or
if an Award terminates or expires without a distribution of shares to the Grantee, or if shares of
Stock are surrendered or withheld as payment of either the exercise price of an Award and/or
withholding taxes in respect of an Award, the shares of Stock with respect to such Award shall, to
the extent of any such forfeiture, cancellation, exchange, surrender, withholding, termination or
expiration, again be available for Awards under the Plan. Upon the exercise of any Award granted in
tandem with any other Award, such related Award shall be cancelled to the extent of the number of
shares of Stock as to which the Award is exercised and, notwithstanding the foregoing, such number
of shares shall no longer be available for Awards under the Plan.
In the event that the Committee shall determine that any dividend or other distribution
(whether in the form of cash, Stock, or other property), recapitalization, Stock split, reverse
split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange,
or other similar corporate transaction or event, affects the Stock such that an adjustment is
appropriate in order to prevent dilution or enlargement of the rights of Grantees under the Plan,
then the Committee shall make such equitable changes or adjustments as it deems necessary or
appropriate to any or all of (i) the number and kind of shares of Stock or other property
(including cash) that may thereafter be issued in connection with Awards, (ii) the number and kind
of shares of Stock or other property (including cash) issued or issuable in respect of outstanding
Awards, (iii) the exercise price, grant price, or purchase price relating to any Award; provided,
that, with respect to ISOs, such adjustment shall be made in accordance with Section 424(h) of the
Code; and (iv) the Performance Goals applicable to outstanding Awards.
6.
Specific Terms of Awards
.
(a)
General
. The term of each Award shall be for such period as may be determined by
the Committee. Subject to the terms of the Plan and any applicable Award Agreement, payments to be
made by the Company or a Parent or Subsidiary of the Company upon the grant, vesting, maturation,
or exercise of an Award may be made in such forms as the Committee shall determine at the date of
grant or thereafter, including, without limitation, cash, Stock, or other property, and may be made
in a single payment or transfer, in installments, or on a deferred basis. The Committee may make
rules relating to installment or deferred payments with respect to
7
Exhibit 10.1
Awards, including the rate of interest to be credited with respect to such payments. In
addition to the foregoing, the Committee may impose on any Award or the exercise thereof, at the
date of grant or thereafter, such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine.
(b)
Long Term Incentive Program
. Under the Long Term Incentive Program, the Committee
is authorized to grant the Awards described in this Section 6(b), under such terms and conditions
as deemed by the Committee to be consistent with the purposes of the Plan. Such Awards may be
granted with value and payment contingent upon Performance Goals. Except as otherwise set forth
herein or as may be determined by the Committee, each Award granted under the Long Term Incentive
Program shall be evidenced by an Award Agreement containing such terms and conditions applicable to
such Award as the Committee shall determine at the date of grant or thereafter.
(i)
Options
. The Committee is authorized to grant Options to Grantees on the
following terms and conditions:
(A)
Type of Award
. The Award Agreement evidencing the grant of an
Option under the Plan shall designate the Option as an ISO or an NQSO.
(B)
Exercise Price
. The exercise price per share of Stock purchasable
under an Option shall be determined by the Committee, but, subject to Section
6(b)(v), in no event shall the per share exercise price of any Option be less than
the Fair Market Value of a share of Stock on the date of grant of such Option. The
exercise price for Stock subject to an Option may be paid in cash or by an exchange
of Stock previously owned by the Grantee for at least six months (if acquired from
the Company), through a “broker cashless exercise” procedure approved by the
Committee (to the extent permitted by law), or a combination of the above, in any
case in an amount having a combined value equal to such exercise price. An Award
Agreement may provide that a Grantee may pay all or a portion of the aggregate
exercise price by having shares of Stock with a Fair Market Value on the date of
exercise equal to the aggregate exercise price withheld by the Company.
(C)
Term and Exercisability of Options
. The date on which the Committee
adopts a resolution expressly granting an Option shall be considered the day on
which such Option is granted. Options shall be exercisable over the exercise period
(which shall not exceed ten years from the date of grant), at such times and upon
such conditions as the Committee may determine, as reflected in the Award Agreement;
provided, that the Committee shall have the authority to accelerate the
exercisability of any outstanding Option at such time and under such circumstances
as it, in its sole discretion, deems appropriate. An Option may be exercised to the
extent of any or all full shares of Stock as to which the Option has become
exercisable, by giving such written, electronic, or telephonic notice as the
Committee may prescribe of such exercise to the Committee or its designated agent.
8
Exhibit 10.1
(D)
Termination of Employment
. An Option may not be exercised unless
the Grantee is then a director of, in the employ of, or providing services to, the
Company or a Parent or Subsidiary of the Company, and unless the Grantee has
remained continuously so employed, or continuously maintained such relationship,
since the date of grant of the Option; provided, that the Award Agreement may
contain provisions extending the exercisability of Options, in the event of
specified terminations of employment or service, to a date not later than the
expiration date of such Option.
(E)
Other Provisions
. Options may be subject to such other conditions
including, but not limited to, restrictions on transferability of the shares
acquired upon exercise of such Options, as the Committee may prescribe in its
discretion or as may be required by applicable law.
(ii)
SARs
. The Committee is authorized to grant SARs to Grantees on the
following terms and conditions:
(A)
In General
. Unless the Committee determines otherwise, a SAR (1)
granted in tandem with an NQSO may be granted at the time of grant of the related
NQSO or at any time thereafter or (2) granted in tandem with an ISO may only be
granted at the time of grant of the related ISO. A SAR granted in tandem with an
Option shall be exercisable only to the extent the underlying Option is exercisable.
Payment of a SAR may be made in cash, Stock, or property as specified in the Award or
determined by the Committee.
(B)
Right Conferred
. A SAR shall confer on the Grantee a right to
receive an amount with respect to each share subject thereto, upon exercise thereof,
equal to the excess of (1) the Fair Market Value of one share of Stock on the date
of exercise over (2) the grant price of the SAR (which in the case of an SAR granted
in tandem with an Option shall be equal to the exercise price of the underlying
Option, and which in the case of any other SAR shall be such price as the Committee
may determine
, not less than the Fair Market Value of a share of Stock on the
date of grant).
(C)
Term and Exercisability of SARs
. The date on which the Committee
adopts a resolution expressly granting a SAR shall be considered the day on which
such SAR is granted. SARs shall be exercisable over the exercise period (which shall
not exceed the lesser of ten years from the date of grant or, in the case of a
tandem SAR, the expiration of its related Award), at such times and upon such
conditions as the Committee may determine, as reflected in the Award Agreement;
provided, that the Committee shall have the authority to accelerate the
exercisability of any outstanding SAR at such time and under such circumstances as
it, in its sole discretion, deems appropriate. A SAR may be exercised to the extent
of any or all full shares of Stock as to which the SAR (or, in the case of a tandem
SAR, its related Award) has become exercisable, by giving such written, electronic,
or telephonic notice as the Committee may prescribe of such exercise
to the Committee or its designated agent.
9
Exhibit 10.1
(D)
Termination of Employment
. A SAR may not be exercised unless the
Grantee is then a director of, in the employ of, or providing services to, the
Company or a Parent or Subsidiary of the Company, and unless the Grantee has
remained continuously so employed, or continuously maintained such relationship,
since the date of grant of the SAR; provided, that the Award Agreement may contain
provisions extending the exercisability of the SAR, in the event of specified
terminations of employment or service, to a date not later than the expiration date
of such SAR (or, in the case of a tandem SAR, its related Award).
(E)
Other Provisions
. SARs may be subject to such other conditions
including, but not limited to, restrictions on transferability of the shares
acquired upon exercise of such SARs, as the Committee may prescribe in its
discretion or as may be required by applicable law.
(iii)
Restricted Stock
. The Committee is authorized to grant Restricted
Stock to Grantees on the following terms and conditions:
(A)
Issuance and Restrictions
. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions, if any, as the
Committee may impose at the date of grant or thereafter, which restrictions may
lapse separately or in combination at such times, under such circumstances, in such
installments, or otherwise, as the Committee may determine. The Committee may place
restrictions on Restricted Stock that shall lapse, in whole or in part, only upon
the attainment of Performance Goals. Except to the extent restricted under the Award
Agreement relating to the Restricted Stock, a Grantee granted Restricted Stock shall
have all of the rights of a stockholder including, without limitation, the right to
vote Restricted Stock and the right to receive dividends thereon.
(B)
Forfeiture
. Upon termination of employment with or service to the
Company, or upon termination of the director or independent contractor relationship,
as the case may be, during the applicable restriction period or portion thereof to
which forfeiture conditions apply, Restricted Stock and any accrued but unpaid
dividends that are then subject to restrictions shall be forfeited; provided, that
the Committee may provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that restrictions or forfeiture conditions
relating to Restricted Stock will be waived in whole or in part in the event of
terminations resulting from specified causes, and the Committee may in other cases
waive in whole or in part the forfeiture of Restricted Stock.
(C)
Certificates for Stock
. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name of the
Grantee, such certificates shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Restricted Stock, and
the Company shall retain physical possession of the certificate.
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Exhibit 10.1
(D)
Dividends
. Dividends paid on Restricted Stock shall be either paid
at the dividend payment date, or deferred for payment to such date as determined by
the Committee, in cash or in shares of unrestricted Stock having a Fair Market Value
equal to the amount of such dividends. Stock distributed in connection with a stock
split or stock dividend, and other property distributed as a dividend, shall be
subject to restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such Stock or other property has been
distributed.
(iv)
Restricted Stock Units
. The Committee is authorized to grant
Restricted Stock Units to Grantees, subject to the following terms and conditions:
(A)
Award and Restrictions
. Delivery of Stock or cash, as determined by
the Committee, will occur upon expiration of the deferral period specified for
Restricted Stock Units by the Committee. The Committee may place restrictions on
Restricted Stock Units that shall lapse, in whole or in part, only upon the
attainment of Performance Goals.
(B)
Forfeiture
. Upon termination of employment with or service to the
Company, or upon termination of the director or independent contractor relationship,
as the case may be, during the applicable deferral period or portion thereof to
which forfeiture conditions apply, or upon failure to satisfy any other conditions
precedent to the delivery of Stock or cash to which such Restricted Stock Units
relate, all Restricted Stock Units and any accrued but unpaid dividend equivalents
that are then subject to deferral or restriction shall be forfeited; provided, that
the Committee may provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that restrictions or forfeiture conditions
relating to Restricted Stock Units will be waived in whole or in part in the event
of termination resulting from specified causes, and the Committee may in other cases
waive in whole or in part the forfeiture of Restricted Stock Units.
(C)
Director Deferred Compensation Awards
. The Company shall issue RSUs
pursuant to this Section 6(b)(iv)(C) for the purpose of fulfilling the Company’s
obligations under its Non-Employee Director Deferred Compensation Plan (the
“Deferred Compensation Plan”); provided, that certain terms and conditions of the
grant and payment of such RSUs set forth in the Deferred Compensation Plan (and only
to the extent set forth in such plan) shall supercede the terms generally applicable
to RSUs granted under the Plan. RSUs granted under this paragraph need not be
evidenced by an Award Agreement unless the Committee determines that such an Award
Agreement is desirable for the furtherance of the purposes of the Plan and the
Deferred Compensation Plan.
(D)
Non-Employee Director Compensatory Awards
. The Company shall issue
RSUs payable only in Stock (unless the Committee determines otherwise) pursuant to
this Section 6(b)(iv)(D) for the purpose of fulfilling the
Company’s obligation to compensate each Non-Employee Director, in part, in the
form of RSUs.
11
Exhibit 10.1
(1) For Plan Years ending on or before December 31, 2006, such RSUs
shall be awarded at such times as the Company shall otherwise pay to
Non-Employee Directors their annual retainer fees, as well as such other fees,
stipends and payments determined by the Committee to be subject to such
Non-Employee Director compensation policy (each such award date, a “Fee Payment
Date”). The Company shall keep a separate book account in the name of each
Non-Employee Director. The number of RSUs to be credited to each Non-Employee
Director’s account as of each Fee Payment Date shall be calculated by dividing
(1) fifty percent (50%) of the total retainer or fee otherwise to be paid to
such Non-Employee Director on such Fee Payment Date by (2) the Fair Market Value
of a share of Stock as of such Fee Payment Date. The Restricted Stock Units so
credited shall be immediately vested and non-forfeitable and shall
be paid
as of
become payable on
the date which is two hundred (200) days immediately following the
date upon which such Director’s service as a member of the Board terminates for
any reason.
(2) For Plan Years beginning on and after January 1, 2007, such RSUs
shall be awarded at the time (“Award Date”) of the annual Stockholders meeting
(unless the Committee determines otherwise). The Company shall keep a separate
book account in the name of each Non-Employee Director and shall credit to each
Non-Employee Director’s account as of each Award Date the number of RSUs awarded
as of such date. The RSUs so credited shall become vested and nonforfeitable and
(unless deferred) shall become payable in accordance with the terms of the Award
Agreement. The RSUs so credited that a Non-Employee Director has deferred, if
any, shall
be paid as
of
become payable on
the date which is 200 days immediately
following the date upon which such Director’s service as a member of the Board
terminates for any reason, but only to the extent such RSUs are vested and
nonforfeitable on the date service on the Board terminates.
(v)
Converted Cendant Awards
. The Committee is authorized to grant Options and
Stock awards (such Options and Stock awards, “Conversion Options” and “Conversion Stock,”
respectively) in consideration of the cancellation by Cendant of certain stock options and
restricted stock unit awards previously granted to Participants by Cendant (such Cendant
awards, the “Cendant Awards”). Notwithstanding any other provision of the Plan to the
contrary, and in any event in accordance with a formula for the conversion of Cendant Awards
determined by the Board in its sole discretion, (i) the number of shares to be subject to a
Conversion Option or Conversion Stock shall be determined by the Committee and (ii) the per
share exercise price of a Conversion Option shall be determined by the Committee and may be
less than the Fair Market Value of a share of Stock on the date of grant.
(vi)
Other Stock- or Cash-Based Awards
. The Committee is authorized to grant
Awards to Grantees in the form of Other Stock-Based Awards or Other Cash-Based
12
Exhibit 10.1
Awards, as deemed by the Committee to be consistent with the purposes of the Plan.
Awards granted pursuant to this paragraph may be granted with value and payment contingent
upon Performance Goals, so long as such goals relate to periods of performance in excess of
one calendar year. The Committee shall determine the terms and conditions of such Awards at
the date of grant or thereafter. Performance periods under this Section 6(b)(vi) may
overlap. The maximum value of the aggregate payment that any Grantee may receive pursuant to
this Section 6(b)(vi) in respect of any Plan Year is $1 million. Payments earned hereunder
may be decreased or, with respect to any Grantee who is not a Covered Employee, increased in
the sole discretion of the Committee based on such factors as it deems appropriate. No such
payment shall be made to a Covered Employee prior to the certification by the Committee that
the Performance Goals have been attained. The Committee may establish such other rules
applicable to the Other Stock- or Cash-Based Awards to the extent not inconsistent with
Section 162(m) of the Code.
(c)
Annual Incentive Program
. The Committee is authorized to grant Awards to Grantees
pursuant to the Annual Incentive Program, under such terms and conditions as deemed by the
Committee to be consistent with the purposes of the Plan. Grantees will be selected by the
Committee with respect to participation for a Plan Year. The maximum value of the aggregate payment
that any Grantee may receive under the Annual Incentive Program in respect of any Plan Year is $1
million. Payments earned hereunder may be decreased or, with respect to any Grantee who is not a
Covered Employee, increased in the sole discretion of the Committee based on such factors as it
deems appropriate. No such payment shall be made to a Covered Employee prior to the certification
by the Committee that the Performance Goals relating to Awards hereunder have been attained. The
Committee may establish such other rules applicable to the Annual Incentive Program to the extent
not inconsistent with Section 162(m) of the Code.
(d) Compliance with Code Section 409A. Effective January 1, 2009, the specific
terms of any Award or Award Agreement relating to the time or form of payment, deferral of payment
or any other feature of an Award that is subject to Section 409A of the Code shall be designed to
comply with the requirements or exemptions in the final regulations under such Section.
7.
Change in Control Provisions
.
Unless otherwise determined by the Committee and evidenced in an Award Agreement, in the event
of a Change
of
in
Control:
(a) any Award carrying a right to exercise that was not previously vested and exercisable
shall become fully vested and exercisable; and
(b) the restrictions, deferral limitations, payment conditions, and forfeiture conditions
applicable to any other Award granted under the Plan shall lapse and such Awards shall be deemed
fully vested, and any performance conditions imposed with respect to Awards shall be deemed to be
fully achieved
; provided, however, payment of a 409A Award upon a change in control may be made
only if such change in control qualifies as a “change in control” under Section 1.409A-3(i)(5) of
the Treasury Regulations.
13
Exhibit 10.1
8.
General Provisions
.
(a)
Nontransferability
. Unless otherwise provided in an Award Agreement, Awards shall
not be transferable by a Grantee except by will or the laws of descent and distribution and shall
be exercisable during the lifetime of a Grantee only by such Grantee or his guardian or legal
representative.
(b)
No Right to Continued Employment, etc
. Nothing in the Plan or in any Award, any
Award Agreement or other agreement entered into pursuant hereto shall confer upon any Grantee the
right to continue in the employ of, or to continue as a director of, or to continue to provide
services to, the Company or any Parent or Subsidiary of the Company or to be entitled to any
remuneration or benefits not set forth in the Plan or such Award Agreement or other agreement or to
interfere with or limit in any way the right of the Company or any such Parent or Subsidiary to
terminate such Grantee’s employment, or director or independent contractor relationship.
(c)
Taxes
. The Company or any Parent or Subsidiary of the Company is authorized to
withhold from any Award granted, any payment relating to an Award under the Plan, including from a
distribution of Stock, or any other payment to a Grantee, amounts of withholding and other taxes
due in connection with any transaction involving an Award, and to take such other action as the
Committee may deem advisable to enable the Company and Grantees to satisfy obligations for the
payment of withholding taxes and other tax obligations relating to any Award. This authority shall
include authority to withhold or receive Stock or other property and to make cash payments in
respect thereof in satisfaction of a Grantee’s tax obligations. The Committee may provide in the
Award Agreement that in the event that a Grantee is required to pay any amount to be withheld in
connection with the issuance of shares of Stock in settlement or exercise of an Award, the Grantee
may satisfy such obligation (in whole or in part) by electing to have a portion of the shares of
Stock to be received upon settlement or exercise of such Award equal to the minimum amount required
to be withheld.
(d)
Stockholder Approval; Amendment and Termination
.
(i) The Plan shall take effect upon its adoption by the Board but the Plan (and any
grants of Awards made prior to the stockholder approval mentioned herein) shall be subject to
the requisite approval of the stockholders of the Company. In the event that the stockholders
of the Company do not ratify the Plan at a meeting of the stockholders at which such issue is
considered and voted upon, then upon such event the Plan and all rights hereunder shall
immediately terminate and no Grantee (or any permitted transferee thereof) shall have any
remaining rights under the Plan or any Award Agreement entered into in connection herewith.
(ii) The Board may at any time and from time to time alter, amend, suspend, or
terminate the Plan in whole or in part; provided, however, that unless otherwise determined
by the Board, an amendment that requires stockholder approval in order for the Plan to
continue to comply with Section 162(m) or any other law, regulation or stock exchange
requirement shall not be effective unless approved by the requisite vote of
14
Exhibit 10.1
stockholders. Notwithstanding the foregoing, no amendment to or termination of the Plan
shall affect adversely any of the rights of any Grantee, without such Grantee’s consent,
under any Award theretofore granted under the Plan.
(e)
Expiration of Plan
. Unless earlier terminated by the Board pursuant to the
provisions of the Plan, the Plan shall expire on the tenth anniversary of the Effective Date. No
Awards shall be granted under the Plan after such expiration date. The expiration of the Plan shall
not affect adversely any of the rights of any Grantee, without such Grantee’s consent, under any
Award theretofore granted.
(f)
Deferrals
. The Committee shall have the authority to establish such procedures and
programs that it deems appropriate to provide Grantees with the ability to defer receipt of cash,
Stock or other property payable with respect to Awards granted under the Plan. Any procedures or
programs established by the Committee under this paragraph shall be designed and administered in
compliance with Section 409A of the Code and Internal Revenue Service guidance issued thereunder.
(g)
No Rights to Awards; No Stockholder Rights
. No Grantee or other person shall have
any claim to be granted any Award under the Plan, and there is no obligation for uniformity of
treatment of Grantees. Except as provided specifically herein, a Grantee or a transferee of an
Award shall have no rights as a stockholder with respect to any shares covered by the Award until
the date of the issuance of a stock certificate to him for such shares.
(h)
Unfunded Status of Awards
. The Plan is intended to constitute an “unfunded” plan
for incentive and deferred compensation. With respect to any payments not yet made to a Grantee
pursuant to an Award, nothing contained in the Plan or any Award shall give any such Grantee any
rights that are greater than those of a general creditor of the Company.
(i)
No Fractional Shares
. No fractional shares of Stock shall be issued or delivered
pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards, or
other property shall be issued or paid in lieu of such fractional shares or whether such fractional
shares or any rights thereto shall be forfeited or otherwise eliminated.
(j)
Regulations and Other Approvals
.
(i) The obligation of the Company to sell or deliver Stock with respect to any Award
granted under the Plan shall be subject to all applicable laws, rules and regulations,
including all applicable federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or appropriate by the Committee.
(ii) Each Award is subject to the requirement that, if at any time the Committee
determines, in its absolute discretion, that the listing, registration or qualification of
Stock issuable pursuant to the Plan is required by any securities exchange or under any state
or federal law, or the consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Award or the issuance of
Stock, no such Award shall be granted or payment made or Stock issued, in
whole or in part, unless listing, registration, qualification, consent or approval has
been effected or obtained free of any conditions not acceptable to the Committee.
15
Exhibit 10.1
(iii) In the event that the disposition of Stock acquired pursuant to the Plan is not
covered by a then-current registration statement under the Securities Act and is not otherwise
exempt from such registration, such Stock shall be restricted against transfer to the extent
required by the Securities Act or regulations thereunder, and the Committee may require a
Grantee receiving Stock pursuant to the Plan, as a condition precedent to receipt of such
Stock, to represent to the Company in writing that the Stock acquired by such Grantee is
acquired for investment only and not with a view to distribution.
(iv) The Committee may require a Grantee receiving Stock pursuant to the Plan, as a
condition precedent to receipt of such Stock, to enter into a stockholder agreement or
“lock-up” agreement in such form as the Committee shall determine is necessary or desirable to
further the Company’s interests.
(k)
Governing Law
. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Delaware without giving effect to the
conflict of laws principles thereof.
(l) 409A Compliance. The terms of the Plan shall be interpreted and applied in a
manner consistent with the requirements of Section 409A of the Code and the Treasury Regulations
thereunder, and the Company shall have no right to make any payment under the Plan, except in
compliance with Section 409A of the Code. It is intended that payments made under the Plan on or
before the 15th day of the third month following the end of the Grantee’s first taxable year in
which the right to the payment is no longer subject to a substantial risk of forfeiture shall be
exempt from compliance with Section 409A of the Code pursuant to the exception for short-term
deferrals set forth in Section 1.409A-1(b)(4) of the Treasury Regulations. The Company shall have
no obligation, however, to reimburse a Grantee for any tax penalty or interest payable, or provide
a gross-up payment in connection with any tax liability of a Grantee under Section 409A of the
Code.
(m) 409A Restrictions. Anything in this Plan to the contrary notwithstanding, the
following rules shall apply to 409A Awards and shall constitute further restrictions on terms of
Awards set forth elsewhere in this Plan:
(i) The Committee may permit a Grantee to elect to defer
an Award, or any
payment under an Award only if such election is either made before the beginning of the Plan
Year for which the Award is granted or complies with an exception set forth in the Treasury
Regulations under Section 409A of the Code.
(ii) The Committee shall have no authority to accelerate
payments relating to
409A Awards in excess of the authority permitted under Section 1.409A-3(j) of the Treasury
Regulations.
16
Exhibit 10.1
(iii) Any payment of a 409A Award triggered by a
Grantee’s termination of
employment shall be made only if such termination constitutes, as determined by the
Committee, a “separation of service” under Treasury Regulation 1.409A-1(h) and shall be
delayed for six months following the date of such termination if such Grantee is a Specified
Employee on such date. In the event of any such delay in the distribution date, the 409A
Award will be paid at the beginning of the seventh month following the Grantee’s
termination. In the event of the Grantee’s death during such six-month period, payment will
be made in the payroll period next following the payroll period in which the Grantee’s death
occurs. A Grantee is a “Specified Employee” if he or she is an employee of the Company who
satisfies the requirements for being designated a “key employee” under Section
416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code
at any time during a calendar year, in which case such employee shall be considered a
Specified Employee for the twelve-month period beginning on the first day of the fourth
month immediately following the end of such calendar year. Notwithstanding the foregoing,
all employees who are nonresident aliens during an entire calendar year are excluded for
purposes of determining which employees meet the requirements of Section 416(i)(1)(A)(i),
(ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for such calendar
year. The term “nonresident alien” as used herein shall have the meaning set forth in
Regulations Section 1.409A-1(j). In the event of any corporate spinoff or merger, the
determination of which employees meet the requirements of Section 416(i)(1)(A)(i), (ii) or
(iii) of the Code without regard to Section 416(i)(5) of the Code for any calendar year
shall be determined in accordance with Regulations Section 1.409A-1(i)(6).
(iv) In the case of any payment of a 409A Award, if the
timing of such payment
is not otherwise specified in the Plan or Award Agreement, the payment shall be made on or
after the date at which the settlement of the Award is specified to occur and on or before
the 75th day following the date at which the settlement of the Award is specified to occur,
determined in the sole discretion of the Committee, except as otherwise provided in
Subsection (iii) above. In the case of any Award providing for payment upon the lapse of a
risk of forfeiture, if the timing of such payment is not otherwise specified in the Plan or
an Award Agreement, the payment shall be made on or after January 1 and on or before March
15 of the year following the year the risk of forfeiture lapsed.
(v) No amendment or termination of the Plan or an Award
pursuant to Section
8(d) above shall be effective with respect to 409A Awards except insofar as it complies with
the requirements of Section 409A of the Code and the Treasury Regulations thereunder,
including without limitation, the requirements set forth in Treasury Regulations Section
1.409A-2(b) governing subsequent changes in time and form of payment and Section
1.409A-3(j)(4)(ix) governing plan terminations.
(vi) Payment of a 409A Award to a Grantee may be delayed
to a date after the
payment date designated in the Plan or Award Agreement if the Company’s deduction with
respect to such payment otherwise would be limited or eliminated by the application of
Section 162(m) of the Code, in which case the payment shall be made upon the earliest date
at which the Committee reasonably anticipates that the deduction of the payment of
the amount will not be limited or eliminated by the application of Section 162(m)
of the Code. Any such delay shall apply to all scheduled payments to such Grantee.
17
Exhibit 10.1
For purposes of Section 8(l) and this Section 8(m), any reference to a term or event (including
any authority or right of the Company or a Grantee) being “permitted” under or being in
“compliance” with Section 409A and the Treasury Regulations thereunder means that the term or event
will not cause the Grantee to be deemed to be in constructive receipt of compensation relating to
the 409A Award prior to the payment of cash, shares or other property or to be liable for payment
of interest or a penalty tax under Section 409A.
18
Exhibit
10.3
AMENDED AND RESTATED
WRIGHT EXPRESS CORPORATION EXECUTIVE
DEFERRED COMPENSATION PLAN
ARTICLE 1-INTRODUCTION
1.1 Purpose of Plan
Wright Express Corporation has adopted the Plan set forth herein to provide a means by which
certain employees designated by Wright Express Corporation for participation may elect to defer
receipt of designated percentages or amounts of their Compensation and to provide a means for
certain other deferrals of Compensation.
1.2 Status of Plan
The Plan is intended to be “a plan which is unfunded and is maintained by an employer primarily
for the purpose of providing deferred compensation for a select group of management or highly
compensated employees” within the meaning of Sections 201(2) and 301(a)(3) of the Employee
Retirement Income Security Act of 1974 (“ERISA”), and shall be interpreted and administered in a
manner consistent with such intent. With respect to Compensation deferred on or after January 1,
2005, the Plan shall be administered in a manner consistent with the applicable requirements of
Code Section 409A and the guidance published thereunder by the U.S. Department of Treasury.
ARTICLE 2-DEFINITIONS
Wherever used herein, the following terms have the meanings set forth below, unless a different
meaning is clearly required by the context:
2.1 Account
means, for each Participant, the account established for his or her benefit under
Section 5.1.
2.2 Adoption Agreement
means the agreement between Wright Express Corporation and Merrill Lynch
(or other service provider) containing certain terms of the Plan and entered into as of the
Effective Date, as the same may be amended from time to time. The Adoption Agreement shall be
considered part of the Plan document.
2.3 Change of Control Transaction
means any transaction or series of transactions that
constitutes a “Change in Control” as defined in Section 2(g) of the 2005 Equity and Incentive
Plan.
2.4 Code
means the Internal Revenue Code of 1986, as amended from time to time. Reference to
any section or subsection of the Code includes reference to any comparable or succeeding
provisions of any legislation which amends, supplements or replaces such section or subsection.
2.5 Compensation
has the meaning set forth in the Adoption Agreement.
2.6 Effective Date
means
January 1, 2009, for this amendment and restatement of the Plan, and
February 22, 2005, the date on which the Plan first
becomes
became
effective
, for the Plan as originally adopted
.
2.7 Election Form
means the participation election form as approved and prescribed by the Plan
Administrator.
2.8 Elective Deferral
means the portion of Compensation which is deferred by a
Participant under Section 4.1.
2.9
Eligible Employee
has the
meaning
means each employee of the Employer who satisfies the criteria
set forth in the Adoption
Agreement.
2.10 Employer
means Wright Express Corporation or any successor to all or a major portion of the
Employer’s assets or business which assumes the obligations of the Employer, and each other entity
that is affiliated with Wright Express Corporation which adopts the Plan with the consent of the
Employer.
2.11 ERISA
means the Employee Retirement Income Security Act of 1974, as amended from time to
time. Reference to any section or subsection of ERISA includes reference to any comparable or
succeeding provisions of any legislation which amends, supplements or replaces such section or
subsection.
2.12 Incentive Deferral
means a discretionary additional deferral of Compensation made by the
Employer for the benefit of a Participant as described in Section 4.3.
2.13 Insolvent
means either (i) the Employer is unable to pay its debts as they become due, or
(ii) the Employer is subject to a pending proceeding as a debtor under the United States Bankruptcy
Code.
2.14 Matching Deferral
means a deferral for the benefit of a Participant as described in Section
4.2.
2.15 Participant
means any individual who participates in the Plan in accordance with Article 3.
2.16 Plan
means this Wright Express Corporation Executive Deferred Compensation Plan, as amended
from time to time, including the provisions of
any
the
Adoption Agreement
, which are incorporated therein.
2.17 Plan Administrator
means the person, persons or entity designated by Wright Express
Corporation in the Adoption Agreement
or in another instrument
to administer the Plan and to serve as the agent for Wright
Express Corporation with respect to the Plan and Trust as contemplated by the agreement
establishing the Trust. If no such person or entity is so serving at any time, the Employer shall
be the Plan Administrator.
2.18 Plan Year
means
a calendar year
the 12-month period set forth in the Adoption Agreement.
2.19 Total and Permanent Disability
means the inability of a Participant to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months, and the permanence and degree of which shall be
supported by medical evidence satisfactory to the Plan Administrator.
2.20 Trust
means the trust, if any, established by the Employer that identifies the Plan as a plan
with respect to which assets are to be held by the Trustee.
2.21 Trustee
means the trustee or trustees under the Trust.
2.22 Year of Service
means the computation period and related service requirement set forth in the Adoption Agreement.
ARTICLE 3-PARTICIPATION
3.1 Commencement of Participation
Any Eligible Employee who elects to defer part of his or her Compensation in accordance with
Section 4.1 shall become a Participant in the Plan as of the date such deferrals commence in
accordance with Section 4.1. Any Eligible Employee who is not already a Participant and whose
Account is credited with an Incentive Deferral shall become a Participant as of the date such
amount is credited.
3.2 Continued Participation
A Participant in the Plan shall continue to be a Participant so long as any amount remains credited
to his or her Account. Notwithstanding the foregoing, Participation in respect of any calendar year
is not a guarantee of participation in respect of any future calendar year.
ARTICLE 4-ELECTIVE, MATCHING AND INCENTIVE DEFERRALS
4.1 Elective Deferrals
An individual who is an Eligible Employee on the Effective Date may, by completing an Election Form
and filing it with the Plan Administrator within 30 days following the Effective Date, elect to
defer a percentage or dollar amount of one or more payments of Compensation, on such terms as the
Plan Administrator may permit,
for services to be performed
which are payable to the Participant
after the date on which the individual
files the Election Form. Any individual who becomes an Eligible Employee after the Effective Date
may, by completing an Election Form and filing it with the Plan Administrator within 30 days
following the date on which the Plan Administrator gives such individual written notice that the
individual is an Eligible Employee, elect to defer a percentage or dollar amount of one or more
payments of Compensation, on such terms as the Plan Administrator may permit,
for services to be
performed
which are payable to the Participant
after the date on which
the individual files the Election Form. Any Eligible Employee who
has not otherwise initially elected to defer Compensation in accordance with this paragraph 4.1 may
elect to defer a percentage or dollar amount of one or more payments of Compensation, on such terms
as the Plan Administrator may permit,
for services to be performed
commencing with Compensation paid
in the next succeeding Plan
Year, by completing an Election Form prior to the first day of such succeeding Plan Year.
In the
case of commissions, services are deemed performed in the year in which the customer pays the
Employer.
In addition, a Participant may defer all or part of the amount of any elective deferral
or matching contribution made on his or her behalf to the Employer’s 401(k) plan for the prior Plan
Year that is treated as an excess deferral, an excess contribution or otherwise limited by the
application of the limitations of sections 401(k), 401(m), 415 or 402(
g
q
) of the Code, so long as
the Participant so indicates on an Election Form. A Participant’s Compensation shall be reduced in
accordance with the Participant’s election hereunder and amounts deferred hereunder shall be paid
by the Employer to the Trust as soon as administratively feasible and credited to the Participant’s
Account as of the date the amounts are received by the Trustee.
An election to defer Compensation for any Plan Year shall
be irrevocable for such year and shall
apply for subsequent Plan Years unless changed or revoked. A Participant may change or revoke his
or her deferral election on a prospective basis as of the first day of any Plan Year by giving
written notice to the Plan Administrator before such first day (or by any earlier date as the Plan
Administrator may prescribe).
4.2 Matching Deferrals
At the Employer’s sole discretion, the Employer may make Matching Deferrals at a rate established
by the Employer
and set forth in the Adoption Agreement.
Each Matching Deferral will be credited,
as of the later of the date it is received by the Trustee or the date the Trustee receives from the
Plan Administrator such instructions as the Trustee may reasonably require to allocate the amount
received among the asset accounts maintained by the Trustee.
4.3 Incentive Deferrals
In addition to other amounts deferred under the Plan, the Employer may, in its sole discretion,
select one or more Eligible Employees to
have
receive
an Incentive Deferral
allocated
to his or her Account
on such terms as the Employer shall specify at the time it
defers such amount
makes the contribution.
For example, the
Employer may credit an amount to a Participant’s Account and condition the payment of that amount
and accrued earnings thereon upon the Participant remaining employed by the Employer for an
additional specified period of time. If the Employer does not specify a method of distribution, the
Incentive Deferral
,
to the extent vested,
shall be distributed in a manner consistent with the
election last made by the
particular
Participant
under Section 7.1
prior to the year in which the Incentive Deferral is made
. The Employer, in its discretion, may
permit the Participant to designate a distribution schedule for a particular Incentive Deferral
provided that such designation is made
under the timing rules of Section 4.1 as if the Participant were making an Elective Deferral
prior to the time that the Employer finally
determines that the Participant will receive the Incentive
Deferral
.
ARTICLE 5-ACCOUNTS
5.1 Accounts
The Plan Administrator shall establish an Account for each Participant reflecting Elective
Deferrals, Matching Deferrals and Incentive Deferrals made for the Participant’s benefit together
with any adjustments for income, gain or loss and any payments from the Account. The Plan
Administrator may cause the Trustee to maintain and invest separate asset accounts corresponding to
each Participant’s Account. The Plan Administrator shall establish sub-accounts for each
Participant that has more than one election in effect under Section 7.1 and such other sub-accounts
as are necessary for the proper administration of the Plan. As of the last business day of each
calendar quarter, the Plan Administrator shall provide the Participant with a statement of his or
her Account reflecting the income, gains and losses (realized and unrealized), amounts of
deferrals, and distributions of such Account since the prior statement.
5.2 Investments
The assets of the Trust shall be invested in such investments as the Trustee shall determine. The
Trustee may (but is not required to) consider the Employer’s or a Participant’s investment
preferences when investing the assets attributable to a Participant’s Account.
ARTICLE 6-VESTING
6.1 General
A Participant shall be immediately vested in,
i.e.
, shall have a nonforfeitable right to,
all Elective Deferrals, and all income and gain attributable thereto, credited to his or her
Account. A Participant shall become vested in the portion of his or her Account attributable to
Matching Deferrals
or Incentive Deferrals
and income and gain attributable thereto in accordance
with the schedule set forth in the Adoption Agreement, subject to earlier vesting in accordance
with Sections 6.3, 6.4, and 6.5.
6.2 Vesting Service
For purposes of applying
any
the
vesting schedule in the
Adoption Agreement, a Participant shall be
considered to have completed a
Year
year
of
Service
service
for each complete year of
full-time service with the
Employer or an Affiliate, measured from the Participant’s first date of such employment, unless the
Employer also maintains a 401(k) plan that is qualified under section 401(a) of the Internal
Revenue Code in which the Participant participates, in which case
any
the
rules governing vesting
service under that plan shall also be controlling under this Plan.
6.3 Change of Control
A Participant shall become fully vested in his or her Account immediately prior to a Change
in
of
Control of the Employer.
6.4 Death or Disability
A Participant shall become fully vested in his or her Account immediately prior to termination of
the Participant’s employment by reason of the Participant’s death or Total and Permanent
Disability. Whether a Participant’s termination of employment is by reason of the Participant’s
Total and Permanent Disability shall be determined by the Plan Administrator in its sole
discretion.
6.5 Insolvency
A Participant shall become fully vested in his or her Account immediately prior to the Employer
becoming Insolvent, in which case the Participant will have the same rights as a general creditor
of the Employer with respect to his or her Account Balance.
ARTICLE 7-PAYMENTS
7.1 Election as to Time and Form of Payment
A Participant shall elect (on the Election Form used to elect to defer Compensation under Section
4.1) the date at which the Elective Deferrals,
and
vested Matching Deferrals
,
and vested Incentive Deferrals, if any,
(including any earnings attributable thereto) will commence to be paid
to the
Participant. The Participant shall also elect thereon for payments to be paid in either:
(a) a single lump-sum payment; or
(b) annual installments over a period elected by the Participant up to 10 years, the amount of
each installment to equal the balance of his or her Account immediately prior to the installment
divided by the number of installments remaining to be paid.
Each such election will be effective for the Plan Year for which it is made and succeeding Plan
Years, unless changed by the Participant. Any change will be effective only for Elective Deferrals,
and
vested Matching Deferrals
and
vested Incentive Deferrals, if any,
made for the first Plan Year
beginning after the date on which the Election Form containing the change is filed with the Plan
Administrator
, unless the following conditions are met: the change (i) is made at least 12 months
before the date payment is to commence (ii) defers the payment date at least 5 years from the
current payment date; and is made at least 12 months after the Participant’s most recent election
of a payment date
. Except as otherwise provided in this Article 7 below, payment of a Participant’s
Account shall be made in accordance with the Participant’s elections under this Section 7.1.
7.2 Death
If a Participant dies prior to the complete distribution of his or her Account, the balance of the
Account shall be paid as soon as practicable to the Participant’s designated beneficiary or
beneficiaries, in the form
elected by the Participant under either of the following options:
of
(a)a
single lump-sum payment
.
; or
(b)annual installments over a period elected by the Participant up to 10 years, the amount of each installment to equal the balance of the Account
immediately prior to the installment divided by the number of installments remaining to be paid.
Any designation of beneficiary
and form of payment to such beneficiary
shall be made by the Participant on an Election Form filed with the
Plan
Administrator and may be changed by the Participant at any time by filing another Election Form
containing the revised instructions. If no beneficiary is designated or no designated beneficiary
survives the Participant, payment shall be made to the Participant’s surviving spouse, or, if none,
payment shall be made in a single lump sum to the Participant’s estate.
7.3 Unforeseeable Emergency
A Participant may elect payment on account of a severe financial hardship resulting from illness or
accident of the Participant or the Participant’s spouse, beneficiary or dependent (as defined in
Code Section 152 without regard to subsections (b)(1), (b)(2) and (d)(1)(B) of that section); loss
of the Participant’s property due to casualty; or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the Participant’s control, all as determined by
the Plan Administrator in compliance with Code Section 409A and applicable regulations. Payment
may not be made under this section to the extent the emergency is or may be relieved through
insurance or other assets available to the Participant without causing severe financial hardship;
shall not exceed the amount reasonably necessary to satisfy the emergency need (which may include
amounts necessary to pay income or penalty taxes reasonably anticipated to result from the
payment); and shall be made only to the extent permitted under Code Section 409A and applicable
regulations.
7.3 Forfeiture of Non-Vested Amounts
To the extent that any amounts credited to a Participant’s Account are not vested at the time such
amounts are otherwise payable under Section 7.1, such amounts shall be forfeited and shall be used
to satisfy the Employer’s obligation to make contributions to any Trust under the Plan.
7.4 Taxes
All federal, state or local taxes that the Plan Administrator determines are required to be
withheld from any payments made pursuant to this Article 7 shall be withheld.
ARTICLE 8-PLAN ADMINISTRATOR
8.1 Plan Administration and Interpretation
The Plan Administrator shall oversee the administration of the Plan. The Plan Administrator shall
have complete control and authority to determine the rights and benefits and all claims, demands
and actions arising out of the provisions of the Plan of any Participant, beneficiary, deceased
Participant, or other person having or claiming to have any interest under the Plan. The Plan
Administrator shall have complete discretion to interpret the Plan and to decide all matters under
the Plan. Such interpretation and decision shall be final, conclusive and binding on all
Participants and any person claiming under or through any Participant, in the absence of clear and
convincing evidence that the Plan Administrator acted arbitrarily and capriciously. Any
individual(s) serving as Plan Administrator who is a Participant shall not vote or act on any
matter relating solely to himself or herself. When making a determination or calculation, the Plan
Administrator shall be entitled to rely on information furnished by a Participant, a beneficiary,
the Employer or the Trustee. The Plan Administrator shall have the responsibility for complying
with any reporting and disclosure requirements or ERISA.
8.2 Powers, Duties, Procedures, Etc.
The Plan Administrator shall have such powers and duties as are described herein and in ERISA, and
may adopt such policies and procedures, may act in accordance with such policies and procedures,
may appoint such officers or agents, may delegate such powers and duties, may receive such
reimbursements and compensation, and shall follow such claims and appeal procedures with respect
to the Plan as it may establish, consistent with its duties under the Plan and ERISA.
8.3 Information
To enable the Plan Administrator to perform its functions, the Employer shall supply full and
timely information to the Plan Administrator on all matters relating to the compensation of
Participants, their employment, retirement, death, termination of employment, and such other
pertinent facts as the Plan Administrator may require.
8.4 Indemnification of Plan Administrator
The Employer agrees to indemnify and to defend to the fullest extent permitted by law any
officer(s) or employee(s) who serve as Plan Administrator (including any such individual who
formerly served as Plan Administrator) against all liabilities, damages, costs and expenses
(including attorneys’ fees and amounts paid in settlement of any claims approved by the Employer)
occasioned by any act or omission to act in connection with the Plan, if such act or omission is
in good faith.
ARTICLE 9-AMENDMENT AND TERMINATION
9.1 Amendments
Board of Directors of Wright Express Corporation shall have the right to amend the Plan from time
to time, subject to Section 9.3, by an instrument in writing which has been executed on behalf of
Wright Express Corporation by its duly authorized officer.
9.2 Termination of Plan
This Plan is strictly a voluntary undertaking on the part of the Employer and shall not be deemed
to constitute a contract between the Employer and any Employee or a consideration for, or an
inducement or condition of employment for, the performance of the services by any Employee. Board
of Directors of Wright Express Corporation reserves the right to terminate the Plan at any time,
subject to Section 9.3, by an instrument in writing which has been executed on behalf of Wright
Express Corporation by its duly authorized officer. Upon termination, the Employer may (a) elect to
continue to maintain any Trust to pay benefits hereunder as they become due as if the Plan had not
terminated or (b) direct the Trustee to pay promptly to Participants (or their beneficiaries) the
vested balance of their Accounts. For purposes of the preceding sentence, in the event the Employer
chooses to implement clause (b), the Account balances of all Participants who are in the employ of
the Employer at the time the Trustee is directed to pay such balances shall become fully vested and
nonforfeitable
; and all Account balances shall be paid as soon as practicable in compliance with
Code Section 409A and related regulations
. After Participants and their beneficiaries are paid all
Plan benefits to which they are entitled, all remaining assets of the Trust attributable to
Participants who terminated employment with the Employer prior to termination of the Plan and who
were not fully vested in their Accounts under Article 6 at that time shall be returned to the
Employer.
9.3 Existing Rights
No amendment or termination of the Plan shall adversely affect the rights of any Participant with
respect to amounts that have been credited to his or her Account prior to the date of such
amendment or termination without the consent of such Participant.
ARTICLE 10
-
CLAIMS PROCEDURE
If an application for a benefit (“claim”) is denied by the Plan Administrator, the Plan
Administrator shall give written notice of such denial to the applicant, by certified or registered mail, within 60 days
after the claim was filed with the Plan Administrator; provided, however, that such 60-day period
may be extended to 120 days by the Plan Administrator if it determines that special circumstances
exist which require an extension of the time required for processing the claim. Such denial shall
set forth:
(a) the specific reason or reasons for the denial;
(b) the specific Plan provisions on which the denial is based;
(c) any additional material or information necessary for the applicant to perfect the claim
and an explanation of why such material or information is necessary; and
(d) an explanation of the Plan’s claim review procedure.
Following receipt of such denial, the applicant or his or her duly authorized
representative may:
(a) request a review of the denial by filing written application for review with the Plan
Administrator within 60 days after receipt by the applicant of such denial;
(b) review documents pertinent to the claim at such reasonable time and location as shall be
mutually agreeable to the applicant and the Plan Administrator; and
(c) submit issues and comments in writing to the Plan Administrator relating to its review of
the claim.
The Plan Administrator shall, after consideration of the application for review, render a
decision and shall give written notice thereof to the applicant, by certified or registered mail,
within 60 days after receipt by the Plan Administrator of the application for review; provided,
however, that such 60-day period may be extended to 120 days by the Plan Administrator if it
determines that special circumstances exist which require an extension of the time required for
processing the application for review. Such notice shall include specific reasons for the decision
and specific references to the pertinent Plan provisions on which the decision is based.
ARTICLE 11-MISCELLANEOUS
11.1 No Funding
The Plan constitutes a mere promise by the Employer to make payments in accordance with the terms
of the Plan and Participants and beneficiaries shall have the status of general unsecured
creditors of the Employer. Nothing in the Plan will be construed to give any employee or any other
person rights to any specific assets of the Employer or of any other person. In all events, it is
the intent of the Employer that the Plan be treated as unfunded for tax purposed and for purposes
of Title I of ERISA.
11.2 Non-assignability
None of the benefits, payments, proceeds or claims of any Participant or beneficiary shall be
subject to any claim of any creditor of any Participant or beneficiary and, in particular, the
same shall not be subject to attachment or garnishment or other legal process by any creditor of
such Participant or beneficiary, nor shall any Participant or beneficiary have any right to
alienate, anticipate, commute, pledge, encumber or assign any of the benefits or payments or
proceeds which he or she may expect to receive, contingently or otherwise, under the Plan.
11.3 Limitation of Participants’ Rights
Nothing contained in the Plan shall confer upon any person a right to be employed or to continue
in the employ of the Employer, or interfere in any way with the right of the Employer to terminate
the employment of a Participant in the Plan at any time, with or without cause.
11.4 Participants Bound
Any action with respect to the Plan taken by the Plan Administrator or the Employer or the Trustee
or any action authorized by or taken at the direction of the Plan Administrator, the Employer or
the Trustee shall be conclusive upon all Participants and beneficiaries entitled to benefits under
the Plan.
11.5 Receipt and Release
Any payment to any Participant or beneficiary in accordance with the provisions of the Plan shall,
to the extent thereof, be in full satisfaction of all claims against the Employer, the Plan
Administrator and the Trustee under the Plan, and the Plan Administrator may require such
Participant or beneficiary, as a condition precedent to such payment, to execute a receipt and
release to such effect
; provided, however, that the timing of such release shall be in compliance
with Code Section 409A and shall not cause an impermissible delay of payment
. If any Participant
or beneficiary is determined by the Plan Administrator to be incompetent by reason of physical or
mental disability (including minority) to give a valid receipt and release, the Plan Administrator
may cause the payment or payments becoming due to such person to be made to another person for his
or her benefit without responsibility on the part of the Plan Administrator, the Employer or the
Trustee to follow the application of such funds.
11.6 Governing Law
The Plan shall be construed, administered, and governed in all respects under and by the laws of
the state of Delaware, without effect to conflicts of laws provisions thereof. If any provision
shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining
provisions hereof shall continue to be fully effective.
11.7 Headings and Subheadings
Headings and subheadings in this Plan are inserted for convenience only and are not to be
considered in the construction of the provisions hereof.
11.8 409A Compliance.
(a) The terms of the Plan shall be interpreted and applied in a manner consistent
with the requirements of Section 409A of the Code and the Treasury Regulations thereunder, and the
Company shall have no right to make any payment under the Plan, except in compliance with Section
409A of the Code.
(b) It is intended that payments made under the Plan on or before the 15th day of
the third month following the end of the Participant’s first taxable year in which the right to the
payment is no longer subject to a substantial risk of forfeiture shall be exempt from compliance
with Section 409A of the Code pursuant to the exception for short-term deferrals set forth in
Section 1.409A-1(b)(4) of the Treasury Regulations
.
(c) The Company shall have no obligation to reimburse a Participant for any tax penalty or
interest payable, or provide a gross-up payment in connection with any tax
liability of a Participant under Section 409A of the Code. The preceding sentence
shall not apply in the event of the Company’s negligence or willful disregard in interpreting the
application of Section 409A of the Code to the Plan, which negligence or willful disregard causes
the Participant to become subject to a tax penalty or interest
payable under Section 409A of the Code. In such case the Company will reimburse the
Participant on an after-tax basis for any such tax penalty or interest not later than the last day
of the Participant’s taxable year next following the Participant’s taxable year in which the
Participant remits the applicable taxes and interest.
(d) The Committee shall have no authority to accelerate payments in excess of the
authority permitted under Section 1.409A-3(j) of the Treasury Regulations.
(e) Any payment triggered by a Participant’s termination of employment
shall be made only if such termination
constitutes
, as determined by the Committee,
a “separation
of service” under Treasury Regulation 1.409A-1(h) and shall be delayed for six months following the
date of such termination if such Participant is a Specified Employee on such date.
In the event of any such delay in the distribution date, payment will be made at the beginning of
the seventh month following the Participant’s termination. In the event of the
Participant’s death during such six-month period, payment will be made in the
payroll period next following the payroll period in which the Participant’s death
occurs. A Participant is a “Specified Employee” if he or she is an employee of the
Company who satisfies the requirements for being designated a “key employee” under Section
416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code at any
time during a calendar year, in which case such employee shall be considered a Specified Employee
for the twelve-month period beginning on the first day of the fourth month immediately following
the end of such calendar year. Notwithstanding the foregoing, all employees who are nonresident
aliens during an entire calendar year are excluded for purposes of determining which employees meet
the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section
416(i)(5) of the Code for such calendar year. The term “nonresident alien” as used herein shall
have the meaning set forth in Regulations Section 1.409A-1(j). In the event of any corporate
spinoff or merger, the determination of which employees meet the requirements of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for any
calendar year shall be determined in accordance with Regulations Section 1.409A-1(i)(6).
(f) Payment may be delayed to a date after the payment date designated in the Plan if
the Company’s deduction with respect to such payment otherwise would be limited or eliminated by
the application of Section 162(m) of the Code, in which case the payment shall be made upon the
earliest date at which the Committee reasonably anticipates that the deduction of the payment of
the amount will not be limited or eliminated by the application of Section 162(m) of the Code. Any
such delay shall apply to all scheduled payments to such Participant
.
(g)
For purposes of Section 11.8, any reference to a term or event (including any
authority or right of the Company or a Participant) being “permitted” under or
being in “compliance” with Section 409A and the Treasury Regulations thereunder means that the term
or event will not cause the Participant to be deemed to be in constructive receipt
of compensation prior to the payment date or to be liable for payment of interest or a penalty tax
under Section 409A.
Exhibit 10.4
AMENDED AND RESTATED
WRIGHT EXPRESS CORPORATION
SEVERANCE PAY PLAN
FOR
OFFICERS
Effective Date:
—————
February 22, 2005
Amended and Restated February 1, 2008
Further Amended and Restated
January 1, 2009
ARTICLE I — INTRODUCTION
Wright Express Corporation and Wright Express Financial Services Corporation (referred to
collectively herein as the “Company”), hereby establishes the Wright Express Corporation Severance
Pay Plan for Officers (the “Plan”), effective as of
February 1, 2008
, to provide severance benefits
to certain employees of the Company and its subsidiaries who suffer a loss of employment under the
terms and conditions set forth in the Plan. The Plan replaces and supercedes (i) any and all
severance plans, policies and/or practices of the Company or its subsidiaries, whether written or
unwritten, in effect for covered employees prior to
February 1, 2008
and (ii) any and all severance
plans, policies and or practices of any business or entity acquired by the Company effective upon
the consummation of any such acquisition, in the sole discretion of the Company. The Plan may not
be amended or changed except in accordance with the provisions set forth below and is to be
administered in the sole and absolute discretion of the Company.
ARTICLE II — DEFINITIONS AND INTERPRETATIONS
The following definitions and interpretations of important terms apply to the Plan.
(a)
Agreement
. The Agreement and General Release provided by the Company to an
Eligible Employee as determined in the sole and absolute discretion of the Company in connection
with his or her termination of employment with the Company, which if executed by the Eligible
Employee (and not timely revoked), will acknowledge his or her termination of employment with the
Company and release the Company from liability for any and all claims. By signing the Agreement
and General Release, an Employee waives all rights he or she may have under state and federal
employment statutes and all common law causes of action related to his or her employment and
termination thereof.
(b)
Base Pay
. For purposes hereof, Base Pay shall mean an employee’s annual base
salary or wages from the Company. Base Pay shall be determined as reflected on the Company’s
payroll records, and shall not include bonuses, overtime pay, shift premiums, commissions, employer
contributions for benefits, incentive or deferred compensation or other additional compensation.
For purposes hereof, an Eligible Employee’s Base Pay shall include any salary reduction
contributions made on his or her behalf to any plan of the Company under section 125 or 401(k) of
the Internal Revenue Code of 1986, as amended
(“Code”)
. One week of Base Pay shall mean an
employee’s annual Base Pay divided by fifty-two (52).
(c)
Cause.
Termination for cause shall mean termination as a result of any of the
following: (a) misappropriation or improper use or disclosure of any confidential or proprietary
information of the Company; (b) failure to comply with any contractual obligations to the Company;
(c) solicitation for hire away from the Company any current Company employees absent the Company’s
consent; or (d) taking any action which the Company, in its sole discretion, deems to have been
inimical or detrimental to the interests of the Company
(d)
Company
. Wright Express Corporation and Wright Express Financial Services
Corporation.
(e)
Effective Date
.
February 1, 2008
(f)
Eligible Employee
. Any employee of the Company who: (i) is classified by the
Company as an active, full-time employee of the Company and who is designated as Chief Executive
Officer(“CEO”), Executive Vice President (“EVP”), Senior Vice President (“SVP”), or Vice President
(“VP”), and, (ii) is involuntarily terminated from employment for one of the reasons set forth in
Article III, Section A of the Plan. Notwithstanding the foregoing, an Eligible Employee shall not
include any individual (i) classified as an independent contractor by the Company, (ii) being paid
by or through an employee leasing company or other third party agency, (iii) any other person
classified by the Company as a leased employee, during the period the individual is so paid or
classified even if such individual is later retroactively reclassified as a common-law employee of
the Company or an affiliate during all or any part of such period pursuant to applicable law or
otherwise.
(g)
Participant
. An Eligible Employee who meets all the requirements set forth in
Article III of the Plan. An individual shall cease being a Participant once payment of all
severance pay and other benefits due to such individual under the Plan has been completed (or upon
the death of the Participant, if earlier) and no person shall have any further rights under the
Plan with respect to such former Participant.
(h)
Plan Administrator
. The Plan Administrator shall be SVP, Human Resources.
(
i
)
Taxation. The Participant acknowledges and agrees that the
Company may directly or
indirectly withhold from any payments under this Plan all federal, state, city or other taxes
that will be required pursuant to any law or governmental regulation. Anything in this Plan to
the contrary notwithstanding, the terms of this Plan shall be interpreted and applied in a manner
consistent with the requirements of Section 409A of the Code and the Treasury Regulations
(“Regulations”) so as not to subject Participants to the payment of any tax or interest which may
be imposed under such section, and the Company shall have no right to accelerate or make any
payment under this Plan to the extent such action would subject the Participant to the payment of
any tax or interest under such section. If all or a portion of the benefits and payments
provided under this Agreement constitute taxable income to Participants for any taxable year that
is prior to the taxable year in which such payments and/or benefits are to be paid to the
Participant, as a result of the Plan’s failure to comply with the requirements of Section 409A of
the Code and the Regulations, the applicable payment or benefit shall be paid immediately to the
Participant to the extent such payment or benefit is required to be included in income.
ARTICLE III — ELIGIBILITY
A.
WHO IS ELIGIBLE?
5
If you meet the criteria to be determined an Eligible Employee as that term is defined in
Article II (f) above, you shall become eligible for the severance pay described in Article IV of
the Plan (
i.e.
, you will become a “Participant”) by meeting the requirements set forth
below:
(a) you are involuntarily terminated for one of the following reasons:
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a reduction in the Company’s workforce;
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•
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elimination or discontinuation of your job or position provided that you are
not offered a comparable position. Comparability shall be determined in the
sole and absolute discretion of the Plan Administrator; or
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other circumstances as the Plan Administrator, in its sole discretion, deems
appropriate for the payment of severance;
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(b) you deliver a signed, dated and notarized Agreement to the individual whose signature
appears on the cover letter accompanying the Plan and the Agreement by no later than the date
(if
any)
set forth in the Agreement
; provided, however, that the timing of such release shall be
in compliance with Code Section 409A and shall not cause an impermissible delay of payment
, and
the time for you to revoke such Agreement (if any) as specified in the Agreement has expired; and
(c) the Company has not determined that you, either prior or subsequent to your termination of
employment, have (a) misappropriated or improperly used or disclosed any confidential or
proprietary information of the Company; (b) failed to comply with any contractual obligations to
the Company; (c) solicited for hire away from the Company, any current Company employees absent the
Company’s consent; (d) taken any action which the Company, in its sole discretion, deems to have
been inimical or detrimental to the interests of the Company; or (e) you meet the criteria to be
determined an Eligible Employee as that term is defined in Article II (f) above.
If you do not satisfy all of the above requirements, you shall not be considered a
Participant, and you shall not be entitled to commence or continue to receive any benefits under
the Plan. Additionally, you shall not become a Participant, and shall not become entitled to
benefits while you continue to be employed by the Company.
B.
WHO IS NOT ELIGIBLE?
You shall not be eligible for severance pay under this Plan if your employment is terminated
for any reason other than set forth in paragraph A, including, but not limited to:
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retirement;
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voluntary termination;
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termination by the Company
either
for cause
or not for cause
;
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6
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elimination or discontinuation of your job or position, if you are offered a
comparable position. Comparability shall be determined in the sole and
absolute discretion of the Plan Administrator.
|
In addition, if you have executed a separate employment agreement with the Company which
expressly provides for severance pay, you shall not be eligible for benefits under this Plan,
unless this Plan provides for greater benefits (as determined by the Plan Administrator). No
employee of any subsidiary of the Company outside of those subsidiary(ies) defined as the Company
by Article II (d) of this Plan shall be eligible for severance pay under this Plan unless provided
for by separate written agreement.
ARTICLE IV — SEVERANCE PAY
A.
SCHEDULE OF BENEFITS
If you become a Participant, you will receive the following benefits under the Plan:
If you are an Officer of the Company and are designated by the Plan Administrator as Chief
Executive Officer (“CEO”), then (i) if you have less than six (6) months employment service with
the Company, you will receive twenty-six (26) weeks of Base Pay; and (ii) if you have been actively
employed with the Company for a minimum of six (6) months, you will receive fifty-two (52) weeks of
Base Pay.
If you are an Officer of the Company and are designated by the Plan Administrator as Senior
Vice President or Executive Vice President (“SVP”) or (“EVP”), then (i) if you have less than six
(6) months of employment service with the Company, you will receive thirteen (13) weeks of Base
Pay; and (ii) if you have been actively employed with the Company for a minimum of six (6) months,
you will receive twenty-six (26) weeks of Base Pay.
If you are an Officer of the Company and are designated by the Plan Administrator as Vice
President (“VP”) then (i) if you have less than six (6) months of employment service with the
Company, you will receive six (6) weeks of Base Pay; and (ii) if you have been actively employed
with the Company for a minimum of six (6) months, you will receive thirteen (13) weeks of Base Pay.
Notwithstanding the foregoing, if the amount of severance pay that you would have received if
calculated pursuant to the most favorable formula set forth in the Wright Express Corporation
Severance Pay Plan for Non-Officer Employees (assuming that you were an eligible participant of
such plan) is greater than the amount of severance pay calculated hereunder, then you will receive
hereunder, upon eligibility for severance pay hereunder, such higher amount.
Notwithstanding any provision of this Plan to the contrary, the Plan Administrator, in its
sole and absolute discretion and based on such criteria as the Administrator deems relevant, may,
vary the severance benefits under this Plan. In no event, however, will a
7
Participant receive more than fifty-two (52) weeks of Base Pay. In addition, in no event will
any employee be entitled to receive severance pay under this Plan in addition to severance pay
provided for under a separate employment agreement or from any other source.
B.
HOW AND WHEN BENEFITS WILL BE PAID
Severance pay benefits are payable at the discretion of the Company and may be paid to you in
a lump sum payment
, in equal installments not less frequently than once per month over a twelve
month period, or a combination of lump sum and equal installments not less frequently than once per
month over a twelve month period
, subject to applicable federal, state and local tax deductions
and withholding.
Amounts payable under Article IV, Section A, following termination of employment, other
than those expressly payable on a deferred basis, will be paid in the payroll period next following
the payroll period in which termination of employment occurs except as otherwise provided in this
Article IV, Section B. Payment of any amount by reason of Participant’s termination of employment
shall be made no later than the last day of the Participant’s second taxable year following the
Participant’s taxable year in which the termination occurs.
Short-Term Deferral Exemption. It is intended that payments made under this Plan due to a
Participant’s termination of employment that are not otherwise subject to Section 409A of the
Internal Revenue Code (“409A”) which are paid on or before the 15
th
day of the third
month following the end of the Participant’s taxable year in which his termination of employment
occurs shall be exempt from compliance with 409A pursuant to the exemption for short-term
deferrals set forth in Section 1.409A-1(b)(4) of the Regulations.
Separation Pay Exemption. It is intended that payments made under this Plan due to a
Participant’s involuntary termination that are not otherwise subject to 409A which do not exceed
two times the lesser of (a) the Participant’s annualized compensation (determined in accordance
with the Regulations) or (b) the maximum amount that may be taken into account under Section
401(a)(17) of the Code
($
230,000
245,000 for
2009
8
) shall be exempt from compliance with 409A
pursuant to the exemption for separation pay set forth in Section 1.409A-1(b)(9) of the
Regulations.
Six-Month Delay for Specified Employees. Anything in this Plan to the contrary
notwithstanding, payments to be made under this Plan upon termination of Participant’s employment
which are subject to 409A (“409A Payments”) shall be delayed for six months following such
termination of employment if Participant is a Specified Employee as defined below on the date of
termination of employment. Any 409A Payment due within such six-month period shall be delayed to
the end of such six-month period. In addition, the following rules apply:
i.
The Company will adjust the 409A Payment to reflect the deferred payment
date by multiplying the payment or reimbursement by the product of the six-month CMT
Treasury Bill annualized yield rate as published by the U.S. Treasury for the date on which
such payment or reimbursement would have been made but for the delay multiplied by a
fraction, the numerator of which is the number of days by which such payment or
reimbursement was delayed and the denominator of which is 365.
8
ii.
The Company will make the adjusted 409A Payment at the beginning of the
seventh month following Participant’s termination of employment. Notwithstanding the
foregoing, if calculation of the amounts payable by any payment date specified in this
subsection is not administratively practicable due to events beyond the control of the
Participant (or the Participant’s beneficiary or estate) and for reasons that are
commercially reasonable, payment will be made as soon as administratively practicable in
compliance with 409A and the Regulations thereunder. In the event of Participant’s death
during such six-month period, payment will be made in the payroll period next following the
payroll period in which Participant’s death occurs.
iii.
“Specified Employee”. For purposes of this Plan, a “Specified
Employee” shall mean an employee of the Company who satisfies the requirements for being
designated a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without
regard to Section 416(i)(5) of the Code at any time during a calendar year, in which case
such employee shall be considered a Specified Employee for the twelve-month period beginning
on the first day of the fourth month immediately following the end of such calendar year.
Notwithstanding the foregoing, all employees who are nonresident aliens during an entire
calendar year are excluded for purposes of determining which employees meet the requirements
of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of
the Code for such calendar year. The term “nonresident alien” as used herein shall have the
meaning set forth in Regulations Section 1.409A-1(j). In the event of any corporate spinoff
or merger, the determination of which employees meet the requirements of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code
for any calendar year shall be determined in accordance with Regulations Section
1.409A-1(i)(6).
You shall not be eligible after your date of termination for continued coverage under the
Company’s medical/dental plans (except to the extent you elect to continue such coverage as under
the Consolidated Omnibus Budget Reconciliation Act of 1985 “COBRA”).
ARTICLE V — GENERAL PROVISIONS OF THE PLAN
(a)
Termination of Your Coverage
. Coverage under this Plan ends when you are no
longer considered a Participant.
(b)
Re-employment
. If you are re-employed by the Company after severance has been
paid to you, you will have to make arrangements, prior to being rehired, to return any severance
pay which you received in excess of one week’s pay plus the amount of your weekly salary multiplied
by the number of weeks during the period of your separation. If, after being re-employed, your
employment with the Company is terminated for a reason set forth Article III, you shall receive the
severance pay calculated based upon your rehire date, plus the severance
9
pay which was refunded by you to the Company upon your re-employment or the severance pay
calculated before your rehire date which was not paid to you because you became re-employed with
the Company.
(c)
Termination, Amendment and Modification
. Notwithstanding anything in this Plan to
the contrary, the Company expressly reserves the right, at any time, for any reason, without
limitation, and in its sole and absolute discretion, to terminate, amend or modify the Plan and any
or all of the benefits provided thereunder, either in whole or in part, whether as to all persons
covered thereby or as to one or more groups thereof. The termination, amendment or modification of
the Plan shall be effected by a document in writing.
(d)
No Additional Rights Created
. Neither the establishment of this Plan, nor any
modification thereof, nor the payment of any benefits hereunder, shall be construed as giving to
any Participant, Eligible Employee (or any beneficiary of either), or other person any legal or
equitable right against the Company or any Officer, director or employee thereof; and in no event
shall the terms and conditions of employment by the Company of any Eligible Employee be modified or
in any way affected by this Plan. There is no promise of employment of any kind by the Company
contained in this Plan. Regardless of what this Plan provides, the Company remains free to change
wages and all other working conditions without notice of agreement. The Company also continues to
have the absolute right to terminate your employment with or without cause.
(e)
Records
. The records of the Company with respect to employment history, Base
Salary, Years of Service, absences, and all other relevant matters shall be conclusive for all
purposes of this Plan.
(f)
Construction
. The respective terms and provisions of the Plan shall be construed,
whenever possible, to be in conformity with the requirements of ERISA, or any subsequent laws or
amendments thereto. To the extent not in conflict with the preceding sentence or another provision
in the Plan, the construction and administration of the Plan shall be in accordance with the laws
of Maine (without reference to its conflicts of law provisions).
(g)
Severability
. Should any provisions of the Plan be deemed or held to be unlawful
or invalid for any reason, such fact shall not adversely affect the other provisions of the Plan
unless such determination shall render impossible or impracticable the functioning of the Plan, and
in such case, an appropriate provision or provisions shall be adopted so that the Plan may continue
to function properly.
(h)
Unfunded Plan
. The Company shall pay for benefits under the Plan out of its
general assets. No Participant or any other person shall have any interest whatsoever in any
specific asset of the Company. To the extent that any person acquires a right to receive payments
under this Plan, such right shall not be secured by any assets of the Company. The obligations of
the Company may be funded through contributions to a trust or otherwise, but the obligations of the
Company are not required to be funded under this Plan unless required by law.
(i)
Nontransferability
. In no event shall the Company make any payment under this
Plan to any assignee or creditor of a Participant, except as otherwise required by law.
10
Prior to the time of a payment hereunder, a Participant shall have no rights by way of
anticipation or otherwise to assign or otherwise dispose of any interest under this Plan, nor shall
rights be assigned or transferred by operation of law.
(j)
Incompetency
. In the event that the Plan Administrator finds that a Participant
is unable to care for his or her affairs because of illness or accident, then benefits payable
hereunder, unless claim has been made therefor by a duly appointed guardian, committee, or other
legal representative, may be paid in such manner as the Plan Administrator shall determine, and the
application thereof shall be a complete discharge of all liability for any payments or benefits to
which such Participant (or designated beneficiary) was or would have been otherwise entitled under
this Plan.
(k)
Welfare Plan
. The Company intends that this Plan constitute a “welfare plan”
under ERISA and any ambiguities in this Plan shall be construed to effect that intent.
(l)
Termination, Amendment and Modification
. Notwithstanding anything in this Plan to
the contrary, the Company expressly reserves the right, at any time, for any reason, without
limitation, and in its sole and absolute discretion, to terminate, amend or modify the Plan and any
or all of the benefits provided thereunder, either in whole or in part, whether as to all persons
covered thereby or as to one or more groups thereof. The termination, amendment or modification of
the Plan shall be effected by a document in writing.
(m)
Exclusive Benefit
. A Participant who receives severance benefits under this Plan
shall not be eligible to receive severance benefits under the Wright Express Corporation Severance
Pay Plan for Non-Officers.
ARTICLE VI — OTHER IMPORTANT INFORMATION
(a)
Claim Procedure
.
How to File a Claim
. If you are a Participant in the Plan, you will automatically
receive the benefits set forth under Article IV of the Plan. If you feel you have not been
provided with all benefits to which you are entitled under the Plan, you may file a written claim
with the Plan Administrator with respect to your rights to receive benefits from the Plan. If you
wish to make a claim for payment of benefits under the Plan, a claim must be filed by contacting
the Human Resources Department at the Company’s headquarter in South Portland, Maine within 90 days
of the date you received notification from the Company that your benefits were denied. You may be
required to provide additional information. After your claim has been processed, you will be
notified in writing if any benefits are denied in whole or in part, or if any additional
information is required by the office that processes your claim. You will receive this written
notification within 90 days after it is filed. Under special circumstances, the Plan Administrator
may require an additional period of not more than 90 days to review your claim. If this occurs,
you will be notified in writing as to the length of the extension, the reason for the extension,
and any other information needed in order to process your claim. If you are not
notified within the 90-day (or 180-day, if so extended) period, you may consider your claim to
be denied.
11
How to Appeal a Claim
. If your claim is denied, in whole or in part, you will be
notified in writing of the specific reason(s) for the denial, the exact plan provision(s) on which
the decision was based, what additional material or information is relevant to your case, and what
procedure you should follow to get your claim reviewed again. If you do not agree with the reason
why your claim was denied in whole or in part, you then have sixty (60) days to appeal the decision
to the Plan Administrator.
Your appeal must be submitted in writing. You may request to review pertinent documents, and
you may submit a written statement of issues and comments. You must state why you believe the
claim should not have been denied and submit any data, questions or comments you think are
appropriate.
Your appeal will be reviewed by the Company, and a decision will be made within sixty (60)
days after the appeal is received. Under special circumstances, the Plan Administrator may require
an additional period of not more than 60 days to review your appeal. If this occurs, you will be
notified in writing as to the length of the extension, not to exceed 120 days from the day on which
your appeal was received.
If your appeal is denied, in whole or in part, you will be notified in writing of the specific
reason(s) for the denial and the exact plan provision(s) on which the decision was based. The
decision on your appeal will be final and binding on all parties and persons affected thereby. If
you are not notified within the 60-day (or 120-day, if so extended) period, you may consider your
appeal as denied.
(b)
Plan Interpretation and Benefit Determination
. The Plan is administered and
operated by the Plan Administrator, who has the exclusive discretionary authority and power to
determine eligibility for benefits and to construe the terms and provisions of the Plan, to
determine questions of fact and law arising under the Plan, to direct disbursements pursuant to the
Plan and to exercise all other powers specified herein or which may be implied from the provisions
hereof. The Plan administrator may adopt such rules for the conduct of the administration of the
Plan as it may deem appropriate. All interpretations and determinations of the Plan Administrator
shall be final and binding upon all parties and persons affected thereby. The Plan Administrator
may appoint one or more individuals and delegate such of its powers and duties as it deems
desirable to any such individual(s), in which case every reference herein made to the Plan
Administrator shall be deemed to mean or include the appointed individual(s) as to matters within
their jurisdiction.
(c)
Your Rights Under ERISA
. The following is a statement of your rights under
Federal law as required by the U.S. Department of Labor:
As a participant in this Plan, you are entitled to certain rights and protections under the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”). ERISA provides that all
Plan participants shall be entitled to:
12
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•
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Examine, without charge, at the Plan Administrator’s office and at other
specified locations, all Plan documents and copies of all documents filed by
the Plan with the U.S. Department of Labor, such as detailed annual reports
and Plan descriptions.
|
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•
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Obtain copies of all Plan documents and other Plan information upon written
request to the Plan Administrator. The Plan Administrator may make a
reasonable charge for the copies.
|
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•
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Receive a summary of the latest annual financial report of the Plan. The
Plan Administrator is required by law to furnish each participant with a copy
of such summary.
|
In addition to creating rights for Plan participants, ERISA imposes duties upon the people who
are responsible for the operation of the employee benefit Plan. The people who operate your Plan,
called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and
other Plan participants and beneficiaries. The named fiduciary is Wright Express Corporation. It
is illegal for anyone to prevent you from obtaining a benefit or exercising your rights under ERISA
by firing you or discriminating against you in any way.
If your claim for a benefit is denied in whole or in part, you must receive a written
explanation of the reason for the denial. You have the right to a review and reconsideration of a
denial of benefits under the Plan.
Under ERISA, there are steps you can take to enforce the above rights. For instance, if you
request materials from the Plan and do not receive them within thirty (30) days, you may file suit
in a federal court. In such a case, the court may require the Plan Administrator to provide the
materials and pay you up to $110 a day until you receive the requested materials, unless the
materials were not sent because of reasons beyond the control of the Plan Administrator.
If you have a claim for benefits which is denied or ignored, in whole or in part, you may file
suit in a state or Federal court. If you believe that Plan fiduciaries misused the Plan’s money,
or that you have been discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a federal court. The named fiduciary is
Wright Express Corporation.
If you file a suit, the court will decide who should pay court costs and legal fees. If you
are successful, the court may order the person you have sued to pay these costs and fees. If you
lose, the court may order you to pay these costs and fees, for example, if the court finds that
your claim is frivolous.
If you have questions about your Plan, you should contact the Plan Administrator. If you have
any questions about this statement or about your rights under ERISA, you should
contact the nearest Area office of the U.S. Labor-Management Services Administration,
Department of Labor, listed in your telephone directory.
13
(d)
Plan Document
. This document shall constitute both the plan document and summary
plan description and shall be distributed to all Eligible Employees in this form.
(e)
Other Important Facts
.
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OFFICIAL NAME OF THE PLAN:
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Wright Express Corporation Severance Pay Plan
for Officers
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SPONSOR:
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Wright Express Corporation
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97 Darling Avenue
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South Portland, Maine 04106
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(207) 773-8171
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PLAN NUMBER:
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516
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TYPE OF PLAN:
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Employee Welfare Severance Benefit Plan
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TYPE OF ADMINISTRATION:
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Employer Administered
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PLAN ADMINISTRATOR:
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SVP, Human Resources
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Wright Express Corporation
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97 Darling Avenue
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South Portland, Maine 04106
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(207) 773-8171
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EFFECTIVE DATE:
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February 22, 2005
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RECORDS
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The Plan Administrator keeps records of the
Plan and is responsible for the administration
of the Plan. The Plan Administrator will also
answer any questions you may have about the
Plan.
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AGENT FOR SERVICE
OF LEGAL PROCESS:
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General Counsel
Wright Express Corporation
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97 Darling Avenue
South Portland, Maine 04106
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(207) 773-8171
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14
Exhibit 10.5
EMPLOYMENT AGREEMENT
This
Employment Agreement is
made and entered into
amended
and restated
effective as of
this
the
28
th
day of
October, 2005 (“Effective Date”) between Wright Express Corporation (“WEX”), a Delaware corporation
headquartered in South Portland, Maine and Michael E. Dubyak (the “Executive”).
WHEREAS, WEX desires to employ the Executive as its President and Chief Executive Officer, and
the Executive desires to serve WEX in such capacity.
NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
SECTION I
EMPLOYMENT
WEX agrees to employ the Executive and the Executive agrees to be employed by WEX for the
Period of Employment as provided in Section III below and upon the terms and conditions provided in
this Agreement.
SECTION II
POSITION AND RESPONSIBILITIES
During the Period of Employment, the Executive will serve as President and Chief Executive
Officer of WEX and, subject to the direction of the Board of Directors of WEX (the “Board”), will
perform such duties and exercise such supervision with regard to the business of WEX as are
associated with such position, as well as such additional duties as may be prescribed from time to
time by the Board. Further, the Executive will serve as a member of the Board;
provided,
however,
that nothing contained in this Agreement shall require WEX to maintain the
Executive’s status as a member of the Board or to re-nominate him for election for additional terms
of service on the Board; however a removal of the Executive from the Board may be treated as
a
material and adverse change to the Executive’s titles,
positions, duties and responsibilities
a
Constructive Discharge
under Section VIII below.
The Executive will, during the Period of Employment, devote substantially all of his time and
attention during normal business hours to the performance of services for WEX. The Executive will
maintain a primary office and conduct his business in South Portland, Maine, except for normal and
reasonable business travel in connection with his duties hereunder. Nothing contained in this
Agreement will prevent or be construed to prevent the Executive from devoting a reasonable amount
of time to serving on civic and charitable boards and conducting his personal affairs.
The Executive will, in accordance with WEX policy and procedures and applicable law, certify
to the accuracy of WEX’s publicly filed financial statements.
SECTION III
PERIOD OF EMPLOYMENT
The period of the Executive’s employment under this Agreement (the “Period of Employment”)
will begin on the Effective Date and end on the third anniversary of such date, subject to earlier
termination as provided in this Agreement;
provided,
however,
that the Period of
Employment will be automatically extended for an additional one year period on October 28, 2006,
and on each anniversary of such date thereafter, unless written notice of intent not to extend or
to reopen negotiations is provided by either party hereto to the other party hereto at least 30
days prior to such date or any such anniversary.
SECTION IV
COMPENSATION AND BENEFITS
Compensation
. For all services rendered by the Executive pursuant to this Agreement
during the Period of Employment, including services as an executive, officer, director of committee
member of WEX or any subsidiary or affiliate of thereof, the Executive will be compensated as
follows:
i.
Base Salary
.
WEX will pay the Executive a base salary of not less than $425,000
per year (“Base Salary”). From time to time, the Executive may be eligible to receive annual
increases as WEX deems appropriate, in accordance with WEX’s customary policies and procedures
regarding the salaries of senior officers, including pursuant to annual compensation reviews to
occur no less than once per year. Base Salary will be payable according to the customary payroll
practices of WEX, but in no event less frequently than semi-monthly.
ii.
Annual Incentive Awards
.
The Executive will be eligible for discretionary annual incentive compensation awards;
provided,
that the Executive will be eligible to receive an Incentive Compensation Award in
respect of each fiscal year of WEX during the Period of Employment based upon a target bonus equal
to no less than 100% of his earned Base Salary during such fiscal year;
provided,
however,
that such bonus will be subject to the attainment by WEX of applicable performance
targets reasonably established and certified by or at the direction of the Board (as hereinafter
defined) or the Compensation Committee of the Board (the “Committee”). For purposes of this
Agreement, the term “Incentive Compensation Award” means the annual bonus paid pursuant to the
Wright Express Corporation Short-Term Incentive Plan (STIP), as the Plan may be amended from time
to time. The term “target” means the value of the STIP bonus payable in the event the Executive
achieves the annual target goals established pursuant to the Plan.
iii.
Long Term Incentive Awards
At such times as the Board or the Committee determines to conduct annual or periodic grants of
long term incentive awards to employees and officers of WEX, the Executive will be eligible to
receive such grants, subject to the sole and complete discretion of the Board or the Committee, and
upon such terms and conditions as determined by the Board or the Committee,
but with due consideration given to the Executive’s position with WEX and the Executive’s
historical performance and anticipated future contributions to WEX.
2
iv.
Additional Benefits
The Executive will be entitled to participate in all other compensation and employee benefit
plans or programs offered generally to employees of WEX, and will receive all perquisites offered
to senior executive officers of WEX in positions comparable to the Executive’s position with WEX,
in either case pursuant to any plan or program now in effect, or later established by WEX. The
Executive will participate to the extent permissible under the terms and provisions of such plans
or programs, and in accordance with the terms of such plans and programs.
SECTION V
BUSINESS EXPENSES
WEX will reimburse the Executive for all reasonable travel and other expenses incurred by the
Executive in connection with the performance of his duties and obligations under this Agreement.
The Executive will comply with such limitations and reporting requirements with respect to expenses
as may be established by WEX from time to time and will promptly provide all appropriate and
requested documentation in connection with such expenses.
SECTION VI
DISABILITY
If the Executive becomes Disabled, as defined below, during the Period of Employment, the
Period of Employment may be terminated at the option of the Executive upon notice of resignation to
WEX, or at the option of WEX upon 30 days’ advance notice of termination to the Executive. WEX’s
obligation to make payments to the Executive under this Agreement will cease as of such date of
termination, except for Base Salary and Incentive Compensation Awards earned but unpaid as of the
date of such termination, and except for payment of a pro rata portion of his Incentive
Compensation Award in respect of the year in which such Disability occurs (paid at target level).
For purposes of this Agreement, “Disabled” means the first to occur of either (i) the Executive’s
inability to perform his duties hereunder as a result of serious physical or mental illness or
injury for a period of no less than 180 days, together with a determination by an independent
medical authority after in person examination of the Executive and review of any relevant medical
records that the Executive is currently unable to perform such duties, or (ii) a determination by
the insurance carrier or third party administrator that the Executive is “Disabled” within the
meaning of the WEX Long Term Disability Plan then in effect. Such independent medical authority
shall be mutually and reasonably agreed upon by WEX and the Executive and such opinion shall be
binding on WEX and the Executive. Nothing contained herein is intended to limit any of the
Executive’s vested benefits under any WEX benefit plan or program.
SECTION VII
DEATH
In the event of the death of the Executive during the Period of Employment, the Period of
Employment will end and WEX’s obligation to make payments under this Agreement
3
will cease as of the date of death, except for Base Salary and Incentive Compensation Awards
earned but unpaid through the date of death, and except for payment of a pro rata portion of his
Incentive Compensation Award in respect of the year in which his death occurs (paid at target
level), which will be paid to the Executive’s surviving spouse, estate or personal representative,
as applicable. Nothing contained herein is intended to limit any of the Executive’s vested benefits
under any WEX benefit plan or program.
SECTION VIII
EFFECT OF TERMINATION OF EMPLOYMENT
A.
Without Cause Termination and Constructive Discharge Outside of a Change in
Control
. If the Executive’s employment terminates due to either a Without Cause Termination or
a Constructive Discharge, as defined below, and Executive is not entitled to receive payment
pursuant to Section VIII(B) hereof, WEX will pay the Executive (or his surviving spouse, estate or
personal representative, as applicable) upon such Without Cause Termination or Constructive
Discharge (i) a cash payment equal to the sum of the Executive’s then current Base Salary plus his
then current target Incentive Compensation Award, multiplied by 200%, payable, at the Company’s
option, in either one lump sum,
or
in
equal installments not less frequently than once per month over a
twelve month period
, or a combination of lump sum and equal installments not less frequently than
once per month over a twelve month period
, and (ii) any and all Base Salary and Incentive
Compensation Awards earned but unpaid through the date of such termination and any legitimate
unreimbursed business expenses. In addition, upon such event, those of the Executive’s outstanding
and unvested WEX stock options and WEX restricted stock units which would have otherwise become
vested between the date of termination of employment and the second anniversary of such date of
termination of employment (without regard for performance based vesting criteria) will immediately
become vested. In addition, in the event that the Executive elects to continue medical and dental
benefits pursuant to COBRA, the Executive’s cost for the first 12 months of such coverage will be
no greater than the cost applicable to active full time employees of WEX, and the Company shall pay
for the balance of the cost for the first 12 months of such coverage. Nothing contained herein is
intended to limit any of the Executive’s vested benefits under any WEX benefit plan or program,
including but not limited to rights with respect to stock options, restricted shares or long term
incentive awards.
B.
Without Cause Termination and Constructive Discharge In Case of Change in Control.
If the Executive’s employment terminates due to either a Without Cause Termination or a
Constructive Discharge, in either case within the time period beginning 90 days before the Change
in Control and ending 540 days after the Change in Control, then WEX will pay the Executive (or his
surviving spouse, estate or personal representative, as applicable) (i) a cash payment equal to the
sum of the Executive’s then current Base Salary plus his then current target Incentive Compensation
Award, multiplied by 300%, payable, at the Company’s option, in
either one lump sum,
or in
equal
installments not less frequently than once per month over a twelve month period
, or a combination
of lump sum and equal installments not less frequently than once per month over a twelve month
period,
and (ii) any and all Base Salary and Incentive Compensation Awards earned but unpaid
through the date of such termination and any legitimate unreimbursed business expenses. In
addition, upon such termination, those of the Executive’s outstanding and unvested WEX stock
options and unvested WEX restricted stock units held by the Executive as of the date of termination
will immediately become vested. In addition, WEX shall pay to the Executive in a lump sum an
amount equal to the present value of WEX’s share of the cost of medical and dental insurance
premiums for a thirty-six (36) month period. Nothing contained
4
herein is intended to limit any of the Executive’s vested benefits under any WEX benefit plan
or program including but not limited to rights with respect to stock options, restricted shares or
long term incentive awards. Payment of cash and benefits and accelerated vesting under this
Section VIII(B) shall be in lieu of and not in addition to anything that might be owed to
Executive under Section VIII(A).
C.
Termination for Cause; Resignation
. If the Executive’s employment terminates due
to a Termination for Cause or a Resignation, Base Salary and any Incentive Compensation Awards
earned but unpaid as of the date of such termination will be paid to the Executive in a lump sum.
Except as provided in this paragraph, WEX will have no further obligations to the Executive
hereunder. Nothing contained herein is intended to limit any of the Executive’s vested benefits
under any WEX benefit plan or program.
D.
For purposes of this Agreement, the following terms have the following meanings:
i. “Termination for Cause” means termination because of (i) the Executive’s willful failure
to substantially perform his duties as an employee of WEX or any subsidiary thereof (other than
any such failure resulting from incapacity due to physical or mental illness), (ii) any act of
fraud, embezzlement, gross misconduct, dishonesty or similar conduct, in each case against WEX or
any subsidiary thereof, (iii) the Executive’s conviction of or indictment for a felony or any
crime involving moral turpitude, (iv) the Executive’s gross negligence in the performance of his
duties, (v) the Executive’s knowing or negligent making of a false certification to WEX
pertaining to its financial statements, or (vi) the Executive’s knowing or grossly negligent
violation of any provision of Section IX of this Agreement or any knowing violation of WEX’s Code
of Business Conduct and Ethics. WEX will provide the Executive a written notice that describes
the circumstances being relied on for the termination with respect to this paragraph. In the
event that WEX terminates the Executive’s employment without Cause but the Company later
discovers evidence not known at the time of termination that would have justified a Termination
for Cause under this paragraph, the Company may terminate the payment of all amounts to the
Executive pursuant to Section VIII(A) or (B), excluding any and all Base Salary and Incentive
Compensation Awards earned but unpaid through the date of such termination and any legitimate
unreimbursed business expenses.
ii. “Constructive Discharge” means the Executive resigns in response to: (i) any material
failure of WEX to fulfill its obligations under this Agreement (including without limitation any
reduction of the Base Salary or any reduction in the target bonus percentage amount, as the same
may be increased during the Period of Employment), (ii) a material and adverse change to the
Executive’s titles, positions, duties and responsibilities with or to WEX, (iii) the relocation of
the Executive’s primary business office to a location more than 50 miles from Portland, Maine or
(iv) WEX’s failure to cause this Agreement to be assumed by any successor to the business of WEX.
The Executive will provide WEX a written notice that describes the circumstances being relied on
for the termination with respect to this paragraph within sixty (60) days after the event giving
rise to the notice. WEX will have sixty (60) days after receipt of such notice to remedy the
situation prior to the termination for Constructive Discharge.
iii. “Without Cause Termination” or “Terminated Without Cause” means termination of the
Executive’s employment by WEX other than due to death, disability, or Termination for Cause.
5
iv. “Resignation” means a termination of the Executive’s employment by the Executive, other
than in connection with a Constructive Discharge.
v. “Change in Control” means the happening of any of the following events:
(1) An acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (any of which, a “Person”) resulting in such Person having beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50%
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 voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); excluding,
however, the following: (A) Any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the security
being so converted was itself acquired directly from the Company, (B) Any acquisition
by the Company, (C) Any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any entity controlled by the Company, or (D)
Any acquisition pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of Section VIII(D)(v)(3);or
(2) A change in the composition of the board of directors of the Company (the
“Board”) such that the individuals who, as of the Effective Date, constitute the Board
(such Board shall be hereinafter referred to as the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board;
provided, however,
for purposes
of this definition, that any individual who becomes a member of the Board subsequent to
the Effective Date, whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of those individuals who
are members of the Board and who were also members of the Incumbent Board (or deemed to
be such pursuant to this proviso) shall be considered as though such individual were a
member of the Incumbent Board; but,
provided further,
that 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 promulgated
under the Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board shall not be so considered as
a member of the Incumbent Board; or
(3) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the acquisition
of shares or assets of another company (“Corporate Transaction”); excluding, however,
such a Corporate Transaction pursuant to which (i) all or substantially all of the
individuals and entities who are the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Corporate Transaction will beneficially own, directly or indirectly, more
than 50% of, respectively, the outstanding shares of common stock (or equity
interests), and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors (or equivalent governing body,
if applicable), as the case may be, of the entity resulting from such Corporate
Transaction (including an entity which as a result of such transaction owns the Company
or all or substantially all of the Company’s
6
assets either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (ii) no Person (other than the Company, any employee benefit plan (or related trust) of
the Company or such entity resulting from such Corporate Transaction) will beneficially
own, directly or indirectly, 50% or more of, respectively, the outstanding shares of common
stock (or equity interests) of the entity resulting from such Corporate Transaction or the
combined voting power of the outstanding voting securities of such corporation entitled to
vote generally in the election of directors (or equivalent governing body, if applicable)
except to the extent that such ownership existed prior to the Corporate Transaction, and
(iii) individuals who were members of the Incumbent Board will constitute at least a
majority of the members of the board of directors (or equivalent governing body, if
applicable) of the entity resulting from such Corporate Transaction; or
(4) The approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.
E.
Conditions to Payment.
All payments due to the Executive under this Section VIII
shall be made as soon as practicable
in
accordance with Section VIIIA
;
provided,
however,
that such payments, shall be subject to, and contingent upon, the execution by the Executive (or
his beneficiary or estate) of a release of any and all claims against WEX and its affiliates in
such reasonable form and substance adopted by WEX; provided further that such release shall not
waive, release or limit any rights the Executive has, or may have, to indemnification under the
Articles or Certificate of Incorporation, Bylaws, or other corporate governance documents of WEX to
the extent arising out of claims asserted other than by the company or its affiliates, or under
applicable law, or any coverage or rights to coverage the Executive may have under insurance
maintained by WEX relating to the Executive’s actions on behalf of WEX within the scope of and
during the course of his employment with WEX.
The Company will provide Executive with a copy of
such release not later than 21 days (45 days if Executive’s termination is part of an exit
incentive or other employment termination program offered to a group or class of employees) before
Executive’s termination of employment. Executive shall deliver the executed release to the Company
not later than eight days before the payment date provided in Section VIIIA for termination
payments to be made under this Agreement which are subject to 409A.
The payments due to the
Executive under this Section VIII shall be in lieu of any other severance benefits otherwise
payable to the Executive under any severance plan of WEX or its affiliates and/or any other
agreement or arrangement. Nothing herein shall be construed as limiting the Executive’s
entitlement to any other vested accrued benefits to which he (or his estate if applicable) is then
entitled under WEX’s applicable employee benefit plans, including without limitation any disability
or life insurance plan benefits which may become payable.
Any payments made under this agreement shall
be compliant with IRS code 409A including the timing of such payments.
SECTION VIIIA
OTHER TERMS RELATING TO TERMINATION OF EMPLOYMENT PAYMENTS;
REIMBURSEMENTS; SECTION 409A EXEMPTIONS; DELAYED PAYMENTS UNDER
SECTION 409A
7
A.
Time of Payment
.
Amounts payable under Section VIII following Executive’s
termination of employment, other than those expressly payable on a deferred basis, will be paid in
the payroll period next following the payroll period in which termination of employment occurs
except as otherwise provided in this Section VIIIA. Payment of any amount by reason of Executive’s
termination of employment shall be made no later than the last day of Executive’s second taxable
year following Executive’s taxable year in which the termination occurs.
B. Reimbursements. Any reimbursements made or in-kind benefits provided under this Agreement
shall be subject to the following conditions:
i. the amount of expenses eligible for reimbursement or in-kind benefits
provided in
any one taxable year of Executive shall not affect the amount of expenses eligible for
reimbursement or in-kind benefits provided in any other taxable year of Executive;
ii. the reimbursement of any expense shall be made no later than the last
day of
Executive’s taxable year following Executive’s taxable year in which the expense was
incurred (unless this Agreement specifically provides for reimbursement by an earlier date);
iii. the right to reimbursement of an expense or payment of an in-kind benefit
shall
not be subject to liquidation or exchange for another benefit.
C.
Short-Term Deferral
Exemption. It is intended that payments made under this
Agreement due to Executive’s termination of employment that are not otherwise subject to Section
409A of the Internal Revenue Code (“409A”) which are paid on or before the 15
th
day of
the third month following the end of Executive’s taxable year in which his termination of
employment occurs shall be exempt from compliance with 409A pursuant to the exemption for
short-term deferrals set forth in Section 1.409A-1(b)(4) of the Treasury Regulations
(“Regulations”).
D.
Separation Pay Exemption.
It is intended that payments made under this Agreement
due to Executive’s Without Cause Termination or Constructive Discharge that are not otherwise
subject to 409A which do not exceed two times the lesser of (a) the Executive’s annualized
compensation (determined in accordance with the Regulations) or (b) the maximum amount that may be
taken into account under Section 401(a)(17) of the Code ($
230,000
245,000 for 2009
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) shall be exempt from
compliance with 409A pursuant to the exemption for separation pay set forth in Section
1.409A-1(b)(9) of the Regulations.
E.
Six-Month Delay for Specified
Employees. Anything in this Agreement to the
contrary notwithstanding, payments to be made under this Agreement upon termination of Executive’s
employment which are subject to 409A (“409A Payments”) shall be delayed for six months following
such termination of employment if Executive is a Specified Employee as defined below on the date of
termination of employment. Any 409A Payment due within such six-month period shall be delayed to
the end of such six-month period.
8
i. The Company will adjust the 409A Payment to reflect the deferred payment date
by
multiplying the payment or reimbursement by the product of the six-month CMT Treasury Bill
annualized yield rate as published by the U.S. Treasury for the date on which such payment
or reimbursement would have been made but for the delay multiplied by a fraction, the
numerator of which is the number of days by which such payment or reimbursement was delayed
and the denominator of which is 365.
ii. The Company will make the adjusted 409A Payment at the beginning of the
seventh
month following Executive’s termination of employment. Notwithstanding the foregoing, if
calculation of the amounts payable by any payment date specified in this Subsection E is not
administratively practicable due to events beyond the control of Executive (or Executive’s
beneficiary or estate) and for reasons that are commercially reasonable, payment will be
made as soon as administratively practicable in compliance with 409A and the Regulations
thereunder. In the event of Executive’s death during such six-month period, payment will be
made in the payroll period next following the payroll period in which Executive’s death
occurs.
iii. “Specified Employee”. For purposes of this Agreement, a
“Specified Employee”
shall mean an employee of the Company who satisfies the requirements for being designated a
“key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to
Section 416(i)(5) of the Code at any time during a calendar year, in which case such
employee shall be considered a Specified Employee for the twelve-month period beginning on
the first day of the fourth month immediately following the end of such calendar year.
Notwithstanding the foregoing, all employees who are nonresident aliens during an entire
calendar year are excluded for purposes of determining which employees meet the requirements
of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of
the Code for such calendar year. The term “nonresident alien” as used herein shall have the
meaning set forth in Regulations Section 1.409A-1(j). In the event of any corporate spinoff
or merger, the determination of which employees meet the requirements of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code
for any calendar year shall be determined in accordance with Regulations Section
1.409A-1(i)(6).
SECTION IX
OTHER DUTIES OF THE EXECUTIVE
DURING AND AFTER THE PERIOD OF EMPLOYMENT
A. Cooperation with Legal Claims. The Executive will, with reasonable notice during or after
the Period of Employment, furnish information as may be in his possession and reasonably cooperate
with WEX and its affiliates as may reasonably be requested in connection with any claims or legal
action in which WEX or any of its affiliates is or may become a party. The foregoing shall not
unreasonably interfere with the Executive’s duties to any successor employer and the Company shall
reimburse the Executive for any reasonable expenses incurred for providing such assistance.
B. Protection of Confidential Information.
9
i.
Acknowledgement.
The Company and the Executive acknowledge that the services to
be performed by the Executive under this Agreement are unique and extraordinary and that, as a
result of the Executive’s employment, the Executive will be in a relationship of confidence and
trust with the Company and will come into possession of Confidential Information (as defined
below) that is (1) owned or controlled by the Company, (2) in the possession of the Company and
belonging to third parties or (3) conceived, originated, discovered or developed, in whole or in
part, by the Executive. “Confidential Information”
means trade
secrets and other
confidential or proprietary business, technical, personnel or financial information, whether or
not the Executive’s work product, in written, graphic, oral, electronic or other tangible or
intangible forms, including specifications, samples, records, data, computer programs, drawings,
diagrams, models, customer names, business or mailing addresses, ID’s or e-mail addresses,
business or marketing plans, studies, analyses, projections and reports, communications by or to
attorneys (including attorney-client privileged communications), memos and other materials
prepared by attorneys or under their direction (including attorney work product), and software
systems and processes. Any Confidential Information that is not readily available to the public
shall be considered to be a trade secret and confidential and proprietary, even if it is not
specifically marked as such, unless the Company advises the Executive otherwise in writing.
ii.
Nondisclosure
. The Executive agrees that the Executive will keep the Confidential
Information in strictest confidence and trust, and will not, without the prior written consent of
the Company, directly or indirectly, use or disclose Confidential Information to any person,
during or after the Executive’s employment, except as may be necessary in the ordinary course of
performing the Executive’s duties under this Agreement. This Section IX(B) shall apply
indefinitely, both during and after the Period of Employment.
iii.
Surrender Upon Termination
. The Executive agrees that in the event of the
termination of the Executive’s employment for any reason, at any time, the Executive will
immediately deliver to the Company all property belonging to the Company, including documents and
materials of any nature pertaining to the Executive’s work with the Company, and will not take
with the Executive any documents or materials of any description, or any reproduction thereof of
any description, containing or pertaining to any Confidential Information. It is understood that the Executive is free to use information that is in the public
domain, but not as a result of a breach of this Agreement.
C. Restrictions.
i. During the Period of Employment and for the Post Termination Period thereafter
(collectively, the “Restricted Period”), the Executive will not knowingly use his status with WEX
or any of its affiliates to obtain loans, goods or services from another organization on terms that
would not be available to him in the absence of his relationship to WEX or any of its affiliates.
The Post Termination Period means a period of: (a) two (2) years following the Executive’s
termination of employment if, in connection with such termination, the Executive receives a
severance under Sections VIII(A) or VIII (B) of this Agreement; or (b) one (1) year following the
Executive’s termination in all other cases, irrespective of the cause, manner or time of such
termination.
10
ii. During the Restricted Period, the Executive will not make any statements or perform
any
acts intended or reasonably calculated to advance the interest of any existing or prospective
Competing Enterprise or in any way to injure the interests of or disparage WEX or any of its
affiliates.
iii. During the Restricted Period, the Executive, without prior express written approval by
the Board, will not become employed by, render services to or directly or indirectly (whether for
compensation or otherwise) own or hold a proprietary interest in, manage, operate, or control, or
join or participate in the ownership, management, operation or control of, or furnish any capital
to or be connected in any manner with, any Competing Enterprise.
iv. For purposes of this Section IX, a “Competing Enterprise” means any entity,
organization
or person engaged, or planning to become engaged, in substantially the same or similar business to
that being conducted or actively and specifically planned to be conducted within the Restricted
Period by WEX or its subsidiaries, owned or controlled. It includes, without limitation: (i) the
business of developing, managing, operating, marketing, processing, financing, or otherwise being
involved in providing any products or services for the benefit of or use by commercial vehicle or
aviation fleets through charge cards, credit cards, procurement cards or any other form of payment
services or electronic commerce; (ii) the sale, distribution or publication of petroleum product
pricing or management information or other products or services currently sold or contemplated to
be sold by WEX or any of its owned or controlled subsidiaries, and (iii) the business of
developing, managing, operating, marketing, processing, financing, or otherwise being involved in
providing commercial travel, entertainment and purchasing credit cards. The restrictions in this
Section shall not be construed to prevent the Executive from working for a business entity that
does not compete with WEX or its subsidiaries simply because the entity is affiliated with a
Competing Enterprise, so long as the entity is operationally separate and distinct from the
Competing Enterprise and the Executive’s job responsibilities at that entity are unrelated to the
Competing Enterprise. The Executive acknowledges that WEX’s and its subsidiaries’ businesses are
conducted nationally and agrees that the provisions in this paragraph shall operate throughout the
United States.
v. During the Restricted Period, the Executive, without express prior written approval
from
the Board, will not solicit any then-current clients, customers or private label, cobrand or
similar strategic partners of WEX or any of its affiliates. In addition, during the Restricted
Period, the Executive, without express prior written approval from the Board, will not discuss with
any employee of WEX or any of its affiliates information related to the operation or potential
operation of any Competing Enterprise.
vi. During the Restricted Period, the Executive will not interfere with the employees or
affairs of WEX or any of its affiliates or solicit or induce any person who is an employee of WEX
or any of its affiliates to terminate any relationship such person may have with WEX or any of its
affiliates. In addition, neither the Executive nor any entity he controls or person he employs
shall, during such period, directly or indirectly engage, employ or compensate, any employee of WEX
or any of its affiliates. The Executive hereby represents and warrants that the Executive has not
entered into any agreement, understanding or arrangement with any employee of WEX or any of its
affiliates pertaining to any business in which the Executive has participated or plans to
participate, or to the employment, engagement or compensation of any such employee.
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vii. For the purposes of this Agreement, “proprietary interest” means legal or
equitable
ownership, whether through stock holding or otherwise, of an equity interest in a business, firm or
entity or ownership of more than 1% of any class of equity interest in a publicly-held company and
the term “affiliate” will include without limitation all subsidiaries of WEX.
D. The Executive hereby acknowledges that damages at law may be an insufficient remedy to WEX
if the Executive violates the terms of this Agreement and that WEX will be entitled, upon making
the requisite showing, to preliminary and/or permanent injunctive relief in any court of competent
jurisdiction to restrain the breach of or otherwise to specifically enforce any of the covenants
contained in this Section IX without the necessity of showing any actual damage or that monetary
damages would not provide an adequate remedy. Such right to an injunction will be in addition to,
and not in limitation of, any other rights or remedies WEX may have. Without limiting the
generality of the foregoing, neither party will oppose any motion the other party may make for any
expedited discovery or hearing in connection with any alleged breach of this Section IX.
E. The Executive agrees that the restrictions contained in this Section IX are an
essential
element of the compensation the Executive is granted hereunder and but for the Executive’s
agreement to comply with such restrictions, WEX would not have entered into this Agreement
SECTION X
DIRECTORS AND OFFICERS INSURANCE
WEX will indemnify the Executive to the fullest extent permitted by the laws of the state of
WEX’s incorporation in effect at that time, or the certificate of incorporation and by-laws of WEX,
whichever affords the greater protection to the Executive. WEX will maintain D&O insurance for the
Executive on a basis no less favorable than it maintains for other officers of WEX.
SECTION XI
MITIGATION
The Executive will not be required to mitigate the amount of any payment provided for
hereunder by seeking other employment or otherwise, nor will the amount of any such payment be
reduced by any compensation earned by the Executive as the result of employment by another employer
after the date the Executive’s employment hereunder terminates or by offset against any amount
claimed to be owed by the Executive to WEX, or otherwise. The parties’ respective obligations
hereunder shall be absolute and unconditional and shall not be affected by any circumstances,
including without limitation any setoff, counterclaim, recoupment, defense or other right which the
other party hereto may have.
SECTION XII
WITHHOLDING TAXES
TAXATION
The Executive acknowledges and agrees that WEX may directly or indirectly withhold from any
payments under this Agreement all federal, state, city or other taxes that will be required
pursuant to any law or governmental regulation.
Anything in this Agreement to the
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contrary notwithstanding, the terms of this Agreement shall be interpreted and applied in a
manner consistent with the requirements of Section 409A of the Code and the Regulations so as not
to subject Executive to the payment of any tax or interest which may be imposed under such
section, and the Company shall have no right to accelerate or make any payment under this
Agreement to the extent such action would subject Executive to the payment of any tax or interest
under such section. If all or a portion of the benefits and payments provided under this
Agreement constitute taxable income to Executive for any taxable year that is prior to the
taxable year in which such payments and/or benefits are to be paid to Executive, as a result of
the Agreement’s failure to comply with the requirements of Section 409A of the Code and the
Regulations, the applicable payment or benefit shall be paid immediately to Executive to the
extent such payment or benefit is required to be included in income.
In the event it shall be determined that any payment or distribution of any type by WEX or
its affiliates to or for the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), would
be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties
with respect to such excise tax (such excise tax, together with any such interest and penalties,
are collectively referred to as the “Excise Tax”), then WEX shall, within thirty days following
the Executive’s incurrence thereof, pay the Executive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Total Payments.
Anything in this section to the contrary notwithstanding, any Gross-Up Payment to be made
hereunder shall be subject to such delay in payment as may apply under Section VIIIA of this
Agreement in the event that such payment is made in connection with the Executive’s termination
of employment and is subject to Section 409A of the Code.
SECTION XIII
EFFECT OF PRIOR AGREEMENTS
This Agreement will supersede any prior employment agreement between the Executive on the one
hand, and WEX (or any of its affiliates or parents) on the other hand (including without limitation
the Employment Agreement dated February 1, 2005, the Employment Agreement dated March 24,1998 and
all amendments thereto), and any such prior employment agreement will be deemed terminated without
any remaining obligations of either party thereunder, provided that nothing in this Agreement will
supersede, modify or vitiate any obligation of Cendant Corporation or Executive to each other
pursuant to the Employment Agreement dated February 1, 2005.
SECTION XIV
CONSOLIDATION, MERGER OR SALE OF ASSETS
Nothing in this Agreement will preclude WEX from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation that assumes this
Agreement and all obligations and undertakings of WEX hereunder. Upon such a consolidation, merger
or sale of assets the term “WEX” will mean the other corporation and this Agreement will continue
in full force and effect.
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SECTION XV
MODIFICATION: WAIVER
This Agreement may not be modified or amended except in writing signed by the parties. No term
or condition of this Agreement will be deemed to have been waived except when waived in writing by
the party charged with waiver. A waiver will operate only as to the specific term or condition
waived and will not constitute a waiver for the future or have any impact on anything other than
that which is specifically waived.
SECTION XVI
GOVERNING LAW
This Agreement has been executed and delivered in the State of Maine and its validity,
interpretation, performance and enforcement will be governed by the internal laws of that state.
SECTION XVII
ARBITRATION
A. Any controversy, dispute or claim arising out of or relating to this Agreement or the
breach hereof which cannot be settled by mutual agreement (other than with respect to the matters
covered by Section IX for which WEX may, but will not be required to, seek injunctive relief) will
be finally settled by binding arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state arbitration law) as follows: Any party who is aggrieved will
deliver a written notice to the other party setting forth the specific points in dispute. Any
points remaining in dispute twenty (20) days after the giving of such written notice may be
submitted by either party, upon ten (10) days prior written notice to the other party, to
arbitration in Portland, Maine, to the American Arbitration Association, before a single arbitrator
appointed in accordance with the arbitration rules of the American Arbitration Association,
National Rules for the Resolution of Employment Disputes, modified only as herein expressly
provided. The arbitrator may enter a default decision against any party who fails to participate in
the arbitration proceedings.
B. The decision of the arbitrator on the points in dispute will be final and binding, and
judgment on the award may be entered in any court having jurisdiction thereof.
C. Except as otherwise provided in this Agreement, the arbitrator will be authorized to
apportion his/her fees and expenses as the arbitrator deems appropriate. In the absence of any
such apportionment, the fees and expenses of the arbitrator will be borne equally by each party,
and each party will bear the fees and expenses of its or his own attorney.
D. The parties agree that this Section XVII has been included to rapidly and inexpensively
resolve any disputes between them with respect to this Agreement, and that this Section XVII will
be grounds for dismissal of any court action commenced by either party with respect to this
Agreement, other than post-arbitration actions seeking to enforce an arbitration award, or matters
covered by Section IX. In the event that any court determines that this arbitration procedure is
not binding, or otherwise allows any litigation regarding a dispute, claim,
14
or controversy covered by this Agreement to proceed, the parties hereto hereby waive any and
all right to a trial by jury in or with respect to such litigation and do hereby consent to the
jurisdiction of the appropriate court within the State of Maine.
E. The parties will keep confidential, and will not disclose to any person, except as may be
required by law, the existence of any controversy hereunder, the referral of any such controversy
to arbitration or the status or resolution thereof.
SECTION XVIII
SURVIVAL
Sections IX, X, XI, XII, XIV and XVII will continue in full force in accordance with their
respective terms notwithstanding any termination of the Period of Employment.
SECTION XIX
SEPARABILITY
All provisions of this Agreement are intended to be severable. In the event any provision or
restriction contained herein is held to be invalid or unenforceable in any respect, in whole or in
part, such finding will in no way affect the validity or enforceability of any other provision of
this Agreement. The parties hereto further agree that any such invalid or unenforceable provision
will be deemed modified so that it will be enforced to the greatest extent permissible under law,
and to the extent that any court of competent jurisdiction determines any restriction herein to be
unreasonable in any respect, such court may limit this Agreement to render it reasonable in the
light or the circumstances in which it was entered into and specifically enforce this Agreement as
limited.
IN WITNESS WHEREOF, the undersigned have executed this Agreement this
31st day of December,
2008, and effective
as of the date first above written.
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WRIGHT EXPRESS CORPORATION
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/s/ Robert Cornett
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By:
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Robert C. Cornett
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Title:
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SVP Human Resources
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MICHAEL E. DUBYAK
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/s/ Michael Dubyak
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15
Exhibit 10.6
[FORM OF EMPLOYMENT AGREEMENT FOR
MELISSA SMITH AND DAVID MAXSIMIC]
EMPLOYMENT AGREEMENT
This Employment Agreement is
made and entered into
amended and restated
effective
as of
this
the
28th day of October,
2005 (“Effective Date”) between Wright Express Corporation (“WEX”), a Delaware corporation
headquartered in South Portland, Maine and
[
]
(the “Executive”).
WHEREAS,
WEX desires to employ the Executive as its
[
]
, and the Executive desires to
serve WEX in such capacity.
NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
SECTION I
EMPLOYMENT
WEX agrees to employ the Executive and the Executive agrees to be employed by WEX for the
Period of Employment as provided in Section III below and upon the terms and conditions provided in
this Agreement.
SECTION II
POSITION AND RESPONSIBILITIES
During the Period of Employment, the Executive will serve as
[
]
of WEX and, subject to
the direction of the Chief Executive Officer of WEX (“CEO”), will perform such duties and exercise
such supervision with regard to the business of WEX as are associated with such position, as well
as such additional duties, reasonably associated with said position, as may be prescribed from time
to time by the CEO.
The Executive will, during the Period of Employment, devote substantially all of [his/her]
time and attention during normal business hours to the performance of services for WEX. The
Executive will maintain a primary office and conduct [his/her] business in South Portland, Maine,
except for normal and reasonable business travel in connection with [his/her] duties hereunder.
Nothing contained in this Agreement will prevent or be construed to prevent the Executive from
devoting a reasonable amount of time to serving on civic and charitable boards and conducting
[his/her] personal affairs.
The Executive will, in accordance with WEX policy and procedures and applicable law, certify
to the accuracy of WEX’s publicly filed financial statements.
SECTION III
PERIOD OF EMPLOYMENT
The period of the Executive’s employment under this Agreement (the “Period of Employment”)
will begin on the Effective Date and end on the second anniversary of such date,
subject to earlier
termination as provided in this Agreement;
provided,
however,
that the Period of
Employment will be automatically extended for an additional one year period on October 28, 2006,
and on each anniversary of such date thereafter, unless written notice of intent not to extend or
to reopen negotiations is provided by either party hereto to the other party hereto at least 30
days prior to such date or any such anniversary.
SECTION IV
COMPENSATION AND BENEFITS
Compensation
. For all services rendered by the Executive pursuant to this Agreement
during the Period of Employment, including services as an executive or officer of WEX or any
subsidiary or affiliate of thereof, the Executive will be compensated as follows:
i.
Base Salary
.
WEX will pay the Executive a base salary of not less than $
[
]
per year (“Base Salary”). From time to time, the Executive may be eligible to receive annual
increases as WEX deems appropriate, in accordance with WEX’s customary policies and procedures
regarding the salaries of senior officers, including pursuant to annual compensation reviews to
occur no less than once per year. Base Salary will be payable according to the customary payroll
practices of WEX, but in no event less frequently than semi-monthly.
ii.
Annual Incentive Awards
.
The Executive will be eligible for discretionary annual incentive compensation awards;
provided,
that the Executive will be eligible to receive an Incentive Compensation Award in
respect of each fiscal year of WEX during the Period of Employment based upon a target bonus equal
to no less than
[
]
% of
[
]
earned Base Salary in fiscal year 2005 and
[
]
% in fiscal year 2006;
provided,
however,
that such bonus will be
subject to the attainment by WEX of applicable performance targets reasonably established and
certified by or at the direction of the Board (as hereinafter defined) or the Compensation
Committee of the Board (the “Committee”). For purposes of this Agreement, the term “Incentive
Compensation Award” means the annual bonus paid pursuant to the Wright Express Corporation
Short-Term Incentive Plan (STIP), as the Plan may be amended from time to time. The term “target”
means the value of the STIP bonus payable in the event the Executive achieves the annual target
goals established pursuant to the Plan.
iii.
Long Term Incentive Awards
At such times as the Board or the Committee determines to conduct annual or periodic grants of
long term incentive awards to employees and officers of WEX, the Executive will be eligible to
receive such grants, subject to the sole and complete discretion of the Board or the Committee, and
upon such terms and conditions as determined by the Board or the Committee, but with due
consideration given to the Executive’s position with WEX and the Executive’s historical performance
and anticipated future contributions to WEX.
iv.
Additional Benefits
2
The Executive will be entitled to participate in all other compensation and employee benefit
plans or programs offered generally to employees of WEX, and will receive all perquisites offered
to senior executive officers of WEX in positions comparable to the Executive’s position with WEX,
in either case pursuant to any plan or program now in effect, or later established by WEX. The
Executive will participate to the extent permissible under the terms and provisions of such plans
or programs, and in accordance with the terms of such plans and programs.
SECTION V
BUSINESS EXPENSES
WEX will reimburse the Executive for all reasonable travel and other expenses incurred by the
Executive in connection with the performance of [his/her] duties and obligations under this
Agreement. The Executive will comply with such limitations and reporting requirements with respect
to expenses as may be established by WEX from time to time and will promptly provide all
appropriate and requested documentation in connection with such expenses.
SECTION VI
DISABILITY
If the Executive becomes Disabled, as defined below, during the Period of Employment, the
Period of Employment may be terminated at the option of the Executive upon notice of resignation to
WEX, or at the option of WEX upon 30 days’ advance notice of termination to the Executive. WEX’s
obligation to make payments to the Executive under this Agreement will cease as of such date of
termination, except for Base Salary and Incentive Compensation Awards earned but unpaid as of the
date of such termination, and except for payment of a pro rata portion of [his/her] Incentive
Compensation Award in respect of the year in which such Disability occurs (paid at target level).
For purposes of this Agreement, “Disabled” means the first to occur of either (i) the Executive’s
inability to perform [his/her] duties hereunder as a result of serious physical or mental illness
or injury for a period of no less than 180 days, together with a determination by an independent
medical authority after in person examination of the Executive and review of any relevant medical
records that the Executive is currently unable to perform such duties, or (ii) a determination by
the insurance carrier or third party administrator that the Executive is “Disabled” within the
meaning of the WEX Long Term Disability Plan then in effect. Such independent medical authority
shall be mutually and reasonably agreed upon by WEX and the Executive and such opinion shall be
binding on WEX and the Executive. Nothing contained herein is intended to limit any of the
Executive’s vested benefits under any WEX benefit plan or program.
SECTION VII
DEATH
In the event of the death of the Executive during the Period of Employment, the Period of
Employment will end and WEX’s obligation to make payments under this Agreement will cease as of the
date of death, except for Base Salary and Incentive Compensation Awards earned but unpaid through
the date of death, and except for payment of a pro rata portion of [his/her] Incentive Compensation
Award in respect of the year in which [his/her] death occurs (paid at target level), which will be
paid to the Executive’s surviving spouse, estate or personal representative, as applicable. Nothing
contained herein is intended to limit any of the Executive’s vested benefits under any WEX benefit
plan or program.
3
SECTION VIII
EFFECT OF TERMINATION OF EMPLOYMENT
A.
Without Cause Termination and Constructive Discharge Outside of a Change in
Control
. If the Executive’s employment terminates due to either a Without Cause Termination or
a Constructive Discharge, as defined below, and the Executive is not entitled to receive payment
pursuant to Section VIII(B) hereof, WEX will pay the Executive (or [his/her] surviving spouse,
estate or personal representative, as applicable) upon such Without Cause Termination or
Constructive Discharge (i) a cash payment equal to the sum of the Executive’s then current Base
Salary plus [his/her] then current target Incentive compensation Award, payable, at the Company’s
option, in either one lump sum
or in
equal installments not less frequently than once per month over a
twelve month period
, or a combination of lump sum and equal installments not less frequently than
once per month over a twelve month period,
and (ii) any and all Base Salary and Incentive
Compensation Awards earned but unpaid through the date of such termination and any legitimate
unreimbursed business expenses. In addition, upon such event, those of the Executive’s outstanding
and unvested WEX stock options and WEX restricted stock units which would have otherwise become
vested between the date of termination of employment and the first anniversary of such date of
termination of employment (without regard for performance based vesting criteria) will immediately
become vested. In addition, in the event that the Executive elects to continue medical and dental
benefits pursuant to COBRA, the Executive’s cost for the first 12 months of such coverage will be
no greater than the cost applicable to active full time employees of WEX, and the Company shall pay
for the balance of the cost for the first 12 months of such coverage. Nothing contained herein is
intended to limit any of the Executive’s vested benefits under any WEX benefit plan or program,
including but not limited to rights with respect to stock options, restricted shares or long term
incentive awards.
B.
Without Cause Termination and Constructive Discharge In Case of Change in Control.
If the Executive’s employment terminates due to either a Without Cause Termination or a
Constructive Discharge, in either case within the time period beginning 90 days before the Change
in Control and ending 365 days after the Change in Control, then WEX will pay the Executive (or
[his/her] surviving spouse, estate or personal representative, as applicable) (i) a cash payment
equal to the sum of the Executive’s then current Base Salary plus [his/her] then current target
Incentive Compensation Award, multiplied by 200%, payable, at the Company’s option, in either one
lump sum
or in
equal installments not less frequently than once per month over a twelve month period
,
or a combination of lump sum and equal installments not less frequently than once per month over a
twelve month period,
and (ii) any and all Base Salary and Incentive Compensation Awards earned but
unpaid through the date of such termination and any legitimate unreimbursed business expenses. In
addition, upon such termination, those of the Executive’s outstanding and unvested WEX stock
options and unvested WEX restricted stock units held by the Executive as of the date of termination
will immediately become vested. In addition, WEX shall pay to the Executive in a lump sum an
amount equal to the present value of WEX’s share of the cost of medical and dental insurance
premiums for a twenty-four (24) month period. Nothing contained herein is intended to limit any of
the Executive’s vested benefits under any WEX benefit plan or program, including but not limited to
rights with respect to stock options, restricted shares or long term incentive awards. Payment of
cash and benefits and accelerated vesting under this Section VIII(B) shall be in lieu of and not in
addition to anything that might be owed to Executive under Section VIII(A).
4
C.
Termination for Cause; Resignation
. If the Executive’s employment terminates due
to a Termination for Cause or a Resignation, as defined below, Base Salary and any Incentive
Compensation Awards earned but unpaid as of the date of such termination will be paid to the
Executive in a lump sum. Except as provided in this paragraph, WEX will have no further obligations
to the Executive hereunder. Nothing contained herein is intended to limit any of the Executive’s
vested benefits under any WEX benefit plan or program.
D.
For purposes of this Agreement, the following terms have the following meanings:
i. “Termination for Cause” means termination because of (i) the Executive’s willful failure
to substantially perform [his/her] duties as an employee of WEX or any subsidiary thereof (other
than any such failure resulting from incapacity due to physical or mental illness), (ii) any act
of fraud, embezzlement, gross misconduct, dishonesty or similar conduct, in each case against WEX
or any subsidiary thereof, (iii) the Executive’s conviction of or indictment for a felony or any
crime involving moral turpitude, (iv) the Executive’s gross negligence in the performance of
[his/her] duties, (v) the Executive’s knowing or negligent making of a false certification to WEX
pertaining to its financial statements, or (vi) the Executive’s knowing or grossly negligent
violation of any provision of Section IX of this Agreement or any knowing violation of WEX’s Code
of Business Conduct and Ethics. WEX will provide the Executive a written notice that describes
the circumstances being relied on for the termination with respect to this paragraph. In the
event that WEX terminates the Executive’s employment without Cause but the Company later
discovers evidence not known at the time of termination that would have justified a Termination
for Cause under this paragraph, the Company may terminate the payment of all amounts to the
Executive pursuant to Section VIII(A) or (B), excluding any and all Base Salary and Incentive
Compensation Awards earned but unpaid through the date of such termination and any legitimate
unreimbursed business expenses.
ii. “Constructive Discharge” means the Executive resigns in response to: (i) any material
failure of WEX to fulfill its obligations under this Agreement (including without limitation any
reduction of the Base Salary or any reduction in the target bonus percentage amount, as the same
may be increased during the Period of Employment), (ii) a material and adverse change to the
Executive’s titles, positions, duties and responsibilities with or to WEX, (iii) the relocation of
the Executive’s primary business office to a location more than 50 miles from Portland, Maine or
(iv) WEX’s failure to cause this Agreement to be assumed by any successor to the business of WEX.
The Executive will provide WEX a written notice that describes the circumstances being relied on
for the termination with respect to this paragraph within sixty (60) days after the event giving
rise to the notice. WEX will have sixty (60) days after receipt of such notice to remedy the
situation prior to the termination for Constructive Discharge.
iii. “Without Cause Termination” or “Terminated Without Cause” means termination of the
Executive’s employment by WEX other than due to death, disability, or Termination for Cause.
iv. “Resignation” means a termination of the Executive’s employment by the Executive, other
than in connection with a Constructive Discharge.
5
v. “Change in Control” means the happening of any of the following events:
(1) An acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (any of which, a “Person”) resulting in such Person having beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50%
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 voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); excluding,
however, the following: (A) Any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the security
being so converted was itself acquired directly from the Company, (B) Any acquisition
by the Company, (C) Any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any entity controlled by the Company, or (D)
Any acquisition pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of Section VIII(D)(v)(3);or
(2) A change in the composition of the board of directors of the Company (the
“Board”) such that the individuals who, as of the Effective Date, constitute the Board
(such Board shall be hereinafter referred to as the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board;
provided, however,
for purposes
of this definition, that any individual who becomes a member of the Board subsequent to
the Effective Date, whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of those individuals who
are members of the Board and who were also members of the Incumbent Board (or deemed to
be such pursuant to this proviso) shall be considered as though such individual were a
member of the Incumbent Board; but,
provided further,
that 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 promulgated
under the Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board shall not be so considered as
a member of the Incumbent Board; or
(3) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the acquisition
of shares or assets of another company (“Corporate Transaction”); excluding, however,
such a Corporate Transaction pursuant to which (i) all or substantially all of the
individuals and entities who are the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Corporate Transaction will beneficially own, directly or indirectly, more
than 50% of, respectively, the outstanding shares of common stock (or equity
interests), and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors (or equivalent governing body,
if applicable), as the case may be, of the entity resulting from such Corporate
Transaction (including an entity which as a result of such transaction owns the Company
or all or substantially all of the Company’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as
6
the case may be, (ii) no Person (other than the Company, any employee benefit plan (or
related trust) of the Company or such entity resulting from such Corporate Transaction)
will beneficially own, directly or indirectly, 50% or more of, respectively, the
outstanding shares of common stock (or equity interests) of the entity resulting from such
Corporate Transaction or the combined voting power of the outstanding voting securities of
such corporation entitled to vote generally in the election of directors (or equivalent
governing body, if applicable) except to the extent that such ownership existed prior to
the Corporate Transaction, and (iii) individuals who were members of the Incumbent Board
will constitute at least a majority of the members of the board of directors (or equivalent
governing body, if applicable) of the entity resulting from such Corporate Transaction; or
(4) The approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.
E.
Conditions to Payment.
All payments due to the Executive under this
Section VIII
shall be made as soon as practicable
in accordance with Section VIIIA
;
provided, however,
that such payments, shall be subject to, and contingent upon, the execution by the Executive (or
[his/her] beneficiary or estate) of a release of any and all claims against WEX and its affiliates
in such reasonable form and substance adopted by WEX; provided further that such release shall not
waive, release or limit any rights the Executive has, or may have, to indemnification under the
Articles or Certificate of Incorporation, Bylaws, or other corporate governance documents of WEX,
to the extent arising out of claims asserted other than by the company or its affiliates, or under
applicable law, or any coverage or rights to coverage the Executive may have under insurance
maintained by WEX relating to the Executive’s actions on behalf of WEX within the scope of and
during the course of [his/her] employment with WEX.
The Company will provide Executive with a copy
of such release not later than 21 days (45 days if Executive’s termination is part of an exit
incentive or other employment termination program offered to a group or class of employees) before
Executive’s termination of employment. Executive shall deliver the executed release to the Company
not later than eight days before the payment date provided in Section VIIIA for termination
payments to be made under this Agreement which are subject to 409A.
The payments due to the
Executive under this Section VIII shall be in lieu of any other severance benefits otherwise
payable to the Executive under any severance plan of WEX or its affiliates and/or any other
agreement or arrangement. Nothing herein shall be construed as limiting the Executive’s
entitlement to any other vested accrued benefits to which she (or [his/her] estate if applicable)
is then entitled under WEX’s applicable employee benefit plans, including without limitation any
disability or life insurance plan benefits which may become payable.
Any payments made under this agreement shall be compliant with IRS
code 409A including the timing of such payments.
SECTION VIIIA
OTHER TERMS RELATING TO TERMINATION OF EMPLOYMENT PAYMENTS;
REIMBURSEMENTS; SECTION 409A EXEMPTIONS; DELAYED PAYMENTS UNDER
SECTION 409A
A. Time of Payment. Amounts payable under Section VIII following Executive’s
termination of employment, other than those expressly payable on a deferred basis, will be paid in
the payroll period next following the payroll period in which termination of employment occurs
except as otherwise provided in this Section VIIIA. Payment of any amount by reason of
Executive’s termination of employment shall be made no later than the last day of Executive’s
second taxable year following Executive’s taxable year in which the termination occurs.
7
B. Reimbursements. Any reimbursements made or in-kind benefits provided under this Agreement
shall be subject to the following conditions:
i. the amount of expenses eligible for reimbursement or in-kind
benefits provided in
any one taxable year of Executive shall not affect the amount of expenses eligible for
reimbursement or in-kind benefits provided in any other taxable year of Executive;
ii. the reimbursement of any expense shall be made no later than the
last day of
Executive’s taxable year following Executive’s taxable year in which the expense was
incurred (unless this Agreement specifically provides for reimbursement by an earlier date);
iii. the right to reimbursement of an expense or payment of an
in-kind benefit shall
not be subject to liquidation or exchange for another benefit.
C. Short-Term Deferral Exemption. It is intended that payments made under this
Agreement due to Executive’s termination of employment that are not otherwise subject to Section
409A of the Internal Revenue Code (“409A”) which are paid on or before the 15
th
day of
the third month following the end of Executive’s taxable year in which
[his/her]
termination of
employment occurs shall be exempt from compliance with 409A pursuant to the exemption for
short-term deferrals set forth in Section 1.409A-1(b)(4) of the Treasury Regulations
(“Regulations”).
D. Separation Pay Exemption. It is intended that payments made under this Agreement
due to Executive’s Without Cause Termination or Constructive Discharge that are not otherwise
subject to 409A which do not exceed two times the lesser of (a) the Executive’s annualized
compensation (determined in accordance with the Regulations) or (b) the maximum amount that may be
taken into account under Section 401(a)(17) of the Code ($245,000 for 2009) shall be exempt from
compliance with 409A pursuant to the exemption for separation pay set forth in Section
1.409A-1(b)(9) of the Regulations.
E. Six-Month Delay for Specified Employees. Anything in this Agreement to the
contrary notwithstanding, payments to be made under this Agreement upon termination of Executive’s
employment which are subject to 409A (“409A Payments”) shall be delayed for six months following
such termination of employment if Executive is a Specified Employee as defined below on the date of
termination of employment. Any 409A Payment due within such six-month period shall be delayed to
the end of such six-month period.
i. The Company will adjust the 409A Payment to reflect the deferred
payment date by
multiplying the payment or reimbursement by the product of the six-month CMT Treasury Bill
annualized yield rate as published by the U.S. Treasury for the date on which such payment
or reimbursement would have been made but for the delay
multiplied by a fraction, the numerator of which is the number of days by which such
payment or reimbursement was delayed and the denominator of which is 365.
8
ii. The Company will make the adjusted 409A Payment at the beginning
of the seventh
month following Executive’s termination of employment. Notwithstanding the foregoing, if
calculation of the amounts payable by any payment date specified in this Subsection E is not
administratively practicable due to events beyond the control of Executive (or Executive’s
beneficiary or estate) and for reasons that are commercially reasonable, payment will be
made as soon as administratively practicable in compliance with 409A and the Regulations
thereunder. In the event of Executive’s death during such six-month period, payment will be
made in the payroll period next following the payroll period in which Executive’s death
occurs.
iii. “Specified Employee”. For purposes of this Agreement,
a “Specified Employee”
shall mean an employee of the Company who satisfies the requirements for being designated a
“key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to
Section 416(i)(5) of the Code at any time during a calendar year, in which case such
employee shall be considered a Specified Employee for the twelve-month period beginning on
the first day of the fourth month immediately following the end of such calendar year.
Notwithstanding the foregoing, all employees who are nonresident aliens during an entire
calendar year are excluded for purposes of determining which employees meet the requirements
of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of
the Code for such calendar year. The term “nonresident alien” as used herein shall have the
meaning set forth in Regulations Section 1.409A-1(j). In the event of any corporate spinoff
or merger, the determination of which employees meet the requirements of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code
for any calendar year shall be determined in accordance with Regulations Section
1.409A-1(i)(6).
SECTION IX
OTHER DUTIES OF THE EXECUTIVE
DURING AND AFTER THE PERIOD OF EMPLOYMENT
A. Cooperation with Legal Claims. The Executive will, with reasonable notice during or after
the Period of Employment, furnish information as may be in [his/her] possession and reasonably
cooperate with WEX and its affiliates as may reasonably be requested in connection with any claims
or legal action in which WEX or any of its affiliates is or may become a party. The foregoing shall
not unreasonably interfere with the Executive’s duties to any successor employer and the Company
shall reimburse the Executive for any reasonable expenses incurred for providing such assistance.
B. Protection of Confidential Information.
i.
Acknowledgement.
The Company and the Executive acknowledge that the services to
be performed by the Executive under this Agreement are unique and extraordinary
9
and that, as a result of the Executive’s employment, the Executive will be in a relationship of
confidence and trust with the Company and will come into possession of Confidential Information
(as defined below) that is (1) owned or controlled by the Company, (2) in the possession of the
Company and belonging to third parties or (3) conceived, originated, discovered or developed, in
whole or in part, by the Executive. “Confidential Information” means trade secrets and other
confidential or proprietary business, technical, personnel or financial information, whether or
not the Executive’s work product, in written, graphic, oral, electronic or other tangible or
intangible forms, including specifications, samples, records, data, computer programs, drawings,
diagrams, models, customer names, business or mailing addresses, ID’s or e-mail addresses,
business or marketing plans, studies, analyses, projections and reports, communications by or to
attorneys (including attorney-client privileged communications), memos and other materials
prepared by attorneys or under their direction (including attorney work product), and software
systems and processes. Any Confidential Information that is not readily available to the public
shall be considered to be a trade secret and confidential and proprietary, even if it is not
specifically marked as such, unless the Company advises the Executive otherwise in writing.
ii.
Nondisclosure
. The Executive agrees that the Executive will keep the Confidential
Information in strictest confidence and trust, and will not, without the prior written consent of
the Company, directly or indirectly, use or disclose Confidential Information to any person,
during or after the Executive’s employment, except as may be necessary in the ordinary course of
performing the Executive’s duties under this Agreement. This Section IX(B) shall apply
indefinitely, both during and after the Period of Employment.
iii.
Surrender Upon Termination
. The Executive agrees that, in the event of the
termination of the Executive’s employment for any reason, at any time, the Executive will
immediately deliver to the Company all property belonging to the Company, including documents and
materials of any nature pertaining to the Executive’s work with the Company, and will not take
with the Executive any documents or materials of any description, or any reproduction thereof of
any description, containing or pertaining to any Confidential
Information. It is understood that the Executive is free to use information that is in the public
domain, but not as a result of a breach of this Agreement.
C. Restrictions.
i. During the Period of Employment and for the Post Termination Period thereafter
(collectively, the “Restricted Period”), the Executive will not knowingly use [his/her] status with
WEX or any of its affiliates to obtain loans, goods or services from another organization on terms
that would not be available to [his/her] in the absence of [his/her] relationship to WEX or any of
its affiliates. The Post Termination Period means a period of two (2) years following the
Executive’s termination of employment, if, in connection with such termination, the Executive
receives a severance under Section VIII(B) of this Agreement, or one (1) year following the
Executive’s termination of employment, in all other cases, irrespective of the cause, manner or
time of such termination.
ii. During the Restricted Period, the Executive will not make any statements or perform any
acts intended or reasonably calculated to advance the interest of any existing or
prospective Competing Enterprise or in any way to injure the interests of or disparage WEX or
any of its affiliates.
10
iii. During the Restricted Period, the Executive, without prior express written approval by
the Chief Executive Officer of WEX, will not become employed by, render services to or directly or
indirectly (whether for compensation or otherwise) own or hold a proprietary interest in, manage,
operate, or control, or join or participate in the ownership, management, operation or control of,
or furnish any capital to or be connected in any manner with, any Competing Enterprise.
iv. For purposes of this Section IX, a “Competing Enterprise” means any entity, organization
or person engaged, or planning to become engaged, in substantially the same or similar business to
that being conducted or actively and specifically planned to be conducted within the Restricted
Period by WEX or its subsidiaries, owned or controlled. It includes, without limitation: (i) the
business of developing, managing, operating, marketing, processing, financing, or otherwise being
involved in providing any products or services for the benefit of or use by commercial vehicle or
aviation fleets through charge cards, credit cards, procurement cards or any other form of payment
services or electronic commerce; (ii) the sale, distribution or publication of petroleum product
pricing or management information or other products or services currently sold or contemplated to
be sold by WEX or any of its owned or controlled subsidiaries, and (iii) the business of
developing, managing, operating, marketing, processing, financing, or otherwise being involved in
providing commercial travel, entertainment and purchasing credit cards. The restrictions in this
Section shall not be construed to prevent the Executive from working for a business entity that
does not compete with WEX or its subsidiaries simply because the entity is affiliated with a
Competing Enterprise, so long as the entity is operationally separate and distinct from the
Competing Enterprise and the Executive’s job responsibilities at that entity are unrelated to the
Competing Enterprise. The Executive acknowledges that WEX’s and its subsidiaries’ businesses are
conducted nationally and agrees that the provisions in this paragraph shall operate throughout the
United States.
v. During the Restricted Period, the Executive, without express prior written approval from
the Chief Executive Officer, will not solicit any then-current clients, customers or private label,
cobrand or similar strategic partners of WEX or any of its affiliates. In addition, during the
Restricted Period, the Executive, without express prior written approval from the Chief Executive
Officer, will not discuss with any employee of WEX or any of its affiliates information related to
the operation or potential operation of any Competing Enterprise.
vi. During the Restricted Period, the Executive will not interfere with the employees or
affairs of WEX or any of its affiliates or solicit or induce any person who is an employee of WEX
or any of its affiliates to terminate any relationship such person may have with WEX or any of its
affiliates. In addition, neither the Executive nor any entity she controls or person she employs
shall, during such period, directly or indirectly engage, employ or compensate any employee of WEX
or any of its affiliates. The Executive hereby represents and warrants that the Executive has not
entered into any agreement, understanding or arrangement with any employee of WEX or any of its
affiliates pertaining to any business in which the Executive has participated or plans to
participate, or to the employment, engagement or compensation of any such employee.
11
vii. For the purposes of this Agreement, “proprietary interest” means legal or equitable
ownership, whether through stock holding or otherwise, of an equity interest in a business, firm or
entity or ownership of more than 1% of any class of equity interest in a publicly-held company and
the term “affiliate” will include without limitation all subsidiaries of WEX.
D. The Executive hereby acknowledges that damages at law may be an insufficient remedy to WEX
if the Executive violates the terms of this Agreement and that WEX will be entitled, upon making
the requisite showing, to preliminary and/or permanent injunctive relief in any court of competent
jurisdiction to restrain the breach of or otherwise to specifically enforce any of the covenants
contained in this Section IX without the necessity of showing any actual damage or that monetary
damages would not provide an adequate remedy. Such right to an injunction will be in addition to,
and not in limitation of, any other rights or remedies WEX may have. Without limiting the
generality of the foregoing, neither party will oppose any motion the other party may make for any
expedited discovery or hearing in connection with any alleged breach of this Section IX.
E. The Executive agrees that the restrictions contained in this Section IX are an essential
element of the compensation the Executive is granted hereunder and but for the Executive’s
agreement to comply with such restrictions, WEX would not have entered into this Agreement.
SECTION X
DIRECTORS AND OFFICERS INSURANCE
WEX will indemnify the Executive to the fullest extent permitted by the laws of the state of
WEX’s incorporation in effect at that time, or the certificate of incorporation and by-laws of WEX,
whichever affords the greater protection to the Executive. WEX will maintain D&O insurance for the
Executive on a basis no less favorable than it maintains for other officers of WEX.
SECTION XI
MITIGATION
The Executive will not be required to mitigate the amount of any payment provided for
hereunder by seeking other employment or otherwise, nor will the amount of any such payment be
reduced by any compensation earned by the Executive as the result of employment by another employer
after the date the Executive’s employment hereunder terminates or by offset against any amount
claimed to be owed by the Executive to WEX, or otherwise. The parties’ respective obligations
hereunder shall be absolute and unconditional and shall not be affected by any circumstances,
including without limitation any setoff, counterclaim, recoupment, defense or other right which the
other party hereto may have.
SECTION XII
WITHHOLDING TAXES
TAXATION
The Executive acknowledges and agrees that WEX may directly or indirectly withhold from any
payments under this Agreement all federal, state, city or other taxes that will be required
pursuant to any law or governmental regulation.
Anything in this Agreement to the contrary
notwithstanding, the terms of this Agreement shall be interpreted and applied in a
manner consistent with the requirements of Section 409A of the Code and the
12
Regulations so
as not to subject Executive to the payment of any tax or interest which may be imposed under such
section, and the Company shall have no right to accelerate or make any payment under this
Agreement to the extent such action would subject Executive to the payment of any tax or interest
under such section. If all or a portion of the benefits and payments provided under this
Agreement constitute taxable income to Executive for any taxable year that is prior to the
taxable year in which such payments and/or benefits are to be paid to Executive, as a result of
the Agreement’s failure to comply with the requirements of Section 409A of the Code and the
Regulations, the applicable payment or benefit shall be paid immediately to Executive to the
extent such payment or benefit is required to be included in income.
SECTION XIII
EFFECT OF PRIOR AGREEMENTS
This Agreement will supersede any prior employment agreement between the Executive on the one
hand, and WEX (or any of its affiliates or parents) on the other hand (including without
limitation, the Employment Agreement dated February, 2005 and all amendments thereto), and any such
prior employment agreement will be deemed terminated without any remaining obligations of either
party thereunder, provided that nothing in this Agreement will supersede, modify or vitiate any
obligation of Cendant Corporation or Executive to each other pursuant to the Employment Agreement
dated February, 2005.
SECTION XIV
CONSOLIDATION, MERGER OR SALE OF ASSETS
Nothing in this Agreement will preclude WEX from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation that assumes this
Agreement and all obligations and undertakings of WEX hereunder. Upon such a consolidation, merger
or sale of assets the term “WEX” will mean the other corporation and this Agreement will continue
in full force and effect.
SECTION XV
MODIFICATION: WAIVER
This Agreement may not be modified or amended except in writing signed by the parties. No term
or condition of this Agreement will be deemed to have been waived except when waived in writing by
the party charged with waiver. A waiver will operate only as to the specific term or condition
waived and will not constitute a waiver for the future or have any impact on anything other than
that which is specifically waived.
SECTION XVI
GOVERNING LAW
This Agreement has been executed and delivered in the State of Maine and its validity,
interpretation, performance and enforcement will be governed by the internal laws of that state.
13
SECTION XVII
ARBITRATION
A. Any controversy, dispute or claim arising out of or relating to this Agreement or the
breach hereof which cannot be settled by mutual agreement (other than with respect to the matters
covered by Section IX for which WEX may, but will not be required to, seek injunctive relief) will
be finally settled by binding arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state arbitration law) as follows: Any party who is aggrieved will
deliver a written notice to the other party setting forth the specific points in dispute. Any
points remaining in dispute twenty (20) days after the giving of such written notice may be
submitted by either party, upon ten (10) days prior written notice to the other party, to
arbitration in Portland, Maine, to the American Arbitration Association, before a single arbitrator
appointed in accordance with the arbitration rules of the American Arbitration Association,
National Rules for the Resolution of Employment Disputes, modified only as herein expressly
provided. The arbitrator may enter a default decision against any party who fails to participate in
the arbitration proceedings.
B. The decision of the arbitrator on the points in dispute will be final and binding, and
judgment on the award may be entered in any court having jurisdiction thereof.
C. Except as otherwise provided in this Agreement, the arbitrator will be authorized to
apportion his/[his/her] fees and expenses as the arbitrator deems appropriate. In the absence of
any such apportionment, the fees and expenses of the arbitrator will be borne equally by each
party, and each party will bear the fees and expenses of its or [his/her] own attorney.
D. The parties agree that this Section XVII has been included to rapidly and inexpensively
resolve any disputes between them with respect to this Agreement, and that this Section XVII will
be grounds for dismissal of any court action commenced by either party with respect to this
Agreement, other than post-arbitration actions seeking to enforce an arbitration award, or matters
covered by Section IX. In the event that any court determines that this arbitration procedure is
not binding, or otherwise allows any litigation regarding a dispute, claim, or controversy covered
by this Agreement to proceed, the parties hereto hereby waive any and all right to a trial by jury
in or with respect to such litigation and do hereby consent to the jurisdiction of the appropriate
court within the State of Maine.
E. The parties will keep confidential, and will not disclose to any person, except as may be
required by law, the existence of any controversy hereunder, the referral of any such controversy
to arbitration or the status or resolution thereof.
SECTION XVIII
SURVIVAL
Sections IX, X, XI, XII, XIV and XVII will continue in full force in accordance with their
respective terms notwithstanding any termination of the Period of Employment.
14
SECTION XIX
SEPARABILITY
All provisions of this Agreement are intended to be severable. In the event any provision or
restriction contained herein is held to be invalid or unenforceable in any respect, in whole or in
part, such finding will in no way affect the validity or enforceability of any other provision of
this Agreement. The parties hereto further agree that any such invalid or unenforceable provision
will be deemed modified so that it will be enforced to the greatest extent permissible under law,
and to the extent that any court of competent jurisdiction determines any restriction herein to be
unreasonable in any respect, such court may limit this Agreement to render it reasonable in the
light or the circumstances in which it was entered into and specifically enforce this Agreement as
limited.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written.
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WRIGHT EXPRESS CORPORATION
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/s/ Michael E. Dubyak
By: Michael E. Dubyak
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Title: President and CEO
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15
Exhibit 10.7
[FORM OF EMPLOYMENT AGREEMENT FOR
HILARY RAPKIN, JAMIE MORIN AND ROBERT CORNETT]
EMPLOYMENT AGREEMENT
This
Employment Agreement is
made and entered into
amended and restated
effective as of the
is
28th day of October,
2005 (“Effective Date”) between Wright Express Corporation (“WEX”), a Delaware corporation
headquartered in South Portland, Maine and
[
]
(the “Executive”).
WHEREAS, WEX desires to employ the Executive as its
[
]
, and the Executive desires
to serve WEX in such capacity.
NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
SECTION I
EMPLOYMENT
WEX agrees to employ the Executive and the Executive agrees to be employed by WEX for the
Period of Employment as provided in Section III below and upon the terms and conditions provided in
this Agreement.
SECTION II
POSITION AND RESPONSIBILITIES
During the Period of Employment, the Executive will serve as
[
]
of WEX and,
subject to the direction of the Chief Executive Officer of WEX (“CEO”), will perform such duties
and exercise such supervision with regard to the business of WEX as are associated with such
position, as well as such additional duties, reasonably associated with said position, as may be
prescribed from time to time by the CEO.
The Executive will, during the Period of Employment, devote substantially all of [his/her]
time and attention during normal business hours to the performance of services for WEX. The
Executive will maintain a primary office and conduct [his/her] business in South Portland, Maine,
except for normal and reasonable business travel in connection with [his/her] duties hereunder.
Nothing contained in this Agreement will prevent or be construed to prevent the Executive from
devoting a reasonable amount of time to serving on civic and charitable boards and conducting
[his/her] personal affairs.
SECTION III
PERIOD OF EMPLOYMENT
The period of the Executive’s employment under this Agreement (the “Period of Employment”)
will begin on the Effective Date and end on the second anniversary of such date, subject to earlier
termination as provided in this Agreement;
provided,
however,
that the Period of
Employment will be automatically extended for an additional one year period on October 28, 2006,
and on each anniversary of such date thereafter, unless written notice of intent not to extend or
to reopen negotiations is provided by either party hereto to the other party hereto at least 30
days prior to such date or any such anniversary.
SECTION IV
COMPENSATION AND BENEFITS
Compensation
. For all services rendered by the Executive pursuant to this Agreement
during the Period of Employment, including services as an executive or officer of WEX or any
subsidiary or affiliate of thereof, the Executive will be compensated as follows:
i.
Base Salary
.
WEX will pay the Executive a base salary of not less than $
[
]
per year (“Base Salary”). From time to time, the Executive may be eligible to receive annual
increases as WEX deems appropriate, in accordance with WEX’s customary policies and procedures
regarding the salaries of senior officers, including pursuant to annual compensation reviews to
occur no less than once per year. Base Salary will be payable according to the customary payroll
practices of WEX, but in no event less frequently than semi-monthly.
ii.
Annual Incentive Awards
.
The Executive will be eligible for discretionary annual incentive compensation awards;
provided,
that the Executive will be eligible to receive an Incentive Compensation Award in
respect of each fiscal year of WEX during the Period of Employment based upon a target bonus equal
to no less than
[
]
% of [his/her] earned Base Salary in fiscal year 2005 and
[
]
% in fiscal year 2006; provided, however
,
that such bonus will be subject to
the attainment by WEX of applicable performance targets reasonably established and certified by or
at the direction of the Board (as hereinafter defined) or the Compensation Committee of the Board
(the “Committee”). For purposes of this Agreement, the term “Incentive Compensation Award” means
the annual bonus paid pursuant to the Wright Express Corporation Short-Term Incentive Plan (STIP),
as the Plan may be amended from time to time. The term “target” means the value of the STIP bonus
payable in the event the Executive achieves the annual target goals established pursuant to the
Plan.
iii.
Long Term Incentive Awards
At such times as the Board or the Committee determines to conduct annual or periodic grants of
long term incentive awards to employees and officers of WEX, the Executive will be eligible to
receive such grants, subject to the sole and complete discretion of the Board or the Committee, and
upon such terms and conditions as determined by the Board or the Committee, but with due
consideration given to the Executive’s position with WEX and the Executive’s historical performance
and anticipated future contributions to WEX.
iv.
Additional Benefits
The Executive will be entitled to participate in all other compensation and employee benefit
plans or programs offered generally to employees of WEX, and will receive all perquisites offered
to senior executive officers of WEX in positions comparable to the Executive’s position with WEX,
in either case pursuant to any plan or program now in effect, or later
established by WEX. The Executive will participate to the extent permissible under the terms
and provisions of such plans or programs, and in accordance with the terms of such plans and
programs.
2
SECTION V
BUSINESS EXPENSES
WEX will reimburse the Executive for all reasonable travel and other expenses incurred by the
Executive in connection with the performance of [his/her] duties and obligations under this
Agreement. The Executive will comply with such limitations and reporting requirements with respect
to expenses as may be established by WEX from time to time and will promptly provide all
appropriate and requested documentation in connection with such expenses.
SECTION VI
DISABILITY
If the Executive becomes Disabled, as defined below, during the Period of Employment, the
Period of Employment may be terminated at the option of the Executive upon notice of resignation to
WEX, or at the option of WEX upon 30 days’ advance notice of termination to the Executive. WEX’s
obligation to make payments to the Executive under this Agreement will cease as of such date of
termination, except for Base Salary and Incentive Compensation Awards earned but unpaid as of the
date of such termination, and except for payment of a pro rata portion of [his/her] Incentive
Compensation Award in respect of the year in which such Disability occurs (paid at target level).
For purposes of this Agreement, “Disabled” means the first to occur of either (i) the Executive’s
inability to perform [his/her] duties hereunder as a result of serious physical or mental illness
or injury for a period of no less than 180 days, together with a determination by an independent
medical authority after in person examination of the Executive and review of any relevant medical
records that the Executive is currently unable to perform such duties, or (ii) a determination by
the insurance carrier or third party administrator that the Executive is “Disabled” within the
meaning of the WEX Long Term Disability Plan then in effect. Such independent medical authority
shall be mutually and reasonably agreed upon by WEX and the Executive and such opinion shall be
binding on WEX and the Executive. Nothing contained herein is intended to limit any of the
Executive’s vested benefits under any WEX benefit plan or program.
SECTION VII
DEATH
In the event of the death of the Executive during the Period of Employment, the Period of
Employment will end and WEX’s obligation to make payments under this Agreement will cease as of the
date of death, except for Base Salary and Incentive Compensation Awards earned but unpaid through
the date of death, and except for payment of a pro rata portion of [his/her] Incentive Compensation
Award in respect of the year in which [his/her] death occurs (paid at target level), which will be
paid to the Executive’s surviving spouse, estate or personal representative, as applicable. Nothing
contained herein is intended to limit any of the Executive’s vested benefits under any WEX benefit
plan or program.
3
SECTION VIII
EFFECT OF TERMINATION OF EMPLOYMENT
A.
Without Cause Termination and Constructive Discharge Outside of a Change in
Control
. If the Executive’s employment terminates due to either a Without Cause Termination or
a Constructive Discharge, as defined below, and the Executive is not entitled to receive payment
pursuant to Section VIII(B) hereof, WEX will pay the Executive (or [his/her] surviving spouse,
estate or personal representative, as applicable) upon such Without Cause Termination or
Constructive Discharge (i) a cash payment equal to the Executive’s then current Base Salary,
payable, at the Company’s option, in either one lump sum
or in
equal installments not less frequently
than once per month over a twelve month period
, or a combination of lump sum and equal installments
not less frequently than once per month over a twelve month period,
, and (ii) any and all Base
Salary and Incentive Compensation Awards earned but unpaid through the date of such termination and
any legitimate unreimbursed business expenses. Nothing contained herein is intended to limit any
of the Executive’s vested benefits under any WEX benefit plan or program, including but not limited
to rights with respect to stock options, restricted shares or long term incentive awards.
B.
Without Cause Termination and Constructive Discharge In Case of Change in Control.
If the Executive’s employment terminates due to either a Without Cause Termination or a
Constructive Discharge, in either case within the time period beginning 90 days before the Change
in Control and ending 365 days after the Change in Control, then WEX will pay the Executive (or
[his/her] surviving spouse, estate or personal representative, as applicable) (i) a cash payment
equal to the sum of the Executive’s then current Base Salary plus [his/her] then current target
Incentive Compensation Award, multiplied by 200%, payable, at the Company’s option, in either one
lump sum
or in
equal
installments not less frequently than once per month over a twelve month period
, or
a combination of lump sum and equal installments not less frequently than once per month over a
twelve month period,
and (ii) any and all Base Salary and Incentive Compensation Awards earned but
unpaid through the date of such termination and any legitimate unreimbursed business expenses. In
addition, upon such termination, those of the Executive’s outstanding and unvested WEX stock
options and unvested WEX restricted stock units held by the Executive as of the date of termination
will immediately become vested. In addition, WEX shall pay to the Executive in a lump sum an
amount equal to the present value of WEX’s share of the cost of medical and dental insurance
premiums for a twenty-four (24) month period. Nothing contained herein is intended to limit any of
the Executive’s vested benefits under any WEX benefit plan or program, including but not limited to
rights with respect to stock options, restricted shares or long term incentive awards. Payment of
cash and benefits and accelerated vesting under this Section VIII(B) shall be in lieu of and not in
addition to anything that might be owed to Executive under Section VIII(A).
C.
Termination for Cause; Resignation
. If the Executive’s employment terminates due
to a Termination for Cause or a Resignation, as defined below, Base Salary and any Incentive
Compensation Awards earned but unpaid as of the date of such termination will be paid to the
Executive in a lump sum. Except as provided in this paragraph, WEX will have no further obligations
to the Executive hereunder. Nothing contained herein is intended to limit any of the Executive’s
vested benefits under any WEX benefit plan or program.
D. For purposes of this Agreement, the following terms have the
following meanings:
4
i. “Termination for Cause” means termination because of (i) the Executive’s willful failure
to substantially perform [his/her] duties as an employee of WEX or any subsidiary thereof (other
than any such failure resulting from incapacity due to physical or mental illness), (ii) any act
of fraud, embezzlement, gross misconduct, dishonesty or similar conduct, in each case against WEX
or any subsidiary thereof, (iii) the Executive’s conviction of or indictment for a felony or any
crime involving moral turpitude, (iv) the Executive’s gross negligence in the performance of
[his/her] duties, (v) the Executive’s knowing or negligent making of a false certification to WEX
pertaining to its financial statements, or (vi) the Executive’s knowing or grossly negligent
violation of any provision of Section IX of this Agreement or any knowing violation of WEX’s Code
of Business Conduct and Ethics. WEX will provide the Executive a written notice that describes
the circumstances being relied on for the termination with respect to this paragraph. In the
event that WEX terminates the Executive’s employment without Cause but the Company later
discovers evidence not known at the time of termination that would have justified a Termination
for Cause under this paragraph, the Company may terminate the payment of all amounts to the
Executive pursuant to Section VIII(A) or (B), excluding any and all Base Salary and Incentive
Compensation Awards earned but unpaid through the date of such termination and any legitimate
unreimbursed business expenses.
ii. “Constructive Discharge” means the Executive resigns in response to: (i) any material
failure of WEX to fulfill its obligations under this Agreement (including without limitation any
reduction of the Base Salary or any reduction in the target bonus percentage amount, as the same
may be increased during the Period of Employment), (ii) a material and adverse change to the
Executive’s titles, positions, duties and responsibilities with or to WEX, (iii) the relocation of
the Executive’s primary business office to a location more than 50 miles from Portland, Maine or
(iv) WEX’s failure to cause this Agreement to be assumed by any successor to the business of WEX.
The Executive will provide WEX a written notice that describes the circumstances being relied on
for the termination with respect to this paragraph within sixty (60) days after the event giving
rise to the notice. WEX will have sixty (60) days after receipt of such notice to remedy the
situation prior to the termination for Constructive Discharge.
iii. “Without Cause Termination” or “Terminated Without Cause” means termination of the
Executive’s employment by WEX other than due to death, disability, or Termination for Cause.
iv. “Resignation” means a termination of the Executive’s employment by the Executive, other
than in connection with a Constructive Discharge.
v. “Change in Control” means the happening of any of the following events:
(1) An acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (any of which, a “Person”) resulting in such Person having beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50%
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 voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); excluding,
however, the
5
following: (A) Any acquisition directly from the Company, other than an acquisition by
virtue of the exercise of a conversion privilege unless the security being so converted was
itself acquired directly from the Company, (B) Any acquisition by the Company, (C) Any
acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any entity controlled by the Company, or (D) Any acquisition pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of Section VIII(D)(v)(3);or
(2) A change in the composition of the board of directors of the Company (the
“Board”) such that the individuals who, as of the Effective Date, constitute the Board
(such Board shall be hereinafter referred to as the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board;
provided, however,
for purposes
of this definition, that any individual who becomes a member of the Board subsequent to
the Effective Date, whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of those individuals who
are members of the Board and who were also members of the Incumbent Board (or deemed to
be such pursuant to this proviso) shall be considered as though such individual were a
member of the Incumbent Board; but,
provided further,
that 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 promulgated
under the Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board shall not be so considered as
a member of the Incumbent Board; or
(3) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the acquisition
of shares or assets of another company (“Corporate Transaction”); excluding, however,
such a Corporate Transaction pursuant to which (i) all or substantially all of the
individuals and entities who are the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Corporate Transaction will beneficially own, directly or indirectly, more
than 50% of, respectively, the outstanding shares of common stock (or equity
interests), and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors (or equivalent governing body,
if applicable), as the case may be, of the entity resulting from such Corporate
Transaction (including an entity which as a result of such transaction owns the Company
or all or substantially all of the Company’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person
(other than the Company, any employee benefit plan (or related trust) of the Company or
such entity resulting from such Corporate Transaction) will beneficially own, directly
or indirectly, 50% or more of, respectively, the outstanding shares of common stock (or
equity interests) of the entity resulting from such Corporate Transaction or the
combined voting power of the outstanding voting securities of such corporation entitled
to vote generally in the election of directors (or equivalent governing body, if
applicable) except to the extent that such ownership existed prior to the Corporate
Transaction, and (iii) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of directors (or equivalent
governing body, if applicable) of the entity resulting from such Corporate
Transaction; or
6
(4) The approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.
E.
Conditions to Payment.
All payments due to the Executive under this Section VIII
shall be made as soon as practicable
in
accordance with Section VIIIA
;
provided,
however,
that such payments, shall be subject to, and contingent upon, the execution by the Executive (or
[his/her] beneficiary or estate) of a release of any and all claims against WEX and its affiliates
in such reasonable form and substance adopted by WEX;
provided further that
such release
shall not waive, release or limit any rights the Executive has, or may have, to indemnification
under the Articles or Certificate of Incorporation, Bylaws, or other corporate governance documents
of WEX, to the extent arising out of claims asserted other than by the company or its affiliates,
or under applicable law, or any coverage or rights to coverage the Executive may have under
insurance maintained by WEX relating to the Executive’s actions on behalf of WEX within the scope
of and during the course of [his/her] employment with WEX.
The Company will provide Executive with
a copy of such release not later than 21 days (45 days if Executive’s termination is part of an
exit incentive or other employment termination program offered to a group or class of employees)
before Executive’s termination of employment. Executive shall deliver the executed release to the
Company not later than eight days before the payment date provided in Section VIIIA for termination
payments to be made under this Agreement which are subject to 409A.
The payments due to the
Executive under this Section VIII shall be in lieu of any other severance benefits otherwise
payable to the Executive under any severance plan of WEX or its affiliates and/or any other
agreement or arrangement. Nothing herein shall be construed as limiting the Executive’s
entitlement to any other vested accrued benefits to which she (or [his/her] estate if applicable)
is then entitled under WEX’s applicable employee benefit plans, including without limitation any
disability or life insurance plan benefits which may become payable.
Any payments made under this agreement shall be compliant with IRS code 409A
including the timing of such payments.
SECTION VIIIA
OTHER TERMS RELATING TO TERMINATION OF EMPLOYMENT PAYMENTS;
REIMBURSEMENTS; SECTION 409A EXEMPTIONS; DELAYED PAYMENTS UNDER
SECTION 409A
A. Time of Payment. Amounts payable under Section VIII following Executive’s
termination of employment, other than those expressly payable on a deferred basis, will be paid in
the payroll period next following the payroll period in which termination of employment occurs
except as otherwise provided in this Section VIIIA. Payment of any amount by reason of Executive’s
termination of employment shall be made no later than the last day of Executive’s second taxable
year following Executive’s taxable year in which the termination occurs.
B. Reimbursements. Any reimbursements made or in-kind benefits provided under this Agreement
shall be subject to the following conditions:
i. the amount of expenses eligible for reimbursement or in-kind benefits provided in
any one taxable year of Executive shall not affect the amount of expenses eligible for
reimbursement or in-kind benefits provided in any other taxable year of Executive;
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ii. the reimbursement of any expense shall be made no later than the last day of
Executive’s taxable year following Executive’s taxable year in which the expense was
incurred (unless this Agreement specifically provides for reimbursement by an earlier date);
iii. the right to reimbursement of an expense or payment of an in-kind benefit shall
not be subject to liquidation or exchange for another benefit.
C.
Short-Term Deferral
Exemption. It is intended that payments made under this
Agreement due to Executive’s termination of employment that are not otherwise subject to Section
409A of the Internal Revenue Code (“409A”) which are paid on or before the 15
th
day of
the third month following the end of Executive’s taxable year in which his termination of
employment occurs shall be exempt from compliance with 409A pursuant to the exemption for
short-term deferrals set forth in Section 1.409A-1(b)(4) of the Treasury Regulations
(“Regulations”).
D.
Separation Pay Exemption. It is intended that payments made under this Agreement
due to Executive’s Without Cause Termination or Constructive Discharge that are not otherwise
subject to 409A which do not exceed two times the lesser of (a) the Executive’s annualized
compensation (determined in accordance with the Regulations) or (b) the maximum amount that may be
taken into account under Section 401(a)(17) of the Code ($245,000 for 2009) shall be exempt from
compliance with 409A pursuant to the exemption for separation pay set forth in Section
1.409A-1(b)(9) of the Regulations.
E.
Six-Month Delay for Specified Employees. Anything in this Agreement to the
contrary notwithstanding, payments to be made under this Agreement upon termination of Executive’s
employment which are subject to 409A (“409A Payments”) shall be delayed for six months following
such termination of employment if Executive is a Specified Employee as defined below on the date of
termination of employment. Any 409A Payment due within such six-month period shall be delayed to
the end of such six-month period.
i. The Company will adjust the 409A Payment to reflect the deferred payment date by
multiplying the payment or reimbursement by the product of the six-month CMT Treasury Bill
annualized yield rate as published by the U.S. Treasury for the date on which such payment
or reimbursement would have been made but for the delay multiplied by a fraction, the
numerator of which is the number of days by which such payment or reimbursement was delayed
and the denominator of which is 365.
ii. The Company will make the adjusted 409A Payment at the beginning of the seventh
month following Executive’s termination of employment. Notwithstanding the foregoing, if
calculation of the amounts payable by any payment date specified in this Subsection E is not
administratively practicable due to events beyond the control of Executive (or Executive’s
beneficiary or estate) and for reasons that are commercially reasonable, payment will be
made as soon as administratively practicable in compliance with 409A and the Regulations
thereunder. In the event of Executive’s death during such six-month period, payment will be made in the payroll period next following the payroll
period in which Executive’s death occurs.
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iii. “Specified Employee”. For purposes of this Agreement, a “Specified Employee”
shall mean an employee of the Company who satisfies the requirements for being designated a
“key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to
Section 416(i)(5) of the Code at any time during a calendar year, in which case such
employee shall be considered a Specified Employee for the twelve-month period beginning on
the first day of the fourth month immediately following the end of such calendar year.
Notwithstanding the foregoing, all employees who are nonresident aliens during an entire
calendar year are excluded for purposes of determining which employees meet the requirements
of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of
the Code for such calendar year. The term “nonresident alien” as used herein shall have the
meaning set forth in Regulations Section 1.409A-1(j). In the event of any corporate spinoff
or merger, the determination of which employees meet the requirements of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code
for any calendar year shall be determined in accordance with Regulations Section
1.409A-1(i)(6).
SECTION IX
OTHER DUTIES OF THE EXECUTIVE
DURING AND AFTER THE PERIOD OF EMPLOYMENT
A. Cooperation with Legal Claims. The Executive will, with reasonable notice during or after
the Period of Employment, furnish information as may be in [his/her] possession and reasonably
cooperate with WEX and its affiliates as may reasonably be requested in connection with any claims
or legal action in which WEX or any of its affiliates is or may become a party. The foregoing shall
not unreasonably interfere with the Executive’s duties to any successor employer and the Company
shall reimburse the Executive for any reasonable expenses incurred for providing such assistance.
B. Protection of Confidential Information.
i.
Acknowledgement.
The Company and the Executive acknowledge that the services to
be performed by the Executive under this Agreement are unique and extraordinary and that, as a
result of the Executive’s employment, the Executive will be in a relationship of confidence and
trust with the Company and will come into possession of Confidential Information (as defined
below) that is (1) owned or controlled by the Company, (2) in the possession of the Company and
belonging to third parties or (3) conceived, originated, discovered or developed, in whole or in
part, by the Executive. “Confidential Information” means trade secrets and other confidential or
proprietary business, technical, personnel or financial information, whether or not the
Executive’s work product, in written, graphic, oral, electronic or other tangible or intangible
forms, including specifications, samples, records, data, computer programs, drawings, diagrams,
models, customer names, business or mailing addresses, ID’s or e-mail addresses, business or
marketing plans, studies, analyses, projections and reports, communications by or to attorneys
(including attorney-client privileged communications), memos and other materials prepared by
attorneys or under their direction (including attorney work product), and software systems and
processes. Any Confidential Information that is not
9
readily available to the public shall be considered to be a trade secret and confidential and
proprietary, even if it is not specifically marked as such, unless the Company advises the
Executive otherwise in writing.
ii.
Nondisclosure
. The Executive agrees that the Executive will keep the Confidential
Information in strictest confidence and trust, and will not, without the prior written consent of
the Company, directly or indirectly, use or disclose Confidential Information to any person,
during or after the Executive’s employment, except as may be necessary in the ordinary course of
performing the Executive’s duties under this Agreement. This Section IX(B) shall apply
indefinitely, both during and after the Period of Employment.
iii.
Surrender Upon Termination
. The Executive agrees that, in the event of the
termination of the Executive’s employment for any reason, at any time, the Executive will
immediately deliver to the Company all property belonging to the Company, including documents and
materials of any nature pertaining to the Executive’s work with the Company, and will not take
with the Executive any documents or materials of any description, or any reproduction thereof of
any description, containing or pertaining to any Confidential
Information. It is understood that the Executive is free to use information that is in the public
domain, but not as a result of a breach of this Agreement.
C. Restrictions.
i. During the Period of Employment and for the Post Termination Period thereafter
(collectively, the “Restricted Period”), the Executive will not knowingly use [his/her] status with
WEX or any of its affiliates to obtain loans, goods or services from another organization on terms
that would not be available to [his/her] in the absence of [his/her] relationship to WEX or any of
its affiliates. The Post Termination Period means a period of two (2) years following the
Executive’s termination of employment, if, in connection with such termination, the Executive
receives a severance under Section VIII(B) of this Agreement, or one (1) year following the
Executive’s termination of employment, in all other cases, irrespective of the cause, manner or
time of such termination.
ii. During the Restricted Period, the Executive will not make any statements or perform any
acts intended or reasonably calculated to advance the interest of any existing or prospective
Competing Enterprise or in any way to injure the interests of or disparage WEX or any of its
affiliates.
iii. During the Restricted Period, the Executive, without prior express written approval by
the Chief Executive Officer of WEX, will not become employed by, render services to or directly or
indirectly (whether for compensation or otherwise) own or hold a proprietary interest in, manage,
operate, or control, or join or participate in the ownership, management, operation or control of,
or furnish any capital to or be connected in any manner with, any Competing Enterprise.
iv. For purposes of this Section IX, a “Competing Enterprise” means any entity, organization
or person engaged, or planning to become engaged, in substantially the same or similar business to
that being conducted or actively and specifically planned to be conducted
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within the Restricted Period by WEX or its subsidiaries, owned or controlled. It includes,
without limitation: (i) the business of developing, managing, operating, marketing, processing,
financing, or otherwise being involved in providing any products or services for the benefit of or
use by commercial vehicle or aviation fleets through charge cards, credit cards, procurement cards
or any other form of payment services or electronic commerce; (ii) the sale, distribution or
publication of petroleum product pricing or management information or other products or services
currently sold or contemplated to be sold by WEX or any of its owned or controlled subsidiaries,
and (iii) the business of developing, managing, operating, marketing, processing, financing, or
otherwise being involved in providing commercial travel, entertainment and purchasing credit cards.
The restrictions in this Section shall not be construed to prevent the Executive from working for
a business entity that does not compete with WEX or its subsidiaries simply because the entity is
affiliated with a Competing Enterprise, so long as the entity is operationally separate and
distinct from the Competing Enterprise and the Executive’s job responsibilities at that entity are
unrelated to the Competing Enterprise. The Executive acknowledges that WEX’s and its subsidiaries’
businesses are conducted nationally and agrees that the provisions in this paragraph shall operate
throughout the United States.
v. During the Restricted Period, the Executive, without express prior written approval from
the Chief Executive Officer, will not solicit any then-current clients, customers or private label,
cobrand or similar strategic partners of WEX or any of its affiliates. In addition, during the
Restricted Period, the Executive, without express prior written approval from the Chief Executive
Officer, will not discuss with any employee of WEX or any of its affiliates information related to
the operation or potential operation of any Competing Enterprise.
vi. During the Restricted Period, the Executive will not interfere with the employees or
affairs of WEX or any of its affiliates or solicit or induce any person who is an employee of WEX
or any of its affiliates to terminate any relationship such person may have with WEX or any of its
affiliates. In addition, neither the Executive nor any entity she controls or person she employs
shall, during such period, directly or indirectly engage, employ or compensate any employee of WEX
or any of its affiliates. The Executive hereby represents and warrants that the Executive has not
entered into any agreement, understanding or arrangement with any employee of WEX or any of its
affiliates pertaining to any business in which the Executive has participated or plans to
participate, or to the employment, engagement or compensation of any such employee.
vii. For the purposes of this Agreement, “proprietary interest” means legal or equitable
ownership, whether through stock holding or otherwise, of an equity interest in a business, firm or
entity or ownership of more than 1% of any class of equity interest in a publicly-held company and
the term “affiliate” will include without limitation all subsidiaries of WEX.
D. The Executive hereby acknowledges that damages at law may be an insufficient remedy to WEX
if the Executive violates the terms of this Agreement and that WEX will be entitled, upon making
the requisite showing, to preliminary and/or permanent injunctive relief in any court of competent
jurisdiction to restrain the breach of or otherwise to specifically enforce any of the covenants
contained in this Section IX without the necessity of showing any actual damage or that monetary
damages would not provide an adequate remedy. Such right to an injunction will be in addition to,
and not in limitation of, any other rights or remedies WEX may have. Without limiting the
generality of the foregoing, neither party will oppose any motion the
other party may make for any expedited discovery or hearing in connection with any alleged
breach of this Section IX.
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E. The Executive agrees that the restrictions contained in this Section IX are an essential
element of the compensation the Executive is granted hereunder and but for the Executive’s
agreement to comply with such restrictions, WEX would not have entered into this Agreement.
SECTION X
DIRECTORS AND OFFICERS INSURANCE
WEX will maintain D&O insurance for the Executive on a basis no less favorable than it
maintains for other officers of WEX
.
SECTION XI
MITIGATION
The Executive will not be required to mitigate the amount of any payment provided for
hereunder by seeking other employment or otherwise, nor will the amount of any such payment be
reduced by any compensation earned by the Executive as the result of employment by another employer
after the date the Executive’s employment hereunder terminates or by offset against any amount
claimed to be owed by the Executive to WEX, or otherwise. The parties’ respective obligations
hereunder shall be absolute and unconditional and shall not be affected by any circumstances,
including without limitation any setoff, counterclaim, recoupment, defense or other right which the
other party hereto may have.
SECTION XII
WITHHOLDING TAXES
TAXATION
The Executive acknowledges and agrees that WEX may directly or indirectly withhold from any
payments under this Agreement all federal, state, city or other taxes that will be required
pursuant to any law or governmental regulation.
Anything in this Agreement to the contrary
notwithstanding, the terms of this Agreement shall be interpreted and applied in a manner
consistent with the requirements of Section 409A of the Code and the Regulations so as not to
subject Executive to the payment of any tax or interest which may be imposed under such section,
and the Company shall have no right to accelerate or make any payment under this Agreement to the
extent such action would subject Executive to the payment of any tax or interest under such
section. If all or a portion of the benefits and payments provided under this Agreement
constitute taxable income to Executive for any taxable year that is prior to the taxable year in
which such payments and/or benefits are to be paid to Executive, as a result of the Agreement’s
failure to comply with the requirements of Section 409A of the Code and the Regulations, the
applicable payment or benefit shall be paid immediately to Executive to the extent such payment
or benefit is required to be included in income.
SECTION XIII
EFFECT OF PRIOR AGREEMENTS
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This Agreement will supersede any prior employment agreement between the Executive on the one
hand, and WEX (or any of its affiliates or parents) on the other hand (including without
limitation, the Employment Agreement dated March 24,1998 and all amendments thereto), and any such
prior employment agreement will be deemed terminated without any remaining obligations of either
party thereunder.
SECTION XIV
CONSOLIDATION, MERGER OR SALE OF ASSETS
Nothing in this Agreement will preclude WEX from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation that assumes this
Agreement and all obligations and undertakings of WEX hereunder. Upon such a consolidation, merger
or sale of assets the term “WEX” will mean the other corporation and this Agreement will continue
in full force and effect.
SECTION XV
MODIFICATION: WAIVER
This Agreement may not be modified or amended except in writing signed by the parties. No term
or condition of this Agreement will be deemed to have been waived except when waived in writing by
the party charged with waiver. A waiver will operate only as to the specific term or condition
waived and will not constitute a waiver for the future or have any impact on anything other than
that which is specifically waived.
SECTION XVI
GOVERNING LAW
This Agreement has been executed and delivered in the State of Maine and its validity,
interpretation, performance and enforcement will be governed by the internal laws of that state.
SECTION XVII
ARBITRATION
A. Any controversy, dispute or claim arising out of or relating to this Agreement or the
breach hereof which cannot be settled by mutual agreement (other than with respect to the matters
covered by Section IX for which WEX may, but will not be required to, seek injunctive relief) will
be finally settled by binding arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state arbitration law) as follows: Any party who is aggrieved will
deliver a written notice to the other party setting forth the specific points in dispute. Any
points remaining in dispute twenty (20) days after the giving of such written notice may be
submitted by either party, upon ten (10) days prior written notice to the other party, to
arbitration in Portland, Maine, to the American Arbitration Association, before a single arbitrator
appointed in accordance with the arbitration rules of the American Arbitration Association,
National Rules for the Resolution of Employment Disputes, modified only as herein expressly
provided. The arbitrator may enter a default decision against any party who fails to participate in
the arbitration proceedings.
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B. The decision of the arbitrator on the points in dispute will be final, and binding, and
judgment on the award may be entered in any court having jurisdiction thereof.
C. Except as otherwise provided in this Agreement, the arbitrator will be authorized to
apportion his/[his/her] fees and expenses as the arbitrator deems appropriate. In the absence of
any such apportionment, the fees and expenses of the arbitrator will be borne equally by each
party, and each party will bear the fees and expenses of its or [his/her] own attorney.
D. The parties agree that this Section XVII has been included to rapidly and inexpensively
resolve any disputes between them with respect to this Agreement, and that this Section XVII will
be grounds for dismissal of any court action commenced by either party with respect to this
Agreement, other than post-arbitration actions seeking to enforce an arbitration award, or matters
covered by Section IX. In the event that any court determines that this arbitration procedure is
not binding, or otherwise allows any litigation regarding a dispute, claim, or controversy covered
by this Agreement to proceed, the parties hereto hereby waive any and all right to a trial by jury
in or with respect to such litigation and do hereby consent to the jurisdiction of the appropriate
court within the State of Maine.
E. The parties will keep confidential, and will not disclose to any person, except as may be
required by law, the existence of any controversy hereunder, the referral of any such controversy
to arbitration or the status or resolution thereof.
SECTION XVIII
SURVIVAL
Sections IX, X, XI, XII, XIV and XVII will continue in full force in accordance with their
respective terms notwithstanding any termination of the Period of Employment.
SECTION XIX
SEPARABILITY
All provisions of this Agreement are intended to be severable. In the event any provision or
restriction contained herein is held to be invalid or unenforceable in any respect, in whole or in
part, such finding will in no way affect the validity or enforceability of any other provision of
this Agreement. The parties hereto further agree that any such invalid or unenforceable provision
will be deemed modified so that it will be enforced to the greatest extent permissible under law,
and to the extent that any court of competent jurisdiction determines any restriction herein to be
unreasonable in any respect, such court may limit this Agreement to render it reasonable in the
light or the circumstances in which it was entered into and specifically enforce this Agreement as
limited.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written.
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WRIGHT EXPRESS CORPORATION
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By: Michael E. Dubyak
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Title: President and CEO
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[
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