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-2.5 — Form of Employment Agreement of James J. Howard
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Exhibit (2)-5
Exhibit 7.15.1
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT by and between [________________________________],
a Wisconsin corporation (the "Company"), and James J. Howard (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 Pe-
riod") (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 later of (i) the date of the annual meeting
of shareholders of the Company that occurs in 1998, and (ii) 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
the later of July 1, 2000 and the second anniversary of the last day of
the Initial Period.
2. POSITION AND DUTIES. (a) During the Initial Period,
the Executive shall serve as Chairman of the Board of Directors of the
Company (the "Board") and Chief Executive Officer of the Company, and
during the Secondary Period, the Executive shall serve as Chairman of
the Board, in each case as an employee of the Company and with such
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.
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(b) During the Initial Period: (i) as is customary,
the Chief Operating Officer of the Company shall report to the Executive
in his capacity as Chief Executive Officer; (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 Executive; and (iii) the
subsidiaries of the Company (other than the Service Company and NRG)
that are operating companies, and their respective chief executive
officers, shall report to the Chief Operating Officer of the Company.
(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 considered a violation of the foregoing for the
Executive to serve on corporate, industry, civic or charitable boards or
committees, so long as such
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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 Executive's services shall be performed
primarily at the Company's headquarters in Minneapolis, Minnesota.
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 NSP
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.
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(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) 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 NSP 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 aggregate value of the ben-
efits he would have received had he continued, through the end of the
Employment Period, to accrue the supplemental retirement benefits
provided by the terms of his employment agreement with NSP as in effect
immediately before the Effective Time], and to participate in the NSP
Deferred
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Compensation Plan, the NSP Excess Benefit Plan, and the NSP Pension
Plan, all as in effect immediately before the Effective Time; PROVIDED,
that notwithstanding the terms of the foregoing agreement and plans, in
determining benefits under the SERP, benefits pursuant to the foregoing
plans shall be computed as if they were based upon the Executive's
average compensation for the three consecutive years in which his
compensation was the highest. In addition, the SERP shall offer the
Executive the option to receive his benefits thereunder in a single lump
sum payment on terms and conditions no less favorable than those in ef-
fect with respect to the supplemental retirement benefits of Richard A.
Abdoo pursuant to the letter agreement dated November 21, 1994 regarding
supplemental benefits from WEC to Richard A. Abdoo or otherwise, as in
effect immediately before the Effective Time; provided, that such lump
sum payment option shall be subject to the consent of the Board in its
sole discretion. Finally, if the Executive dies while employed, or
deemed pursuant to paragraph (a) of Section 5 to be employed, by the
Company, his surviving spouse (or, if he has no surviving spouse, his
estate) shall be entitled to receive a SERP benefit equal in value to
the SERP benefit that the Executive would have received under the SERP
if he had retired (rather than died) on the date of his death and
received a lump sum SERP benefit; PROVIDED, that in the case
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where the Executive has no surviving spouse, the benefit pursuant to
this sentence shall be paid in a lump sum; and PROVIDED, further, that
in the case where the Executive has a surviving spouse, the benefit
pursuant to this sentence shall be paid in the form of a single life
annuity for her life unless she elects a single lump sum payment and the
Board, in its sole discretion, consents to the lump sum payment. The
Company shall maintain and fund one or more grantor trusts (the
"Trusts"), or such other funding mechanism as may be satisfactory to the
Executive, which shall comply with the following sentence and 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 Annual Cash Incentives by the Executive (with such
adequacy being determined by an independent consulting firm acceptable
to the Executive, whose fees shall be paid by the Company). The assets
of the Trusts (if any) shall be subject to the claims of the Company's
creditors, and the Trusts (if any) 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.
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(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. Following the Employment Period, the
Company shall provide the Executive with a life insurance benefit at
least equal to the benefit that would have been provided to the
Executive after termination of employment under the Northern States
Power Company Officer Survivor Benefit Plan as in effect immediately
before the Effective Time.
(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 limita-
tion, medical, prescription, dental, disability, salary continuance,
employee
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life insurance, group life insurance, accidental death and travel ac-
cident 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 NSP
immediately before the Effective Time or, if more favorable, the terms
and conditions that fringe benefits were available to Richard A. Abdoo
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
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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 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 the
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 reputa-
tion 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
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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 employ-
ment for Cause shall be effected in accordance with the 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 op-
portunity, together with counsel, to be heard at the Special Board Meet-
ing 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
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described in the Notice of Termination for Cause, and that conduct
constitutes Cause under this Agreement.
(iii) A termination of the Executive's employ-
ment 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, 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 Termina-
tion without Cause. The Executive shall be given an opportunity, to-
gether 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.
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(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 and is remedied by the Company promptly
after receipt of notice thereof from the Executive;
C. any requirement by the Company that the Execu-
tive'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;
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
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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).
(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.
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(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) BY
THE COMPANY OTHER THAN FOR CAUSE OR DISABILITY; BY THE EXECUTIVE FOR
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 if he had remained
employed by the Company pursuant to this Agreement through the end of
the Employment Period and then retire (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)(ii) and
(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
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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;
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 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
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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 OR DISABILITY. If the Executive's em-
ployment 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 frac-
tion, the numerator of which is the number of days in such period
through the Date of Termination, and the denominator of which is the to-
tal number
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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
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or 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
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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 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.
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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 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
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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 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 Account-
ing 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
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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 writ-
ing of any claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the 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,
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(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 ex-
penses. Without 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
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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 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
-25-
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 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
-26-
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 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
-27-
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 pro-
vision 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,
-28-
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 provision 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
-29-
law. Any attempt by the Executive to anticipate, alienate, assign,
sell, transfer, pledge, encumber or charge the same shall be void. Pay-
ments 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.
-----------------------------------
James J. Howard
[COMPANY]
By__________________________________
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Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘8-K’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 7/1/00 | | 2 | | | | | None on these Dates |
| Filed on: | | 5/3/95 |
| For Period End: | | 4/28/95 | | 1 |
| | 11/21/94 | | 6 |
| List all Filings |
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