Exhibit 10.1
CHANGE OF CONTROL AGREEMENT
     This AGREEMENT is entered into by and between The Greenbrier Companies,
Inc., an Oregon corporation (the “Company”), and Martin R. Baker (the
“Employee”) as of the 6th day of May, 2008.
     The Board of Directors of the Company (the “Board”) has determined that it
is in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Employee, notwithstanding the
possibility or occurrence of a Change of Control (as defined in Section 2) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Employee by virtue of the personal uncertainties and risks
created by a pending or potential Change of Control and to encourage the
Employee’s full attention and dedication to the Company currently and in the
event of any pending or potential Change of Control, and to provide the Employee
with compensation and benefits arrangements upon a Change of Control which
ensure that the compensation and benefits expectations of the Employee will be
satisfied and which are competitive with those of other corporations. Therefore,
in order to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Intent; Certain Definitions.
     The intent of this Agreement is to entitle the Employee to receive from the
Company certain payments and benefits in the event that the Employee’s
employment is terminated following a Change of Control, subject to the terms,
conditions and limitations set forth herein.
     (a) The “Effective Date” shall mean the first date during the Change of
Control Period (as defined in Section 1(b)) on which a Change of Control occurs,
subject to Section 1(c), below.
     (b) The “Change of Control Period” shall mean the period commencing on the
Effective Date and ending on the second anniversary of such date.
     (c) Notwithstanding any other provision of this Agreement to the contrary,
if a Change of Control occurs and if the Employee’s employment with the Company
is terminated prior to the date on which the Change of Control occurs, and if it
is reasonably demonstrated by the Employee that such termination of employment
(i) was at the request of a third party who has taken steps reasonably
calculated to effect the Change of Control or (ii) otherwise arose in connection
with or anticipation of the Change of Control, then for all purposes of this
Agreement the “Effective Date” shall mean the date immediately prior to the date
of such termination of employment, and such termination shall be deemed to have
occurred during the Change of Control Period.

 

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2. Change of Control.
For the purpose of this Agreement, a “Change of Control” shall mean the
occurrence of any of the following:
    (a) The acquisition by any individual, entity or group (within the meaning
of section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) of beneficial ownership (within the meaning of
Rule 13d–3 promulgated under the Exchange Act) of 30 percent or more of the
stock of any class or classes having by the terms thereof ordinary voting power
to elect a majority of the directors of the Company (irrespective of whether at
the time stock of any class or classes of the Company shall have or might have
voting power by reason of the happening of any contingency); provided, however,
that for purposes of this subsection (a), the following acquisitions will not
constitute a Change of Control: (i) any acquisition directly from the Company;
(ii) any acquisition by the Company or a subsidiary of the Company; or (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company.
    (b) The individuals who, as of the date of this Agreement, are the members
of the Board of Directors of the Company (the “Incumbent Board”) cease for any
reason to constitute a majority of the Board, unless the election or
appointment, or nomination for election or appointment, of any new member of the
Board was approved by a vote of a majority of the Incumbent Board of Directors,
then such new member shall be considered as though such individual were a member
of the Incumbent Board.
    (c) The consummation of a merger or consolidation involving the Company if
the stockholders owning the capital and profits (“ownership interests”) of the
Company immediately before such merger or consolidation do not, as a result of
such merger or consolidation, own, directly or indirectly, more than 50 percent
of the combined voting power or ownership interests of the Company, or the
entity resulting from such merger or consolidation, in substantially the same
proportion as their ownership of the combined voting power or ownership
interests outstanding immediately before such merger or consolidation.
    (d) The sale or other disposition of all or substantially all of the assets
of the Company.
    (e) The dissolution or the complete or partial liquidation of the Company.
3. Termination of Employment.
    (a) Death or Disability. The Employee’s employment shall terminate
automatically upon the Employee’s death during the Change of Control Period. If
the Company determines in good faith that the Disability of the Employee has
occurred during the Change of Control Period (pursuant to the definition of
Disability set forth below), it may give to the Employee written notice in
accordance with Section 11(b) of its intention to terminate the Employee’s
employment. In such event, the Employee’s employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the Employee
(the “Disability Effective Date”), provided
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that, within the 30 days after such receipt, the Employee shall not have
returned to full-time performance of the Employee’s duties. For purposes of this
Agreement, “Disability” shall mean the absence of the Employee from the
Employee’s duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company
or its insurers and acceptable to the Employee or the Employee’s legal
representative (such agreement as to acceptability not to be withheld
unreasonably).
     (b) Cause. The Company may terminate the Employee’s employment during the
Change of Control Period for Cause. For purposes of this Agreement, “Cause”
shall mean (i) a willful and continued failure to perform substantially the
Employee’s duties with the Company, other than such failure (A) resulting from
Employees’ Disability or incapacity due to bodily injury or physical or mental
illness; or (B) for which a demand for substantial performance is delivered to
Employee which specifically identifies the manner in which Employee has not
substantially performed Employee’s duties and provides a 30-day period during
which time Employee may take corrective actions, which period of time has not
yet expired; or (ii) the conviction of the Employee (including a plea of nolo
contendere) of a felony or gross misdemeanor under federal or state law which is
materially and demonstrably injurious to the Company or which impairs the
Employee’s ability to perform substantially the Employee’s duties for the
Company.
     (c) Good Reason. The Employee’s employment may be terminated during the
Change of Control Period by the Employee for Good Reason. For purposes of this
Agreement, “Good Reason” shall mean:
          (A) A material change in Employee’s status, positions, duties or
responsibility as an employee of the Company as in effect immediately prior to
the Effective Date which may reasonably be considered to be an adverse change,
except in connection with the termination of Employee’s employment for Cause or
due to Disability or death, or resulting from Employee’s decision for any reason
other than for Good Reason;
          (B) A reduction by the Company of Employee’s base salary exceeding
5 percent of Employee’s prior year’s base salary (or an adverse change in the
form or timing of the payment thereof) as in effect immediately prior to the
Effective Date;
          (C) A reduction by the Company of Employee’s annual bonus exceeding
20 percent of Employee’s prior year’s annual bonus (unless such reduction
relates to the amount of annual bonus payable to Employee for the achievement of
specified performance goals or to the attainment of profitability levels of the
Company or certain of its subsidiaries, and the non-achievement of such goals
and/or the non-attainment of profitability levels of the Company or certain of
its subsidiaries is the reason for the reduction in Employee’s annual bonus
compared to the prior year’s bonus);
          (D) the Company’s requiring the Employee to be based at any office
more than 35 miles from where Employee’s office is located immediately prior to
the
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Effective Date;
          (E) any purported termination by the Company of the Employee’s
employment otherwise than as expressly permitted by this Agreement; or
          (F) any failure by the Company to comply with and satisfy
Section 10(c), provided that such successor has received at least ten days’
prior written notice from the Company or the Employee of the requirements of
Section 10(c).
For purposes of this Section 3(c), any good faith determination of “Good Reason”
made by the Employee shall be conclusive.
     (d) Notice of Termination. Any termination by the Company for Cause, or by
the Employee for Good Reason, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 11(b). For purposes of
this Agreement, a “Notice of Termination” means a written notice which
(i) indicates the specific termination provision in this Agreement relied upon,
(ii) to the extent applicable sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee’s
employment under the provision so indicated, and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date of such notice. The failure by the Employee or
the Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any right
of the Employee or the Company hereunder or preclude the Employee or the Company
from asserting such fact or circumstance in enforcing the Employee’s or the
Company’s rights hereunder.
     (e) Date of Termination. “Date of Termination” means (i) if the Employee’s
employment is terminated by the Company for Cause, or by the Employee for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Employee’s employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Employee of such
termination, and (iii) if the Employee’s employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of death of the
Employee or the Disability Effective Date, as the case may be.
4. Obligations of the Company upon Termination.
     (a) Good Reason; Other than for Cause, or Disability. If, during the Change
of Control Period, the Company shall terminate the Employee’s employment other
than for Cause or Disability or the Employee shall terminate employment for Good
Reason:
     (i) Subject to Section 4(e) below, the Company shall pay to the Employee in
a lump sum in cash within 30 days after the Date of Termination the aggregate of
the following amounts:
          (A) the Employee’s Base Salary through the Date of Termination and any
accrued vacation pay, in each case to the extent not previously paid (the sum of
such
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amounts shall be hereinafter referred to as the “Accrued Obligations”); and
          (B) the amount equal to one and one-half times the amount of the sum
of (x) the Employee’s Base Salary and (y) the Average Bonus (such amount shall
be hereinafter referred to as the “Severance Amount”).
     (ii) “Base Salary” shall mean Employee’s current annual base salary in
effect at the time a Change in Control occurs. “Average Bonus” shall mean the
average of the two most recent annual bonuses received by the Employee prior to
the year in which a Change of Control occurs, or, if the Employee shall not have
been employed by the Company for a sufficient tenure as to have been eligible to
receive two annual bonuses, an amount equal to the most recent annual bonus, if
any, received by the Employee.
     (iii) To the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Employee and/or the Employee’s family any other
amounts or benefits required to be paid or provided or which the Employee and/or
the Employee’s family is eligible to receive pursuant to this Agreement and
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies as in effect and applicable generally to
other peer Employees of the Company and its affiliated companies and their
families during the 90–day period immediately preceding the Effective Date or,
if more favorable to the Employee, as in effect generally thereafter with
respect to other peer Employees of the Company and its affiliated companies and
their families (such other amounts and benefits shall be hereinafter referred to
as the “Other Benefits”).
     (iv) All unvested stock options and restricted stock grants held by
Employee shall become fully vested and exercisable as of the Date of
Termination.
     (v) For a period of one and one-half years following the Date of
Termination (the “Employee Benefit Continuation Period”), the Company shall
continue to provide all insured and self-insured employee benefits (including,
without limitation, medical, life, dental, vision and disability plans) to the
Employee and/or the Employee’s family reasonably similar to those which would
have been provided to them in accordance with the plans, programs, practices and
policies if the Employee’s employment had not been terminated (such continuation
of benefits shall be referred to as “Employee Benefit Continuation”). If the
Employee becomes reemployed with another employer during the Employee Benefit
Continuation Period and is eligible to receive medical or other employee
benefits under another employer provided plan, the Company shall not be
obligated to continue to provide the medical and other employee benefits
described herein, to the extent that reasonably similar medical or other
benefits are available to the Employee pursuant to such employer-provided plan.
For purposes of Employee’s rights to continuation coverage pursuant to COBRA,
Employee shall be considered to have remained employed until, and Employee’s
COBRA rights shall be triggered by, the end of the Employee Benefit Continuation
Period. “COBRA” refers to the Consolidated Omnibus Budget Reconciliation Act of
1985.
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     (b) Death. If the Employee’s employment is terminated by reason of the
Employee’s death during the Change of Control Period, this Agreement shall
terminate without further obligations to the Employee’s legal representatives
under this Agreement, other than for (i) payment of Accrued Obligations (which
shall be paid to the Employee’s estate or beneficiary, as applicable, in a lump
sum in cash within 30 days of the Date of Termination); and (ii) the timely
payment or provision of the Employee Benefit Continuation and Other Benefits.
     (c) Disability. If the Employee’s employment is terminated by reason of the
Employee’s Disability during the Change of Control Period, this Agreement shall
terminate without further obligations to the Employee, other than for
(i) payment of Accrued Obligations (which shall be paid to the Employee in a
lump sum in cash within 30 days of the Date of Termination); and (ii) the timely
payment of provision of the Employee Benefit Continuation and Other Benefits.
     (d) Cause; Other than for Good Reason. If the Employee’s employment shall
be terminated for Cause during the Change of Control Period, this Agreement
shall terminate without further obligations to the Employee other than the
obligation to pay to the Employee Annual Base Salary through the Date of
Termination to the extent previously unpaid. If the Employee terminates
employment during the Change of Control Period, excluding a termination for Good
Reason, this Agreement shall terminate without further obligations to the
Employee, other than for Accrued Obligations and the timely payment or provision
of Other Benefits. In such case, all Accrued Obligations shall be paid to the
Employee in a lump sum in cash within 30 days of the Date of Termination.
     (e) Six-Month Payment Delay for Specified Employees. Notwithstanding any
other provision of this Agreement to the contrary, in the event that the
Employee is determined to be a “specified employee” within the meaning of Treas.
Reg. §1.409A-1(i), then no payments shall be made to the Employee pursuant to
this Agreement before the date that is six months after the date of the
Employee’s separation from service, as that term is defined in Treas. Reg.
§1.409A-1(h).
5. Non-Exclusivity of Rights.
    Except as provided in Sections 4(a)(v), 4(b) and 4(c), nothing in this
Agreement shall prevent or limit the Employee’s continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its affiliated companies and for which the Employee may qualify, nor
shall anything herein limit or otherwise affect such rights as the Employee may
have under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Employee is otherwise
entitled to receive under any plan, policy, practice or program of, or any
contract or agreement with, the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
6. Full Settlement; Resolution of Disputes.
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     (a) The Company’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Employee or others. In no event
shall the Employee be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Employee under any of
the provisions of this Agreement and, except as provided in Section 4(a)(v),
such amounts shall not be reduced whether or not the Employee obtains other
employment. The Company agrees to pay promptly as incurred, to the full extent
permitted by law, all legal fees and expenses which the Employee may reasonably
incur as a result of any contest (regardless of the outcome thereof) by the
Company, the Employee or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Employee about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in section
7872(f)(2)(A) of the Internal Revenue Code (the “Code”).
     (b) If there shall be any dispute between the Company and the Employee
(i) in the event of any termination of the Employee’s employment by the Company,
whether such termination was for Cause, or (ii) in the event of any termination
of employment by the Employee, whether Good Reason existed, then, unless and
until there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause or that the
determination by the Employee of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits, to the
Employee and/or the Employee’s family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to Section
4(a) as though such termination were by the Company without Cause, or by the
Employee with Good Reason; provided, however, that the Company shall not be
required to pay any disputed amount pursuant to this paragraph except upon
receipt of an undertaking by or on behalf of the Employee to repay all such
amounts to which the Employee is ultimately adjudged by such court not to be
entitled.
7. Limitation on Payments and Benefits.
     Notwithstanding anything in this Agreement to the contrary, if any of the
payments or benefits to be made or provided in connection with the Agreement,
together with any other payments or benefits which the Employee has the right to
receive from the Company or any entity which is a member of an “affiliated
group” (as defined in section 1504(a) of the Code without regard to section
1504(b) of the Code) of which the Company is a member constitute an “excess
parachute payment” (as defined in section 280G(b) of the Code), the payments or
benefits to be made or provided in connection with this Agreement will be
reduced to the extent necessary to prevent any portion of such payments or
benefits from becoming nondeductible by the Company pursuant to section 280G of
the Code or subject to the excise tax imposed under section 4999 of the Code.
The determination as to whether any such decrease in the payments or benefits to
be made or provided in connection with this Agreement is necessary must be made
in good faith by a nationally recognized accounting firm (the “Accounting
Firm”), and such determination will be conclusive and binding upon Employee and
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
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Control, the Company 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. In the event that such a
reduction is necessary, Employee will have the right to designate the particular
payments or benefits that are to be reduced or eliminated so that no portion of
the payments or benefits to be made or provided to Employee in connection with
the Agreement will be excess parachute payments subject to the deduction
limitations under section 280G of the Code and the excise tax under section 4999
of the Code.
8. Confidential Information.
     The Employee 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,
which shall have been obtained by the Employee during the Employee’s employment
by the Company or any of its affiliated companies and which shall not be or
become public knowledge (other than by acts by the Employee or representatives
of the Employee in violation of this Agreement). After termination of the
Employee’s employment with the Company, the Employee shall not, without the
prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section 8 constitute a basis for
deferring or withholding any amounts otherwise payable to the Employee under
this Agreement.
9. Nondisparagement; Cooperation.
     (a) Employee agrees not to disparage the Company or its officers,
directors, employees, shareholders or agents, in any manner likely to be harmful
to them or their business, business reputations or personal reputations.
Employee shall respond accurately and fully to any question, inquiry or request
for information when required by legal process, notwithstanding the foregoing.
     (b) During the Change of Control Period and during the twelve month period
following the Date of Termination, Employee will cooperate with the Company in
responding to the reasonable requests of the Board, the Company’s or its General
Counsel, in connection with any and all existing or future litigation,
arbitrations, mediations or investigations brought by or against the Company, or
its affiliates, agents, officers, directors or employees, whether
administrative, civil or criminal in nature, in which the Company reasonably
deems Employee’s cooperation necessary or desirable. In such matters, Employee
agrees to provide the Company with reasonable advice, assistance and
information, including offering and explaining evidence, providing sworn
statements, and participating in discovery and trial preparation and testimony.
Employee also agrees to promptly send the Company copies of all correspondence
(for example, but not limited to, subpoenas) received by Employee in connection
with any such legal proceedings, unless Employee is expressly prohibited by law
from so doing. The Company will reimburse Employee for reasonable out-of-pocket
expenses incurred by Employee as a result of Employee’s cooperation with the
obligations described in this Section 9(b), within 30 days of the
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presentation of appropriate documentation thereof, in accordance with the
Company’s standard reimbursement policies and procedures.
10. Successors.
     (a) This Agreement is personal to the Employee and without the prior
written consent of the Company shall not be assignable by the Employee otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Employee’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 will 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 to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
11. Miscellaneous.
     (a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Oregon, 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
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
     (b) All notices and other communications hereunder 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 Employee:
Martin R. Baker
1936 Palisades Lake Court
Lake Oswego, OR 97034
If to the Company:
The Greenbrier Companies, Inc.
One Centerpointe Drive, Suite 200
Lake Oswego, Oregon 97035 USA
Attention: President
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With a copy to:
General Counsel
The Greenbrier Companies, Inc.
One Centerpointe Drive, Suite 200
Lake Oswego, Oregon 97035 USA
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
     (c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
     (d) The Company may withhold from any amounts payable under this Agreement
such Federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
     (e) The Employee’s or the Company’s failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Employee or the Company may have hereunder,
including, without limitation, the right of the Employee to terminate employment
for Good Reason pursuant to Section 3(c)(A)–(F), shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
     (f) The Employee and the Company acknowledge that, except as may otherwise
be provided under any other written agreement between the Employee and the
Company, the employment of the Employee by the Company is “at will” and, prior
to the Effective Date, may be terminated by either the Employee or the Company
at any time. Moreover, if prior to the Effective Date, the Employee’s employment
with the Company terminates, then the Employee shall have no further rights
under this Agreement.
     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.

          THE GREENBRIER COMPANIES, INC.   EMPLOYEE:
 
       
By:
  /s/ Mark J. Rittenbaum   /s/ Martin R. Baker
 
       
Its:
  Executive Vice President, Treasurer and   Martin R. Baker
 
  Chief Financial Officer    

Change of Control Agreement
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