Looking for a specific COO Severance Agreement?
Below is a list of COO Severance Agreements signed by actual companies.
Click a link below to preview an agreement.
COO Severance Agreements
Preview of our top selling COO Severance Agreement
Albertsons - Change of Control Severance For Coo & Evp
ALBERTSON'S, INC.
CHANGE OF CONTROL SEVERANCE AGREEMENT
FOR CHIEF OPERATING OFFICER AND EXECUTIVE VICE PRESIDENTS
THIS CHANGE OF CONTROL SEVERANCE AGREEMENT (this "Agreement"), dated as of November 1, 2002, is made and entered by and between Albertsons, Inc., a Delaware corporation (the "Company"), and _________________ (the "Executive").
WITNESSETH:
WHEREAS, the Executive is a key employee of the Company or one or more of its Subsidiaries (as defined below) and has made and is expected to continue to make major contributions to the short- and long-term profitability, growth and financial strength of the Company;
WHEREAS, the Company recognizes that, as is the case for most publicly held companies, the possibility of a Change in Control (as defined below) exists and that such possibility, and the uncertainty it may create among management, may result in the distraction or departure of management personnel, to the detriment of the Company and its stockholders;
WHEREAS, the Company desires to assure itself of both present and future continuity of management and desires to establish certain minimum severance benefits for certain of its senior executives, including the Executive, applicable in the event of a Change in Control; and
WHEREAS, the Company wishes to ensure that its senior executives are not unduly distracted by the circumstances attendant to the possibility of a Change in Control and to encourage the continued attention and dedication of such executives, including the Executive, to their assigned duties with the Company; and
WHEREAS, the Company desires to provide additional inducement for the Executive to continue to remain in the employ of the Company.
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Certain Defined Terms. In addition to terms defined elsewhere herein, the following terms have the following meanings when used in this Agreement with initial capital letters:
(a) "Base Pay" means the Executive's annual base salary rate as in effect from time to time.
(b) "Board" means the Board of Directors of the Company.
(c) "Cause" means that, prior to any termination pursuant to Section 3(b), the Executive shall have:
(i) been convicted of a criminal violation involving, in each
case, fraud, embezzlement or theft in connection with his duties or in the
course of his employment with the Company or any Subsidiary;
(ii) committed intentional wrongful damage to property of the
Company or any Subsidiary;
(iii) committed intentional wrongful disclosure of secret
processes or confidential information of the Company or any Subsidiary; or
(iv) committed intentional wrongful engagement in any Competitive
Activity; and any such act shall have been demonstrably and materially
harmful to the Company. For purposes of this Agreement, no act or failure
to act on the part of the Executive shall be deemed "intentional" if it was
due primarily to an error in judgment or negligence, but shall be deemed
"intentional" only if done or omitted to be done by the Executive not in
good faith and without reasonable belief that the Executive's action or
omission was in the best interest of the Company. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for
"Cause" hereunder unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of
not less than three quarters of the Board then in office at a meeting of
the Board called and held for such purpose, after reasonable notice to the
Executive and an opportunity for the Executive, together with the
Executive's counsel (if the Executive chooses to have counsel present at
such meeting), to be heard before the Board, finding that, in the good
faith opinion of the Board, the Executive had committed an act constituting
"Cause" as herein defined and specifying the particulars thereof in detail.
Nothing herein will limit the right of the Executive or his beneficiaries
to contest the validity or propriety of any such determination.
(d) "Change in Control" means the occurrence during the Term of any of the following events:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of the combined voting power of the
then-outstanding Voting Stock of the Company; provided, however, that:
(1) for purposes of this Section 1(d)(i), the following
acquisitions shall not constitute a Change in Control: (A) any
acquisition of Voting Stock of the Company directly from the Company
that is approved by a majority of the Incumbent Directors, (B) any
acquisition of Voting Stock of the Company by the Company or any
Subsidiary, (C) any acquisition of Voting Stock of the Company by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary, and (D) any acquisition of Voting Stock of
the Company by any Person pursuant to a Business Combination that
complies with clauses (A), (B) and (C) of Section 1(d)(iii) below;
(2) if any Person acquires beneficial ownership of 20% or more of
combined voting power of the then-outstanding Voting Stock of the
Company as a result of a transaction described in clause (1)(A) of
Section 1(d)(i) and such Person thereafter becomes the beneficial owner
of any additional shares of Voting Stock of the Company representing 1%
or more of the then-outstanding Voting Stock of the Company, other than
in an acquisition directly from the Company that is approved by a
majority of the Incumbent Directors or other than as a result of a
stock dividend, stock split or similar transaction effected by the
Company in which all holders of Voting Stock are treated equally, such
subsequent acquisition shall be treated as a Change in Control;
(3) a Change in Control will not be deemed to have occurred if a
Person acquires beneficial ownership of 20% or more of the Voting Stock
of the Company as a result of a reduction in the number of shares of
Voting Stock of the Company outstanding unless and until such Person
thereafter becomes the beneficial owner of any additional shares of
Voting Stock of the Company representing 1% or more of the
then-outstanding Voting Stock of the Company, other than as a result of
a stock dividend, stock split or similar transaction effected by the
Company in which all holders of Voting Stock are treated equally; and
(4) if at least a majority of the Incumbent Directors determine in
good faith that a Person has acquired beneficial ownership of 20% or
more of the Voting Stock of the Company inadvertently, and such Person
divests as promptly as practicable a sufficient number of shares so
that such Person beneficially owns less than 20% of the Voting Stock of
the Company, then no Change in Control shall have occurred as a result
of such Person's acquisition; or
(ii) a majority of the Directors are not Incumbent Directors; or
(iii) the consummation of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of
the assets of the Company or the acquisition of assets of another
corporation, or other transaction (each, a "Business Combination"), unless,
in each case, immediately following such Business Combination (A) all or
substantially all of the individuals and entities who were the beneficial
owners of Voting Stock of the Company immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
combined voting power of the then outstanding shares of Voting Stock of the
entity resulting from such Business Combination (including, without
limitation, an entity which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries), (B) no Person (other than the
Company, such entity resulting from such Business Combination, or any
employee benefit plan (or related trust) sponsored or maintained by the
Company, any Subsidiary or such entity resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of the
combined voting power of the then outstanding shares of Voting Stock of the
entity resulting from such Business Combination, and (C) at least a
majority of the members of the Board of Directors of the entity resulting
from such Business Combination were Incumbent Directors at the time of the
execution of the initial agreement or of the action of the Board providing
for such Business Combination; or
(iv) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company, except pursuant to a Business
Combination that complies with clauses (A), (B) and (C) of Section
1(d)(iii).
(e) "Competitive Activity" means the Executive's having an investment constituting more than $100,000 in or providing personal services to any business enterprise (without the prior written consent of the Company), if such enterprise:
(i) at the time of determination, is substantially similar to the
whole or a substantial part of the business conducted by the Company or any
of its divisions or affiliates;
(ii) at the time of determination, is operating a store or stores
which, during its or their fiscal year preceding the determination, had
aggregate net sales in excess of $10,000,000, if such store or any of such
stores is or are located in a city or within a radius of 25 miles from the
outer limits of a city where the Company, or any of divisions or
affiliates, is operating a store or stores which, during its or their
fiscal year preceding the determination, had aggregate net sales in excess
of $10,000,000; and
(iii) had aggregate net sales at all its locations, and sales by
its divisions and affiliates, during its fiscal year preceding that in
which the Executive made an investment therein, or first rendered personal
services thereto, in excess of $500,000,000.
(f) "Employee Benefits" means the perquisites, benefits and service credit for benefits as provided under any and all employee retirement income and Welfare Benefit policies, plans, programs or arrangements in which Executive is entitled to participate, including without limitation any stock option, performance share, performance unit, stock purchase, stock appreciation, savings, pension, supplemental executive retirement, or other retirement income or Welfare Benefit, deferred compensation, incentive compensation, group or other life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by the Company or a Subsidiary), disability, salary continuation, expense reimbursement and other employee benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs or arrangements that may be adopted hereafter by the Company or a Subsidiary, providing perquisites, benefits and service credit for benefits at least as great in the aggregate as are payable thereunder immediately prior to a Change in Control.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(h) "Good Reason" means the occurrence of one or more of the following events (regardless of whether any other reason, other than Cause, for such termination exists or has occurred, including without limitation other employment):
(i) Failure to elect or reelect or otherwise to maintain the
Executive in the office or the position, or a substantially equivalent or
better office or position, of or with the Company and/or a Subsidiary (or
any successor thereto by operation of law of or otherwise), as the case may
be, which the Executive held immediately prior to a Change in Control, or
the removal of the Executive as a Director of the Company and/or a
Subsidiary (or any successor thereto) if the Executive shall have been a
Director of the Company and/or a Subsidiary immediately prior to the Change
in Control;
(ii) Failure of the Company to remedy any of the following within
10 calendar days after receipt by the Company of written notice thereof
from the Executive: (A) A significant adverse change in the nature or scope
of the authorities, powers, functions, responsibilities or duties attached
to the position with the Company and any Subsidiary which the Executive
held immediately prior to the Change in Control, (B) a reduction in the
Executive's Base Pay received from the Company or any Subsidiary, (C) a
reduction in the Executive's Incentive Pay as compared with the Incentive
Pay most recently paid prior to the Change in Control, or (D) the
termination or denial of the Executive's rights to Employee Benefits or a
reduction in the scope or value thereof;
(iii) The liquidation, dissolution, merger, consolidation or
reorganization of the Company or the transfer of all or substantially all
of its business and/or assets, unless the successor or successors (by
liquidation, merger, consolidation, reorganization, transfer or otherwise)
to which all or substantially all of its business and/or assets have been
transferred (by operation of law or otherwise) assumed all duties and
obligations of the Company under this Agreement pursuant to Section 11(a);
(iv) The Company requires the Executive to have his principal
location of work changed to any location that is in excess of 50 miles from
the location thereof immediately prior to the Change in Control, or
requires the Executive to travel away from his office in the course of
discharging his responsibilities or duties hereunder at least 20% more (in
terms of aggregate days in any calendar year or in any calendar quarter
when annualized for purposes of comparison to any prior year) than was
required of Executive in any of the three full years immediately prior to
the Change in Control without, in either case, his prior written consent;
or
(v) Without limiting the generality or effect of the foregoing,
any material breach of this Agreement by the Company or any successor
thereto which is not remedied by the Company within 10 calendar days after
receipt by the Company of written notice from the Executive of such breach.
(i) "Incentive Pay" means an annual bonus, incentive or other payment of compensation, in addition to Base Pay, made or to be made in regard to services rendered in any year or other period pursuant to any bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement, policy, plan, program or arrangement (whether or not funded) of the Company or a Subsidiary, or any successor thereto. "Incentive Pay" does not include any stock option, stock appreciation, stock purchase, restricted stock or similar plan, program, arrangement or grant, whether or not provided under an arrangement described in the preceding sentence.
(j) "Incumbent Directors" means the individuals who, as of the date hereof, are Directors of the Company and any individual becoming a Director subsequent to the date hereof whose election, nomination for election by the Company's shareholders, or appointment, was approved by a vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination); provided, however, that an individual shall not be an Incumbent Director if such individual's election or appointment to the Board occurs as a result of an actual or threatened election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.
(k) "Retirement Plans" means the benefit plans of the Company that are intended to be qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code") and any supplemental executive retirement benefit plan or any other plan that is a successor thereto if the Executive was a participant in such Retirement Plan on the date of the Change in Control.
(l) "Severance Period" means the period of time commencing on the date of the first occurrence of a Change in Control and continuing until the earlier of (i) the second anniversary of the occurrence of the Change in Control, or (ii) the Executive's death; provided, however, that commencing on each anniversary of the Change in Control, the Severance Period will automatically be extended for an additional year unless, not later than 90 calendar days prior to such anniversary date, either the Company or the Executive shall have given written notice to the other that the Severance Period is not to be so extended.
(m) "Subsidiary" means an entity in which the Company directly or indirectly beneficially owns 50% or more of the outstanding Voting Stock.
(n) "Term" means the period commencing as of the date hereof and expiring on the close of business on December 31, 2005; provided, however, that (i) commencing on January 1, 2004 and each January 1 thereafter, the term of this Agreement will automatically be extended for an additional year unless, not later than September 30 of the immediately preceding year, the Company or the Executive shall have given notice that it or the Executive, as the case may be, does not wish to have the Term extended; (ii) if a Change in Control occurs during the Term, the Term shall expire and this Agreement will terminate on the last day of the Severance Period; and (iii) subject to Section 3(c), if, prior to a Change in Control, the Executive ceases for any reason to be an employee of the Company or any Subsidiary (including termination arising in connection with the Company ceasing to beneficially own 50% or more of the Voting Stock of a Subsidiary), or ceases to be an employee at a level previously designated for the benefits set forth in Annex A hereto, thereupon without further action the Term shall be deemed to have expired and this Agreement will immediately terminate and be of no further effect. For purposes of this Section 1(n), the Executive shall not be deemed to have ceased to be an employee of the Company and any Subsidiary by reason of the transfer of Executive's employment between the Company and any Subsidiary, or among any Subsidiaries.
(o) "Termination Date" means the date on which the Executive's employment is terminated (the effective date of which shall be the date of termination, or such other date that may be specified by the Executive if the termination is pursuant to Section 3(b)).
(p) "Voting Stock" means securities entitled to vote generally in the election of directors.
(q) "Welfare Benefits" means Employee Benefits that are provided under any "welfare plan" (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) of the Company.
2. Operation of Agreement. This Agreement will be effective and binding immediately upon its execution, but, anything in this Agreement to the contrary notwithstanding, except as provided in Section 3(c), this Agreement will not be operative unless and until a Change in Control occurs. Upon the occurrence of a Change in Control at any time during the Term, without further action, this Agreement will become immediately operative.
3. Termination Following a Change in Control. (a) In the event of the occurrence of a Change in Control, the Executive's employment may be terminated by the Company or a Subsidiary during the Severance Period and the Executive will be entitled to the benefits provided by Section 4 unless such termination is the result of the occurrence of one or more of the following events:
(i) The Executive's death;
(ii) If the Executive becomes permanently disabled within the
meaning of, and begins actually to receive disability benefits pursuant to,
the long-term disability plan in effect for, or applicable to, Executive
immediately prior to the Change in Control; or
(iii) Cause.
If, during the Severance Period, the Executive's employment is terminated by the Company or any Subsidiary other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), the Executive will be entitled to the benefits provided by Section 4.
(b) In the event of the occurrence of a Change in Control, the Executive may terminate employment with the Company and any Subsidiary during the Severance Period for Good Reason with the right to severance compensation as provided in Section 4.
(c) Anything in this Agreement to the contrary notwithstanding, if a Change in Control occurs and not more than twelve months prior to the date on which the Change in Control occurs, the Executive's employment with the Company ceases at the previously designated level or is terminated by the Company (or the Executive terminates his employment for Good Reason), such cessation or termination of employment will be deemed to be a cessation or termination of employment after a Change in Control for purposes of this Agreement if the Executive has reasonably demonstrated that such cessation or termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control, or (ii) otherwise arose in connection with or in anticipation of a Change in Control.
(d) A termination by the Company pursuant to Section 3(a) or by the Executive pursuant to Section 3(b) will not affect any rights that the Executive may have pursuant to any agreement, policy, plan, program or arrangement of the Company or Subsidiary providing Employee Benefits, which rights shall be governed by the terms thereof, except for any rights to severance compensation to which Executive may be entitled upon termination of employment under any severance or employment agreement between the Company and the Executive which rights, to the extent not greater than those provided by this Agreement, shall, during the Severance Period, be superseded by this Agreement.
4. Severance Compensation. (a) If, following the occurrence of a Change in Control, the Company or Subsidiary terminates the Executive's employment during the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or if the Executive terminates his employment pursuant to Section 3(b), provided that the Executive executes a release substantially in the form rendered by senior executives of the Company prior to the Change in Control. The Company will pay to the Executive the amounts described in Annex A within five business days after the Termination Date and will continue to provide to the Executive the benefits described on Annex A for the periods described therein.
(b) Without limiting the rights of the Executive at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the "prime rate" as set forth from time to time during the relevant period in The Wall Street Journal "Money Rates" column, plus 2%. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such change.
(c) Unless otherwise expressly provided by the applicable annual incentive compensation plan or program, after the occurrence of a Change in Control, the Company will pay in cash to the Executive a lump sum amount equal to the value of the Executive's annual bonus for the performance period that includes the date on which the Change in Control occurred, disregarding any applicable vesting requirements; provided that such amount will be equal to the product of the target award percentage under the applicable annual incentive plan or program in effect immediately prior to the Change in Control or, if the applicable Incentive Pay plan or program does not specify such percentage, the target percentage that would be applicable immediately prior to the Change in Control based upon the Executive's salary grade, job classification and title, in either event, multiplied by Base Pay, but prorated to base payment only on the portion of the Executive's service that had elapsed during the applicable performance period through the Change in Control. Such payment will be made within five business days after the Change in Control.
5. Certain Additional Payments by the Company. (a) Anything in this Agreement to the contrary notwithstanding, but subject to Paragraph 7 of Annex B, in the event that this Agreement becomes operative and it is determined (as hereafter provided) that any payment (other than the Gross-Up payments provided for in this Section 5 and Annex B) or distribution by the Company or any of its affiliates 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 pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, performance share, performance unit, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code by reason of being considered "contingent on a change in ownership or control" of the Company, within the meaning of Section 280G of the Code or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the "Excise Tax"), then the Executive will be entitled to receive an additional payment or payments (collectively, a "Gross-Up Payment"); provided, however, that no Gross-up Payment will be made with respect to the Excise Tax, if any, attributable to (i) any incentive stock option, as defined by Section 422 of the Code ("ISO") granted prior to the execution of this Agreement, or (ii) any stock appreciation or similar right, whether or not limited, granted in tandem with any ISO described in clause (i). The Gross-Up Payment will be 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 any 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 Payment. For purposes of determining the amount of the Gross-Up Payment, the Executive will be considered to pay (x) federal income taxes at the highest rate in effect in the year in which the Gross-Up Payment will be made and (y) state and local income taxes at the highest rate in effect in the state or locality in which the Gross-Up Payment would be subject to state or local tax, net of the maximum reduction in federal income tax that could be obtained from deduction of such state and local taxes.
(b) The obligations set forth in Section 5(a) will be subject to the procedural provisions described in Annex B.
6. No Mitigation Obligation. The Company hereby acknowledges that it will be difficult and may be impossible for the Execu...
View agreement details