UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report: December 31, 2008
ENERGIZER
HOLDINGS, INC.
(Exact
name of Registrant as specified in its charter)
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MISSOURI
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1-15401
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No.
43-1863181
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(State
or Other Jurisdiction of Incorporation)
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(Commission File
Number)
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(IRS
Employer Identification
Number)
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533
MARYVILLE UNIVERSITY DRIVE, ST. LOUIS,
MO 63141
(Address
of Principal Executive
Offices) (Zip
Code)
(314)
985-2000
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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ITEM
5.02. COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
(1) On
December 31, 2008, the Nominating and Executive Compensation Committee (the
“Committee”) of the Board of Directors of the Company approved by written
consent certain amendments of the Change of Control Employment Agreements which
the Company has entered into with key executives, including the Company’s
Executive Officers, in order to comply with the provisions of Section 409A of
the Internal Revenue Code. The material amendments of the Agreements are as
follows, and the form of the amended Change of Control Employment Agreement is
attached to this filing as Exhibit 10.1.
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(a)
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the
Agreements have been amended to provide that the definition of “change of
control” set forth in Section 409A will apply in the event that (i) an
executive is terminated prior to a change of control at the direction and
behest of the acquiring company or otherwise in connection with the change
of control, or (ii) a successor to the Company (whether by reason of
merger, acquisition, or other event) refuses to explicitly assume the
obligations under the Agreements to pay severance benefits upon
termination of the executives. The definition of “change of control” set
forth in the Agreements prior to this amendment will continue to apply to
all other distribution events.
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(b)
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Section
IV(e)(i) is amended to clarify that an executive is required to be taxed
on the full cost of continuing health coverage for the protected period
(measured by COBRA premium) less the cost he or she has to pay for such
coverage.
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(c)
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Section
IV(e)(ii) is amended to delete references to tax gross-ups in relation to
receipt of insured benefits.
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(d)
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The
Agreements are amended to provide for distribution of benefits only upon
Section 409A permissible payment
events.
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(e)
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Section
III(c) is amended to provide, in compliance with Section 409A, that an
executive must take reasonable good faith efforts to enforce his or her
rights within 180 days following the date payment should have been made
under the Agreement.
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(f)
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A new Section
XIII has been added as a "belt and suspenders" provision to ensure that
all payments made upon Termination of Employment satisfy the six month
delay rule mandated by Section
409A.
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(2) Also
on December 31, 2008, the Energizer Plans Administrative Committee, an executive
employee committee delegated authority by the Board of Directors of the Company
to amend benefit plans and programs of the Company in order to maintain
compliance with the Internal Revenue Code, approved by written consent certain
amendments of the Company’s 2000 Incentive Stock Plan, and a universal amendment
of the terms of outstanding restricted stock equivalent awards granted to
employees of the Company since January 1, 2005, including the Executive
Officers, in order to maintain compliance with Section 409A of the Internal
Revenue Code. These awards have been granted under the terms of the 2000
Incentive Stock Plan and also under the terms of the Company’s Deferred
Compensation Plan. The form of the amended 2000 Incentive Stock Plan is attached
to this filing as Exhibit 10.2, and the form of the universal amendment of the
terms of outstanding restricted stock equivalent awards is attached to this
filing as Exhibit 10.3.
The amendments to
the 2000 Incentive Stock Plan were immaterial and intended solely to clarify
that to the extent Section 409A is applicable all provisions of the Plan must
satisfy the requirements of Section 409A and the regulations and guidance
thereunder. The universal amendment to the terms of outstanding restricted stock
equivalent awards, which was also immaterial, clarifies that the
awards have been operated in good faith compliance with Code Section 409A for
the period from January 1, 2005 through December 31, 2008 and that the terms of
the amended awards will govern on or after January 1, 2009. The
amendments clarify, consistent with Section 409A, that the definition of “change
of control” to be utilized under the awards is the definition set forth in
Section 409A, and also clarify the appropriate timing of the vesting and
conversion of the restricted stock equivalents into shares of Common Stock of
the Company and the payment of related cash payments in an amount equal to any
dividends which may be paid.
SIGNATURES:
Pursuant to the
requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
ENERGIZER HOLDINGS,
INC.
By:
Daniel J.
Sescleifer
Executive Vice
President and Chief Financial Officer
Dated: January 6,
2009
EXHIBIT
INDEX
Exhibit
No.
Exhibit
10.1
AMENDED CHANGE OF
CONTROL
EMPLOYMENT
AGREEMENT
This Amended Change
of Control Employment Agreement (the “Amended Agreement”) by and between
Energizer Holdings, Inc. (the “Company”), a Missouri corporation, and ________
(“Executive”),
WITNESSETH:
WHEREAS, the
Company, on behalf of itself, its subsidiaries and its stockholders, and any
successor or surviving entity, wishes to encourage Executive’s continued service
and dedication in the performance of his duties, notwithstanding the
possibility, threat or occurrence of a Change of Control of the Company;
and
WHEREAS, the Board
of Directors of the Company (the “Board”) believes that the prospect of a
pending or threatened Change of Control inevitably creates distractions and
personal risks and uncertainties for its executives, and that it is in the best
interests of Company and its stockholders to minimize such distractions to
certain executives, and the Board further believes that it is in the best
interests of the Company to encourage its executives’ full attention and
dedication to their duties, both currently and in the event of any threatened or
pending Change of Control; and
WHEREAS, the Board
has determined that appropriate steps should be taken to reinforce and encourage
the continued retention of certain members of the Company’s management,
including Executive, and the attention and dedication of management to their
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change of Control.
NOW, THEREFORE, in
order to induce Executive to remain in the employ of the Company and in
consideration of his continued service to the Company, the Company agrees that
Executive shall receive the benefits set forth in this Amended Agreement in the
event that Executive’s employment with the Company is terminated subsequent to a
Change of Control in the circumstances described herein, and the parties further
agree as follows:
I. Definitions.
The
meaning of each defined term that is used in this Amended Agreement is set forth
below.
(a)
AAA. The
American Arbitration Association.
(b)
Accounting
Firm. The meaning of this term is set forth in Subsection
IV(f)(ii).
(c)
Additional
Pay. The meaning of this term is set forth in Subsection
IV(b).
(d)
After-Tax
Amount. The meaning of the term is set forth in Subsection
IV(f)(i).
(e)
After-Tax Floor
Amount. The meaning of this term is set forth in Subsection
IV(f)(i).
(f)
Agreement
Payments. The meaning of this term is set forth in Subsection
IV(f).
(g)
Beneficiaries. The
meaning of this term is set forth in Subsection VI(b).
(h)
Board. The
meaning of this term is set forth in the second WHEREAS clause of this Amended
Agreement.
(i)
Business
Combination. The meaning of this term is set forth in Subsection
I(k)(iii).
(j)
Cause. For
purposes of this Amended Agreement, “Cause” shall mean Executive’s willful
breach or failure to perform his/her employment duties. For purposes
of this Subsection I(j), no act, or failure to act, on the part of Executive
shall be deemed “willful” unless done, or omitted to be done, by Executive not
in good faith and without reasonable belief that such action or omission was in
the best interest of the Company. Notwithstanding the foregoing,
Executive’s employment shall not be treated as having been terminated for Cause
unless the Company delivers to Executive, prior to or at Termination of
Employment, a certificate of a resolution duly adopted by the affirmative vote
of not less than seventy-five percent (75%) of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice to Executive and an opportunity for Executive, together with
Executive’s counsel, to be heard before the Board), finding that in the good
faith opinion of the Board, Executive has engaged in such willful conduct and
specifying the details of such willful conduct.
(k) Change
of Control. For purposes of this Amended Agreement, a “Change of
Control” shall be deemed to have occurred if there is a change of control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), whether or not the Company is then
subject to such reporting requirement; provided that, without limitation, such a
Change of Control shall be deemed to have occurred if:
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(i)
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any “person”
(as such term is used in Sections 13(d) and 14(d)(2) as currently in
effect, of the Exchange Act) is or becomes a “beneficial owner” (as
determined for purposes of Regulation 13D-G, as currently in effect, of
the Exchange Act), directly or indirectly, of securities representing
twenty percent (20%) or more of the total voting power of all of the
Company’s then outstanding voting securities. For purposes of
this Amended Agreement, the term “person” shall not
include: (A) the Company or any of its Subsidiaries, (B) a
trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its Subsidiaries, or (C) an underwriter
temporarily holding securities pursuant to an offering of said
securities;
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(ii)
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during any
period of two (2) consecutive calendar years, individuals who at the
beginning of such period constitute the Board and any new director(s)
whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority of the
Board;
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(iii)
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the
stockholders of the Company approve a merger, consolidation or sale or
other disposition of all or substantially all of the assets of the Company
(a “Business Combination”), in each case, unless following such Business
Combination: (i) all or substantially all of the individuals
and entities who were the “beneficial owners” (as determined for purposes
of Regulation 13D-G, as currently in effect, of the Exchange Act) of the
outstanding voting securities of the Company immediately prior to such
Business Combination beneficially own, directly or indirectly, securities
representing more than fifty percent (50%) of the total voting power of
the then outstanding voting securities of the corporation resulting from
such Business Combination or the parent of such corporation (the
“Resulting Corporation”); (ii) no “person” (as such term is used in
Section 13(d) and 14(d)(2), as currently in effect, of the Exchange Act),
other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or the Resulting Corporation, is the
“beneficial owner” (as determined for purposes of Regulation 13D-G, as
currently in effect, of the Exchange Act), directly or indirectly, of
voting securities representing twenty percent (20%) or more of the total
voting power of then outstanding voting securities of the Resulting
Corporation; and (iii) at least a majority of the members of the board of
directors of the Resulting Corporation were members of the Board at the
time of the execution of the initial agreement, or at the time of the
action of the Board, providing for such Business
Combination;
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(iv)
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the
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company;
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(v
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a Section 409A Change of
Control; or
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(
vi
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any other
event that a simple majority of the Board, in its sole discretion, shall
determine constitutes a Change of
Control.
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(l) Code. For
purposes of this Amended Agreement, “Code” shall mean the Internal Revenue Code
of 1986, as amended.
(m) Company. The
meaning of this term is set forth in the first paragraph of this Amended
Agreement and in Subsection VI(a).
(n) Controlled
Group. For purposes of this Amended Agreement, “Controlled Group”
shall mean
a group including
any corporation or
other business entity that from time to time is, along with the Company, a
member of a controlled group of businesses, as defined in
sections
414(b) and 414(c)
of the Code, provided that the language “at least 50 percent” shall be used
instead of “at least 80 percent” each place it appears in such test. A
corporation or other business entity ceases to be a member of the Controlled
Group when a sale or other disposition causes it to fall outside the definition
of the term Controlled Group.
(o) Disability. For
purposes of this Amended Agreement, “Disability” shall mean an illness, injury
or similar incapacity which 52 weeks after its commencement, continues to render
Executive unable to perform the material and substantial duties of Executive’s
position or any substantially similar occupation or substantially similar
employment for which Executive is qualified or may reasonably become qualified
by training, education or experience. Any question as to the
existence of a Disability upon which Executive and the Company cannot agree
shall be determined by a qualified independent physician selected by Executive
(or, if Executive is unable to make such selection, by any adult member of
Executive’s immediate family or Executive’s legal representative), and approved
by the Company, such approval not to be unreasonably withheld. The
determination of such physician made in writing to both the Company and
Executive shall be final and conclusive for all purposes of this Amended
Agreement.
(p) Employer. For
purposes of this Amended Agreement, “Employer” shall mean the Company or the
Subsidiary, as the case may be, with which Executive has an employment
relationship.
(q) Exchange
Act. This term shall have the meaning set forth in Subsection
I(k).
(r) Executive. This
term shall have the meaning set forth in the first paragraph of this Amended
Agreement.
(s) Excise
Tax. This term shall have the meaning set forth in Subsection
IV(f)(i).
(t) Floor
Amount. This term shall have the meaning set forth in Subsection
IV(f)(i).
(u) Good
Reason. For purposes of this Amended Agreement, “Good Reason” shall
mean the occurrence, without Executive’s prior express written consent, of any
of the following circumstances:
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(i)
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The
assignment to Executive of any duties inconsistent with Executive’s status
or responsibilities as in effect immediately prior to a Change of Control,
including imposition of travel obligations which differ materially from
required business travel immediately prior to the Change of
Control;
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(ii)
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(A) A
reduction in Executive’s annual base salary as in effect immediately
before the Change of Control; or (B) the failure to pay a bonus award to
which Executive is entitled under any short-term incentive plan(s) or
program(s), any long-term incentive plan(s) or program(s), or any other
incentive compensation plan(s) or program(s) of Company in which Executive
participated immediately prior to the time of the Change of
Control;
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(iii)
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A change in
the principal place of Executive’s employment, as in effect immediately
prior to the Change of Control to a location more than fifty (50) miles
distant from the location of such principal place at such
time;
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(iv)
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The failure
by the Company to offer Executive participation in incentive compensation
or stock or stock option plans on at least a substantially equivalent
basis, both in terms of the nature and amount of benefits provided and the
level of Executive’s participation, as is then being provided by the
Company to similarly situated peer executives of the
Company;
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(v)
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(A) Except as
required by law, the failure by the Company to offer Executive benefits on
at least a substantially equivalent basis, in the aggregate, to those then
being provided by the Company to similarly situated peer executives of the
Company under the qualified and non-qualified employee benefit and welfare
plans of the Company, including, without limitation, any pension, deferred
compensation, life insurance, medical, dental, health and accident,
disability, retirement or savings plan(s) or program(s) offered by the
Company; (B) the taking of any action by the Company that would, directly
or indirectly, materially reduce or deprive Executive of any other
perquisite or benefit then being offered by the Company to similarly
situated peer executives of the Company (including, without limitation,
Company-paid and/or reimbursed club memberships, financial counseling fees
and the like); or (C) the failure by the Company to treat Executive under
the Company’s vacation policy, past practice or special agreement in the
same manner and to the same extent as then being provided by the Company
to similarly situated peer executives of the
Company;
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(vi)
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The failure
of the Company to obtain a satisfactory written agreement from any
successor prior to consummation of the Change of Control to assume and
agree to perform this Amended Agreement, as contemplated in Subsection
VI(a); or
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(vii)
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Any purported
Termination of Employment by the Company of Executive that is not effected
pursuant to a Notice of Termination satisfying the requirements of
Subsection III(c) or, if applicable, Subsection I(j). For
purposes of this Amended Agreement, no such purported Termination of
Employment shall be effective except as constituting Good
Reason.
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Executive’s
continued employment with the Company or any Subsidiary shall not constitute a
consent to, or a waiver of rights with respect to, any circumstances
constituting Good Reason hereunder. Any good faith determination of
“Good Reason” made by the Executive shall be conclusive for purposes of this
Amended Agreement.
(v)
Gross-Up
Payment. The meaning of this term is set forth in Subsection
IV(f)(i).
(w)
Notice of
Termination. The meaning of this term is set forth in Subsection
III(c).
(x)
Other
Payments. The meaning of this term is set forth in Subsection
IV(f)(i).
(y)
Payments. The meaning of this term is set forth in Subsection
IV(f)(i).
(z)
Resulting
Corporation. The meaning of this term is set forth in Subsection
I(k)(iii).
(aa)
Retirement. For
purposes of this Amended Agreement, “Retirement” shall mean Executive’s
voluntary Termination of Employment with the Company, other than for Good
Reason, and in accordance with the Company’s retirement policy generally
applicable to its employees or in accordance with any prior or contemporaneous
retirement agreement or arrangement between Executive and the
Company.
(bb
)
Section
409A Change of Control. For purposes of
this
Amended Agreement,
“Section
409A Change of Control” shall mean:
(i) The acquisition by
one person, or more than one person acting as a group, of ownership of stock of
the Company that, together with stock held by such person or group, constitutes
more than 50% of the total fair market value or total voting power of the stock
of the Company. Notwithstanding the above, if any person or more than
one person acting as a group, is considered to own more than 50% of the total
fair market value or total voting power of the stock of the Company , the
acquisition of additional stock by the same person or persons will not
constitute a Change of Control.;
(ii) The acquisition
by one person, or more than one person acting as a group, of ownership of stock
of the Company, that together with stock of the Company acquired during the
twelve-month period ending on the date of the most recent acquisition by such
person or group, constitutes 30% or more of the total voting power of the stock
of the Company. Notwithstanding the above if any person or more than one person
acting as a group is considered to own 30% or more the total fair market value
or total voting power of the stock of the Company , the acquisition of
additional stock by the same person or persons will not constitute a Change of
Control.;
(iii) A
majority of the members of the Company’s board of directors is replaced during
any twelve-month period by directors whose appointment or election is not
endorsed by a majority of the members of the Company’s board of directors before
the date of the appointment or election;
(iv) One
person, or more than one person acting as a group, acquires (or has acquired
during the twelve-month period ending on the date of the most recent acquisition
by such person or group) assets from the Company that have a total gross fair
market value (determined without regard to any liabilities associated with such
assets) equal to or more than 40% of the total gross fair market value of all of
the assets of the Company immediately before such acquisition or
acquisitions.
Persons will not be considered to
be acting as a group solely because they purchase or own stock of the same
corporation at the same time, or as a result of the same public
offering. However, persons will be considered to be acting as a group
if they are owners of a corporation that enters into a merger, consolidation,
purchase or acquisition of stock, or similar business transaction with the
Company.
This definition of Change in
Control shall be interpreted in accordance with, and in a manner that will bring
the definition into compliance with, the regulations under Section 409A of the
Internal Revenue Code.
(cc
)
Severance
Bonus Amount. For purposes of this Amended Agreement, “Severance
Bonus Amount” means an amount determined by averaging the percentages of
Executive’s base salary which were actually awarded to Executive as incentive
bonuses under short-term incentive plans of the Company or any of its
Subsidiaries for the five most recently completed fiscal years prior to the
fiscal year in which the Change of Control occurs, and multiplying such average
percentage by the greater of (A) Executive’s annual base salary in effect
immediately prior to the Termination
of Employment
, or (B)
Executive’s annual base salary in effect as of the date of the Change of
Control. If Executive was not employed by the Company or any of its
Subsidiaries for the entire five-year period, the average shall be determined
only for those years during which Executive was so employed.
(
dd
)
Subsidiary. For
purposes of this Amended Agreement, “Subsidiary” shall mean any corporation of
which fifty percent (50%) or more of the voting stock is owned, directly or
indirectly, by the Company.
(
ee
)
Target
Bonus. For purposes of this Amended Agreement, “Target Bonus” means
the assigned bonus target for the Executive under any short-term incentive
plan(s) of the Company, multiplied by his or her base salary, for the relevant
fiscal year. If the Executive’s base salary is changed during the
relevant fiscal year, the Target Bonus shall be calculated by multiplying the
Executive’s assigned bonus target by the highest base salary in effect during
that fiscal year.
(
ff
)
Termination
Notice
Date. For purposes
of this Amended Agreement, “Termination
Notice
Date” shall mean:
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(i)
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In
the case of
Executive’s Termination of Employment because of Disability, thirty
(30) calendar days
in advance
of
Executive’s
Termination
of
Employment
; and
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(ii)
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In the case of
Executive’s Termination of Employment for Cause
,
a date
not be less than thirty
(30) calendar days
in
advance of Executive’s
Termination of Employment
and
,
in the case of
Executive’s
Termination of Employment for Good Reason
,
a date
not be less than thirty (30)
calendar days nor more than sixty (60) calendar days
in advance of Executive’s
Termination
of
Employment
.
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(
gg
)
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Termination
of Employment. For purposes of this Amended Agreement, “Termination of
Employment” shall mean Executive’s separation from service with the
Employer and all other members of the Controlled Group, as
the term “separation from
service
”
is
defined in IRS regulations
under Section 409A of the Code (generally, a decrease in the performance
of services to no more than 20% of the average for the preceding 36-month
period, and disregarding leave of absences up to six months where there is
a reasonable expectation the Employee will
return).
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II. Term
of Agreement.
(a) General. Upon
execution by Executive, this Amended Agreement shall commence effective as of
January 28, 2008. This Amended Agreement shall continue in effect
through May 1, 2011; provided, however, that commencing on May 1, 2009, and
every May 1 thereafter, the term of this Amended Agreement shall automatically
be extended for an additional year unless, not later than ninety (90) calendar
days prior to the date on which this Amended Agreement otherwise automatically
would be extended, the Company shall have given notice to Executive that it does
not wish to extend this Amended Agreement; provided further, however, that if a
Change of Control shall have occurred during the original or any extended term
of this Amended Agreement, this Amended Agreement shall continue in effect for a
period of thirty-six (36) months beyond the month in which the Change of Control
occurred.
(b) Disposition
of Employer. In the event Executive is employed by a Subsidiary, the
terms of this Amended Agreement shall expire if such Subsidiary is sold or
otherwise disposed of prior to the date on which a Change of Control occurs,
unless Executive continues in employment with the Controlled Group after such
sale or other disposition. If Executive’s Employer is sold or
disposed of on or after the date on which a Change of Control occurs, this
Amended Agreement shall continue through its original term or any extended term
then in effect.
(c) Deemed
Change of Control. If Executive’s Termination of Employment occurs
prior to the date on which a
Section 409A
Change of Control occurs,
and such Termination of Employment was at the request of a third party who has
taken steps to effect a
Section 409A
Change of Control, or
otherwise was in connection with the
Section 409A
Change of Control, then for all
purposes of this Amended Agreement, a
Section 409A
Change of Control shall be deemed to have
occurred prior to such Termination of Employment.
(d) Expiration
of Agreement. No termination or expiration of this Amended Agreement
shall affect any rights, obligations or liabilities of either party that shall
have accrued on or prior to the date of such termination or
expiration.
III. Benefits
Following Change of Control.
(a) Prorated
Payout of Short Term Bonus. If a Change of Control shall have
occurred, Executive shall be entitled to, immediately upon the date of the
Change of Control, payment in full of Executive’s prorated bonus for the fiscal
year in which the Change of Control occurs. The prorated bonus amount
shall be calculated as Executive’s Target Bonus for the fiscal year in which the
Change of Control occurs, or, if greater, the actual bonus awarded to Executive
under any short-term incentive plan(s) of the Company for the fiscal year
immediately preceding the fiscal year in which the Change of Control occurs,
divided by 365 and multiplied by the number of calendar days in said year
immediately up to the day on which the Change of Control occurs. The payment
described in this section III(a) shall be subject to any valid deferral election
which was made prior to that time by the Executive under any Company qualified
pension plan, nonqualified pension plan, 401(k), excess 401(k) or non-qualified
deferred compensation plan then in effect. The payment of such prorated
short-term bonus shall also be taken into consideration for purposes of
computation of benefits under any qualified and/or nonqualified employee pension
benefit plans or employee welfare benefit plans then maintained by the Company,
and, if applicable, any agreement entered into between the Executive and the
Company which is then in effect, in accordance with the terms and conditions of
such plans and/or agreements.
(b) Entitlement
to Benefits Upon Termination of Employment. If a Change of Control
shall have occurred, Executive shall be entitled to, in addition to the benefits
described in Subsection III(a), the benefits provided in Section IV hereof upon
his/her subsequent Termination of Employment within three (3) years after the
date of the Change of Control unless such Termination of Employment is (i) a
result of Executive’s death or Retirement, (ii) for Cause, (iii) a result of
Executive’s Disability, or (iv) by Executive other than for Good
Reason. For purposes of Executive’s entitlement to benefits under
Section IV of this Amended Agreement, “Termination of Employment” shall be
limited to a Termination of Employment that is not as a result of Executive’s
death, Retirement or Disability and (x) if by the Company, is not for Cause, or
(y) if by Executive, is for Good Reason.
(c) Notice
of Termination. Any purported Termination of Employment by either the
Company or Executive shall be communicated
on
the Termination Notice Date
by written Notice of Termination to
the other party hereto in accordance with Section VIII. For purposes
of this Amended Agreement, a “Notice of Termination” shall mean a written notice
that indicates the specific provision(s) of this Amended Agreement relied upon
and sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for Executive’s Termination of Employment under the provision(s)
so indicated. If Executive’s Termination of Employment shall be for
Cause or by Executive for other than Good Reason, the Company shall pay
Executive his/her full base salary through the Termination
of Employment
at the salary
level in effect at the time Notice of Termination is given and shall pay any
amounts to be paid to Executive pursuant to any other compensation or stock or
stock option plan(s), program(s) or employment agreement(s) then in effect,
at the time such payments are due under such
plan(s), program(s) or agreement(s),
and the Company shall have no
further obligations to Executive under this Amended Agreement.
If
within thirty (30) calendar days after any Notice of Termination is given, the
party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the grounds for Termination of Employment, then,
amounts will be treated as paid
upon Termination of Employment if paid on
the date on which the dispute
is finally resolved, whether by mutual written agreement of the parties or by a
decision rendered pursuant to Section XI; provided that such notice is given in
good faith and the party giving such notice pursues the resolution of such
dispute with reasonable diligence
.
In the event such dispute involves nonpayment of
benefits under this Agreement, Executive must take further enforcement efforts
within the period specified in Regulation §1.409A-3(g) in order to demonstrate
reasonable diligence (generally within 180 days of the latest date on which
payment could have been timely made absent such dispute)
.
Notwithstanding the pendency of
any such dispute, the Company will continue to pay Executive his/her full
compensation including, without limitation, base salary, bonus, incentive pay
and equity grants, in effect when the notice of the dispute was given, and
continue Executive’s participation in all benefits plans or other perquisites in
which Executive was participating, or which Executive was enjoying, when the
Notice of Termination giving rise to the dispute was given, until the dispute is
finally resolved
,
provided that any amounts subject to Section 409A
shall not commence to be paid until the sixth month anniversary of Executive’s
Termination of Employment
.
Amounts paid under this
Subsection III(c) are in addition to and not in lieu of all other amounts due to
Executive under this Amended Agreement and shall not be offset against or reduce
any other amounts due to Executive under this Amended Agreement.
IV. Compensation
Upon a Termination of Employment.
Following a Change
of Control, upon Executive’s Termination of Employment, Executive shall be
entitled to the following benefits, provided that such Termination of Employment
occurs during the three (3) year period immediately following the date of the
Change of Control, and such Termination of Employment is not as a result of
Executive’s death, Retirement or Disability and (x) if by the Company, is not
for Cause, or (y) if by Executive, is for Good Reason:
(a) Accelerated
Vesting of Equity Awards. All unvested stock options and restricted
stock and stock equivalent awards, including performance awards, that have been
granted or sold to the Executive by the Company and which have not otherwise
vested, shall immediately accelerate and vest in the manner and to the extent
such awards would vest under the terms of the individual award agreements with
respect to each of those equity awards as if a change of control, as defined in
those individual award agreements, had occurred, notwithstanding that the
definition of a change of control set forth in those award agreements may differ
from the definition of Change of Control set forth in this Agreement, and
notwithstanding that the terms of individual award agreements might otherwise
provide for forfeiture of those awards upon Executive’s Termination of
Employment.
With respect to stock equivalents,
the acceleration and vesting described in this Subsection IV(a) shall be subject
to any valid deferral election which was made prior to that time by the
Executive under any Company non-qualified deferred compensation plan, program or
permitted deferral arrangement then in effect. If Executive does not incur a
Termination of Employment following a Change of Control, nothing herein shall be
deemed to revise or amend the terms of the individual award agreements with
respect to such equity awards.
(b) Standard
Benefits. The Company shall pay Executive his/her full base salary
through Termination
of
Employment
at the rate in effect at the time the Notice of Termination is
given, no later than the second business day following Termination
of Employment
, plus all
other amounts to which Executive is entitled under any compensation plan(s) or
program(s) of the Company applicable to Executive at the time such payments are
due
under such plan(s) or program(s)
.
Without limitation, amounts
payable pursuant to this Subsection IV(b) shall include, pursuant to the express
terms of any short-term incentive plan(s) in which Executive participates or
otherwise, Executive’s Target Bonus for the then-current fiscal year, pro-rated
to Termination
of
Employment
.
If Termination
of Employment
shall fall
within the same short-term incentive period, as set forth by the express terms
of any of the short-term incentive plan(s) in which Executive participates or
otherwise, as of the Change of Control Date, and Executive has previously
received the prorated bonus amount as described in Subsection III(a), then
Executive shall be paid the difference between the prorated bonus amount as
described here in Subsection IV(b) and the prorated bonus amount described in
Subsection III(a).
(c) Additional
Benefits. The Company shall pay to Executive as additional pay
(“Additional Pay”), the product of three (3) multiplied by the sum of (x) the
greater of (i) Executive’s annual base salary in effect immediately prior to the
Termination
of
Employment
, or (ii) Executive’s annual base salary in effect as of the
date of the Change of Control, and (y) Executive’s Severance Bonus
Amount. The Company shall pay the Additional Pay to Executive in a
lump sum, in cash, on the sixth month anniversary of Executive’s Termination
of
Employment
. Subject to the provisions of Section XIII, the
Company shall maintain for Executive all such perquisites and fringe benefits
enjoyed by Executive immediately prior to Termination
of Employment
as are
approved in writing by the Company’s Chief Executive Officer for such period as
is specified in such writing. The payment described in this section IV(c) shall
not be deemed to be regular compensation which is subject to any deferral
elections made by the Executive, or Company matching contributions, under any
qualified pension plan, nonqualified pension plan, 401(k), excess 401(k) or
nonqualified deferred compensation plan then maintained by the Company. Except
as specifically set forth in section IV(d) below, such payment shall not be
taken into consideration for purposes of computation of benefits under any
qualified and/or non-qualified employee pension benefit plans or employee
welfare benefit plans then maintained by the Company, and, if applicable, any
agreement entered into between the Executive and the Company which is then in
effect.
(d) Retirement
Plan Benefits. If not already vested, Executive shall be deemed fully
vested as of
his or
her
Termination
of
Employment
in any Company retirement plan(s) or other written
agreement(s) between Executive and the Company relating to pay or other
retirement income benefits upon retirement in which Executive was a participant,
party or beneficiary immediately prior to the Change of Control, and any
additional plan(s) or agreement(s) in which such Executive became a participant,
party or beneficiary thereafter. In addition to the foregoing, for
purposes of determining the amounts to be paid to Executive under such plan(s)
or agreement(s), the years of service with the Company and the age of Executive
under all such plans and agreements shall be deemed increased by thirty-six (36)
months. For purposes of this Subsection IV(d), the term “plan(s)”
includes, without limitation, the Company’s qualified pension plan,
non-qualified pension plans, 401(k) plans and excess 401(k) plans, and any
companion, successor or amended plan(s), and the term “agreement(s)”
encompasses, without limitation, the terms of any offer letter(s) leading to
Executive’s employment with the Company where Executive was a signatory thereto,
any written amendment(s) to the foregoing and any subsequent agreements on such
matters. In the event the terms of the plans referenced in this
Subsection IV(d) do not for any reason coincide with the provisions of this
Subsection IV(d) (e.g., if plan amendments would cause disqualification of
qualified plans), Executive shall be entitled to receive from the Company, under
the terms of this Amended Agreement, an amount equal to all amounts Executive
would have received, had all such plans continued in existence as in effect on
the date of this Amended Agreement after being amended to coincide with the
terms of this Subsection IV(d), payable in 36 monthly installments, commencing
on the first day of the month immediately following the sixth-month anniversary
of Executive’s Termination
of
Employment
.
(e) Health
and Other Benefits.
(i) For
a period of thirty-six (36) months after Termination
of Employment
, the Company
shall continue health, vision, dental, life insurance and long-term disability
benefits, including executive benefits, to Executive and/or Executive’s family
as if Executive’s employment with the Company had not been terminated as of
Termination
of
Employment
, in accordance with the Company’s then-current plans,
programs, practices and policies on terms and conditions (including the level of
benefits, deductibles and employee payments for such benefits) not less
favorable than those which are then being provided to peer executives of the
Company. The
full
cost of
health and dental
coverage,
less the portion of the cost that the Executive is required to pay for such
benefits pursuant to the Company’s
health and dental
plan or program,
will be included in Executive’s taxable income. The amount paid under this
Section IV(e)(i) during a taxable year of Executive may not impact the amount
paid by the Company under this Section IV(e)(i) during any other taxable
year.
The
Company will also pay Executive an amount equal to any federal, state and local
taxes due on such taxable income such that Executive will be in tax-equivalent
position after such payments to what Executive would have been in had Executive
paid the full cost of the coverage. Such amount will be paid to the Executive on
the later of (i) the due date for the Executive’s tax return for the taxable
year in which such taxable income is reported, and (ii) the sixth month
anniversary of Executive’s Termination
of Employment
. In no event
shall such amount be paid later than the end of Executive’s taxable year next
following the taxable year in which such taxes are remitted to the applicable
taxing authority.
(ii) If
pursuant to the terms and conditions of any such health or welfare plan or
program, the Company is not able to continue Executive’s and/or Executive’s
family participation in the plan or program for all or any portion of such
thirty-six (36) month period, the Company will reimburse Executive for the cost
of insurance for any such benefit for Executive and/or Executive’s family, for
such period as such benefits are not able to be continued pursuant to a plan or
program of the Company, less the amount that would have been paid by Executive
for such benefits pursuant to the Company’s plan or program. Such amount will be
payable in 36 monthly installments, commencing on the first day of the month
immediately following Executive’s Termination
of
Employment
.
In the event that Executive and the Company cannot
agree upon the amount of such payments described in the previous two sentences,
they shall mutually agree upon an independent third-party benefits consultant
who shall determine, after an opportunity for both Executive and the Company to
present evidence, the amount of such payments which shall be made, which
determination shall be binding upon Executive and the Company, absent manifest
error.
In
the event that the Executive, at the time of a Change of Control, is not
eligible to participate as a retiree in the Company’s health and dental plans,
including executive plans, the Company shall immediately cause the eligibility
requirements for participation as a retiree in such plans to be revised or
waived so that Executive shall be entitled to participate as a retiree following
Executive’s Termination of Employment and the continuation of benefits period
described in the preceding paragraph.
(f) Alternatives
in the Event of Excise Tax.
(i) In the
event any payment(s) or the value of any benefit(s) received or to be received
by Executive in connection with Executive’s Termination of Employment or
contingent upon a Change of Control (whether received or to be received pursuant
to the terms of this Amended Agreement (the “Agreement Payments”) or of any
other plan, arrangement or agreement of the Company, its successors, any person
whose actions result in a Change of Control, or any person affiliated with any
of them (or which, as a result of the completion of the transaction(s) causing a
Change of Control, will become affiliated with any of them) (“Other Payments”
and, together with the Amended Agreement Payments, the “Payments”)), are
determined, under the provisions of Subsection IV(f)(ii), to be subject to an
excise tax imposed by Section 4999 of the Code (any such excise tax, together
with any interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), as determined in this Subsection IV(f)(i), the Company shall pay
to Executive an additional amount such that the net amount retained by
Executive, after any federal, state, and local income and employment tax and
Excise Tax payable by Executive upon the Payment(s) provided for by this
Subsection IV(f)(i), and any interest, penalties or additions to tax payable by
Executive with respect thereto shall be equal to the Excise Tax imposed on the
Payments (the “Gross-Up Payment(s)”). The intent of the parties is
that the Company shall be responsible in full for, and shall pay, any and all
Excise Tax on any Payments and Gross-Up Payment(s) and any income and all excise
and employment taxes (including, without limitation, penalties and interest)
imposed on any Gross-Up Payment(s) as well as any loss of deduction caused by or
related to the Gross-Up Payment(s). Notwithstanding the above, however, and any
other provision of this Agreement, if the After-Tax Amount (as defined below) of
the aggregate of the Payments and the Gross-Up Payments that would, but for the
provisions of this sentence, be payable to Executive, does not exceed 110% of
the After-Tax Floor Amount (as defined below), then no Gross-Up Payment shall be
made to Executive, and the aggregate amount of the Agreement Payments payable to
Executive shall be reduced to the largest amount which would both (i) not cause
any Excise Tax to be payable by Executive, and (ii) not cause any Payments to
become nondeductible by the Company by reason of Section 280G of the Code (or
any successor provision thereto). For purposes of this Agreement: (i) “After-Tax
Amount” means the portion of a specified amount that would remain after payment
of all Excise Taxes, income taxes, payroll and withholding taxes, and other
applicable taxes paid or payable by Executive in respect of such specified
amount; (ii) “Floor Amount” means the greatest pre-tax amount of Payments that
could be paid to Executive without causing Executive to become liable for any
Excise Taxes in connection therewith; and (iii) “After-Tax Floor Amount” means
the After-Tax Amount of the Floor Amount.
If
there is a determination that the Agreement Payments payable to Executive must
be reduced pursuant to the penultimate sentence of the immediately preceding
paragraph, the Company shall promptly give Executive notice to that effect and a
copy of the detailed calculation thereof and of the amount to be reduced.
Executive may then elect, in Executive’s sole discretion, which and how much of
the Agreement Payments shall be eliminated or reduced as long as after such
election the aggregate present value of the Agreement Payments equals the
largest amount that would both (i) not cause any Excise Tax to be payable by
Executive, and (ii) not cause any Payments to become nondeductible by the
Company by reason of Section 280G of the Code (or any successor provision
thereto). Executive shall advise the Company in writing of Executive’s election
within ten (10) days of Executive’s receipt of such notice from the Company. If
no election is made by Executive within the ten-day period, the Company may
elect which and how much of the Agreement Payments shall be eliminated or
reduced as long as after such election the aggregate present value of the
Agreement Payments equals the largest amount that would both (i) not cause any
Excise Tax to be payable by Executive, and (ii) not cause any Payments to be
nondeductible by the Company by reason of Section 280G of the Code (or any
successor provision thereto). For purposes of this paragraph, present value
shall be determined in accordance with Code Section 280G(d)(4).
(ii) All
determinations required to be made under this Subsection IV(f), including,
without limitation, whether and when a Gross-Up Payment is required, the amount
of such Gross-Up Payment, and whether the aggregate amount of Agreement Payments
shall be reduced, and the assumptions to be utilized in arriving at such
determinations, unless otherwise set forth in this Amended Agreement, shall be
made by a nationally recognized certified public accounting firm selected by the
Company and reasonably acceptable to Executive (the “Accounting
Firm”). For purposes of determining the amount of any Gross-Up
Payment, Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the
Gross-Up Payment is to be made, and state and local income taxes at the highest
marginal rate of taxation in the state and locality of Executive’s residence on
his
or
her
Termination
of Employment
, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes. The Company shall cause the Accounting
Firm to provide detailed supporting calculations to the Company and Executive
within fifteen (15) business days after notice is given by Executive to the
Company that any or all of the Payments have occurred, or such earlier time as
is requested by the Company. Within two (2) business days after such
notice is given to the Company, the Company shall instruct the Accounting Firm
to timely provide the data required by this Subsection IV(f)(ii) to
Executive. All fees and expenses of the Accounting Firm shall be paid
in full by the Company. Any Gross-Up Payment as determined pursuant
to this Subsection IV(f)(ii), net of applicable withholding taxes, shall be paid
by the Company to the Executive on the later of (i) five (5) business days after
receipt of the Accounting Firm’s determination, or (ii) the sixth-month
anniversary of Executive’s Termination
of Employment. In no
event shall such amount be paid later than the
date for the Executive’s remittance of such taxes to
the applicable taxing authority
.
If the Accounting Firm
determines that there is substantial authority (within the meaning of Section
6662 of the Code) that no Excise Tax is payable by Executive, the Accounting
Firm shall furnish Executive with a written opinion that failure to disclose or
report the Excise Tax on Executive’s federal income tax return will not
constitute a substantial understatement of tax or be reasonably likely to result
in the imposition of a negligence or any other penalty. Any
determination by the Accounting Firm shall be binding upon the Company and
Executive in the absence of material mathematical or legal error. As
a result of the uncertainty in the application of Section 4999 of the Code at
the time the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments will not have been made by the Company that
should have been made or that Gross-Up Payments will have been made that should
not have been made, in each case, consistent with the calculations required to
be made hereunder. In the event the Company exhausts its remedies
pursuant to Subsection IV(f)(iii) below and Executive is thereafter required to
make a payment of any Excise Tax or any interest, penalties or addition to tax
related thereto, the Accounting Firm shall determine the amount of underpayment
of Excise Taxes that has occurred and any such underpayment and interest,
penalties or addition to tax shall be paid by the Company to Executive along
with such additional amounts described in Section IV (f)(i)
on
the later of (i) five (5) business days after receipt of the Accounting Firm’s
determination, or (ii) the sixth-month anniversary of Executive’s
Termination
of
Employment. In no event shall such amount be paid later than the date
for the Executive’s remittance of such taxes to the applicable taxing
authority
. In the event the Accounting Firm determines that an
overpayment of Gross-Up Payment(s) has occurred,
Executive shall be required to
reimburse the Company for such overpayment
; provided, however, that
Executive shall have no duty or obligation whatsoever to reimburse the Company
if Executive’s receipt of the overpayment, or any portion thereof, is included
in Executive’s income and Executive’s reimbursement of the same is not
deductible by Executive for federal and state income tax purposes.
(iii) Executive
shall notify the Company in writing of any claim of which Executive is aware by
the Internal Revenue Service or state or local taxing authority, that, if
successful, would result in any Excise Tax or an underpayment of any Gross-Up
Payment(s). Such notice shall be given as soon as practicable but no
later than fifteen (15) business days after Executive is informed in writing of
the claim by the taxing authority and Executive shall provide written notice of
the Company of the nature of the claim, the administrative or judicial appeal
period, and the date on which any payment of the claim must be
paid. Executive shall not pay any portion of the claim prior to the
expiration of the thirty (30) day period following the date on which Executive
gives such notice to the Company (or such shorter period ending on the date that
any amount under the claim is due). If the Company notifies Executive
in writing prior to the expiration of such thirty (30) day period that it
desires to contest the claim, Executive shall:
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give the
Company any information reasonably requested by the Company relating to
the claim;
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take such
action in connection with contesting the claim as the Company shall
reasonably request in writing from time to time, including without
limitation, accepting legal representation concerning the claim by an
attorney selected by the Company who is reasonably acceptable to
Executive; and
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cooperate
with the Company in good faith in order to effectively contest the
claim;
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provided, however,
that the Company shall bear and pay directly all costs and expenses (including,
without limitation, additional interest and penalties and attorneys’ fees)
incurred in such contests and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including, without
limitation, interest and penalties thereon) imposed as a result of such
representation. Without limitation upon the foregoing provisions of
this Subsection IV(f)(iii), except as provided below, the Company shall control
all proceedings concerning such contest and, in its sole opinion, may pursue or
forego any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority pertaining to the claim. At the written
request of the Company and upon payment to Executive of an amount at least equal
to any amount necessary to obtain the jurisdiction of the appropriate taxing
authority and sue for a refund, Executive agrees to prosecute in cooperation
with the Company any contest of a claim to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company requests Executive to pay the claim and sue for a refund, the Company
shall advance the amount of such payment to Executive, on an interest-free
basis, and shall indemnify and hold Executive harmless on an after-tax basis,
from any Excise Tax or income tax (including, without limitation, interest and
penalties thereon) imposed on such advance or for any imputed income on such
advance. Any extension of the statute of limitations relating to
assessment of any Excise Tax for the taxable year of Executive which is the
subject of the claim is to be limited solely to the
claim. Furthermore, the Company’s control of the contest shall be
limited to issues for which a Gross-Up Payment would be payable
hereunder. Executive shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
(iv) If
after the receipt by Executive of an amount advanced by the Company pursuant to
Subsection IV(f)(iii) above, Executive receives any refund of a claim or any
additional amount that was necessary to obtain jurisdiction, Executive shall
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by Executive of an amount advanced by
the Company pursuant to Subsection IV(f)(iii) above, a determination is made
that Executive shall not be entitled to any refund of the claim, and the Company
does not notify Executive in writing of its intent to contest such denial of
refund of a claim prior to the expiration of thirty (30) calendar days after
such determination, then the portion of such advance attributable to a claim
shall be forgiven by the Company and shall not be required to be repaid by
Executive. The amount of such advance attributable to a claim shall
offset, to the extent thereof, the amount of the underpayment required to be
paid by the Company to Executive.
(g) Legal
Fees and Expenses. The Company shall pay to Executive all legal fees
and expenses as and when incurred by Executive in connection with this Amended
Agreement, including all such fees and expenses, if any, incurred in contesting
or disputing any Termination of Employment or in seeking to obtain or enforce
any right or benefit provided by this Amended Agreement, regardless of the
outcome, unless, in the case of a legal action brought by or in the name of
Executive, a decision is rendered pursuant to Section XI, or in any other proper
legal proceeding, that such action was not brought by Executive in good faith.
Such reimbursements shall be made no later than the
last day of the calendar year following the calendar year in which the expenses
were incurred.
(h) No
Mitigation. Executive shall not be required to mitigate the amount of
any payment provided for in this Section IV by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section IV be reduced by any compensation earned by Executive as the result of
employment by another employer or by retirement or other benefits received from
whatever source after
his or
her
Termination of
Employment
or otherwise,
except as specifically provided in this Section IV. The Company’s
obligation to make payments to Executive provided for in this Amended Agreement
and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action that
the Company or Employer may have against Executive or other
parties.
V.
Death and Disability
Benefits.
In the event of the
death or Disability of Executive after a Change of Control, Executive, or in the
case of death, Executive’s Beneficiaries (as defined below in Subsection VI(b)),
shall receive the benefits to which Executive or his/her Beneficiaries are
entitled under this Amended Agreement and any and all retirement plans, pension
plans, disability policies and other applicable plans, programs, policies,
agreements or arrangements of the Company.
VI.
Successors; Binding
Agreement.
(a) Obligations
of Successors. The Company will require any successor
or
assignee
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Amended
Agreement in the same manner and to the same extent that the Company is required
to perform it.
Accordingly, this Agreement shall
be binding upon such successor or assignee, and the term “Company” shall
include
any surviving entity or successor
to all or substantially all of its business and/or assets and the parent of any
such surviving entity or successor.
Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Amended Agreement and shall entitle Executive to
pursue appropriate remedies for such
breach. In particular, the parties agree that failure of the Company
to obtain such assumption and agreement prior to the effectiveness of a Section
409A Change of Control shall entitle Executive to
compensation
from the Company in the same amount and on the same terms as Executive would be
entitled hereunder if Executive had
incurred a Termination of
Employment
for Good Reason following a Change of Control, except that for
purposes of implementing the foregoing, the date
of
the Section 409A Change of Control shall be the payment event triggering the
payment of benefits.
(b) Enforceable
by Beneficiaries. This Amended Agreement shall inure to the benefit
of and be enforceable by Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees (the “Beneficiaries”). In the event of the death of
Executive while any amount would still be payable hereunder if such death had
not occurred, all such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Amended Agreement to Executive’s
Beneficiaries.
(c) Employment. Except
in the event of a Change of Control and, thereafter, only as specifically set
forth in this Amended Agreement, nothing in this Amended Agreement shall be
construed to (i) limit in any way the right of the Company or a Subsidiary to
terminate Executive’s employment at any time for any reason or for no reason; or
(ii) be evidence of any agreement or understanding, expressed or implied, that
the Company or a Subsidiary will employ Executive in any particular position, on
any particular terms or at any particular rate of remuneration.
VII. Non-Competition;
Non-Solicitation; Confidential Information.
(a) In
consideration of the benefits provided under this Amended Agreement upon
Executive’s Termination of Employment, Executive agrees that for a period of two
years after Executive’s Termination of Employment, Executive will not compete
against the Company or any Employer within the Controlled Group in any Energizer
Business. For purposes of this Amended Agreement, “Energizer
Business” shall mean any of the following business activities: all aspects of
manufacturing, marketing, distributing, consulting with regard to, and/or
operating a facility for the manufacturing, processing, marketing, or
distribution of batteries, lighting products, rechargeable batteries, related
battery and lighting products, wet-shave products, feminine care products,
infant care products and skin care products. For purposes of this
Amended Agreement, to “compete” means to accept or begin employment with,
advise, finance, own (partially or in whole), consult with, or accept an
assignment through an employer with any third party worldwide in a position
involving or relating to an Energizer Business. This subparagraph, however, does
not preclude Executive from buying or selling shares of stock in any company
that is publicly listed and traded in any stock exchange or over-the-counter
market.
(b) For
a period of two years following the Executive’s Termination of Employment,
Executive shall not (i) induce or attempt to induce any employee of the Company
or any Employer within the Controlled Group to leave the employ of the Company
or such Employer or in any way interfere with the relationship between the
Company or any such Employer and its employees or (ii) induce or attempt to
induce any customer, supplier, distributor, broker, or other business relation
of the Company or any Employer within the Controlled Group to cease doing
business with the Company or such Employer, or in any way interfere with the
relationship between any customer, supplier, distributor, broker or other
business relation and the Company or such Employer.
(c) Executive
shall hold in fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company, the
Subsidiaries and their respective businesses, which shall have been obtained
during Executive’s employment with the Employer and which shall not be public
knowledge (other than by acts by Executive or his/her representatives in
violation of this Amended Agreement). After Executive’s Termination
of Employment with the Company or any Employer within the Controlled Group,
Executive shall not, without prior written consent of the Company or the
Employer, communicate or divulge any such information, knowledge or data to
anyone other than the Company, the Employer or those designated by
them.
In no event shall
an asserted violation of this Section VII constitute a basis for deferring or
withholding any amounts otherwise payable to Executive under this Amended
Agreement.
VIII. Notice.
All notices and
communications including, without limitation, any Notice of Termination
hereunder, shall be in writing and shall be given by hand delivery to the other
party, by registered or certified mail, return receipt requested, postage
prepaid, or by overnight delivery service, addressed as follows:
If to
Executive:
________________
________________
________________
If to the
Company:
Energizer Holdings,
Inc.
533 Maryville
University Drive
St. Louis,
MO 63141
Attn: General
Counsel
or to such other
address as either party shall have furnished to the other in writing in
accordance herewith. Notice and communications shall be deemed given
and effective when actually received by the addressee.
IX. Miscellaneous.
No provision of
this Amended Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by Executive and
the Company’s Chief Executive Officer or other authorized officer designated by
the Board or an appropriate committee of the Board. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any conditions or provision of this Amended Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Amended
Agreement. The validity, interpretation, construction and performance
of this Amended Agreement shall be governed by the laws of the State of
Missouri. All references to sections of the Code or the Exchange Act
shall be deemed also to refer to any successor provisions of such
sections. Any payments provided for hereunder shall be paid net of
any applicable withholding required under federal, state or local
law. The obligations of the Company under Sections IV and V shall
survive the expiration of the term of this Amended Agreement.
X. Validity.
The invalidity or
unenforceability of any provision of this Amended Agreement shall not affect the
validity or enforceability of any other provision of this Amended Agreement,
which shall remain in full force and effect.
XI. Arbitration.
Any dispute that
may arise directly or indirectly in connection with this Amended Agreement,
Executive’s employment or Executive’s Termination of Employment, whether arising
in contract, statute, tort, fraud, misrepresentation, discrimination or other
legal theory, shall be resolved by arbitration in St. Louis, Missouri under the
applicable rules and procedures of the AAA. The only legal claims
between Executive and the Company or any Subsidiary that would not be included
in this agreement to arbitration are claims by Executive for workers’
compensation or unemployment compensation benefits, claims for benefits under a
Company or Subsidiary benefit plan if the plan does not provide for arbitration
of such disputes, and claims by Executive that seek judicial relief in the form
of specific performance of the right to be paid until Termination
of Employment
during the
pendency of any applicable dispute or controversy. If this Article XI
is in effect, any claim with respect to this Amended Agreement, Executive’s
employment or Executive’s Termination of Employment must be established by a
preponderance of the evidence submitted to an impartial arbitrator. A
single arbitrator engaged in the practice of law shall conduct any arbitration
under the applicable rules and procedures of the AAA. The arbitrator
shall have the authority to order a pre-hearing exchange of information by the
parties including, without limitation, production of requested documents, and
examination by deposition of parties and their authorized agents. If
this Article XI is in effect, the decision of the arbitrator: (i)
shall be final and binding, (ii) shall be rendered within ninety (90) days after
the impanelment of the arbitrator, and (iii) shall be kept confidential by the
parties to such arbitration. The arbitration award may be enforced in
any court of competent jurisdiction. The Federal Arbitration Act, 9
U.S.C. §§ 1
et seq.
,
not state law, shall govern the arbitrability of all claims.
This Amended
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof, and supersedes and replaces, in its
entirety, the Amended Change of Control Employment Agreement dated as of January
23, 2006. Upon the execution of this Amended Agreement by the
Executive and the Company, said prior agreement shall be considered null and
void and of no further effect.
XIII.
Key Employee Six Month
Deferral.
Notwithstanding anything to the
contrary in this Agreement, if Executive qualifies as a “specified employee” as
defined in Code Section 409A, a payment of nonqualified deferred compensation
paid on account of a Termination of Employment may not be made until at least
six months after such Termination of Employment. Any such
payment otherwise due in such six month period shall be suspended and become
payable at the end of such six month period.
XIV.
Compliance with Code Section
409A.
No provision of this Agreement
shall be operative to the extent that it will result in the imposition of the
additional tax described in Code Section 409A(a)(1)(B)(i)(II) because of failure
to satisfy the requirements of Code Section 409A and the regulations and
guidance issued thereunder.
IN WITNESS WHEREOF,
the Company and Executive have executed this Amended Agreement effective as of
the 31st day of
December
, 2008.
Energizer Holdings,
Inc. Attest:
By:___________________________________ By:_____________________
Peter
Conrad
Timothy L. Grosch
Vice
President, Human
Resources
Secretary
______________________________________ ______________________
Executive
Witness
Exhibit
10.2
ENERGIZER HOLDINGS,
INC.
2000 INCENTIVE
STOCK PLAN
(2009 Amendment and
Restatement)
Section
I. General Provisions
A. Purpose
of Plan
The purpose of the
Energizer Holdings, Inc. Incentive Stock Plan (the “Plan”) is to enhance the
profitability and value of the Company for the benefit of its shareholders by
providing for stock options and other stock awards to attract, retain and
motivate officers and other key employees who make important contributions to
the success of the Company, and to provide equity-linked compensation for
directors
.
Pursuant to Internal Revenue Service Notice 2007-86,
with respect to the period from January 1, 2005 through December 31, 2008, the
Plan was operated in accordance with the Company’s good faith interpretation of
compliance with Section 409A of the Internal Revenue Code of 1986, as amended
(“Code”) based on available guidance. Effective January 1, 2009, the
Plan will be administered in accordance with the 2009 Amendment and Restatement
of the Energizer Holdings, Inc. 2000 Incentive
Stock Plan
.
B. Definitions
of Terms as Used in the
Plan
“Affiliate” shall
mean any entity fifty percent or more of whose outstanding voting securities, or
beneficial ownership for entities other than corporations, is owned, directly or
indirectly, by the Company, or which otherwise controls, is controlled by, or is
under common control with, the Company.
“Award” shall mean
an Option, including a Restoration Option, or any Other Stock Award, granted
under the terms of the Plan.
“Award Agreement”
shall mean the document or documents evidencing an Award granted under the
Plan.
“Board” shall mean
the Board of Directors of the Company.
“Code” shall mean
the Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder.
“Committee” shall
mean the Nominating and Executive Compensation Committee of the Board, or any
successor committee the Board may designate to administer the
Plan. Each member of the Committee shall be (i) an “outside director”
within the meaning of Section 162(m) of the Code, subject to any transitional
rules applicable to the definition of outside director, and (ii) a “Non-Employee
Director” within the meaning of Rule 16b-3 under the Exchange Act, or otherwise
qualified to administer the Plan as contemplated by that Rule or any successor
Rule under the Exchange Act.
“Common Stock”
shall mean Energizer Holdings, Inc. $.01 par value Common Stock or common stock
of the Company outstanding upon the reclassification of the Common Stock or any
other class or series of common stock, including, without limitation, by means
of any stock split, stock dividend, creation of targeted stock, or other
distributions of stock in respect of stock, or any reverse stock split, or by
reason of any recapitalization, merger or consolidation of the
Company.
“Company” shall
mean Energizer Holdings, Inc.
“Corporate Officer”
shall mean any President, Chief Executive Officer, Corporate Vice President,
Controller, Secretary or Treasurer of the Company, and any other officers
designated as corporate officers by the Board.
“Director” shall
mean any member of the Board.
“Employee” shall
mean any person who is employed by the Company or an Affiliate, including
Corporate Officers.
“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.
“Fair Market Value”
of the Common Stock shall mean the closing price as reported on the Composite
Tape of the New York Stock Exchange, Inc. on the date that such Fair Market
Value is to be determined, or if no shares were traded on the determination
date, the immediately preceding day on which the Common Stock was traded, or the
fair market value as determined by any other method
that
may be required in order to comply with or to conform to the requirements of
applicable laws or regulations.
“Incentive Stock
Options” shall mean Options that qualify as such under Section 422 of the
Code.
“Non-Qualified
Stock Options” shall mean Options that do not qualify as Incentive Stock
Options.
“Option” shall mean
the right, granted under the Plan, to purchase a specified number of shares of
Common Stock, at a fixed price for a specified period of time.
“Other Stock Award”
shall mean any Award granted under Section III of the Plan.
“Phantom Stock
Option” shall mean an Option, granted under the Plan, which provides that in
lieu of receiving shares of Common Stock upon exercise, the recipient will
receive an amount equal to the excess of the Fair Market Value of the Common
Stock at exercise over the exercise price set forth in the Award Agreement for
the Phantom Stock Option.
“Restoration
Option” shall mean an Option granted upon exercise of an outstanding Option,
provided that the exercise price is paid by tendering previously owned shares of
Common Stock by the Employee or Director.
“Restricted Stock
Award” shall mean an Award of shares of Common Stock on which are imposed
restrictions on transferability or other shareholder rights, including, but not
limited to, restrictions which subject such Award to a “substantial risk of
forfeiture” as defined in Section 83 of the Code.
“Stock Appreciation
Right” shall mean a right granted under the terms of the Plan to receive an
amount equal to the excess of the Fair Market Value of one share of Common Stock
as of the date of exercise of the Stock Appreciation Right over the price per
share of Common Stock specified in the Award Agreement of which it is a
part.
“Termination for
Cause” shall mean an Employee’s termination of employment with the Company or an
Affiliate because of the Employee’s willful engaging in gross misconduct,
provided, however, that a Termination for Cause shall not include termination
attributable to (i) poor work performance, bad judgment or negligence on the
part of the Employee, (ii) an act or omission believed by the Employee in good
faith to have been in or not opposed to the best interests of the Company and
reasonably believed by the Employee to be lawful, or (iii) the good faith
conduct of the Employee in connection with a change of control of the Company
(including opposition to or support of such change of control).
C. Scope
of Plan and Eligibility
Any Employee
selected by the Committee, and any member of the Board, shall be eligible for
any Award contemplated under the Plan.
D. Authorization
and Reservation
The Company shall
establish a reserve of authorized shares of Common Stock in the amount of
15,000,000 shares. This reserve shall represent the total number of
shares of Common Stock that may be presently issued pursuant to Awards,
including Restoration Options, subject to increase as described
below. The reserves may consist of authorized but unissued shares of
Common Stock or of reacquired shares, or both. Upon the forfeiture or
expiration of an Award, all shares of Common Stock not issued thereunder shall
become available for the granting of additional Awards. In addition,
when a Restoration Option is granted upon the tendering of shares of Common
Stock in payment of the exercise price of any Options, the reserve shall be
increased in an amount equal to the number of shares so tendered, and such
additional reserved shares shall become available for the granting of additional
Awards. Awards under the Plan which are payable in cash will not be
counted against the reserve unless actual payment is made in shares of Common
Stock instead of cash.
E. Grant
of Awards and Administration of the Plan
1. The
Committee shall determine those Employees eligible to receive Awards and the
amount, type and terms of each Award, subject to the provisions of the Plan, and
it shall have the power to delegate responsibility to others to select Employees
other than Corporate Officers eligible to receive Awards and the amount of each
such Award, on terms determined by the Committee. The Board shall
determine the amount, type and terms of each Award to a Director, subject to the
provisions of the Plan. In making any determinations under the Plan,
the Committee or the Board, as the case may be, shall be entitled to rely on
reports, opinions or statements of officers or employees of the Company, as well
as those of counsel, public accountants and other professional or expert
persons. All determinations, interpretations and other decisions
under or with respect to the Plan or any Award by the Committee or the Board, as
the case may be, shall be final, conclusive and binding upon all parties,
including without limitation, the Company, any Employee or Director, and any
other person with rights to any Award under the Plan, and no member of the Board
or the Committee shall be subject to individual liability with respect to the
Plan.
2. The
Committee shall administer the Plan and, in connection therewith, it shall have
full power to construe and interpret the Plan, establish rules and regulations
and perform all other acts it believes reasonable and proper, including the
power to delegate responsibility to others to assist it in administering the
Plan. To the extent, however, that such construction and
interpretation or establishment of rules and regulations relates to or affects
any Awards granted to Directors, the Board must ratify such construction,
interpretation or establishment.
3. During
the term of the Plan, the aggregate number of shares of Common Stock that may be
the subject of performance-based Awards (as defined in Section 162(m) of the
Code), excluding Restoration Options, that may be granted to an Employee or
Director during any one fiscal year may not exceed 1,900,000. The
aggregate number of shares of Common Stock that may be the subject of
Restoration Options that may be granted to an Employee or Director during any
one fiscal year may not exceed 950,000. These amounts are subject to
adjustment as provided in Section VI. F. below. The maximum number of
shares with regard to which Options and Stock Appreciation Rights may be granted
to any individual during any one fiscal year is 1,900,000. Any
stock-related deferred compensation will not be applied against this
limit. Awards granted in a fiscal year but cancelled during that same
year will continue to be applied against the annual limit for that year, despite
cancellation.
4. Awards
granted under the Plan shall be evidenced in the manner prescribed by the
Committee from time to time in accordance with the terms of the
Plan. The terms of each Award shall be set forth in an Award
Agreement, and the Committee may require that a recipient execute and deliver
the Award Agreement to the Company in order to evidence his or her acceptance of
the Award.
Section
II. Stock Options
A. Description
The Committee or,
in the case of Awards granted to Directors, the Board, may grant Incentive Stock
Options and it may grant Non-Qualified Stock Options. At the
discretion of the Committee or the Board, in the case of Options granted to
Directors, an Employee or Director may also be eligible to receive a Restoration
Option in connection with an Option exercise, as more particularly set forth
below.
B. Terms
and Conditions
1. Each
Option shall be set forth in a written Award Agreement containing such terms and
conditions as the Committee, or in the case of Awards granted to Directors, the
Board, may determine, subject to the provisions of the Plan.
2. The
option price of shares of Common Stock subject to any Option shall not be less
than the Fair Market Value of the Common Stock
on
the
date
that the Option is granted.
3. The
Committee, or in the case of Awards granted to Directors, the Board, shall
determine the vesting schedules and the terms, conditions and limitations
governing exercisability of Options granted under the Plan. Unless
accelerated in accordance with its terms, an Option may not be exercised until a
period of at least one year has elapsed from the date of grant, and the term of
any Option granted hereunder shall not exceed ten years.
4. The
purchase price of any shares of Common Stock pursuant to exercise of any Option
must be paid in full upon such exercise. The payment shall be made in
cash, in United States dollars, or by tendering shares of Common Stock owned by
the Employee or Director (or the person exercising the Option). If
shares of Common Stock are tendered, they must have been owned at least six
months prior to the date of tender (or such other time period as may be
determined by the Committee).
5. The
terms and conditions of any Incentive Stock Options granted hereunder shall be
subject to and shall be designed to comply with, the provisions of Section 422
of the Code, and any other administrative procedures adopted by the Committee
from time to time. Incentive Stock Options may not be granted to any
person who is not an Employee at the time of grant.
C. Restoration
Options
The Committee, or,
in the case of Awards granted to Directors, the Board, may provide either at the
time of grant or subsequently that an option include the right to acquire a
Restoration Option. An option which provides for the grant of a
Restoration Option shall entitle the Employee or Director, upon exercise of the
option (in whole or in part) prior to termination of employment or retirement or
resignation as a Director, and payment of the exercise price in shares of Common
Stock, to receive a Restoration Option. In addition to any other
terms and conditions set forth in the Award Agreement, the Restoration Option
shall be subject to the following terms: (i) the number of shares of Common
Stock which are the subject of the Restoration Option shall not exceed the
number of shares used to satisfy the option price of the original option (which
shares must have been owned for the time period described in B.4. above), (ii)
the grant date of the Restoration Option will be the date of exercise of the
original option, (iii) the exercise price per share shall be the Fair Market
Value on the Restoration Option grant date, (iv) the Restoration Option, unless
accelerated, in accordance with its terms, shall be exercisable no earlier than
one year after its grant date, (v) the term of the Restoration Option shall not
extend beyond the term of the original option, and (vi) the Restoration Option
will comply with all other provisions of the Plan. The Committee, or
in the case of Awards granted to Directors, the Board, shall, in addition to all
other powers granted to it under the Plan, have the power to designate any
limitations on the frequency of the grants of Restoration Options to any
Employee or Director, and may require, as a condition to the grant of
Restoration Options, that the recipient agree not to resell shares received upon
exercise of the original option (which original option may be a Restoration
Option) for a specific period.
Section III. Other
Stock Awards
In
addition to Options, the Committee or, in the case of Awards granted to
Directors, the Board may grant Other Stock Awards payable in Common Stock or
cash, upon such terms and conditions as the Committee or Board may determine,
subject to the provisions of the Plan. Other Stock Awards may
include, but are not limited to, the following types of Awards:
A. Restricted Stock
Awards
and Restricted Stock
Equivalents
The Committee or,
in the case of Awards granted to Directors, the Board may grant Restricted Stock
Awards, each of which consists of a grant of shares of Common Stock, subject to
terms and conditions determined by the Committee or Board in its sole discretion
as well as to the provisions of the Plan. Such terms and conditions
shall be set forth in a written Award Agreement. The shares of Common
Stock granted will be restricted and may not be sold, pledged, transferred or
otherwise disposed of until the lapse or release of restrictions in accordance
with the terms of the Award Agreement and the Plan. Prior to the
lapse or release of restrictions, all shares of Common Stock which are the
subject of a Restricted Stock Award are subject to forfeiture in accordance with
Section IV of the Plan. Shares of Common Stock issued pursuant to a
Restricted Stock Award will be issued for no monetary consideration
.
The Committee or, in the case of
Awards granted to
Directors,
the
Board, may also grant restricted stock equivalents which only convert into
shares of Common Stock upon vesting at the end of a specified restricted
period. To the extent Code Section 409A is applicable, all restricted
stock equivalents must satisfy the requirements of Code Section 409A and the
regulations and guidance thereunder
.
B. Stock
Related Deferred Compensation
The Committee may, in its
discretion, permit the deferral of payment of an Employee’s cash bonus or other
cash compensation in the form of either Common Stock or Common Stock equivalents
(with each such equivalent corresponding to a share of Common Stock), under such
terms and conditions as the Committee may prescribe in the Award Agreement
relating thereto, including the terms of any deferred compensation plan under
which such Common Stock equivalents may be granted. In addition, the
Committee may, in any fiscal year, provide for an additional matching deferral
to be credited to an Employee’s account under such deferred compensation
plans. The Committee may also permit account balances of other cash
or mutual fund accounts maintained pursuant to such deferred compensation plans
to be converted, at the discretion of the participant, into the form of Common
Stock equivalents, or to permit Common Stock equivalents to be converted into
account balances of such other cash or mutual fund accounts, upon the terms set
forth in such plans as well as such other terms and conditions as the Committee
may, in its discretion, determine. The Committee may, in its
discretion, determine whether any deferral in the form of Common Stock
equivalents, including deferrals under the terms of any deferred compensation
plans of the Company, shall be paid on distribution in the form of cash or in
shares of Common Stock.
To the extent Code Section 409A is applicable, all
actions pursuant to this Section III.B. must satisfy the requirements of Code
Section 409A and the regulations and guidance
thereunder.
C. Stock
Appreciation Rights and Phantom Stock Options
The Committee or in
the case of Awards granted to Directors, the Board, may, in its discretion,
grant Stock Appreciation Rights or Phantom Stock Options to Employees or
Directors, subject to terms and conditions determined by the Committee or Board
in its sole discretion. Such terms and conditions shall be set forth
in a written Award Agreement. Each Stock Appreciation Right or
Phantom Stock Option shall entitle the holder thereof to elect, prior to its
cancellation or termination, to exercise such unit or option and receive either
cash or shares of Common Stock, or both, as the Committee or Board may
determine, in an aggregate amount equal in value to the excess of the Fair
Market Value of the Common Stock on the date of such election over the Fair
Market Value on the date of grant of the Stock Appreciation Right or Phantom
Stock Option; except that if an option is amended to include Stock Appreciation
Rights, the designated Fair Market Value in the applicable Award Agreement may
be the Fair Market Value on the date that the Option was granted. The
Committee or Board may provide that a Stock Appreciation Right shall be
automatically exercised on one or more specified dates. Stock
Appreciation Rights may be granted on a “free-standing” basis or in conjunction
with all or a portion of the shares of Common Stock covered by an Option, either
at the time of grant of the Option or at any time thereafter during the term of
the Option. In addition to any other terms and conditions set forth
in the Award Agreement, Stock Appreciation Rights and Phantom Stock Options
shall be subject to the following terms: (i) Stock Appreciation Rights and
Phantom Stock Options, unless accelerated in accordance with their terms, may
not be exercised within the first year after the date of grant, (ii) the
Committee or Board, as the case may be, may, in its sole discretion, disapprove
an election to surrender any Stock Appreciation Right or Phantom Stock Option
for cash in full or partial settlement thereof, provided that such disapproval
shall not affect the recipient’s right to surrender the Stock Appreciation Right
or Phantom Stock Option at a later date for shares of Common Stock or cash, and
(iii) no Stock Appreciation Right or Phantom Stock Option may be exercised
unless the holder thereof is at the time of exercise an Employee or Director and
has been continuously since the date the Stock Appreciation Right or Phantom
Stock Option was granted, except that the Committee or Board may permit the
exercise of any Stock Appreciation Right or Phantom Stock Option for any period
following the recipient’s termination of employment or retirement or resignation
from the Board, not in excess of the original term of the Award, on such terms
and conditions as it shall deem appropriate and specify in the related Award
Agreement.
D. Performance-Based
Other Stock Awards
The payment under
any Other Stock Award that may be the subject of a performance-based Award (as
defined in Section 162(m) of the Code) (hereinafter “Target Award”) shall be
contingent upon the attainment of one or more pre-established performance goals
established by the Committee in writing within ninety (90) days
after
the commencement of the Target Award performance period (or in the case of a
newly hired Employee, before 25% of such Employee’s service for such Target
Award performance period has lapsed). Such performance goals will be
based upon one or more of the following performance-based
criteria: (a) earnings per share; (b) income or net income; (c)
return measures (including, but not limited to, return on assets, capital,
equity or sales); (d) cash flow return on investments which equals net cash
flows divided by owners equity; (e) controllable earnings (a division’s
operating profit, excluding the amortization of goodwill and intangible assets,
less a charge for the interest cost for the average working capital investment
by the division); (f) operating earnings or net operation earnings; (g) cost
control; (h) share price (including, but not limited to, growth measures); (i)
total shareholder return (stock price appreciation plus dividends); (j) economic
value added; (k) EBITDA; (l) operating margin (m) market share and (n) cash flow
from operations. Performance may be measured on an individual,
corporate group, business unit, or consolidated basis and may be measured
absolutely or relatively to the Company’s peers. In establishing the
Performance Goals, the Committee may account for the effects of acquisitions,
divestitures, extraordinary dividends, stock split-ups, stock dividends or
distributions, issuances of any targeted stock, recapitalizations, warrants or
rights issuances or combinations, exchanges or reclassifications with respect to
any outstanding class or series of Stock, or a corporate transaction, such as
any merger of the Company with another corporation, any consolidation of the
Company and another corporation into another corporation, any separation of the
Company or its business units (including a spinoff or other distribution of
stock or property by the Company), any reorganization of the Company (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation by the Company, or sale of all or
substantially all of the assets of the Company, or other extraordinary
items.
The Committee, in
its discretion, may cancel or decrease an earned Target Award, but, except as
otherwise permitted by Treasury Regulation Section 1.162-27(e)(2)(iii)(C), may
not, under any circumstances, increase such award. Before payments
are made under a Target Award, the Committee shall certify in writing that the
performance goals justifying the payment under Target Award have been
met.
Section
IV. Forfeiture of Awards
A. Unless
the Committee, or in the case of a Director, the Board, shall have determined
otherwise, the recipient of any Award pursuant to the Plan shall forfeit the
Award, to the extent not then payable or exercisable, upon the occurrence of any
of the following events:
1. The
recipient is Terminated for Cause.
2. The
recipient voluntarily terminates his or her employment other than by retirement
after attainment of age 62, or such other age as may be provided for in the
Award Agreement.
3. The
recipient engages in competition with the Company or any Affiliate.
4. The
recipient engages in any activity or conduct contrary to the best interests of
the Company or any Affiliate, including, but not limited to, conduct that
breaches the recipient’s duty of loyalty to the Company or an Affiliate or that
is materially injurious to the Company or an Affiliate, monetarily or
otherwise. Such activity or conduct may include: (i)
disclosing or misusing any confidential information pertaining to the Company or
an Affiliate; (ii) any attempt, directly or indirectly, to induce any Employee
of the Company or any Affiliate to be employed or perform services elsewhere, or
(iii) any direct or indirect attempt to solicit, or assist another employer in
soliciting, the trade of any customer or supplier or prospective customer of the
Company or any Affiliate.
B. The
Committee or the Board, as the case may be, may include in any Award Agreement
any additional or different conditions of forfeiture it may deem appropriate,
and may waive any condition of forfeiture stated above or in the Award
Agreement.
C. In
the event of forfeiture, the recipient shall lose all rights in and to portions
of the Award which are not vested or which are not
exercisable. Except in the case of Restricted Stock Awards as to
which restrictions have not lapsed, this provision, however, shall not be
invoked to require any recipient to transfer to the Company any Common Stock
already received under an Award.
D. Such
determinations as may be necessary for application of this Section, including
any grant of authority to others to make determinations under this Section,
shall be at the sole discretion of the Committee, or in the case of Awards
granted to Directors, of the Board, and such determinations shall be conclusive
and binding.
Section
V. Beneficiary Designation; Death of Awardee
A. An
Award recipient may file with the Committee a written designation of a
beneficiary or beneficiaries (subject to such limitations as to the classes and
number of beneficiaries and contingent beneficiaries as the Committee may from
time to time prescribe) to exercise, in the event of the death of the recipient,
an Option, Stock Appreciation Right or Phantom Stock Option, or to receive, in
such event, any Other Stock Awards. The Committee reserves the right
to review and approve beneficiary designations. A recipient may from
time to time revoke or change any such designation or beneficiary and any
designation of beneficiary under the Plan shall be controlling over any other
disposition, testamentary or otherwise. However, if the Committee
shall be in doubt as to the right of any such beneficiary to exercise any
Option, Stock Appreciation Right or Phantom Stock Option, or to receive any
Other Stock Award, the Committee may determine to recognize only an exercise by,
or right to receive of, the legal representative of the recipient, in which case
the Company, the Committee and the members thereof shall not be under any
further liability to anyone.
B. Upon
the death of an Award recipient, the following rules shall apply:
1. An
Option, to the extent exercisable on the date of the recipient’s death, may be
exercised at any time within three years after the recipient’s death, but not
after the expiration of the term of the Option. The Option may be
exercised by the recipient’s designated beneficiary or personal representative
or the person or persons entitled thereto by will or in accordance with the laws
of descent and distribution, or by the transferee of the Option in accordance
with the provisions of Section VI.A.
2. In the
case of any Other Stock Award, any shares of Common Stock or cash payable shall
be determined as of the date of the recipient’s death, in accordance with the
terms of the Award Agreement, and the Company shall issue such shares of Common
Stock or pay such cash to the recipient’s designated beneficiary or personal
representative or the person or persons entitled thereto by will or in
accordance with the laws of descent and distribution.
Section
VI. Other Governing Provisions
A. Transferability
Except as otherwise
provided herein, no Award shall be transferable other than by beneficiary
designation, will or the laws of descent and distribution, and any right granted
under an Award may be exercised during the lifetime of the holder thereof only
by Award Recipient or by his/her guardian or legal representative; provided,
however, that an Award recipient may be permitted, in the sole discretion of the
Committee or its delegee, to transfer to a member of such recipient’s immediate
family, family trust or family partnership as defined by the Committee or its
delegee, an Option granted pursuant to Section II hereof, other than an
Incentive Stock Option, subject to such terms and conditions as the Committee or
its delegee, in their sole discretion, shall determine.
B. Rights
as a Shareholder
A
recipient of an Award shall, unless the terms of the Award Agreement provide
otherwise, have no rights as a shareholder, with respect to any Options or
shares of Common Stock which may be issued in connection with an Award, until
the issuance of a Common Stock certificate for such shares, and no adjustment
other than as stated herein shall be made for dividends or other rights for
which the record date is prior to the issuance of such Common Stock
certificate. In addition, with respect to Restricted Stock Awards,
recipients shall have only such rights as a shareholder as may be set forth in
the terms of the Award Agreement.
C. General
Conditions of Awards
No
Employee, Director or other person shall have any rights with respect to the
Plan, the shares of Common Stock reserved or in any Award, contingent or
otherwise, until an Award Agreement shall have been delivered to the recipient
and all of the terms, conditions and provisions of the Plan applicable to such
recipient shall have been met.
D. Reservation
of Rights of Company
Neither the
establishment of the Plan nor the granting of an Award shall confer upon any
Employee any right to continue in the employ of the Company or any Affiliate or
interfere in any way with the right of the Company or any Affiliate to terminate
such employment at any time. No Award shall be deemed to be salary or
compensation for the purpose of computing benefits under any employee benefit,
pension or retirement plans of the Company or any Affiliate, unless the
Committee shall determine otherwise.
E. Acceleration
The Committee, or,
with respect to any Awards granted to Directors, the Board, may, in its sole
discretion, accelerate the vesting or date of exercise of any Awards
,
except to the extent such acceleration will
result in the imposition of the additional tax described in Code Section
409A(a)(1)(B)(i)(II) because of failure to satisfy the requirements of Code
Section 409A and the regulations and guidance issued
thereunder
.
F. Effect
of Certain Changes
Subject
to Treasury Regulations §1.409A-1(b)(5)(v)(D), in
the event of any
extraordinary dividend, stock split-up, stock dividend, issuance of targeted
stock, recapitalization, warrant or rights issuance, or combination, exchange or
reclassification with respect to the Common Stock or any other class or series
of common stock of the Company, or consolidation, merger or sale of all, or
substantially all, of the assets of the Company, the Committee or its delegate
shall cause such equitable adjustments as it deems appropriate to be made to the
shares reserved under Section I.D of the Plan and the limits on Awards set forth
in Section I.E.3 of the Plan, and the Committee or Board shall cause such
adjustments to be made to the terms of outstanding Awards to reflect such event
and preserve the value of such Awards.
Any such adjustments to an Award subject to Section
409A shall comply with the requirements of Section 409A and the regulations
thereunder.
Notwithstanding the above, no adjustments
shall be made to the shares reserved and the limits on awards, or to the terms
of outstanding awards, unless such adjustments would require an increase or
decrease of at least 1% in the number of shares or exercise price to be
adjusted. However, any adjustments which by reason of this subsection are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment, but only to the extent the event mandating the subsequent
adjustment occurs within three years after the initial event which would have,
but for this de minimus provision, mandated an adjustment. In all
events, the determination of the Committee or Board or their delegate shall be
conclusive. If any such adjustment would result in a fractional share
of Common Stock being issued or awarded under this Plan, such fractional share
shall be disregarded.
G. Withholding
of Taxes
The Company shall
deduct from any payment, or otherwise collect from the recipient, any taxes
required to be withheld by federal, state or local governments in connection
with any Award. The recipient may elect, subject to approval by the
Committee, to have shares of Common Stock withheld by the Company in
satisfaction of such taxes, or to deliver other shares of Common Stock owned by
the recipient in satisfaction of such taxes. With respect to
Corporate Officers, Directors or other recipients subject to Section 16(b) of
the Exchange Act, the Committee or, with respect to Awards granted to Directors,
the Board, may impose such other conditions on the recipient’s election as it
deems necessary or appropriate in order to exempt such withholding from the
penalties set forth in said Section. The number of shares to be
withheld or delivered shall be calculated by reference to the Fair Market Value
of the Common Stock on the date that such taxes are determined.
H. No
Warranty of Tax Effect
Except as may be
contained in the terms of any Award Agreement, no opinion is expressed nor
warranties made as to the tax effects under federal, foreign, state or local
laws or regulations of any Award granted under the Plan.
I. Amendment
of Plan
Except
as otherwise provided in this Section VI.I., the
Board may, from time to
time, amend, suspend or terminate the Plan in whole or in part, and if
terminated, may reinstate any or all of the provisions of the Plan, except that
(i) no amendment, suspension or termination may apply to the terms of any Award
(contingent or otherwise) granted prior to the effective date of such amendment,
suspension or termination, in a manner which would reasonably be considered to
be adverse to the recipient, without the recipient’s consent; (ii) except as
provided in Section VI.F., no amendment may be made to increase the number of
shares of Common Stock reserved under Section I.D of the Plan; (iii) except as
provided in Section VI.F., no amendment may be made to increase the limitations
set forth in Section 1.E.3 of the Plan, and (iv) no amendment may withdraw the
authority of the Committee to administer the Plan.
To
the extent a portion of the Plan is subject to Code Section 409A, the Board may
terminate the Plan, and distribute all vested accrued benefits, subject to the
restrictions set forth in Treasury Regulation §1.409A-3(j)(4). A
termination of any portion of the Plan that is subject to Code Section 409A must
comply with the provisions of Code Section 409A and the regulations and guidance
promulgated thereunder, including, but not limited to, restrictions on the
timing of final distributions and the adoption of future deferred compensation
arrangements.
J. Construction
of Plan
The place of
administration of the Plan shall be in the State of Missouri and the validity,
construction, interpretation, administration and effect of the Plan and of its
rules and regulations, and rights relating to the Plan, shall be determined
solely in accordance with the laws of the State of Missouri, without giving
regard to the conflict of laws provisions thereof.
K. Compliance
with Code Section 409A
No
provision of this Plan or any Award shall be operative to the extent that it
will result in the imposition of the additional tax described in Code Section
409A(a)(1)(B)(i)(II) because of failure to satisfy the requirements of Code
Section 409A and the regulations and guidance issued
thereunder.
L. Unfunded
Nature of Plan
The Plan, insofar
as it provides for cash payments, shall be unfunded, and the Company shall not
be required to segregate any assets which may at any time be awarded under the
Plan. Any liability of the Company to any person with respect to any
Award under the Plan shall be based solely upon any contractual obligations
which may be created by the terms of any Award Agreement entered into pursuant
to the Plan. No such obligation of the Company shall be deemed to be
secured by any pledge of, or other encumbrance on, any property of the
Company.
M. Successors
All obligations of
the Company under the Plan, with respect to any Awards granted hereunder, shall
be binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation
or otherwise, of all or substantially all of the business and/or assets of the
Company.
Section
VII. Effective Date and Term
The Plan shall be effective April 1,
2000 and shall continue in effect until December 31, 2009, when it shall
terminate. Upon termination, any balances in the reserve established
under Section I.D shall be cancelled, and no Awards shall be granted under the
Plan thereafter. The Plan shall continue in effect, however, insofar
as is necessary, to complete all of the Company’s obligations under outstanding
Awards or to conclude the administration of the Plan.
This amendment and restatement of the Plan is
effective January 1, 2009.
Exhibit
10.3
AMENDMENT TO
CERTAIN RESTRICTED STOCK EQUIVALENTS ISSUED UNDER
ENERGIZER HOLDINGS,
INC. 2000 INCENTIVE STOCK PLAN
and
ENERGIZER
HOLDINGS, INC. DEFERRED COMPENSATION PLAN
WHEREAS, Energizer
Holdings, Inc. (“Company”) issued Restricted Stock Equivalent Award Agreements
under the Energizer Holdings, Inc. 2000 Incentive Stock Plan (“2000 Plan”) and
the Energizer Holdings, Inc. Deferred Compensation Plan (“Deferred Compensation
Plan”) that vest on or after January 1, 2005 and that are subject to the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended
(“Code”) (such Restricted Stock Equivalent Award Agreements to be referred to as
“Award Agreements”); and
WHEREAS, failure to
amend the Award Agreements to comply with Section 409A would result in
imposition of a 20% additional tax on the deferred compensation provided to the
recipients (“Recipients”) under the Award Agreements;
and
WHEREAS, the terms of
the Award Agreements issued under the 2000 Plan authorize the Company
to unilaterally substitute equivalent Award Agreements; and
WHEREAS, the Deferred
Compensation Plan authorizes amendments without the consent of the participants
if such amendments do not adversely affect Recipients of such Award
Agreements; and
WHEREAS, the Award
Agreements have been administered in accordance with the Company’s good faith
interpretation of compliance with Code Section 409A, based on available
guidance; and
WHEREAS, the Company
desires to amend the Award Agreements, to the extent they are subject to Section
409A, effective January 1, 2009, to comply with Code Section 409A and the
regulations thereunder.
NOW, THEREFORE, the
Company hereby amends the Award Agreements, effective January 1, 2009, as
follows:
1.
Vesting;Payment
Any date specified
for the vesting/payment of an Equivalent shall be referred to as the
“Vesting/Payment Date.”
To the extent that an
Award Agreement provides that vesting/ payment of an Equivalent is predicated on
the Announcement Date of the earnings results for a specified fiscal year, the
term “Vesting/Payment Date” shall be substituted for “Announcement
Date.” The term “Vesting/Payment Date” shall mean a date after the
end of such fiscal year but not later than the December 31 immediately following
the end of such fiscal year.
2.
Additional
Cash Payment
Additional cash
payments equal to the amount of dividends, if any, which would have been paid to
the Recipient had shares of Common Stock been issued in lieu of the Equivalents,
will be paid on or after the Vesting/Payment Date, but not later than the
December 31 following the Vesting/Payment Date.
3.
Acceleration
The following
provisions will apply if vesting/payment of the Equivalents is accelerated prior
to the Vesting/Payment Date:
Disability
To the extent
vesting/payment of Equivalents is predicated upon the declaration of a
Recipient’s total and permanent disability, such vesting/payment shall be
predicated upon the Recipient’s Termination of Employment due to total and
permanent disability.
Termination of
Employment
To the extent
vesting/payment of Equivalents is predicated upon Termination of Employment for
any reason, the term “Termination of Employment shall mean a “separation from
service” with the Company and its Affiliates, as such term is defined in Code
Section 409A and the regulations thereunder. The term “Affiliates”
shall mean all entities within the controlled group that includes the Company,
as defined in Code Sections 414(b) and 414(c) and the regulations thereunder,
provided that the language “at least 50 percent” shall be used instead of “at
least 80 percent” each place it appears in such definition.
To the extent
vesting/payment of Equivalents is predicated upon the Recipient’s death or
Termination of Employment for any reason, the Equivalents and related cash
payments will be converted and paid not later than (i) the 15
th
day of
the third calendar month following such event, or (ii) a date after such event,
but not later than the December 31 immediately following the
event.
Change of
Control
To the extent
vesting/payment of Equivalents is predicated upon a Change of Control, such
Equivalents and related cash payments shall be converted and paid on the date of
the Change of Control.
The term “Change of
Control” shall mean the following:
(i) The
acquisition by one person, or more than one person acting as a group, of
ownership of stock of the Company that, together with stock held by such person
or group, constitutes more than 50% of the total fair market value or total
voting power of the stock of the Company. Notwithstanding the above,
if any person or more than one person acting as a group, is considered to own
more than 50% of the total fair market value or total voting power of the stock
of the Company , the acquisition of additional stock by the same person or
persons will not constitute a Change of Control.; or
(ii) A
majority of the members of the Company’s board of directors is replaced during
any twelve-month period by directors whose appointment or election is not
endorsed by a majority of the members of the Company’s board of directors before
the date of the appointment or election;
Persons will not be
considered to be acting as a group solely because they purchase or own stock of
the same corporation at the same time, or as a result of the same public
offering. However, persons will be considered to be acting as a group
if they are owners of a corporation that enters into a merger, consolidation,
purchase or acquisition of stock, or similar business transaction with the
Company.
This definition of
Change in Control shall be interpreted in accordance with, and in a manner that
will bring the definition into compliance with, the regulations under Section
409A of the Internal Revenue Code.
4.
Delayed
Payment for Specified Employees
Notwithstanding
anything to the contrary herein, a payment on account of Termination of
Employment to a Specified Employee may not be made until at least six months
after such Termination of Employment. Any payment otherwise due
in such six month period shall be suspended and become payable at the end of
such six month period.
The term “Specified
Employee”
shall
mean a specified employee as defined in Treas. Reg. § 1.409A – 1(i) (generally
5% shareholders, 1% shareholders earning more than $150,000, and officers
earning over $130,000 per year, as indexed for inflation ($150,000 for 2008) who
are among the fifty highest paid employees).
IN WITNESS WHEREOF, the Company has
adopted this Amendment to the Award Agreements, effective as of January 1,
2009.
ENERGIZER HOLDINGS,
INC.
By:________________________________
Dated: December __,
2008
