Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - EXIDE TECHNOLOGIES | f8k_020912.htm |
| EX-10.3 - EXHIBIT 10.3 - EXIDE TECHNOLOGIES | exh_103.htm |
| EX-10.2 - EXHIBIT 10.2 - EXIDE TECHNOLOGIES | exh_102.htm |
| EX-99.1 - EXHIBIT 99.1 - EXIDE TECHNOLOGIES | exh_991.htm |
Exhibit 10.1
EXIDE TECHNOLOGIES
CHANGE IN CONTROL
EXECUTIVE SEVERANCE PLAN
Effective February 5, 2012
INTRODUCTION
The purpose of the Plan is to enable Exide Technologies (the “Company,”) to offer certain protections to employees if their employment with the Company or a Subsidiary is terminated without Cause or for Good Reason in connection with a Change in Control. Accordingly, to accomplish this purpose, the Board of Directors has adopted the Plan, effective as of February 5, 2012 (the “Effective Date”).
Unless otherwise expressly provided in Section 2.3 or unless otherwise agreed to between the Company and a Participant on or after the date hereof, Participants covered by the Plan shall not be eligible to participate in any other severance or termination plan, policy or practice of the Company that would otherwise apply under the circumstances described herein. The Plan is intended to constitute a “top hat” plan under ERISA for the benefit of a select group of highly compensated or management employees. Capitalized terms and phrases used herein shall have the meanings ascribed thereto in Article I.
ARTICLE I
DEFINITIONS
For purposes of the Plan, capitalized terms and phrases used herein shall have the meanings ascribed in this Article.
“Accounting Firm” shall have the meaning set forth in Section 2.6 below.
“Applicable Percentage” shall mean (i) for the Company’s Chief Executive Officer, 250%, (ii) for the Company’s Executive Vice Presidents and Regional Presidents, 200%, and (iii) for any other employees designated as Participants by the Board, 150%.
“Base Salary” shall mean a Participant’s annual base compensation rate for services paid by the Company to the Participant at the time immediately prior to the Participant’s termination of employment, as reflected in the Company’s payroll records. Base Salary shall not include commissions, bonuses, overtime pay, incentive compensation, benefits paid under any qualified or non-qualified plan, any group medical, dental or other welfare benefit plan, non-cash compensation or any other additional compensation.
“Board” shall mean the Board of Directors of the Company.
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“Cause” shall have the meaning in a Participant’s employment or similar services agreement, or if none (or in the absence of any definition of “Cause” contained in such an agreement), (i) the Participant’s commission of, conviction for, plea of guilty or nolo contendere to a felony or a crime involving moral turpitude, or other material act or omission involving dishonesty or fraud, (ii) the Participant’s conduct that results in or is reasonably likely to result in harm to the reputation or business of the Company or any of its affiliates in any material way, (iii) the Participant’s failure to perform duties as reasonably directed by the Company or the Participant’s material violation of any rule, regulation, policy or plan for the conduct of any service provider to the Company or its affiliates or its or their business (which, if curable, is not cured within 5 days after notice thereof is provided to the Participant) or (iv) the Participant’s gross negligence, willful malfeasance or material act of disloyalty with respect to the Company or its affiliates (which, if curable, is not cured within 5 days after notice thereof is provided to the Participant). Any determination of whether Cause exists shall be made by the Committee in its sole discretion.
“Change in Control” shall mean the occurrence of any of the following events: (i)the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole to any “Person” or “Group” of related persons (as such terms are used in Section 13(d)(3) of the Securities Exchange Act of 1934), (ii) the adoption of a plan relating to the liquidation or dissolution of the Company, (iii) the consummation of any transaction (including, without limitation, any purchase, sale, acquisition, disposition, merger or consolidation) the result of which is that any Person or Group becomes the “beneficial owner” (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934, but excluding, for this purpose, any options to purchase equity securities of the Company held by such Person or Group) of more than 50% of the aggregate voting power of all classes of capital stock of the Company having the right to elect directors under ordinary circumstances, (iv) the first day on which a majority of the members of the Board are not Continuing Directors, or (v) such other event as the Board may determine by express resolution to constitute a Change in Control for purposes of this Plan.
“COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
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“Code Section 409A” shall mean Section 409A of the Code together with the treasury regulations and other official published guidance promulgated thereunder.
“Committee” shall mean the Compensation Committee of the Board or such other committee appointed by the Board from time to time to administer the Plan.
“Company” shall have the meaning set forth in the Introduction above.
“Continuation Period” shall mean a period commencing on the date of a Participant’s termination of employment until the earliest of: (A) eighteen (18) months following the date of termination; (B) the date the Participant becomes eligible for coverage under the health insurance plan of a subsequent employer; or (C) the date the Participant or the Participant’s eligible dependents, as the case may be, cease to be eligible under COBRA.
“Continued Health Coverage” shall mean the benefit set forth in Section 2.2(b) below.
“Continuing Directors” shall mean, as of any date of determination, any member of the Board who (i) was a member of the Board on the date this plan is approved by the Company’s stockholders or (ii) was nominated for election or elected to the Board with the approval of (a) a majority of the Continuing Directors who were members of the Board at the time of such nomination or election or (b) a majority of those Directors who were previously approved by Continuing Directors.
“Delay Period” shall mean the period commencing on the date the Participant incurs a Separation from Service from the Company until the earlier of (A) the six (6)-month anniversary of the date of such Separation from Service and (B) the date of the Participant’s death.
“Disability” shall mean a Participant’s disability that would qualify as such under the Company’s long-term disability plan without regard to any waiting periods set forth in such plan.
“Effective Date” shall have the meaning set forth in the Introduction above.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Good Reason” shall have the meaning in a Participant’s employment or similar services agreement, or if none (or in the absence of any definition of “Good Reason” contained in such an agreement), shall mean the occurrence of any of the following events on or following a Change in Control without the Participant’s express written consent, provided, that, the Participant gives notice to the Company of the Good Reason event within ninety (90) days after the initial occurrence of the Good Reason event and such event is not corrected in all
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material respects by the Company within thirty (30) days following receipt of the Participant’s written notification: (a) a reduction in the Participant’s Base Salary, (b) a relocation of the Participant’s principal business location to an area outside a 50 mile radius of the Participant’s principal business location immediately prior to the Change in Control, (c) the Company’s failure to pay amounts to the Participant when due or (d) the assignment of the Participant to duties materially inconsistent with the Participant’s authorities, duties, responsibilities, and status as an executive and/or officer of the Company, or a material reduction or alteration in the nature or status of the Participant’s authorities, duties, or responsibilities from those in effect as of ninety (90) calendar days prior to the Change in Control, other than (i) a reduction or alteration resulting from the Company’s no longer being a public company due to a Change in Control or (ii) an insubstantial and inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Participant.
“Net After Tax Benefit” shall have the meaning set forth in Section 2.6 below.
“Participant” shall mean any individual that is designated in writing by the Board or the Committee for participation in the Plan.
“Plan” shall mean the Exide Technologies Change in Control Executive Severance Plan.
“Plan Administrator” shall have the meaning set forth in Section 4.1 below.
“Qualifying Event” shall have the meaning set forth in Section 2.1 below.
“Release” shall mean the general release of claims contemplated by Section 2.5 below.
“Separation from Service” shall mean termination of a Participant’s employment with the Company, provided, that, such termination constitutes a separation from service within the meaning of Code Section 409A and the default presumptions set forth in the Treasury Regulations promulgated under Code Section 409A. All references in the Plan to a “resignation,” “termination,” “termination of employment” or like terms shall mean Separation from Service.
“Severance Benefits” shall mean collectively, the Severance Payments and the Continued Health Coverage.
“Severance Payments” shall mean the payments set forth in Section 2.2(a) below.
“Specified Employee” shall mean a Participant who, as of the date of his or her Separation from Service, is deemed to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code and using the identification methodology selected by the Company from time to time in accordance therewith, or if none, the default methodology set forth therein.
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“Subsidiary” shall mean a corporation, company or other entity (i) more than 50 percent of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than 50 percent of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company.
“Underpayment” shall have the meaning set forth in Section 2.6 below.
ARTICLE II
SEVERANCE BENEFITS
2.1 Eligibility for Severance Benefits.
(a) Qualifying Event for Participants. In the event that during the period commencing on the date of the consummation of a Change in Control and ending twenty-four (24) months thereafter, the employment of a Participant is terminated by the Company or a Subsidiary without Cause or by the Participant for Good Reason (each a “Qualifying Event”), then the Company shall pay or provide the Participant with the Severance Benefits.
(b) Non-Qualifying Events. A Participant shall not be entitled to Severance Benefits under the Plan if the Participant’s employment is terminated by the Company or a Subsidiary for any reason other than a Qualifying Event, including, without limitation, (i) by the Company or a Subsidiary for Cause, (ii) by the Participant for any reason other than for Good Reason, or (iii) on account of the Participant’s death or Disability.
2.2 Amount of Severance Benefits. Unless otherwise determined by the Committee at the time of termination, in the event that a Participant becomes entitled to benefits pursuant to Section 2.1 hereof, the Company shall pay or provide the Participant with the Severance Benefits as follows:
(a) Severance Payment. Subject to the provisions of Sections 2.3 through 2.6, and 6.8, as applicable, the Company (or as applicable, a Subsidiary) shall pay to the Participant an amount equal to the product of (i) the Applicable Percentage, multiplied by (ii) the sum of (x) the Participant’s Base Salary and (y) the Participant’s Bonus Target, if any. Any such Severance Payment shall be payable in a lump sum on the first payroll after the sixtieth (60th) day following a Qualifying Event, so long as the conditions therefor have been fully satisfied.
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(b) Continued Health Coverage. Subject to the provisions of Sections 2.3 through 2.6, and subject to a timely election pursuant to COBRA by a Participant, during the applicable Continuation Period the Company shall pay the full cost for continued coverage pursuant to COBRA, for the Participant and the Participant’s eligible dependents, under the Company’s group health plans in which the Participant participated immediately prior to the date of termination of the Participant’s employment. Following the applicable Continuation Period, the Participant shall be entitled to such continued coverage for the remainder of the COBRA period on a full self-pay basis to the extent eligible under COBRA. For the avoidance of doubt, nothing in this Plan shall prohibit the Company from amending or terminating any group health plan. Notwithstanding anything in this Plan to the contrary, in the event that the payment of amounts payable hereunder this clause (b) shall result in adverse tax consequences under Chapter 100 of the Code, Code Section 4980D or otherwise to the Company, the parties shall undertake commercially reasonable efforts to restructure such benefit in an economically equivalent manner to avoid the imposition of such taxes on the Company, provided, however, that, should the Company’s auditors determine in good faith that no such alternative arrangement is achievable, the Participant shall not be entitled to his rights to payment under this clause (b). Further, the Company’s and the Participant shall undertake commercially reasonable efforts to structure the benefits under this clause (b) in a manner that is most tax efficient for the parties (i.e., on an after-tax basis), although neither the Company nor any of its employees, directors, managers, board members, affiliates, parents, stakeholders, equityholders, agents, successors, predecessors or related parties guarantees the tax treatment of any benefit under this clause (b) and no such party shall have liability to the Participant or his beneficiaries with respect to the taxation of such benefits or amounts payable in respect thereof. Notwithstanding any other rights of this Section 2.3 or the definition of Continuation Period, health coverage for Participants residing outside the United States shall be limited to such Participant’s health insurance premiums for eighteen months calculated as of the date of termination.
(c) Outplacement. Notwithstanding the provisions Section 2.3 hereof to the contrary, but subject to the provisions of Sections 2.4 through 2.6, a Participant shall be entitled to any outplacement services or outplacement reimbursement to which the Participant would have been entitled in connection with the Participant’s termination of employment under any plan, program or arrangement of the Company immediately prior to a Change in Control.
(d) Equity. Subject to the provisions of Sections 2.3 through 2.6, an immediate full vesting and lapse of all restrictions on any and all outstanding equity-based long-term incentives, including but not limited to stock options, restricted stock, performance unit and performance share awards held by the Executive. For purposes of the performance unit and performance share awards, target goals will be assumed to have been achieved for purposes of determining the number of shares and/or units earned under such awards. This
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2.3 No Other Entitlements. Subject to the provision of Section 2.2(c) hereof, Participants hereunder shall not be entitled to severance amounts under any other plan, program or policy of the Company and any amounts required to be paid to Participant as a matter of law or contract shall offset amounts payable hereunder in a manner that does not result in adverse tax consequences to the Participant under Code Section 409A as determined by the Plan Administrator.
2.4 No Duty to Mitigate/Set-off. No Participant entitled to receive Severance Benefits hereunder shall be required to seek other employment or to attempt in any way to reduce any amounts payable to the Participant by the Company pursuant to the Plan and, except as provided in Sections 2.2(b) hereof, there shall be no offset against any amounts due to the Participant under the Plan on account of any remuneration attributable to any subsequent employment that the Participant may obtain or otherwise. The amounts payable hereunder may be subject to setoff, counterclaim, recoupment, defense or other right which the Company may have against the Participant, except as the Plan Administrator determines would result in adverse tax consequences to the Participant under Code Section 409A.
2.5 Release Required. Any amounts payable pursuant to the Plan shall be conditioned upon the Participant’s execution and non-revocation, within sixty (60) days following the effective date of termination, of a general release of claims against the Company, its affiliates, and related parties thereto, in a form reasonably satisfactory to the Company. The Company shall provide the release to the Participant within five (5) calendar days following the Participant’s date of termination. The Release will contain customary confidentiality and non-disparagement provisions, a non-compete clause consistent with past practices and not to exceed fifty-two (52) weeks, and contain customary carveouts for the payment of consideration payable hereunder (which shall serve as consideration for such Release), vested benefits under the Company qualified plans, directors’ and officers’ insurance and indemnification and such other carveouts as the Plan Administrator determines in its sole and absolute discretion. In the event that the Release is not executed or is revoked by the Participant in accordance with its terms, and benefits have been provided by the Company to the Participant (including, without limitation, benefits under Section 2.2(b), the Participant shall be required (and the Company will be entitled to setoff amounts owed to Participant) to immediately reimburse the Company for the cost of benefits provided to Participant and his/her beneficiaries thereunder as reasonably determined by the Plan Administrator.
2.6 Code Section 280G. Notwithstanding any other provision of this Plan or any other agreement to which the Participant is a party to the contrary, if payments made pursuant to this Plan (when taken together with other payments to such Participant) are considered “excess parachute payments” under Section 280G of the Code, then such excess parachute
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ARTICLE III
UNFUNDED PLAN; ERISA
3.1 Unfunded Status. The Plan shall be “unfunded” for the purposes of ERISA and the Code and Severance Payments shall be paid out of the general assets of the Company as and when Severance Payments are payable under the Plan. All Participants shall be solely unsecured general creditors of the Company. If the Company decides in its sole discretion to establish any advance accrued reserve on its books against the future expense of the Severance Payments payable hereunder, or if the Company decides in its sole discretion to fund a trust under the Plan, such reserve or trust shall not under any circumstances be deemed to be an asset of the Plan.
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3.2 ERISA. The Plan is intended to constitute a “top hat” plan under ERISA for the benefit of a select group of highly compensated or management employees.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.1 Plan Administrator. The general administration of the Plan on behalf of the Company shall be placed with the Committee, or if none the Board (the “Plan Administrator”).
4.2 Reimbursement of Expenses of Plan Administrator. The Company may, in its sole discretion, pay or reimburse the members of the Plan Administrator for all reasonable expenses incurred in connection with their duties hereunder, including, without limitation, expenses of outside legal counsel.
4.3 Retention of Professional Assistance. The Plan Administrator may employ such legal counsel, accountants and other persons as may be reasonably required in carrying out its work in connection with the Plan.
4.4 Books and Records. The Plan Administrator shall maintain such books and records regarding the fiscal and other transactions of the Plan and such other data as may be required to carry out its functions under the Plan and to comply with all applicable laws.
4.5 Indemnification. The Plan Administrator and its members shall not be liable for any action or determination made in good faith with respect to the Plan. The Company shall, to the fullest extent permitted by law, indemnify and hold harmless each member of the Plan Administrator for liabilities or expenses they and each of them incur in carrying out their respective duties under the Plan, other than for any liabilities or expenses arising out of such individual’s willful misconduct or fraud.
ARTICLE V
AMENDMENT AND TERMINATION
The Company reserves the right to amend or terminate, in whole or in part, any or all of the provisions of the Plan by action of the Board (or a duly authorized committee thereof) at any time. This Plan shall automatically terminate on the second anniversary following the first Change in Control to occur hereunder, provided, that, in no event shall any amendment reducing the Severance Benefits provided hereunder or any Plan termination be effective prior to the twelve (12) month anniversary of the Effective Date, and further provided that the Company shall not amend or terminate the Plan at any time after (i) the occurrence of a Change in Control or (ii) the date the Company enters into a definitive agreement which, if consummated, would result in a Change in Control, unless the potential Change in Control is abandoned (as publicly announced by the Company), in either case until twenty-four (24)
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ARTICLE VI
SUCCESSORS
For purposes of the Plan, the Company shall include any and all successors or assignees, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Company (or its members, as the case may be) and such successors and assignees shall perform the Company’s obligations under the Plan, in the same manner and to the same extent that the Company would be required to perform if no such succession or assignment had taken place. In the event the surviving corporation in any transaction to which the Company is a party is a subsidiary of another corporation, then the ultimate parent corporation of such surviving corporation shall cause the surviving corporation to perform the Plan in the same manner and to the same extent that the Company would be required to perform if no such succession or assignment had taken place. In such event, the term “Company,” as used in the Plan, shall mean the Company, as hereinbefore defined and any successor or assignee (including the ultimate parent corporation) to the business or assets which by reason hereof becomes bound by the terms and provisions of the Plan.
ARTICLE VII
MISCELLANEOUS
7.1 Minors and Incompetents. If the Plan Administrator shall find that any person to whom Severance Benefits are payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, any Severance Benefits due (unless a prior claim therefore shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, child, parent, or brother or sister, or to any person deemed by the Plan Administrator to have incurred expense for such person otherwise entitled to the Benefits, in such manner and proportions as the Plan Administrator may determine in its sole discretion. Any such Severance Benefits shall be a complete discharge of the liabilities of the Company, the Plan Administrator and the Board under the Plan.
7.2 Limitation of Rights. Nothing contained herein shall be construed as conferring upon a Participant the right to continue in the employ of the Company as an employee in any other capacity or to interfere with the Company’s right to discharge him or her at any time for any reason whatsoever.
7.3 Payment Not Salary. Any Severance Benefits payable under the Plan shall not be deemed salary or other compensation to the Participant for the purposes of computing
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7.4 Severability. In case any provision of the Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but the Plan shall be construed and enforced as if such illegal and invalid provision never existed.
7.5 Withholding. The Company shall have the right to make such provisions as it deems necessary or appropriate to satisfy any obligations it may have to withhold federal, state or local income or other taxes incurred by reason of payments pursuant to the Plan. In lieu thereof, the Company and/or the Company shall have the right to withhold the amounts of such taxes from any other sums due or to become due from the Company and/or the Company to the Participant upon such terms and conditions as the Plan Administrator may prescribe.
7.6 Non-Alienation of Benefits. The Severance Benefits payable under the Plan shall not be subject to alienation, transfer, assignment, garnishment, execution or levy of any kind, and any attempt to cause any Severance Benefits to be so subjected shall not be recognized.
7.7 Governing Law. To the extent legally required, the Code and ERISA shall govern the Plan and, if any provision hereof is in violation of any applicable requirement thereof, the Company reserves the right to retroactively amend the Plan to comply therewith. To the extent not governed by the Code and ERISA, the Plan shall be governed by the laws of the State of Georgia without reference to rules relating to conflicts of law.
78 Code Section 409A.
(a) General. Neither the Company nor any employee, director, manager, board member, affiliate, parent, stakeholder, equityholder, agent, successor, predecessor or related party makes a guarantee with respect to the tax treatment of payments hereunder and no such party shall be responsible in any event with regard to non-compliance with or failure to be exempt from Code Section 409A. The Plan is intended to either comply with, or be exempt from, the requirements of Code Section 409A. To the extent that the Plan is not exempt from the requirements of Code Section 409A, the Plan is intended to comply with the requirements of Code Section 409A and shall be limited, construed and interpreted in accordance with such intent. Notwithstanding the foregoing, in no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on a Participant by Code Section 409A or any damages for failing to comply with Code Section 409A.
(b) Separation from Service; Specified Employees. A termination of employment shall not be deemed to have occurred for purposes of any provision of the Plan
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7.9 Non-Exclusivity. The adoption of the Plan shall not be construed as creating any limitations on the power of the Company to adopt such other termination or benefits arrangements as it deems desirable, and such arrangements may be either generally applicable or limited in application.
7.10 Headings and Captions. The headings and captions herein are provided for reference and convenience only. They shall not be considered part of the Plan and shall not be employed in the construction of the Plan.
7.11 Gender and Number. Whenever used in the Plan, the masculine shall be deemed to include the feminine and the singular shall be deemed to include the plural, unless the context clearly indicates otherwise.
7.12 Communications. All announcements, notices and other communications regarding the Plan will be made by the Company in writing.
The Plan Administrator keeps records of the Plan and is responsible for the administration of the Plan. The Plan Administrator will also answer any questions a Participant may have about the Plan. Service of legal process may be made upon the Plan Administrator or the Company’s General Counsel.
No individual may, in any case, become entitled to additional benefits or other rights under the Plan after the Plan is terminated. Under no circumstances, will any benefit under the Plan ever vest or become nonforfeitable prior to a change in control.
Adopted by the Board of Directors: February 5 2012
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