Current Report — Form 8-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 8-K Wisconsin Energy Corporation 9 34K
2: EX-2.1 Agreement and Plan of Merger 84 331K
3: EX-2.2 Wec Stock Option Agreement 18 79K
4: EX-2.3 Nsp Stock Option Agreement 18 78K
5: EX-2.4 Committees of the Board of Directors of Primergy 1 6K
6: EX-2.5 Form of Employment Agreement of James J. Howard 30 66K
7: EX-2.6 Form of Employment Agreement of Richard A. Abdoo 27 63K
8: EX-2.7 Amended and Restated Articles of Northern Power 37 124K
Wis Corp
9: EX-99.1 Wec Press Release 5 22K
EX-2.6 — Form of Employment Agreement of Richard A. Abdoo
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Exhibit (2)-6
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT by and between _________________________, a Wisconsin
corporation (the "Company"), and Richard A. Abdoo (the "Executive"), dated as
of the ___ day of __________, 199_.
W I T N E S S E T H T H A T
WHEREAS, Northern States Power Company, a Minnesota corporation ("NSP")
and Wisconsin Energy Corporation, a Wisconsin corporation ("WEC") have entered
into an Agreement and Plan of Merger dated as of April 28, 1995 (the "Merger
Agreement"), whereby the NSP and WEC organizations will merge, with the
Company as the surviving parent; and
WHEREAS, NSP and WEC wish to provide for the orderly succession of
management of the Company following the Effective Time (as defined in the
Merger Agreement); and
WHEREAS, NSP and WEC further wish to provide for the employment by the
Company of the Executive, and the Executive wishes to serve the Company, in
the capacities and on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, it is hereby agreed as follows:
1. EMPLOYMENT PERIOD. The Company shall employ the Executive,
and the Executive shall serve the Company, on the terms and conditions set
forth in this Agreement, for an initial period (the "Initial Period") and a
further period (the
"Secondary Period") (the Initial Period and the Secondary Period are
hereinafter referred to in the aggregate as the "Employment Period"). The
Initial Period shall begin at the Effective Time (as defined in the Merger
Agreement), and end on the earlier of: (i) such date as James J. Howard
ceases to be Chief Executive Officer of the Company for any reason; or (ii)
the later of (a) the date of the annual meeting of shareholders of the Company
that occurs in 1998, and (b) the last day of the sixteenth full month
following the Effective Time. The Secondary Period shall begin at the end of
the Initial Period and end on that date which is the later of:
(x) January 31, 2002; or (y) five (5) years after the first day of the Initial
Period; except that on the third, fourth and fifth anniversaries of the first
day of the Employment Period, the Secondary Period shall be extended by one
year unless either party gives written notice to the other, at least 60 days
before the Secondary Period would otherwise be so extended, that the Secondary
Period shall not be so extended.
2. POSITION AND DUTIES. (a) During the Initial Period, the
Executive shall serve as Vice Chairman of the Board of Directors of the
Company (the "Board"), President and Chief Operating Officer of the Company;
during the Secondary Period, the Executive shall serve as Vice Chairman of the
Board, President and Chief Executive Officer of the Company; and on and after
any date during the Employment Period as of which James J. Howard ceases to be
Chairman of the Board, the Executive shall serve as the Chairman of the Board;
in each case with such
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duties and responsibilities as are customarily assigned to such positions, and
such other duties and responsibilities not inconsistent therewith as may from
time to time be assigned to him by the Board. The Executive shall be a member
of the Board on the first day of the Employment Period, and the Board shall
propose the Executive for re-election to the Board throughout the Employment
Period.
(b) During the Initial Period: (i) as is customary, the
Executive shall report to the Chief Executive Officer of the Company; (ii) the
subsidiary of the Company that provides administrative and other services to
the Company's utility company subsidiaries (the "Service Company"), as well as
the Company's subsidiary NRG Energy Inc. ("NRG"), and their respective chief
executive officers, shall report to the Chief Executive Officer of the
Company; and (iii) all other subsidiaries of the Company (other than the
Service Company and NRG), and their respective chief executive officers, shall
report to the Executive.
(c) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
shall devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive under this Agreement, use the
Executive's reasonable best efforts to carry out such responsibilities
faithfully and efficiently. It shall not be
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considered a violation of the foregoing for the Executive to serve on
corporate, industry, civic or charitable boards or committees, so long as such
activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement.
(d) The Company's headquarters shall be located in
Minneapolis, Minnesota and the Executive shall reside in the general area of
the Twin Cities of Minneapolis and St. Paul, Minnesota. The Company shall
assure that the Executive suffers no financial loss on the sale of Executive's
Milwaukee residence (including the value of loss of tax deferrals which may
occur if Executive does not reinvest all of the proceeds of the sale of such
residence in accordance with the provisions of Section 1034 of the Internal
Revenue Code of 1986, as amended and a gross up payment for the additional
income taxes payable by the Executive as a result of such payment). The
Company shall reimburse the Executive for all of his moving expenses incurred
in relocating Executive's residence to the Twin Cities area. During the
period from the first day of the Employment Period through the earlier of the
end of the last day of the sixth full calendar month of the Employment Period
and the date of such relocation, the Company shall provide the Executive with
an apartment in the Twin Cities area and reimburse him for reasonable expenses
while in the Twin Cities area and travel between the Twin Cities Area and his
principal residence, provided in each case that the Executive
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complies with the policies, practices and procedures of the Company for
submission of expense reports, receipts, or similar documentation of such
expenses.
3. COMPENSATION. (a) BASE SALARY. The Executive's
compensation during the Employment Period shall be determined by the Board
upon the recommendation of the Compensation Committee of the Board, subject to
the next sentence and Section 3(b). During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary") of not
less than his annual base salary from WEC as in effect immediately before the
Effective Time. The Annual Base Salary shall be payable in accordance with
the Company's regular payroll practice for its senior executives, as in effect
from time to time. During the Employment Period, the Annual Base Salary shall
be reviewed for possible increase at least annually. Any increase in the
Annual Base Salary shall not limit or reduce any other obligation of the
Company under this Agreement. The Annual Base Salary shall not be reduced
after any such increase, and the term "Annual Base Salary" shall thereafter
refer to the Annual Base Salary as so increased.
(b) INCENTIVE COMPENSATION. During the Employment Period,
the Executive shall participate in short-term incentive compensation plans and
long-term incentive compensation plans (the latter to consist of plans
offering stock options, restricted stock and other long-term incentive
compensation)
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providing him with the opportunity to earn, on a year-by-year basis, short-
term and long-term incentive compensation (the "Incentive Compensation") at
least equal to the amounts that he had the opportunity to earn under the
comparable plans of WEC as in effect immediately before the Effective Time.
(c) OTHER BENEFITS. (i) SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN. During the Employment Period, the Executive shall participate in a
supplemental executive retirement plan ("SERP") such that the aggregate value
of the retirement benefits that he and his spouse will receive at the end of
the Employment Period under all defined benefit plans of the Company and its
affiliates (whether qualified or not) will be not less than the benefits he
would have received had he continued, through the end of the Employment
Period, to participate in the WEC Defined Benefit Pension Plan, Supplemental
Executive Retirement Plan A, Supplemental Executive Retirement Plan B, the
special supplemental benefits letter dated November 21, 1994 as amended on
April 26, 1995 between WEC and the Executive, and Executive Deferred
Compensation Plan (collectively, the "WEC Plans"), as in effect immediately
before the Effective Time. The Company shall maintain and fund one or more
grantor trusts (the "Trusts"), the assets of which shall at all times be
adequate to provide for the payment of all benefits under the SERP to the
Executive and his spouse, as well as any elective deferrals of Incentive
Compensation by the Executive (with such adequacy being determined by an
independent consulting firm acceptable to the
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Executive, whose fees shall be paid by the Company). The assets of the Trusts
shall be subject to the claims of the Company's creditors, and the Trusts
shall in all other respects be designed to prevent the Executive and his
spouse from being taxed on the assets or income thereof, except as and when
such assets or income are paid to them.
(ii) During the Employment Period, the Company shall
provide the Executive with life insurance coverage (the "Life Insurance
Coverage") providing a death benefit to such beneficiary or beneficiaries as
the Executive may designate of not less than three times his Annual Base
Salary.
(iii) In addition, and without limiting the
generality of the foregoing, during the Employment Period and thereafter: (A)
the Executive shall be entitled to participate in all applicable incentive,
savings and retirement plans, practices, policies and programs of the Company
to the same extent as other senior executives (or, where applicable, retired
senior executives) of the Company, and (B) the Executive and/or the
Executive's family, as the case may be, shall be eligible for participation
in, and shall receive all benefits under, all applicable welfare benefit
plans, practices, policies and programs provided by the Company, other than
severance plans, practices, policies and programs but including, without
limitation, medical, prescription, dental, disability, salary continuance,
employee life insurance, group life insurance,
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accidental death and travel accident insurance plans and programs, to the same
extent as other senior executives (or, where applicable, retired senior
executives) of the Company.
(d) FRINGE BENEFITS. During the Employment Period,
the Executive shall be entitled to receive fringe benefits on the same terms
and conditions as he received such fringe benefits from WEC immediately before
the Effective Time.
4. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY.
The Executive's employment shall terminate automatically upon the Executive's
death during the Employment Period. The Company shall be entitled to
terminate the Executive's employment because of the Executive's Disability
during the Employment Period. "Disability" means that (i) the Executive has
been unable, for a period of 180 consecutive business days, to perform the
Executive's duties under this Agreement, as a result of physical or mental
illness or injury, and (ii) a physician selected by the Company or its
insurers, and acceptable to the Executive or the Executive's legal
representative, has determined that the Executive's incapacity is total and
permanent. A termination of the Executive's employment by the Company for
Disability shall be communicated to the Executive by written notice, and shall
be effective on the 30th day after receipt of such notice by the Executive
(the "Disability Effective Date"), unless the Executive returns to
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full-time performance of the Executive's duties before the Disability
Effective Date.
(b) BY THE COMPANY. (i) The Company may terminate
the Executive's employment during the Employment Period for Cause or without
Cause. "Cause" means:
A. the willful and continued failure of
Executive substantially to perform the Executive's
duties under this Agreement (other than as a result of
physical or mental illness or injury), after the Board
of the Company delivers to the Executive a written
demand for substantial performance that specifically
identifies the manner in which the Board believes that
the Executive has not substantially performed the
Executive's duties; or
B. illegal conduct or gross misconduct by the
Executive, in either case that is willful and results
in material and demonstrable damage to the business or
reputation of the Company.
No act or failure to act on the part of the Executive shall be considered
"willful" unless it is done, or omitted to be done, by the Executive in bad
faith or without reasonable belief that the Executive's action or omission was
in the best interests of the Company. Any act or failure to act that is based
upon authority given pursuant to a resolution duly adopted by the Board, or
the advice of counsel for the Company, shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company.
(ii) A termination of the Executive's employment for
Cause shall be effected in accordance with the
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following procedures. The Company shall give the Executive written notice
("Notice of Termination for Cause") of its intention to terminate the
Executive's employment for Cause, setting forth in reasonable detail the
specific conduct of the Executive that it considers to constitute Cause and
the specific provision(s) of this Agreement on which it relies, and stating
the date, time and place of the Special Board Meeting for Cause. The "Special
Board Meeting for Cause" means a meeting of the Board called and held
specifically for the purpose of considering the Executive's termination for
Cause, that takes place not less than ten and not more than twenty business
days after the Executive receives the Notice of Termination for Cause. The
Executive shall be given an opportunity, together with counsel, to be heard at
the Special Board Meeting for Cause. The Executive's termination for Cause
shall be effective when and if a resolution is duly adopted at the Special
Board Meeting for Cause by affirmative vote of a majority of the entire
membership of the Board, excluding employee directors, stating that in the
good faith opinion of the Board, the Executive is guilty of the conduct
described in the Notice of Termination for Cause, and that conduct constitutes
Cause under this Agreement.
(iii) A termination of the Executive's employment
without Cause shall be effected in accordance with the following procedures.
The Company shall give the Executive written notice ("Notice of Termination
without Cause") of its intention to terminate the Executive's employment
without Cause,
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stating the date, time and place of the Special Board Meeting without Cause.
The "Special Board Meeting without Cause" means a meeting of the Board called
and held specifically for the purpose of considering the Executive's
termination without Cause, that takes place not less than ten and not more
than twenty business days after the Executive receives the Notice of
Termination without Cause. The Executive shall be given an opportunity,
together with counsel, to be heard at the Special Board Meeting without Cause.
The Executive's termination without Cause shall be effective when and if a
resolution is duly adopted at the Special Board Meeting without Cause by
affirmative vote of a majority of the entire membership of the Board,
excluding employee directors, stating that the Executive is terminated without
Cause.
(c) GOOD REASON. (i) The Executive may terminate
employment for Good Reason or without Good Reason. "Good Reason" means:
A. the assignment to the Executive of any duties
inconsistent in any respect with paragraph (a) of Section 2
of this Agreement, or any other action by the Company that
results in a diminution in the Executive's position,
authority, duties or responsibilities, other than an
isolated, insubstantial and inadvertent action that is not
taken in bad faith and is remedied by the Company promptly
after receipt of notice thereof from the Executive;
B. any failure by the Company to comply with any
provision of Section 3 of this Agreement, other than an
isolated, insubstantial and inadvertent failure that is not
taken in bad faith
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and is remedied by the Company promptly after receipt of
notice thereof from the Executive;
C. any requirement by the Company that the
Executive's services be rendered primarily at a location or
locations other than that provided for in paragraph (d) of
Section 2 of this Agreement;
D. any purported termination of the Executive's
employment by the Company for a reason or in a manner not
expressly permitted by this Agreement; or
E. any failure by the Company to comply with
paragraph (c) of Section 11 of this Agreement; or
F. any other substantial breach of this Agreement
by the Company that either is not taken in good faith or is
not remedied by the Company promptly after receipt of notice
thereof from the Executive.
(ii) A termination of employment by the Executive for
Good Reason shall be effectuated by giving the Company written notice ("Notice
of Termination for Good Reason") of the termination, setting forth in
reasonable detail the specific conduct of the Company that constitutes Good
Reason and the specific provision(s) of this Agreement on which the Executive
relies. A termination of employment by the Executive for Good Reason shall be
effective on the fifth business day following the date when the Notice of
Termination for Good Reason is given, unless the notice sets forth a later
date (which date shall in no event be later than 30 days after the notice is
given).
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(iii) A termination of the Executive's employment by
the Executive without Good Reason shall be effected by giving the Company
written notice of the termination.
(d) NO WAIVER. The failure to set forth any fact or
circumstance in a Notice of Termination for Cause, a Notice of Termination
without Cause or a Notice of Termination for Good Reason shall not constitute
a waiver of the right to assert, and shall not preclude the party giving
notice from asserting, such fact or circumstance in an attempt to enforce any
right under or provision of this Agreement.
(e) DATE OF TERMINATION. The "Date of Termination"
means the date of the Executive's death, the Disability Effective Date, the
date on which the termination of the Executive's employment by the Company for
Cause or without Cause or by the Executive for Good Reason is effective, or
the date on which the Executive gives the Company notice of a termination of
employment without Good Reason, as the case may be.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) OTHER
THAN FOR CAUSE, DEATH OR DISABILITY; GOOD REASON. If, during the Employment
Period, the Company terminates the Executive's employment, other than for
Cause or Disability, or the Executive terminates employment for Good Reason,
the Company shall continue to provide the Executive with the compensation and
benefits set forth in paragraphs (a), (b) and (c) of Section 3 as
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if he had remained employed by the Company pursuant to this Agreement through
the end of the Employment Period and then retired [at which time he will be
treated as eligible for all retiree welfare benefits and other benefits
provided to retired senior executives, as set forth in Section 3(c)(iii)];
provided, that the Incentive Compensation for such period shall be equal to
the maximum Incentive Compensation that the Executive would have been eligible
to earn for such period; provided, further that in lieu of stock options,
restricted stock and other stock-based awards, the Executive shall be paid
cash equal to the fair market value (without regard to any restrictions) of
the stock options, restricted stock and other stock-based awards that would
otherwise have been granted; and provided, further, that to the extent any
benefits described in paragraph (c) of Section 3 cannot be provided pursuant
to the plan or program maintained by the Company for its executives, the
Company shall provide such benefits outside such plan or program at no
additional cost (including without limitation tax cost) to the Executive and
his family; and provided, finally, that during any period when the Executive
is eligible to receive benefits of the type described in clause (B) of
paragraph (c)(iii) of Section 3 under another employer-provided plan, the
benefits provided by the Company under this paragraph (a) of Section 5 may be
made secondary to those provided under such other plan. In addition to the
foregoing, any restricted stock outstanding on the Date of Termination shall
be fully vested as of the Date of Termination
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and all options outstanding on the Date of Termination shall be fully vested
and exercisable and shall remain in effect and exercisable through the end of
their respective terms, without regard to the termination of the Executive's
employment. The payments and benefits provided pursuant to this paragraph (a)
of Section 5 are intended as liquidated damages for a termination of the
Executive's employment by the Company other than for Cause or Disability or
for the actions of the Company leading to a termination of the Executive's
employment by the Executive for Good Reason, and shall be the sole and
exclusive remedy therefor.
(b) DEATH AND DISABILITY. If the Executive's employment
is terminated by reason of the Executive's death or Disability during the
Employment Period, the Company shall pay to the Executive or, in the case of
the Executive's death, to the Executive's designated beneficiaries (or, if
there is no such beneficiary, to the Executive's estate or legal
representative), in a lump sum in cash within 30 days after the Date of
Termination, the sum of the following amounts (the "Accrued Obligations"):
(1) any portion of the Executive's Annual Base Salary through the Date of
Termination that has not yet been paid; (2) an amount representing the
Incentive Compensation for the period that includes the Date of Termination,
computed by assuming that the amount of all such Incentive Compensation would
be equal to the maximum amount of such Incentive Compensation that the
Executive would have been eligible to earn for such period, and multiplying
that amount by a fraction, the numerator
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of which is the number of days in such period through the Date of Termination,
and the denominator of which is the total number of days in the relevant
period; (3) any compensation previously deferred by the Executive (together
with any accrued interest or earnings thereon) that has not yet been paid; and
(4) any accrued but unpaid Incentive Compensation and vacation pay; and the
Company shall have no further obligations under this Agreement, except as
specified in Section 6 below.
(c) BY THE COMPANY FOR CAUSE; BY THE EXECUTIVE OTHER THAN
FOR GOOD REASON. If the Executive's employment is terminated by the Company
for Cause during the Employment Period, the Company shall pay the Executive
the Annual Base Salary through the Date of Termination and the amount of any
compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon), in each case to the extent not yet paid, and
the Company shall have no further obligations under this Agreement, except as
specified in Section 6 below. If the Executive voluntarily terminates
employment during the Employment Period, other than for Good Reason, the
Company shall pay the Accrued Obligations to the Executive in a lump sum in
cash within 30 days of the Date of Termination, and the Company shall have no
further obligations under this Agreement, except as specified in Section 6
below.
6. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Executive's continuing or
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future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies for which the Executive may
qualify, nor, subject to paragraph (f) of Section 12, shall anything in this
Agreement limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Vested benefits and other amounts that the Executive is otherwise
entitled to receive under the Incentive Compensation, the SERP, the Life
Insurance Coverage, or any other plan, policy, practice or program of, or any
contract or agreement with, the Company or any of its affiliated companies on
or after the Date of Termination shall be payable in accordance with the terms
of each such plan, policy, practice, program, contract or agreement, as the
case may be, except as explicitly modified by this Agreement.
7. FULL SETTLEMENT. The Company's obligation to make the
payments provided for in, and otherwise to perform its obligations under, this
Agreement shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action that the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and,
except as specifically provided in paragraph (a) of Section 5 with respect to
benefits described in clause (B) of paragraph (c)(iii) of Section 3, such
amounts shall
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not be reduced, regardless of whether the Executive obtains other employment.
8. CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
affiliated companies and their respective businesses that the Executive
obtains during the Executive's employment by the Company or any of its
affiliated companies and that is not public knowledge (other than as a result
of the Executive's violation of this Section 8) ("Confidential Information").
The Executive shall not communicate, divulge or disseminate Confidential
Information at any time during or after the Executive's employment with the
Company, except with the prior written consent of the Company or as otherwise
required by law or legal process. In no event shall any asserted violation of
the provisions of this Section 8 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this
Agreement.
9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY. (a)
Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by the Company to or for
the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional
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payments required under this Section 9) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code") or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of paragraph (c) of this
Section 9, all determinations required to be made under this Section 9,
including whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a certified public accounting firm designated
by the Executive (the "Accounting Firm"), which shall provide detailed
supporting calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that there has been
a Payment, or such earlier time as is requested by the Company. In the event
that the Accounting
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Firm is serving as accountant or auditor for the individual, entity or group
effecting the change of control, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Company to the Executive within five days of
the receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made (Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to paragraph (c) of this Section 9 and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting
Firm shall determine the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by the Company to or for the benefit
of the Executive.
(c) The Executive shall notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would require
the payment by the Company of the
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Gross-Up Payment. Such notification shall be given as soon as practicable but
no later than ten business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on
which it gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
PROVIDED, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without
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limitation on the foregoing provisions of this paragraph (c) of Section 9, the
Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the Executive
to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; PROVIDED, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and PROVIDED, further, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other
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issue raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to paragraph (c) of this Section 9, the
Executive becomes entitled to receive any refund with respect to such claim,
the Executive shall (subject to the Company's complying with the requirements
of paragraph (c) of this Section 9) 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 the Executive of an amount
advanced by the Company pursuant to paragraph (c) of this Section 9, a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid.
10. ATTORNEYS' FEES. The Company agrees to pay, as incurred, to
the fullest extent permitted by law, all legal fees and expenses that the
Executive may reasonably incur as a result of any contest (regardless of the
outcome) by the Company, the Executive or others of the validity or
enforceability of or liability under, or otherwise involving, any provision of
this
-23-
Agreement, together with interest on any delayed payment at the applicable
federal rate provided for in Section 7872(f)(2)(A) of the Code.
11. SUCCESSORS. (a) This Agreement is personal to the
Executive and, without the prior written consent of the Company, shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
both the Company as defined above and any such successor that assumes and
agrees to perform this Agreement, by operation of law or otherwise.
12. MISCELLANEOUS. (a) This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Minnesota, without
reference to principles of conflict
-24-
of laws. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended or
modified except by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b) All notices and other communications under this
Agreement shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
-------------------
If to the Company:
-----------------
Attention: General Counsel
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 12. Notices and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. If any provision of this Agreement shall be held
invalid or unenforceable in part, the remaining portion of such provision,
-25-
together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent
consistent with law.
(d) Notwithstanding any other provision of this Agreement,
the Company may withhold from amounts payable under this Agreement all
federal, state, local and foreign taxes that are required to be withheld by
applicable laws or regulations.
(e) The Executive's or the Company's failure to insist
upon strict compliance with any provisions of, or to assert any right under,
this Agreement (including, without limitation, the right of the Executive to
terminate employment for Good Reason pursuant to paragraph (c) of Section 4 of
this Agreement) shall not be deemed to be a waiver of such provision or right
or of any other provision of or right under this Agreement.
(f) The Executive and the Company acknowledge that this
Agreement supersedes any other agreement between them concerning the subject
matter hereof.
(g) The rights and benefits of the Executive under this
Agreement may not be anticipated, assigned, alienated or subject to
attachment, garnishment, levy, execution or other legal or equitable process
except as required by law. Any attempt by the Executive to anticipate,
alienate, assign, sell, transfer, pledge, encumber or charge the same shall be
void.
-26-
Payments hereunder shall not be considered assets of the Executive in the
event of insolvency or bankruptcy.
(h) This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and said counterparts
shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization of its Board of Directors, the Company
has caused this Agreement to be executed in its name on its behalf, all as of
the day and year first above written.
____________________________________
Richard A. Abdoo
____________________________________
By__________________________________
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Dates Referenced Herein
| Referenced-On Page |
---|
This ‘8-K’ Filing | | Date | | First | | Last | | | Other Filings |
---|
| | |
| | 1/31/02 | | 2 | | | | | None on these Dates |
Filed on: | | 5/3/95 |
For Period End: | | 4/28/95 | | 1 |
| | 4/26/95 | | 6 |
| | 11/21/94 | | 6 |
| List all Filings |
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