Looking for a specific CEO Severance Agreement?
Below is a list of CEO Severance Agreements signed by actual companies.
Click a link below to preview an agreement.
CEO Severance Agreements
Biotechnology / Pharmaceuticals (1)
Computer Software and Services (3)
Electronics and Miscellaneous Technology (3)
Health Products and Services (1)
Preview of our top selling CEO Severance Agreement
AK Steel Holding - Form Of Chief Executive Officer Severance Agreement
Exhibit 10.5
CHIEF EXECUTIVE OFFICER
SEVERANCE AGREEMENT
(as amended and restated to reflect changes
adopted by the Board on September 18, 1997)
-------------------------------------------
______________, 19___
____________________ ____________________ ____________________
Dear _____________:
Reference is made to your Executive Officer Severance Agreement, dated ___________, 19___ (the "Agreement"), setting forth the benefits to be provided to you in the event of the termination of your employment upon the circumstances therein specified. Upon your execution of a counterpart of this letter, the Agreement shall be deemed amended and, as so amended, is restated in its entirety to read as hereinafter set forth.
AK Steel Corporation ("AKS"), since its formation, has established itself as a strong competitor in the carbon flat rolled steel industry. Continuity of the management of AKS is a critical factor to the continued growth and success of AKS. The Board of Directors ("Board") of AK Steel Holding Corporation ("Holding"), of which AKS is a wholly-owned subsidiary, believes it is in the best interest of Holding and AKS to reinforce and encourage the continued attention and dedication of key members of management to their assigned duties.
In consideration of the mutual promises contained herein, it is hereby agreed that Holding shall cause AKS to provide and AKS shall provide to you, and you shall receive from AKS, the benefits set forth in this Agreement if your employment by AKS (including, for the purposes hereof, its subsidiaries and Affiliates, as hereinafter defined) is terminated during the term of this Agreement as provided herein.
1 . Purpose
-------
This Agreement establishes certain basic terms and conditions relating to
your employment with AKS, and special arrangements relating to the
termination of your employment with AKS for any reason other than: (i) your
voluntary retirement; (ii) your becoming totally and permanently disabled
under the AKS long-term disability plan or policy; or (iii) your death.
This Agreement supersedes all prior agreements with AKS or any predecessor
business, as well as all other AKS severance policies and practices, except
to the extent incorporated or restated herein. Notwithstanding the
foregoing, neither the termination of your employment nor anything
contained
in this Agreement shall have any affect upon your rights under (i) any tax-
qualified "pension benefit plan", as such term is defined in the Employee
Retirement Income Security Act of 1974, as amended (ERISA), (ii) any
"welfare benefit plan" as defined in ERISA, including by way of
illustration and not limitation, any medical, surgical or hospitalization
benefit coverage or long-term disability benefit coverage, or (iii) any
non-qualified deferred compensation arrangement, including by way of
illustration and not limitation, any non-qualified pension plan or deferred
compensation plan.
2. Employment
----------
During the term of this Agreement:
(a) you will be employed by AKS (including for this purpose any direct or
indirect subsidiary or Affiliate of AKS to which you may be
transferred) in your present position or in a position that is at
least comparable to your present position in compensation,
responsibility and stature and for which you are suited by education
and background;
(b) you will continue to be eligible to participate in any employee
benefit plan of AKS in accordance with its terms; and
(c) you will be entitled to the same treatment under any generally
applicable employment policy or practice as any other key member of
management of AKS whose position in the AKS organization is at a level
of responsibility comparable to yours.
Those plans, policies and practices that generally apply to other key
members of management of AKS will be referred to in this Agreement as your
"Employment Benefits." Your Employment Benefits may be modified from time
to time after the date hereof without violation of this Agreement if the
changes apply generally to other key members of management of AKS.
3. Term of Agreement
-----------------
This Agreement shall be deemed effective as of ____________, 19___ (the
"Effective Date") and shall continue in effect through the later of: (i)
the fifth anniversary of the Effective Date or (ii) the completion of full
payment of all benefits promised hereunder. This Agreement shall be
automatically renewed annually from and after the fifth anniversary of the
Effective Date unless written notice of non-renewal is given by you or by
AKS at least ninety (90) days prior to the expiration of the term,
including any extension thereof.
2
4. Termination of Employment
-------------------------
Your employment may be terminated in accordance with any of the following
paragraphs. The date upon which the termination of your employment becomes
effective is hereinafter referred to as the "Date of Termination". The
period between the date of notice of termination and the Date of
Termination is referred to as the "Notice Period".
(a) Involuntary Termination Without Cause
-------------------------------------
AKS may terminate your employment without Cause (as defined in Section
4(b) below), but only upon written notice given to you by AKS not less
than thirty (30) days prior to the Date of Termination. During the
Notice Period, you shall continue to receive your full salary and
Employment Benefits. From and after the Date of Termination, pursuant
to this Section 4(a), you shall be entitled to those benefits provided
under Section 5.
(b) Involuntary Termination For Cause
---------------------------------
AKS may terminate your employment for Cause, but only upon written
notice, specifying the facts or circumstances constituting such Cause,
which notice may be given on or at any time prior to the Date of
Termination. For the purposes of this Section 4(b), "Cause" means a
willful engaging in gross misconduct materially and demonstrably
injurious to AKS. "Willful" means an act or omission in bad faith and
without reasonable belief that such act or omission was in or not
opposed to the best interests of AKS. From and after your Date of
Termination, pursuant to this Section 4(b), you shall only be entitled
to those benefits provided under Section 8.
(c) Voluntary Termination Without Good Reason
-----------------------------------------
You may voluntarily terminate your employment without Good Reason (as
defined in Section 4(d) below), but only upon written notice given to
AKS by you not less than thirty (30) days prior to the Date of
Termination. During the Notice Period, you shall continue to receive
your full salary and Employment Benefits, provided you satisfactorily
perform your duties during the Notice Period (unless relieved of those
duties by AKS). From and after the Date of Termination, pursuant to
this Section 4(c), you shall only be entitled to those benefits
provided under Section 8.
(d) Voluntary Termination For Good Reason
-------------------------------------
You may voluntarily terminate your employment for Good Reason (as
herein defined), but only upon written notice, specifying the facts or
circumstances constituting such Good Reason, given to AKS by you at
least thirty (30) days prior to the Date of Termination and not more
than sixty (60) days following
3
the occurrence of the circumstances constituting such Good Reason. For
the purposes of this Section 4(d), "Good Reason" shall mean the
occurrence, without your express written consent, of any of the
following circumstances (unless, in the case of clauses (i), (v),
(vi), (vii) or (viii) below, such circumstances are fully corrected
prior to the Date of Termination specified in the notice of
termination):
(i) the assignment to you of any duties inconsistent with your
position within AKS or a significant adverse alteration in the
nature or status of your responsibilities or the conditions of
your employment;
(ii) a reduction by AKS in your annual base salary provided,
however, that no such reduction shall reduce your benefits
under Section 5 if you have given timely notice pursuant to
this Section 4(d);
(iii) a requirement by AKS that you be based anywhere other than the
principal executive offices of AKS except for required travel
on AKS business to an extent substantially consistent with your
customary business travel obligations;
(iv) the failure of AKS to pay to you any portion of your
compensation within seven (7) days of the date such
compensation is due;
(v) the failure of AKS, at any time within 24 months following the
occurrence of a Change In Control (as defined in Section 7(b)
hereof), to continue in effect any compensation plan in which
you participated immediately prior to such Change In Control,
which plan is material to your total compensation, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or
the failure of AKS to continue your participation in such
compensation plan (or in such substitute or alternative plan)
on a basis not materially less favorable to you, both in terms
of the amount of benefits provided and the level of your
participation relative to other participants, than that
existing immediately prior to such Change In Control;
(vi) any material reduction, except to the extent permitted by
Section 2 hereof, in your Employment Benefits;
(vii) the failure of AKS to obtain a satisfactory agreement from any
successor corporation to assume and agree to perform this
Agreement, as contemplated in Section 15 hereof;
(viii) any purported termination of your employment by AKS that is not
effected in compliance with the provisions of Section 4(a) or
4(b) hereof, as the case may be;
4
(ix) notice of non-renewal is given by AKS pursuant to Section 3 of
this Agreement.
If you give notice of termination for Good Reason, then, during the
Notice Period (which shall not exceed 60 days), you shall continue to
receive your full base salary and Employment Benefits as in effect
prior to the occurrence of the circumstances constituting such Good
Reason, subject to the right of AKS to make changes to your Employment
Benefits to the extent permitted by Section 2. From and after the
Date of Termination, pursuant to this Section 4(d), you shall be
entitled to those benefits provided under Section 5.
(e) Voluntary Termination After A Change In Control
-----------------------------------------------
You may voluntarily terminate your employment, with or without Good
Reason, during the thirty (30)-day period immediately following the
date on which a Change In Control occurs, but only upon written notice
given to AKS by you during such 30-day period specifying the Date of
Termination which, unless otherwise agreed by you and AKS, shall not
be less than thirty (30) days nor more than sixty (60) days following
such Change In Control. During the Notice Period, you shall continue
to receive your full salary and Employment Benefits, provided you
satisfactorily perform your duties during the Notice Period (unless
relieved of those duties by AKS). From and after the Date of
Termination, pursuant to this Section 4(e), you shall be entitled to
those benefits provided under Section 5.
5. Special Severance Benefits
--------------------------
(a) If your employment with AKS is involuntarily terminated by AKS without
Cause in accordance with Section 4(a), you voluntarily terminate your
employment for Good Reason in accordance with Section 4(d), or you
voluntarily terminate your employment after a Change In Control in
accordance with Section 4(e), then you shall receive the following
benefits:
(i) Your base salary shall be continued in effect for a period
(hereafter, the "Severance Pay Period") of (1) 36 months from the
Date of Termination, if the notice of your termination is given
within 24 months after the occurrence of a Change In Control or
(2) 24 months from your Date of Termination, if the notice of
your termination is given at any time other than within 24 months
after the occurrence of a Change In Control. The aggregate base
salary payable in accordance with this Section 5(a)(i) shall be
paid to you in a single, undiscounted, lump sum payment within
ten (10) days following the Date of Termination unless you have
requested, in writing, at any time prior to your Date of
Termination to receive payments of your
5
base salary in regular monthly payments throughout the Severance
Pay Period.
(ii) (1) Within ten (10) days following the Date of Termination, you
will receive a lump-sum payment equal in amount to the
result obtained by application of the following formula: P =
(x) times (y) times (z), where:
P = the lump-sum payment;
(x) = twelve times your monthly base salary;
(y) = the fraction obtained by dividing your annual
incentive compensation which was paid or is
payable to you for the immediately preceding
calendar year by your actual base salary for such
year; and
(z) = 3.0 (if the notice of your termination is given
within 24 months after the occurrence of a Change
In Control) or 2.0 (if the notice of your
termination is given at any time other than within
24 months after the occurrence of a Change in
Control).
(2) Within ten (10) days following the date that payment is made
to active employees of AKS, you shall receive a pro-rata
payment of the annual incentive payment you would have
received for the year in which your Date of Termination
occurs. Such payment shall be (A) pro-rated based upon your
Date of Termination and (B) otherwise calculated as an
employee in good standing at your level of participation in
effect prior to the Date of Termination and assuming 100
percent completion of any individual performance factors.
(iii) Notwithstanding any provision to the contrary in the AK Steel
Holding Corporation 1994 Stock Incentive Plan as amended or any
other similar plan of AKS or Holding (each, a "Plan"), or under
the terms of any grant, award agreement or form for exercising
any right under the Plan, you shall have the right:
(1) to exercise any stock option awarded to you under the Plan
without regard to any waiting period required by the Plan
or award agreement (but subject to a minimum six month
holding period from the date of award and any restrictions
imposed by law) from the first day of your Notice Period
until
6
the first to occur of the third anniversary of your Date
of Termination or the date the award expires by its terms,
and
(2) to the absolute ownership of any shares of stock granted to
you under the Plan, free of any restriction on your right to
transfer or otherwise dispose of the shares (but subject to
a minimum six month holding period from the date of grant
and any restrictions imposed by law), regardless of whether
entitlement to the shares is contingent or absolute by the
terms of the grant; and the Board shall take such action
within the Notice Period as is necessary or appropriate to
eliminate any restriction on your ownership of, or your
right to sell or assign, any such shares; and further
provided that if the Board should fail or refuse to take
such action, AKS shall pay you, in exchange for such shares,
no later than ten (10) days after the Date of Termination,
an amount in cash equal to the greatest aggregate market
value of the shares during the Notice Period.
You agree, for a period of six (6) months after your Termination
Date, to continue to comply with all AKS and Holding policies and
directives related to trading in Holding stock which were in
effect prior to your notice of termination. If your compliance
with such policies and directives precludes you from exercising
any stock options or selling any shares of stock described in
paragraphs (1) and (2) above for a period of more than sixty (60)
days from the first day of your Notice Period, then AKS will pay
you in cash the difference between the average share price during
the Notice Period and, if less, the actual share price received
by you at the time of sale provided you have completed such sale
within sixty (60) days from your first opportunity to do so. The
average sale price during the Notice Period will be determined by
averaging the highest share price and the lowest share price
during the Notice Period. Any such differential payment will be
paid to you within thirty (30) days after you provide written
notice to AKS requesting such payment. Such notice is to be
directed to the attention of the Secretary of AKS and contain the
relevant stock transaction dates and actual share price
information.
(iv) During the Severance Pay Period your Employment Benefits shall be
continued, subject to the right of AKS to make any changes to
your Employment Benefits permitted in accordance with Section 2;
provided, however, that you shall not:
(1) accumulate vacation pay for periods after the Date of
Termination;
7
(2) first qualify for sickness and accident plan benefits by
reason of an accident occurring or a sickness first
manifesting itself after t...
View agreement details