Document:

ex10_1b3.htm

EXHIBIT 10.1(b)(3)

CHANGE OF CONTROL

EMPLOYMENT AND SEVERANCE AGREEMENT

AGREEMENT by and between Sensient Technologies Corporation, a Wisconsin corporation (the “Company”), and (the “Executive”), as of the _____ day of ________________, 20___.

WHEREAS, 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 Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1.             Certain Definitions.

(a)            The “Effective Date” shall mean the first date during the Change of Control Period (as defined in Section l(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive’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 Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a 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.

(b)            The “Change of Control Period” shall mean the period commencing on the date hereof and ending on the third anniversary of the date hereof; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless previously terminated, the Change of Control Period shall be automatically extended so as to terminate three years from such Renewal Date, unless at least 60 days prior to the Renewal Date the Company shall give notice to the Executive that the Change of Control Period shall not be so extended.

  

  

  

2.             Change of Control. For the purpose of this Agreement, a “Change of Control” shall mean:

(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”)) (a “Person”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (D) any acquisition pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or

(b)            Individuals who, as of the date of this Agreement, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date of this Agreement, whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest 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; or

(c)            Consummation by the Company 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 entity (a “Business Combination”), in each case unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation 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) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

  

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(d)            Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company taxed under Section 331 of the Code or with the approval of a bankruptcy court pursuant to Section 503(b)(1)(A) of Title II of the U.S. Bankruptcy Code.

(e)            Notwithstanding the foregoing, a Change of Control as defined in this Section 2 shall not be treated as a Change of Control for purposes of this Agreement unless it constitutes a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5) or results in a termination or liquidation of a plan within the meaning of Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B) (as applicable).

3.             Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the third anniversary of such date (the “Employment Period”).

4.             Terms of Employment.

(a)            Position and Duties.

(i)             During the Employment Period, (A) the Executive’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the Executive’s services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office location less than 35 miles from such location.

(ii)            During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company.

  

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(b)            Compensation.

(i)             Base Salary. During the Employment Period, the Executive shall receive an annual base salary (“Annual Base Salary”), which shall be paid at a monthly rate, at least equal to twelve times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company and its affiliated companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed and increased a minimum of 3% no more than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement and shall be commensurate with increases given to peer executives. Annual Base Salary shall not be reduced after any such increase and the term “Annual Base Salary” as utilized in this Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the term “affiliated companies” shall include any company controlled by, controlling or under common control with the Company.

(ii)            Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the “Annual Bonus”) in cash at least equal to the greater of the highest bonus, if any, paid to the Executive under the Company’s Management Incentive Plan for Division Presidents or the Company’s Incentive Compensation Plan for Elected Corporate Officers, or any comparable bonus under any predecessor or successor plan, on: any one of the last five annual bonus payment dates immediately preceding the Effective Date; or any one annual bonus payment date coinciding with or following the date on which the Executive attains age 50 and preceding the Effective Date (the “Recent Annual Bonus”). Each such Annual Bonus shall be paid no later than March 15th of the fiscal year following the fiscal year for which the Annual Bonus is earned.

  

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(iii)           Incentive, Savings and Retirement Plans. During the Employment Period, the Executive shall be entitled to participate in all qualified and nonqualified incentive (cash and stock related), savings and retirement plans, and/or comparable practices, policies and programs applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

(iv)           Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

(v)            Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(vi)           Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, including, without limitation, tax and financial planning services, use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

  

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(vii)          Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(viii)         Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(ix)            Change of Control.

	
  

	
A.

	
In the event of a Change of Control, for purposes of calculating the Executive’s benefit under the Company’s Supplemental Executive Retirement Plan A (effective January 1, 2005) and the Company’s Supplemental Executive Retirement Plan B (effective as of January 1, 2005), each as amended from time to time (collectively, the “SERP”), if the Executive is a SERP participant, the Executive will be deemed to have received three additional years of base salary in amounts equal to the Executive’s Annual Base Salary as of the Effective Date as increased for purposes of this subparagraph in each of such three years by the percentage increase (if positive) in the Executive’s Annual Base Salary from the year prior to the year which the Effective Date occurs to the year in which the Effective Date occurs. Notwithstanding anything in the SERP or in the Company’s Executive Income Deferral Plan, as amended from time to time (the “EIDP”) to the contrary, in the event of a Change of Control, for purposes of determining the “annual bonus” amount for Final Compensation under the SERP, the measurement period shall be the greater of any one of the last five annual bonus payment dates immediately preceding the Effective Date or any one annual bonus payment date coinciding with or following the date on which the Executive attains age 50 and preceding the Effective Date as set forth in Section 4(b)(ii) of this Agreement and the lump sum distribution payments under the SERP and the EIDP shall be made as soon as administratively feasible, but no later than 5 business days after the Effective Date, subject to the 6-Month Delay Period (as defined under Section 12 below) only if and to the extent such delay is required under Section 409A of the Code and the regulations thereunder.

  

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B.

	
If upon a Change of Control, the Executive vests in any of the Executive’s restricted stock grants under any of the Company’s equity plans or arrangements and becomes subject to income and/or employment taxes as a result of such vesting (the “Vesting Taxes”) and the executive’s restricted stock agreement provides for a tax gross-up payment, the Company shall pay to the Executive additional payments (a “Restricted Stock Reimbursement”) in amounts such that after payment by the Executive of all income, employment, state, local or foreign taxes imposed on such Restricted Stock Reimbursement, the Executive Retains an amount of the Restricted Stock Reimbursement equal to the Vesting Taxes. The Restricted Stock Reimbursement will be paid as soon as administratively feasible, but no later than 5 business days after the Effective Date, subject to the 6-Month Delay Period (as defined under Section 12 below) only if and to the extent such delay is required under Section 409A of the Code and the regulations thereunder.

5.              Termination of Employment.

(a)            Death or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 13(b) of this Agreement of its intention to terminate the Executive’s employment. In such event, the Executive’s employment with the Company shall terminate effective on the Disability determination date (the “Disability Effective Date”), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability” means that (i) the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) the Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering the Executive. The determination of Disability shall be made by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal representative.

  

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(b)            Cause. The Company may terminate the Executive’s employment during the Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean:

(i)             the willful and continued failure of the Executive to perform substantially the Executive’s duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness or following the Executive’s delivery of a Notice of Termination for Good Reason), after a written demand for performance is delivered to the Executive by the Chief Executive Officer of the Company which specifically identifies the manner in which the Chief Executive Officer believes that the Executive has not substantially performed the Executive’s duties, or

(ii)            the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company.

For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause 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 entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail. Any termination of the Executive’s employment by the Company during the Employment Period (other than a termination under Section 5(a)) shall be deemed to be a termination other than for Cause unless it meets all requirements of this Section 5(b).

  

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(c)            Good Reason. The Executive’s employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, “Good Reason” shall mean:

(i)             the assignment to the Executive of any duties inconsistent in any respect with the Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities (whether or not occurring solely as a result of the Company’s ceasing to be a publicly traded entity), excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(ii)            any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(iii)           the Company’s requiring the Executive to be based at any office or location other than as provided in Section 4(a)(i)(B) hereof or the Company’s requiring the Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date;

(iv)           any purported termination by the Company of the Executive’s employment otherwise than as expressly permitted by this Agreement; or

(v)            any failure by the Company to comply with and satisfy Section 1l(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of “Good Reason” made by the Executive shall be conclusive. The Executive’s mental or physical incapacity following the occurrence of an event described above in clauses (i) through (v) shall not affect the Executive’s ability to terminate employment for Good Reason. Anything in this Agreement to the contrary notwithstanding, if the Executive terminates employment for Good Reason after the second anniversary of the Effective Date of the Change of Control, the definition of Good Reason shall be deemed modified so as to qualify as an “involuntary separation from service” within the meaning of Treasury Regulation Section 1.409A-1(n).

(d)            Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 13(b) of this Agreement. 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 Executive’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 (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive 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 Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

  

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(e)            Date of Termination. “Date of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, or by the Executive 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 Executive’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 Executive of such termination and (iii) if the Executive’s employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

6.             Obligations of the Company upon Termination.

(a)            Good Reason, Other Than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause or Disability or the Executive shall terminate employment for Good Reason:

(i)             the Company shall pay to the Executive in a lump sum in cash on or within 5 business days (after the expiration of the 6-Month Delay Period (as defined under Section 12 below) if and to the extent such delay is required under Section 409A of the Code and the regulations thereunder) following the Date of Termination the aggregate of the following amounts:

	
  

	
A.

	
the sum of (1) the Executive’s Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the higher of (I) the Recent Annual Bonus and (II) the Annual Bonus paid or payable, including any bonus or portion thereof which has been earned but deferred (and annualized for any fiscal year consisting of less than twelve full months or during which the Executive was employed for less than twelve full months), for the most recently completed fiscal year during the Employment Period, if any (such higher amount being referred to as the: “Highest Annual Bonus”) and (y) a fraction, the numerator of which is the number of days in the current fiscal year of the Company through the Date of Termination, and the denominator of which is 365 and (3) any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the “Accrued Obligations”); and

  

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B.

	
the amount equal to the product of (1) three and (2) the sum of (x) the Executive’s Annual Base Salary and (y) the Highest Annual Bonus; and

	
  

	
C.

	
the amount equal to the product of (x) three and (y) the highest aggregate annual amount contributed by the Company (as a Company contribution, and not a salary reduction) on behalf of the Executive, during the last three full fiscal years prior to the Effective Date, to the Company’s Transition Retirement Plan, Savings Plan, Retirement Employee Stock Ownership Plan, and Supplemental Benefits Plan, or any successor or replacement defined contribution plans.

(ii)            for three years after the Executive’s Date of Termination, the Company shall continue benefits to the Executive and/or the Executive’s family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(iv) of this Agreement if the Executive’s employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families; provided that if any of the welfare benefits provided during the period the Executive is considered a “specified employee” or “key employee” under Section 12 of this Agreement are not subject to an exemption under Section 409A of the Code, such benefits will be provided at the Executive’s cost and may be submitted for reimbursement after such period; provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer-provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until three years after the Date of Termination and to have retired on the last day of such period;

  

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(iii)           for three years after the Executive’s Date of Termination, the Company shall continue fringe benefits and perquisites for the Executive and/or the Executive’s family equal to those that, as of the Executive’s Date of Termination, were in effect in accordance with the plans, programs, practices and policies described in Section 4(b)(vi) of this Agreement; provided that if any of the fringe benefits and perquisites provided during the period the Executive is considered a “specified employee” or “key employee” under Section 12 of this Agreement are not subject to an exemption under Section 409A of the Code, such benefits will be provided at the Executive’s cost and may be submitted for reimbursement after such period;

(iv)           the Company shall, at its sole expense as incurred, provide the Executive with reasonable outplacement services the scope and provider of which shall be selected by the Executive in his sole discretion;

(v)            the exercise period for each outstanding stock option held by the Executive (or by any transferee of the Executive) under any of the Company’s equity plans or arrangements shall continue for two years after the Executive’s Date of Termination, or for such longer period provided for with respect to such stock option, provided, that such exercise period shall not extend beyond the scheduled exercise period or term of the stock option; and

(vi)           to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided, or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”).

(b)            Death. If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to the Executive’s legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(b) shall include, without limitation, and the Executive’s estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and affiliated companies to the estates and beneficiaries of peer executives of the Company and such affiliated companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive’s death with respect to other peer executives of the Company and its affiliated companies and their beneficiaries.

  

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(c)            Disability. If the Executive’s employment is terminated by reason of the Executive’s Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term “Other Benefits” as utilized in this Section 6(c) shall include, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive’s family, as in effect at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies and their families.

(d)            Cause; Other than for Good Reason. If the Executive’s employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary through the Date of Termination, (y) the amount of any compensation previously deferred by the Executive, and (z) Other Benefits, in each case to the extent theretofore unpaid. If the Executive voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive, 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 Executive in a lump sum in cash within 30 days of the Date of Termination.

7.             Nonexclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive’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 Executive may qualify (provided, that the Executive hereby waives any right to participate in any severance plan, program, or policy of the Company during the Employment Period), nor, subject to Section 13(f), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits, or which the Executive 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.

  

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8.             Full Settlement. The Company’s obligations 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 Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. Each and every payment made hereunder by the Company shall be final, and the Company will not seek to recover all or any part of such payment from the Executive for any reason. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive 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 Executive 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 of 1986, as amended (the “Code”).

9.             Certain Limitation on Payments by the Company.

(a)            Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive the Payments unless the after-tax amount that would be retained by the Executive (after taking into account any and all applicable federal, state and local excise, income or other taxes payable by the Executive, including the Excise Tax) is less than the after-tax amount that would be retained by the Executive (after taking into account any and all applicable federal, state and local excise, income or other taxes payable by the Executive) if the Executive were instead to be paid or provided, as the case may be, the maximum amount of the Payments that the Executive could receive without being subject to the Excise Tax (the “Reduced Payments”), in which case the Executive shall be entitled only to the Reduced Payments. The reduction of the amounts payable hereunder, if applicable, shall be made by first reducing the payments under paragraph 6(a)(i), unless an alternative method of reduction is elected by the Executive and permitted by Section 409A, and shall be made in such a manner as to maximize the value of all Payments actually made to the Executive. For purposes of reducing the Payments, only amounts payable under this Agreement (and no other Payments) shall be reduced.

(b)            All determinations required to be made under this Section 9, including the assumptions to be utilized in arriving at such determination, shall be made by Ernst & Young LLP or such certified public accounting firm as may be designated by the Executive (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there will be a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

  

14

  

10.            Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive’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 Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive’s employment with the Company, the Executive 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 10 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement.

11.            Successors.

(a)            This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.

(b)            This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)            The Company 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.

12.            Section 409A of the Code.

(a)            This Agreement is intended to comply with Section 409A of the Code and shall be interpreted, operated and administered in a manner that conforms to the requirements of Section 409A of the Code and the regulations thereunder.

  

15

  

(b)            If, at the time of Executive’s “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) other than by reason of death, Executive is deemed to be a “specified employee” of a public company within the meaning of Treasury Regulation Section 1.409A-1(i), any amount constituting deferred compensation under Code Section 409A to which Executive otherwise would have been entitled to under any provision of this Agreement shall not be paid until the date that is 6 months following Executive’s separation from service (or, if earlier, the date of Executive’s death) (the “6-Month Delay Period”), if and to the extent such delay is required under Section 409A of the Code and the regulations thereunder.

(i)             If Executive is considered to be a “specified employee” as set forth above and payments and benefits are subject to the 6-Month Delay Period, the Company shall make an irrevocable contribution to Rabbi Trust A within 5 business days following the Date of Termination in an amount that is sufficient to pay Executive the payments and benefits to which Executive is entitled under this Agreement, plus, interest (calculated at the prime rate as published in the Wall Street Journal on the Date of Termination plus 1%) for the period beginning on the earlier of Executive’s Date of Termination or “separation from service” as set forth above, and ending on the later of: (A) the last day of the 6-Month Delay Period; or (B) the payment date under subsection 12(c) below.

(ii)            The amounts described in Section 12(b)(i) shall be paid to the Executive on the first business day after the end of the 6-Month Delay Period.

(c)            In the event that any payment under this Agreement is delayed due to a disputed payment or refusal to pay under Treasury Regulation Section 1.409A-3(g), such payment shall be deemed to be paid as of the date that is specified as the payment date under the relevant provision of this Agreement. If under this Agreement, an amount is to be paid in installments, each installment shall be treated as a separate payment for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii).

(d)            The Company shall indemnify the Executive, as provided in this subsection (d), if the Executive incurs additional tax under Section 409A of the Code as a result of a violation of Section 409A of the Code (each an “Indemnified Section 409A Violation”) that occurs as a result of (1) the Company’s clerical error (other than an error cause by erroneous information provided to the Company by the Executive), (2) the Company’s failure to administer this Agreement or any benefit plan or program in accordance with its written terms (such written terms, the “Plan Document”), or (3) following December 31, 2008, the Company’s failure to maintain the Plan Documents in compliance with Section 409A of the Code; provided, that the indemnification set forth in clause (3) shall not be available to the Executive if (x) the Company has made a reasonable, good faith attempt to maintain the applicable Plan Document in compliance with Code Section 409A but has failed to do so or (y) the Company has maintained the applicable Plan Document in compliance with Section 409A of the Code but subsequent issuance by the Internal Revenue Service or the Department of the Treasury of interpretive authority results in the applicable Plan Document not (or no longer) complying with Section 409A of the Code (except that, if the Company is permitted by such authority or other authority to amend the Plan Document to bring the Plan Document into compliance with Section 409A of the Code and fails to do so, then such indemnification shall be provided).

  

16

  

(i)             In the event of an Indemnified Section 409A Violation, the Company shall reimburse the Executive for (1) the 20% additional income tax described in Section 409A(a)(1)(B)(i)(II) of the Code (to the extent that the Executive incurs the 20% additional income tax as a result of the Indemnified Section 409A Violation), and (2) any interest or penalty that is assessed with respect to the Executive’s failure to make a timely payment of the 20% additional income tax described in clause (1), provided that the Executive pays the 20% additional income tax promptly upon being notified that the tax is due (the amounts described in clause (1) and clause (2) are referred to collectively as the “Section 409A Tax”).

(ii)            In addition, in the event of an Indemnified Section 409A Violation, the Company shall make a payment (the “Section 409A Gross-Up Payment”) to the Executive such that the net amount the Executive retains, after paying any federal, state, or local income tax or FICA tax on the Section 409A Gross-Up Payment, shall be equal to the Section 409A Tax. The Company shall have the right to contest the Section 409A Tax and the Executive shall reasonably cooperate with measures identified by the Company that are intended to mitigate the Section 409A Tax to the extent that such measures do not materially reduce or delay the payments and benefits to the Executive hereunder.

13.            Miscellaneous.

(a)            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)            Notices given pursuant to this Agreement shall be in writing and shall be deemed given when actually received by the Executive or actually received by the Company’s secretary. If mailed, such notices shall be mailed by United States registered or certified mail, return receipt requested, addressee only, postage prepaid, if to the Company, to Attention: Secretary (or President, if the Executive is then Secretary), or if to the Executive, at the address set forth below the Executive’s signature to this Agreement, or to such other address as the party to be notified shall have theretofore given to the other party in writing.

  

17

  

(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, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e)            The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

(f)            The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is “at will” and, subject to Section l(a) hereof, prior to the Effective Date, the Executive’s employment and/or this Agreement may be terminated by either the Executive or the Company at any time prior to the Effective Date, in which case the Executive shall have no further rights under this Agreement. From and after the Effective Date this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof.

14.            Governing Law; Resolution of Disputes. This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Wisconsin. Any dispute arising out of this Agreement shall, at the Executive’s election, be determined by arbitration under the rules of the American Arbitration Association then in effect (in which case both parties shall be bound by the arbitration award) or by litigation. Whether the dispute is to be settled by arbitration or litigation, the venue for the arbitration or litigation shall be in the judicial district encompassing the city in which the Executive resides; provided that, if the Executive is not then residing in the United States, the election of the Executive with respect to such venue shall be Wisconsin. The parties consent to personal jurisdiction in each trial court in the selected venue having subject matter jurisdiction, and each party irrevocably consents to service of process in the manner provided hereunder for the giving of notices.

  

18

  

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name and on its behalf, all as of the day and year first above written.

	  	
SENSIENT TECHNOLOGIES CORPORATION

	  	  	  
	  	
By:

	  
	  	  	
Kenneth P. Manning

	  	  	
Chairman, President & Chief Executive Officer

	  	  	  
	  	  	  
	  	  	
(Executive)

	 	 	 
	  	  	
Address:

 

 

19ex10_9.htm

Exhibit 10.9

 

JONES LANG LASALLE INCORPORATED

 

SEVERANCE PAY PLAN

 

(As Amended and Restated Effective July 1, 2010)

 

  

  

  

 

TABLE OF CONTENTS

 

JONES LANG LASALLE INCORPORATED

SEVERANCE PAY PLAN

s

AMENDED AND RESTATED EFFECTIVE JULY 1, 2010

 

I, Nazneen Razi, am the Chief Human Resources Officer for Jones Lang LaSalle Americas, Inc., and the Administrator of the Jones Lang LaSalle Incorporated Severance Pay Plan (the “Plan”).  The Plan originally was established effective June 1, 1998.  Pursuant to the authority granted to me under Section 7.7 of the Plan, the Plan is hereby amended and restated in the form attached hereto, with an “effective date” of July 1, 2010.  All previous versions of the Plan are superseded by the attached Plan, as amended and restated effective July 1, 2010.

 

	/s/ Nazneen Razi 	 
	Nazneen Razi	 
	

Chief Human Resources Officer

	 
	Jones Lang LaSalle Americas, Inc.	 

 

  

 

  

 

TABLE OF CONTENTS

(continued)

 

	
SECTION 1

	 	
IINTRODUCTION

	
1

	
1.1

	 	
Purpose.

	
1

	
1.2

	 	
Effective Date, Plan Year.

	
1

	
1.3

	 	
Employers.

	
1

	
1.4

	 	
Administration.

	
2

	
1.5

	 	
Plan Supplements.

	
2

	 	 	 	 
	
SECTION 2

	 	
ELIGIBILITY FOR PARTICIPATION 

	
2

	
2.1

	 	
Participants.

	
2

	
2.2

	 	
Conditions of Ineligibility.

	
3

	 	 	 	 
	
SECTION 3

	 	
PLAN BENEFITS 

	
5

	
3.1

	 	
Pay.

	
5

	
3.2

	 	
Full Years of Continuous Service.

	
6

	
3.3

	 	
Base Severance.

	
6

	
3.4

	 	
Enhanced Severance.

	
6

	
3.5

	 	
Conditions to Payment of Enhanced Severance Benefits.

	
12

	
3.6

	 	
Repayments and Forfeitures.

	
13

	
3.7

	 	
Offset for Other Benefits or Amounts Due.

	
13

	
3.8

	 	
Non-Solicitation of Employees and Clients.

	
13

	
3.9

	 	
Benefits for Certain Acquired Employees.

	
14

	 	 	 	 
	
SECTION 4

	 	
PAYMENT OF BENEFITS 

	
14

	
4.1

	 	
Release.

	
14

	
4.2

	 	
Form of Payment.

	
14

	
4.3

	 	
Section 409A Restrictions.

	
15

	
4.4

	 	
Death Benefits.

	
15

	 	 	 	 
	
SECTION 5

	 	
FINANCING PLAN BENEFITS 

	
15

	 	 	 	 
	
SECTION 6

	 	
REEMPLOYMENT

	
16

	 	 	 	 
	
SECTION 7

	 	
MISCELLANEOUS

	
16

	
7.1

	 	
Information to be Furnished by Participants.

	
16

	
7.2

	 	
Employment Rights.

	
16

	
7.3

	 	
Employer’s and Administrator’s Decision Final.

	
16

	
7.4

	 	
Evidence.

	
16

	
7.5

	 	
Uniform Rules.

	
17

	
7.6

	 	
Gender and Number.

	
17

	
7.7

	 	
Action by Employer.

	
17

	
7.8

	 	
Controlling Laws.

	
17

 

 

ii

 

 

	
7.9

	 	
Interests Not Transferable.

	
17

	
7.10

	 	
Mistake of Fact.

	
17

	
7.11

	 	
Severability.

	
18

	
7.12

	 	
Withholding.

	
18

	
7.13

	 	
Effect on Other Plans or Agreements.

	
18

	
7.14

	 	
Non-Duplication.

	
18

	
7.15

	 	
No Vested Rights.

	
18

	
7.16

	 	
Procedure for Making and Appealing Claims.

	
18

	 	 	 	 
	
SECTION 8

	 	
AMENDMENT AND TERMINATION

	
19

	
8.1

	 	
Amendment and Termination.

	
19

	
8.2

	 	
Notice of Amendment or Termination.

	
20

 

  

iii

  

 

JONES LANG LASALLE INCORPORATED

SEVERANCE PAY PLAN

 

(As Amended and Restated Effective July 1, 2010)

 

SECTION 1

 

Introduction

 

	
1.1 

	
Purpose.

 

Jones Lang LaSalle Incorporated (the “Company”) has established the Jones Lang LaSalle Incorporated Severance Pay Plan (the “Plan”) to enable the Company and its subsidiaries and certain affiliates that adopt the Plan with the Company’s consent to provide severance benefits to eligible employees who involuntarily terminate employment with the Company or its subsidiaries or certain affiliates.  Severance benefits for eligible employees shall be determined exclusively under the Plan.  The Plan, as set forth herein, shall constitute an “employee welfare benefit plan” within the meaning of Section 3(1) of the Employee Retirement Income Act of 1974 (“ERISA”).

 

	
1.2 

	
Effective Date, Plan Year.

          

The Plan was originally established effective June 1, 1998.  The “effective date” of the Plan, as amended and restated, is July 1, 2010.  The terms of the Plan apply, on and after the effective date, to each participant who terminates employment with an Employer on or after that date, and such employees shall be entitled to benefits only if they satisfy each of the Plan’s requirements for participation and benefits.  A “plan year” is the 12-month period beginning on January 1 and ending on the following December 31.

 

	
1.3

	
Effective Date, Plan 

          

Any subsidiary or affiliate of the Company may adopt the Plan with the Company’s consent.  A “subsidiary” of the Company is any corporation more than 50% of the voting stock of which is owned, directly or indirectly by the Company.  An “affiliate” of the Company is any business entity in which the Company does not own more than 50% of the voting stock, but which exists to spend all or a substantial part of its time to service the Company or its subsidiaries.  Currently, Jones Lang LaSalle Americas, Inc. and LaSalle Investment Management, Inc. are the only participating employers in the Plan other than the Company.  Thus, the Company, Jones Lang LaSalle Americas, Inc. and LaSalle Investment Management, Inc. are referred to herein collectively as the “Employers” and sometimes individually as an “Employer.”  Notwithstanding the foregoing, the term “Employer” or “Employers” shall not include Jones Lang LaSalle Services, Inc.

 

  

  

  

 

	
1.4

	
Administration.

         

The Plan is administered by the Chief Human Resources Officer of Jones Lang LaSalle Americas, Inc. (the “Administrator”).  The Administrator, from time to time, may adopt such rules and regulations as may be necessary or desirable for the proper and efficient administration of the Plan and as are consistent with the terms of the Plan.  The Administrator, from time to time, may also appoint such individuals to act as the Company’s representatives as the Administrator considers necessary or desirable for the effective administration of the Plan.  In administering the Plan, the Administrator shall have the sole discretionary authority to construe and interpret the provisions of the Plan and make factual determinations thereunder, including the authority to determine the eligibility of employees and the amount of benefits payable under the Plan.  The Administrator shall have the sole discretionary authority to grant or deny benefits under this Plan.  Benefits under this Plan shall be paid only if the Administrator decides in his or her sole discretion that the applicant is entitled to them.  Any notice or document required to be given or filed with the Company shall be properly given or filed if delivered or mailed, by registered mail, postage prepaid, to the Company, attention Severance Pay Plan Administrator, at Jones Lang LaSalle Incorporated, 200 East Randolph Drive, Chicago, Illinois 60601.

 

	
1.5

	
Plan Supplements.

         

The provisions of the Plan may be modified by supplements to the Plan.  The terms and provisions of each supplement are a part of the Plan and supersede the provisions of the Plan to the extent necessary to eliminate inconsistencies between the Plan and the supplement(s).

 

SECTION 2

 

Eligibility for Participation

 

	
2.1

	
Participants.

           

Subject to the conditions and limitations of the Plan, the Plan applies to each regular employee whose employment with an Employer is terminated for reasons described below, and who is not otherwise ineligible for severance pay under Section 2.2.  A “regular employee” means an employee of an Employer who is eligible for coverage under the Employer’s medical benefit plan, who spends all or substantially all of his or her time on Employer matters and who is not covered by a written agreement or severance agreement, unless such agreement specifically provides for participation in the Plan.  A “regular employee” does not include an individual who is compensated under a variable compensation program or who otherwise has the opportunity to receive bonus or commission after termination of employment that is based on a percentage of revenue that an Employer earns and collects for transactions that close after the employee’s termination, and such individuals are not eligible for participation in the Plan.  For purposes of the Plan, a “variable compensation program” means a program that provides a bonus or commission opportunity to an employee after termination of employment that is based on a percentage of revenue an Employer earns and collects for transactions that close after the employee’s termination of employment.  In addition, the Plan applies to (i) GEC Participants as defined in Section 3.4(e) to the extent provided therein; and (ii) Modified Participants as defined in Section 3.4(f) to the extent provided therein.   The Plan does not apply to the following employees of an Employer:

 

  

2

  

 

	
  

	
(a)

	
those who are covered by a collective bargaining agreement;

 

	
  

	
(b)

	
those who hold positions that were formerly Jones Lang LaSalle Services, Inc. positions, including, for example, positions providing direct building support (i.e., Chief Engineer, Engineer, Mechanic, HVAC, Day Porter, Facility Coordinator) and/or building support personnel dedicated exclusively to one or more identified clients;

 

	
  

	
(c)

	
those who are performing services for an Employer pursuant to the terms of an individual agreement (i.e., an employment agreement or as an independent contractor) or a leasing arrangement with another entity (i.e., as a leased employee);

 

	
  

	
(d)

	
except in the case of GEC Participants, those who perform all or most of their services outside the United States; and

 

	
  

	
(e)

	
individuals who are compensated under a variable compensation program, as defined above.

 

An individual’s status as an eligible employee shall be determined by the Administrator in its sole discretion and such determination shall be conclusive and binding on all persons notwithstanding any contrary determination by any court or governmental agency.

 

A regular employee described above who satisfies each of the conditions and limitations of the Plan (including Section 2.2) shall become a participant in the Plan on the date the employee’s employment with an Employer ends due to involuntary termination on account of (i) job elimination; (ii) permanent reduction in work force; or (iii) permanent shut down of a facility, department or subdivision.  The Administrator shall have sole and exclusive discretion to determine whether an involuntary termination is on account of any such event.  Notwithstanding the foregoing, a GEC Participant shall become a participant in the Plan on the date he or she becomes eligible for benefits under Section 3.4(e).  An employee in the job categories of National, Regional or International Director shall become a Modified Participant in the Plan on the date he or she becomes eligible for benefits under Section 3.4(f).

 

 

	
2.2

	
Conditions of Ineligibility.

           

An otherwise eligible employee shall not be eligible for severance benefits under the Plan if:

 

  

3

  

 

	
  

	
(a)

	
employment with the Employer terminates by reason of discharge for cause, as determined in the Employer’s sole discretion (including, but not limited to, violations of the Company’s policies or Code of Business Ethics, willful or grossly negligent breach of the employee’s duties as an employee of the Employer, fraud, embezzlement, theft, falsification of documents, use or distribution on premises of illegal drugs, refusal to cooperate with an investigation or any other similar dishonest conduct);

 

	
  

	
(b)

	
employment with the Employer terminates involuntarily as a result of poor performance, as determined by the Administrator;

 

	
  

	
(c)

	
employment with the Employer terminates by reason of death of the employee;

 

	
  

	
(d)

	
employment with the Employer terminates voluntarily for any reason, including retirement, resignation or job abandonment;

 

	
  

	
(e)

	
at the time of his or her termination, the employee is entitled to any form of disability benefits or workers’ compensation, provided however, that an employee who is certified to return to work and whose disability benefits or workers’ compensation ends and who cannot be placed in employment with an Employer shall then become eligible for severance benefits under the Plan;

 

	
  

	
(f)

	
employment with an Employer is involuntarily terminated after the employee refuses a position with an Employer, a subsidiary, an affiliate, a client or a company that takes over a client assignment that an Employer loses, or a company to whom an Employer outsources that position, provided that such position is reasonably comparable in responsibility and salary, and is in the same general location (the Administrator shall have sole discretion to determine whether the position offered constitutes a “reasonably comparable” position for purposes of this paragraph);

 

	
  

	
(g)

	
on or before the employee’s termination date, he or she takes a position with the same or another Employer, a subsidiary, an affiliate of an Employer or a client or company that takes over a client assignment that the Employer loses, or a company to whom an Employer outsources that position;

 

	
  

	
(h)

	
the employee has not remained employed with an Employer until the date of any qualifying job elimination, permanent reduction in work force or permanent shut down of a facility, department or subdivision, regardless of whether an advance announcement was made before such event.  If an employee does not remain employed with an Employer until the last work day of an event described in this paragraph, no benefits under the Plan are payable to the employee;

 

  

4

  

 

	
  

	
(i)

	
the Plan is terminated, whether or not the Company provided prior notice concerning the termination of the Plan;

 

	
  

	
(j)

	
an employee’s employment is terminated in conjunction with the sale or transfer (whether of stock or assets) of all or any part of the business of an Employer;

 

	
  

	
(k)

	
employment with an Employer in a property or facility management role terminates involuntarily as a result of the loss of all or a part of a property or facility management assignment within the Accounts or Markets groups or the Retail business units, as determined in the sole discretion of the Administrator.  For purposes of this paragraph, loss of a property or facility management assignment shall include the resignation or relinquishment by an Employer of a property or facility management assignment;

 

	
  

	
(l)

	
an employee is terminated after a client of the Employer requests that the employee cease providing services at the client’s premises; and

 

	
  

	
(m)

	
except as provided in Section 3.4(e) in the case of a GEC Participant, an employee is entitled to severance benefits under any other plan, program or arrangement maintained by an Employer.

 

Except as provided in Section 3.4(e), in no event shall any participant’s severance pay benefit exceed an amount equal to 24 months of the participant’s base pay.

 

SECTION 3

 

Plan Benefits

 

	
3.1

	
Pay.

           

“Pay” for purposes of the Plan shall mean:

 

	
  

	
(a)

	
for salaried employees, the participant’s annualized base salary (excluding any target bonus and/or value added compensation, cost of living adjustment (“COLA”) or any other type or form of compensation); or

 

	
  

	
(b)

	
for hourly employees, the participant’s annualized base compensation, calculated by multiplying the participant’s regular hourly rate by 2080.

 

Pay rates shall be the rates in effect on a participant’s last date of employment with an Employer.  Any performance or merit reviews that are pending or in process shall not affect the amount of any severance pay benefit.  In determining the amount of a participant’s weekly pay for purposes of Sections 3.3 and 3.4, the annualized amounts determined above shall be divided by a factor of 52.

 

  

5

  

 

	
3.2

	
Full Years of Continuous Service.

         

A participant’s “full years of continuous service” for purposes of the Plan shall mean the number of completed 12-consecutive month periods, prior to his or her employment termination date, measured from the participant’s last date of hire by an Employer, determined in accordance with the Employer’s personnel records.  No fractional years of service are counted under the Plan.  A participant’s service remains “continuous” despite a break in service, provided the participant has incurred only one break in service and it is less than 12 months in duration, and such participant repays any severance benefit paid by the Employer or subsidiary attributable to such service before the break in service.  For purposes of the preceding sentence, and disregarding fractional years, a participant’s number of full years of continuous service:

 

	
  

	
(a)

	
before such a break in service, and

 

	
  

	
(b)

	
after such a break in service

 

shall be added together and the sum shall be the participant’s number of full years of continuous service.

 

	
3.3

	
Base Severance.

          

A participant who is eligible for severance benefits under the Plan shall be entitled to receive as base severance pay an amount equal to two weeks of pay as of the date of his or her termination from the Employer, calculated by multiplying the participant’s weekly pay determined under Section 3.1 by a factor of two.

 

	
3.4

	
Enhanced Severance.

          

Subject to Section 3.6, in addition to the base severance pay that a participant is entitled to receive under Section 3.3, a participant who satisfies all of the conditions of the Plan (specifically including executing and not revoking the Severance Agreement and General Release described in Section 3.5) shall be entitled to enhanced severance pay in an amount determined by multiplying the participant’s number of full years of continuous service, times the applicable multiplier from the table below, times the participant’s weekly pay (as described in Section 3.1), and the result so determined shall not be less than the minimum number of months of pay as set forth in column (c) of the following table, but shall not exceed the maximum number of months of pay as set forth in column (d) of the following table:

 

  

6

  

 

	
(a)

Position Level

	
(b)

Applicable Multiplier 

(Applicable to Participant’s 

Weekly Pay x Full Years of 

Continuous Service)

	
(c)

Minimum Months 

of Pay

	
(d)

Maximum Months

 of Pay

	
International &

Regional Director

	
3

	
6 Months

	
15 Months

	
National & Associate Director

	
2

	
1 Month

	
9 Months

	
Exempt Staff

	
1

	
1 Month

	
6 Months

	
Non-Exempt Staff

	
1

	
1 Month

	
3 Months

 

Notwithstanding the foregoing, enhanced severance pay for a GEC Participant and a Modified Participant shall be separately calculated pursuant to Sections 3.4(e) and (f).

 

In addition to the amount of severance pay set forth in Section 3.3 and this Section 3.4, the following additional benefits are provided:

 

	
  

	
(a)

	
Benefit Continuation.  If the participant was enrolled in Employer-sponsored medical benefits on his or her termination date, the participant may be eligible for health care continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”).  In addition, the participant may be eligible for a special subsidy to help pay for COBRA coverage, as described in subparagraphs (ii) and (iii) below.

 

	
  

	
(i)

	
COBRA Continuation Coverage.  A participant enrolled in an Employer-sponsored medical benefits plan on his or her termination date is eligible to continue such coverage for up to 18 months under COBRA.  Generally, the participant is required to pay the full cost of this coverage, plus a 2% administrative fee. The amount required to be paid by the participant is subject to change on January 1 of every year.  If the participant does not timely elect to exercise his or her COBRA continuation rights to continue Employer-sponsored medical and dental benefits, the participant may not reinstate such coverage at a later date.  All of the terms and conditions of the corresponding medical benefits plans sponsored by the Employer shall be applicable to a participant receiving COBRA continuation coverage.

 

	
  

	
(ii)

	
Subsidy for COBRA Coverage.  Under the American Recovery and Reinvestment Act of 2009, a participant who is involuntarily terminated between September 1, 2008 and May 31, 2010 is entitled to a 65% reduction in his or her COBRA continuation premium (subject to certain income limitations) for up to nine months, unless he or she becomes eligible for coverage under another group health plan or Medicare.  (This premium reduction is referred to herein as the “ARRA Subsidy.”)  Correspondence regarding availability of the ARRA Subsidy shall be forthcoming from the Employer’s COBRA Administrator.  Generally, except as described below, the participant shall be responsible for payment of his or her entire COBRA premium after the nine-month ARRA Subsidy period ends.  However, under no circumstances shall COBRA coverage extend beyond the date on which a terminated participant becomes eligible for coverage under another group health plan unless the new plan has a pre-existing condition limitation or the participant is entitled to Medicare.  In addition, the ARRA Subsidy shall not extend beyond the date on which the terminated participant becomes eligible for coverage under another group health plan or the participant is entitled to Medicare.  The amount required to be paid by the participant under both the subsidized and non-subsidized period is subject to change on January 1 of every year.

 

  

7

  

 

	
  

	
(iii)

	
Additional COBRA Enhancements.  As described above, a participant who elects COBRA coverage is only required to pay 35% of the total premium cost for the first nine months of coverage, subject to the limitations described above.  This subsection describes additional COBRA-related enhancements.  Each participant shall be entitled to receive a special COBRA severance payment (separate from the ARRA Subsidy) until the earlier of: (i) the date that the participant becomes covered under another group plan or Medicare; (ii) the last day of the participant’s severance pay period; or (iii) the end of the nine-month ARRA Subsidy period described above.  This COBRA severance payment is issued directly to the participant on an after-tax basis.  This special payment is intended to reimburse the participant for his or her COBRA premium payment to the extent such premium is greater than the amount a similarly situated active employee would be required to pay for comparable coverage.  This way, the participant’s total cost for COBRA coverage during the severance pay period will be comparable to the health care premium for an active employee.  In addition, to the extent a participant’s severance pay period is longer than the nine-month ARRA Subsidy period, the Employer shall pay the additional premiums so that the participant’s share of the COBRA payments are comparable to the premiums for a similarly situated active employee receiving comparable coverage.  This extended Employer provided subsidy, if applicable, shall continue until the earlier of: (i) the date that the participant becomes covered under another group plan or Medicare; or (ii) the last day of the participant’s severance pay period.

 

  

8

  

 

	
  

	
(b)

	
Outplacement Counseling Services.  The Employer shall provide each participant with outplacement counseling services to be provided by a firm of the Employer’s choice.  The nature of such services, its duration and all other terms and conditions shall be determined by the Employer.

 

	
  

	
(c)

	
Timing and Consideration.  Each of the enhanced severance arrangements described in this Section 3.4 shall become available to a participant beginning after the seven-day revocation period following the execution of the Severance Agreement and General Release described in Section 3.5.  The consideration for this voluntary Severance Agreement and General Release shall be the enhanced severance, Employer-provided benefits and outplacement counseling services, if applicable, to which the participant otherwise would not be entitled.  Benefits are payable at the time and in the manner described in Section 4.2.

 

	
  

	
(d)

	
Prorated Target Bonus.  The provisions in this Section 3.4(d) shall apply exclusively to participants who: (i) have target bonuses; (ii) are not GEC Participants as defined in Section 3.4(e); and (iii) are eligible for severance pay under the Plan as the result of a termination occurring during the last calendar quarter of the plan year (a “Target Bonus Participant”).

 

In the event a Target Bonus Participant has otherwise satisfied all of the conditions of the Plan for enhanced severance under Section 3.4 (specifically including executing the Severance Agreement and General Release described in Section 3.5), such Target Bonus Participant may receive a prorated share of his or her target bonus for the year of termination, subject to the Employer’s then existing practice of determining discretionary bonus payments.  Payment of bonuses is within the Employer’s sole discretion, and may be made, if at all, subject to year-to-year variations.  Factors included in considering individual bonus awards include, without limitation, the Target Bonus Participant’s performance against specific objective and subjective standards developed with his or her manager, subjective evaluation by management and the anticipated performance of the Employer, region and business unit.  A consideration of these factors may lead to a Target Bonus Participant receiving more than, less than or none of his or her prorated target bonus.  Any bonus payment shall be less any required payroll deductions.

 

Furthermore, except as specifically otherwise provided in this Section 3.4(d), all of the other provisions and conditions of the Plan shall be applicable to enhanced severance payable to a Target Bonus Participant.

 

	
  

	
(e)

	
GEC Supplemental Benefit.  The provisions in this Section 3.4(e) shall apply exclusively to each of those individuals who is a member of the Company’s Global Executive Committee (the “GEC”) or any successor global management committee to the GEC as may be designated as such by the Company at the time of his or her termination.  As of May 1, 2004, the GEC consists of the Company’s Global Chief Executive Officer, Global Chief Financial Officer and the Chief Executive Officers of each of the Company’s Americas, Europe, Asia-Pacific and LaSalle Investment Management operating units (each a “GEC Participant” and collectively the “GEC Participants”).

 

  

9

  

 

In the event that the employment of a GEC Participant with the Employer ends due to an involuntary termination for any reason other than those set forth in Sections 2.1 or 2.2(a), (b), (c), (d), (e), (f), (g), (h), (k) or (m), then such GEC Participant, if he or she has satisfied all of the conditions of the Plan (specifically including executing the Severance Agreement and General Release described in Section 3.5), shall be entitled to enhanced severance pay equal to the sum of: (i) 52 times the GEC Participant’s weekly pay; plus (ii) an amount equal to the annual target bonus then in effect for such GEC Participant.  Such enhanced severance pay shall be payable in a lump sum.

 

In addition to the foregoing amounts:

 

	
  

	
(i)

	
If a GEC Participant is terminated under this Section 3.4(e) between January 1 in a given year and the date thereafter on which the Employer pays bonuses in respect of the previous year (the “Bonus Payment Date”), then the GEC Participant shall remain eligible to receive his or her bonus on the Bonus Payment Date subject to the Employer’s then existing practice of determining discretionary bonus payments and otherwise subject to the considerations with respect to the payment of bonuses set forth in Section 3.4(d).

 

	
  

	
(ii)

	
If a GEC Participant is terminated under this Section 3.4(e) between the Bonus Payment Date and June 30 of any given year, then the GEC Participant shall not be eligible to receive any further bonus payment beyond any bonus paid in respect of the then previous Bonus Payment Date.

 

	
  

	
(iii)

	
If a GEC Participant is terminated under this Section 3.4(e) between June 30 and December 31 (inclusive) of any given year, then when the Employer calculates and pays bonuses in the following year, such GEC Participant may receive a prorated share of his or her target bonus for the year of termination, subject to the Employer’s then existing practice of determining discretionary bonus payments and otherwise subject to the considerations with respect to the payment of bonuses set forth in Section 3.4(d).

 

  

10

  

 

After termination under this Section 3.4(e), a GEC Participant shall not be eligible to receive any bonus payments except as specifically contemplated in this subsection as set forth above.

 

In the case of Section 2.2(f), it shall be the Compensation Committee (rather than the Administrator) that has the discretion to determine whether the position offered to a GEC Participant constitutes a “reasonably comparable” position (which in any event may only be with the Company or one of its subsidiaries).  In the case of Section 2.2(m), the GEC Participant shall be permitted to elect whether to receive severance pay under this Plan or under such other plan, program or arrangement (including an employment agreement) with respect to which he or she may be entitled to receive severance (or “Garden Leave”) benefits, but shall not be entitled to receive payments under both.  Such election shall be made on or after the date the GEC Participant is terminated and before the GEC Participant receives severance payments from an Employer under any plan, program or arrangement, including this Plan, for such termination.  Payment of severance under this Plan shall not, however, preclude payment of any other benefits (such as, for example, with respect to health care) that may otherwise be provided under any separate plan, program or arrangement (including an employment agreement).

 

For avoidance of doubt, the provisions of the Plan shall apply according to its terms if the particular circumstances set forth in Section 2.1 of the Plan cause a GEC Participant’s employment to end.  Furthermore, except as specifically otherwise provided in this Section 3.4(e), all of the other provisions and conditions of the Plan shall be applicable to enhanced severance payable to a GEC Participant.

 

	
  

	
(f)

	
Modified Participant Benefit.  The provisions in this Section 3.4(f) shall apply exclusively to individuals who (i) are individuals in the job categories of National, Regional or International Director whose employment is involuntarily terminated; (ii) are otherwise not eligible for severance benefits as participants under the Plan; and (iii) are not ineligible for severance benefits under Sections 2.2(a), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l) or (m) of the Plan.  A person meeting all the criteria in the previous sentence shall be deemed to be a “Modified Participant.”  A Modified Participant shall not include an individual who is compensated under a variable compensation program, as defined in Section 2.1.  In the event of such termination, then such Modified Participant, if he or she satisfies all of the conditions of the Plan (specifically including executing the Severance Agreement and General Release described in Section 3.5), shall be entitled to the following enhanced severance payment, in addition to the base severance pay under Section 3.3:

 

  

11

  

 

	
  

	
(i)

	
If terminated after performance counseling:

 

	
  

	
A.

	
For National Directors – 1⁄2 month base compensation

 

	
  

	
B.

	
For Regional or International Directors – 1-1⁄2 months base compensation

 

	
  

	
(ii)

	
If terminated without performance counseling – 1⁄2 of the enhanced severance benefits to which the Modified Participant would have been eligible had the Modified Participant been an eligible participant under the Plan.

 

For purposes of the Plan, performance counseling shall mean the written memorandum or memoranda explaining a performance deficiency, and/or a 30-day period from the first written memorandum.  “Terminated after performance counseling” shall mean involuntary termination within six months of performance counseling, which shall be six months after the date on which the 30 days from the first written memorandum expires or the date of the last written memorandum, whichever is later.  Terminations outside six months after performance counseling shall be considered terminations “without performance counseling.”

 

	
3.5

	Conditions to Payment of Enhanced severance Benefits.

         

As a condition to receiving the enhanced severance benefits described in Section 3.4, each participant is required to:

 

	
  

	
(a)

	
Execute and submit within the allotted time, a Severance Agreement and General Release in the form prescribed.  A participant may be required to re-execute the release on his or her date of separation, if necessary.  The participant shall have a period of 21 days (45 days in certain cases) to consider and sign the Severance Agreement and General Release.  If a participant’s signed release is not returned by the deadline, no enhanced severance benefits shall be provided under the Plan.  If a participant revokes the Severance Agreement and General Release within the seven-day revocation period, no enhanced severance benefits shall be provided under the Plan.

 

	
  

	
(b)

	
Return all Employer property (including, but not limited to computers, keys, credit cards, documents, records, identification cards and equipment) on or before his or her termination of employment.

 

	
  

	
(c)

	
Repay all loans or other amounts due to the Employer including, without limitation, any outstanding corporate credit card balances or negative paid-time-off balances.  Any loans or other amounts due from the employee shall be set off against and deducted from the severance amount otherwise due the employee under the Plan.

 

  

12

  

 

	
3.6

	Repayments and Forfeitues.

       

	
  

	
(a)

	
Notwithstanding any other provision of the Plan to the contrary, any participant who accepts benefits under the Plan shall reimburse the Employer for the full amount of any benefits he or she received under the Plan if the participant subsequently discloses any of the Employer’s trade secrets, violates any written covenants between such participant and the Employer or otherwise engages in conduct that may adversely affect the Employer’s reputation or business relations.  In addition, any participant described in the preceding sentence shall forfeit any right to benefits under the Plan which have not yet been paid.  If, and to the extent required by the terms of any agreement between the Employer and a third party concerning the sale or transfer of all or any portion of the Employer, any participant whose employment is involuntarily terminated in conjunction with such sale and who becomes a direct competitor of such third party or is employed by a direct competitor of such third party shall forfeit any right to any additional benefits under the Plan which have not yet been paid.

 

	
  

	
(b)

	
Effective March 15, 2009, as a condition to reemployment by the Company or any of its affiliated companies within the time period equal to the period of the Enhanced Severance payment, a participant must repay the difference between the actual break in service and the total enhanced severance payment, if any.  If a participant is rehired and does not repay Enhanced Severance, then upon rehire for purposes of future severance calculations, the rehire date shall be used.

 

	
3.7

	Offset for Other Benefits or Amounts Due.

          

Except as provided in Section 3.4(e), the amount of any benefits payable to a participant under the Plan shall be reduced on a dollar-for-dollar basis by any separation, termination or similar benefits that an Employer, subsidiary or affiliate pays or is required to pay to such participant through insurance or otherwise under any plan, program, agreement or contract of the Employer, subsidiary or affiliate, or under any federal or state law.

 

	
3.8

	Non-Solicitation of Employees and Clients.

        

As a condition to receiving enhanced severance benefits under Section 3.4, each participant shall execute a release in a form specified by the Employer, containing the participant’s agreement to the following restrictions: during the period severance is payable, or during the period of 12 months after termination, whichever is longer, the participant shall not (i) solicit or induce any other employees of an Employer or subsidiary to leave the employ of the Employer; (ii) solicit or induce any of an Employer’s or subsidiary’s clients to discontinue or reduce the extent of such relationship with the Employer or subsidiary; or (iii) assist, perform services for or have any equity interest in any of an Employer’s or subsidiary’s clients.  If a participant fails to comply with such restrictions, any remaining unpaid benefits under the Plan shall not be paid and the Employer may pursue all legal remedies available to it, including recovery of severance already paid.  The Employer has the sole discretion to determine whether an entity is a “client” of an Employer or a subsidiary.

 

  

13

  

 

	
3.9

	Benefits for Certain Acquired Employees.

      

Notwithstanding the provisions of Sections 3.3 and 3.4, the Company may, in its discretion, provide severance pay and benefits that are different than those set forth in such Sections in the event the Company enters into an agreement or arrangement with a third party to provide special severance pay and benefits to certain employees acquired from the third party.  Other than with regard to special severance pay, benefits and eligibility, all of the other terms of the Plan shall apply to such employees.

 

SECTION 4

 

Payment of Benefits

 

	
4.1

	Release.

           

No enhanced severance pay benefits under Section 3.4 of the Plan shall be payable to any participant until such participant has executed a release (as described in Section 3.5) of all of such participant’s then existing rights and legal claims against the Employers and their subsidiaries and affiliates.

 

	
4.2

	Form of Payment.

    

Base severance pay under Section 3.3 shall be paid in a single lump sum as soon as administratively practicable after the termination giving rise to such severance pay, but in no event later than the later of: (i) December 31 of the calendar year in which the termination occurs; or (ii) the 15th day of the third month following the termination date.  Subject to the distribution requirements under Section 409A of the Internal Revenue Code of 1986 (the “Code”) described in Section 4.3, enhanced severance pay under Section 3.4 shall be paid in equal installments according to the Employer’s normal payroll schedule; provided, that all benefit payments to a participant shall be completed within 24 months following the date on which the participant’s employment terminates.  The Employer may, in its sole discretion, elect to pay benefits in a lump sum. Notwithstanding the foregoing, all severance payments made pursuant to Section 3.4(e) shall be made in a lump sum.  All payments made under the Plan are subject to reduction for withholding.  Severance payments made under this Plan are not considered eligible wages for any other Employer-provided benefits, including the 401(k) plan.

 

  

14

  

 

	
4.3

	Section 409A Restrictions.

        

Code Section 409A places certain restrictions on when severance pay may be distributed.  Specifically, the first installment of severance pay shall be paid beginning at least six months after the participant’s termination date. However, the six-month delay restriction in the previous sentence shall not apply if (i) the severance pay is distributed not later than 2-1⁄2 months following the end of the year in which the participant’s employment terminated; or (ii) the severance pay meets the following two requirements:

 

	
  

	
(a)

	
The entire amount of the severance pay does not exceed the lesser of (i) two times the participant’s annual compensation for the year preceding the termination; or (ii) two times the Code Section 401(a)(17) limit for the year of the termination ($490,000 for terminations in 2010); and

 

	
  

	
(b)

	
All amounts are paid by December 31 of the second calendar year following the year in which the termination occurs (i.e., if the participant terminates employment in 2010, all payments must be made by December 31, 2012).

 

	
4.4

	Death Benefits.

          

In the event of a participant’s death before he or she receives all benefits to which he or she otherwise would be entitled under the Plan, payment of his or her benefits shall be made to his or her beneficiary in installments or a lump sum, as determined by the Company, subject to any distribution requirements under Code Section 409A.  By signing a form furnished by the Employer (and approved by the Company), each participant may designate any person or persons to whom his or her benefits are to be paid if he or she dies before he or she receives all of his or her benefits.  A beneficiary designation form shall be effective only when the form is filed with the Employer while the participant is still alive and shall cancel all beneficiary designation forms previously filed by the participant with the Employer with respect to this Plan.  If a deceased participant has failed to designate a beneficiary as provided above, or if the designated beneficiary predeceases the participant, payment of the participant’s benefits shall be made to his or her estate.  If a designated beneficiary dies before complete payment of any benefits attributable to a participant, remaining benefits shall be paid to the beneficiary’s estate.

 

SECTION 5

 

Financing Plan Benefits

 

All benefits payable under this Plan shall be paid directly by the Employers out of their general assets.  The Employers shall not be required to segregate on their books or otherwise any amount to be used for the payment of benefits under this Plan.

 

  

15

  

 

SECTION 6

 

Reemployment

 

If a participant who is entitled to receive benefits under the Plan is reemployed by an Employer, by any enterprise in which the Employer owns an interest or by any acquiror of all or a portion of an Employer (whether by stock or assets) before all his or her benefits have been paid, any benefits remaining to be paid will be forfeited.

 

SECTION 7

 

Miscellaneous

 

	
7.1 

	Information to be Furnished by Participants.

          

Each participant shall furnish to his or her Employer such documents, evidence, data or other information as the Employer considers necessary or desirable for the purpose of administering the Plan.  Benefits under the Plan for each par­ticipant are provided on the condition that he or she furnish full, true and complete data, evi­dence or other information, and that he or she shall promptly sign any document related to the Plan, requested by his or her Employer.

 

	
7.2

	Employment Rights.

        

The Plan does not constitute a contract of employment and participation in the Plan shall not give a participant the right to be rehired or retained in the employ of an Employer on a full-time, part-time or any other basis or to be retrained by the Employer, nor shall participation in the Plan give any participant any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan.  Participants remain employees “at-will.”  Nothing in the Plan guarantees that a participant shall receive his or her target bonus during his or her employment with the Employer.

 

	
7.3

	Employer’s and Administrator’s Decision Final.

          

Any interpretation of the Plan and any decision on any matter within the discretion of an Employer or Administrator made by the Employer or Administrator in good faith is binding on all persons.  The Administrator shall establish and maintain a written procedure under which participants may submit claims for benefits, and may request reviews of denied claims.

 

	
7.4

	Evidence.

         

Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person relying thereon considers pertinent and reliable, and signed, made or presented by the proper party or parties.

 

  

16

  

 

	
7.5

	Uniform Rules.

         

In managing the Plan, the Employers shall apply uniform rules to all participants similarly situated.  The Administrator may make such other awards of severance benefits to any employee or group of employees as he or she deems desirable, pursuant to conditions and procedures established in writing from time to time in accordance with the terms of the Plan and as are incorporated in the Plan.

 

	
7.6

	Gender and Number.

         

Where the context admits, words in the masculine gender shall include the feminine and neuter genders, the plural shall include the singular and the singular shall include the plural.

 

	
7.7

	Action by Employer.

         

Any action required of or permitted by the Company or an Employer under the Plan shall be by resolution of its Board of Directors, by resolution of a duly authorized committee of its Board of Directors, by a person or persons authorized by resolutions of its Board of Directors or such committee, or by the Administrator.  An amendment to the Plan that is approved subsequently by resolution of the Board of Directors or a duly authorized committee of the Board of Directors may have retroactive effect.

 

	
7.8

	Controlling Laws.

        

Except to the extent superseded by ERISA, the laws of the State of Illinois shall be controlling in all matters relating to the Plan.

 

	
7.9

	Interests Not Transferable.

       

Subject to Section 3.7, the interests of persons entitled to benefits under the Plan are not subject to their debts or other obligations and, except as may be required by the tax withholding provisions of the Code or any state’s income tax act, or pursuant to an agreement between a participant and the Employer, may not be voluntarily sold, transferred, alienated, assigned or encumbered.

 

	
7.10 

	Mistake of Fact.

        

Any mistake of fact or misstatement of fact shall be corrected when it becomes known and proper adjustment made by reason thereof.

 

  

17

  

 

	
7.11

	Severability.

         

In the event any provision of the Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if such illegal or invalid provisions had never been contained in the Plan.

 

	
7.12   

	Withholding.

      

The Employers reserve the right to withhold from any amounts payable under this Plan all federal, state, city and local taxes as shall be legally required and any applicable insurance or health coverage premiums, as well as any other amounts authorized or required by Employer policy including, but not limited to, withholding for garnishments and judgments or other court orders.

 

	
7.13   

	Effect on Other Plans or Agreements.

       

Payments or benefits provided to a participant under any Employer stock, deferred compensation, savings, retirement or other employee benefit plan are governed solely by the terms of such plan.  Any obligations or duties of a par­ticipant pursuant to any non-competition or other agreement with an Employer shall be governed solely by the terms of such agreement and shall not be affected by the terms of this Plan.

 

	
7.14

	Non-Duplication.

       

No person shall be entitled to benefits under this Plan who is entitled to severance or similar benefits under any other plan or arrangement of an Employer, unless otherwise expressly provided in this Plan.

 

	
7.15

	No Vested Rights.

        

No person shall acquire any vested rights to any benefits described in the Plan, and the Company reserves the right to discontinue such benefits at any time, as further provided in Section 8.1.

 

	
7.16

	Procedure for Making and Appealing Claims.

     

It is not necessary for a participant to apply for benefits under the Plan.  However, if a participant wishes to file a claim for benefits, such claim must be in writing and filed with the Administrator.  Within 90 days after receiving a claim, the Administrator shall either accept or deny the claim completely or partially, and shall notify the claimant of acceptance or denial of the claim.  Benefits shall be paid only if the Administrator decides in his or her sole discretion that the claimant is entitled to them.

 

  

18

  

 

If the claim is completely or partially denied, the Administrator shall furnish a written notice to the claimant containing the specific reasons for the denial, specific refer­ences to the Plan provisions on which any denial is based, a description of any additional information that must be provided by the claimant in order to support the claim (and why it is necessary), an explanation of the Plan’s appeal procedures and a statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following a denial of the claim on review.  The claimant may receive copies of all documents, records and other information relevant to the claim upon request and free of charge.

 

A claimant may appeal the denial of his or her claim and have the Administrator reconsider the decision.  The claimant or the claimant’s authorized representative has the right to request an appeal by written request to the Administrator not later than 60 days after receipt from the Administrator denying his or her claim.  The claimant or the claimant’s authorized representative may submit written comments, documents, records and other information related to the claim for benefits with the appeal.

 

The Administrator shall make a decision with respect to such an appeal within 60 days after receiving the written request for such appeal, unless additional time is required.  The claimant shall be advised of the Administrator’s decision on the appeal in writing.  This notice shall set forth the specific reasons for the decision and make specific reference to Plan provisions upon which the decision on the appeal is based.  If the claim is denied, the notice shall also include a statement that the claimant is entitled to receive, upon request and free of charge, copies of all documents, records or other information relevant to the claim and a statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

 

SECTION 8

 

Amendment and Termination

  

	
8.1

	Amendment and Termination.

           

The Company reserves the right to amend the Plan at any time and to alter, reduce or eliminate any benefit under the Plan (in whole or in part) at any time or to terminate the Plan at any time, as to any class or classes of covered employees (includ­ing former or retired employees), with or without notice.  Any amendment or termination of the Plan by the Company shall be made in accordance with the procedures set forth in Section 7.7.  Notwithstanding the foregoing, the terms of Section 3.4(e) shall remain effective for each GEC Participant, and may not be amended or terminated, until the date of such GEC Participant’s termination of employment from the Employer or until such time as the GEC Participant’s severance benefits have been superceded by some other severance plan, program or arrangement (including an employment agreement entered into after May 1, 2004) with the Employer.

 

	
8.2

	 Notice of Amendment or Termination.

         

Participants shall be notified of any material amendment or termination of the Plan within a reasonable time.

 

 

19

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