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Change in Control Agreement

 

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Title:

Change in Control Agreement

Entities:

Bowater Inc.

Date:

2001

Size:

Preview shows 8KB of 41KB total

Price:

$36

ID:

#369488

 

 

► Employment ► Change in Control Agreements
► Commodities ► Paper & Paper Products

 

 

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                           CHANGE IN CONTROL AGREEMENT



THIS AGREEMENT, made as of the 24th day of September, 2001, by and between
Bowater Incorporated, a Delaware corporation having a mailing address of 55 East
Camperdown Way, P.O. Box 1028, Greenville, South Carolina 29602 (the
"Corporation"), and _______________ of ______________________ (the "Executive").

WHEREAS, the Corporation considers it essential to the best interests
of its stockholders to foster the continued employment of key management
personnel; and

WHEREAS, the uncertainty attendant to a change in control of the
Corporation may result in the departure or distraction of management personnel
to the detriment of the Corporation and its stockholders; and

WHEREAS, the Board of Directors of the Corporation (the "Board") has
determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the Corporation's management,
including Executive, to their assigned duties in the event of a change in
control of the Corporation.

NOW THEREFORE, it is hereby agreed as follows:

1. DEFINITIONS

The following terms shall have the meanings assigned to them below.

(a) "Accrued Compensation" shall mean all amounts earned or
accrued through the Termination Date but not paid as of the
Termination Date including (i) the Base Amount, (ii)
reimbursement for reasonable and necessary expenses incurred
by the Executive on behalf of the Corporation during the
period ending on the Termination Date, (iii) vacation pay, and
(iv) any bonus award with respect to the Corporation's fiscal
year ended prior to the Termination Date.

(b) "Acquiring Person" shall mean the Beneficial Owner, directly
or indirectly, of securities representing 20% or more of the
combined voting power of the Corporation's then outstanding
securities, not including (except as provided in clause (i) of
the next sentence) securities of such Beneficial Owner
acquired pursuant to an agreement allowing the acquisition of
up to and including 50% of such voting power approved by
two-thirds of the members of the Board who are Board members
before the Person becomes Beneficial Owner, directly or
indirectly, of securities representing 5% or more of the
combined voting power of the Corporation's then outstanding
securities. Notwithstanding the foregoing, (i) securities
acquired pursuant to an agreement described in the preceding
sentence will be included in determining whether a Beneficial
Owner is an



{PAGE}


Acquiring Person if, subsequent to the approved acquisition,
the Beneficial Owner acquires 5% or more of such voting power
other than pursuant to such an agreement so approved; and (ii)
a Person shall not be an Acquiring Person if such Person is
eligible to and files a Schedule 13G under the Exchange Act
with respect to such Person's status as a Beneficial Owner of
all securities of the Corporation of which the Person is a
Beneficial Owner.

(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date
hereof.

(d) "Base Amount" shall mean the greater of (i) the Executive's
annual base salary at the rate in effect immediately prior to
the Change in Control and (ii) the Executive's annual base
salary at the rate in effect on the Termination Date.

(e) "Beneficial Owner" of securities shall mean (i) a Person who
beneficially owns such securities, directly or indirectly, or
(ii) a Person who has the right to acquire such securities
(whether such right is exercisable immediately or only with
the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, warrants, options or
otherwise.

(f) "Bonus Amount" shall mean an amount equal to the maximum
amount the Executive could have been paid under the
Corporation's annual or other short term cash incentive plans
in effect immediately prior to the Change in Control for the
fiscal year in which the Change in Control occurred or, if
higher, the maximum amount under such plans in effect at the
Termination Date based on the Executive's then base salary and
position.

(g) "Cause" shall mean and be limited to the Executive's gross
negligence, willful misconduct or conviction of a felony,
which has a demonstrable and material adverse effect upon the
Corporation; provided that if Cause exists by virtue of the
Executive's gross negligence or willful misconduct that is
capable of being cured, the Corporation shall give the
Executive written notice of the alleged negligence or
misconduct and if the Executive cures the negligence or
misconduct within thirty (30) days after receipt of the
notice, such Cause shall cease to exist and the Corporation
shall not terminate the Executive's employment therefor. The
Executive shall be deemed to have been terminated for Cause as
of the effective date stated in a Notice of Termination
delivered by the Corporation to the Executive, which shall not
be delivered before the end of the thirty (30) day period
described in the preceding sentence, if applicable. The Notice
of Termination must be accompanied by a certified copy of a
resolution duly adopted by the affirmative vote of not less
than three-quarters (3/4) of the membership of the Board after
reasonable notice to the Executive and an opportunity for the
Executive, with the Executive's counsel present, to be heard
before the Board, finding that, in the good faith opinion of
the Board, the



2
{PAGE}


Executive was guilty of conduct constituting Cause hereunder
and setting forth in reasonable detail the facts and
circumstances claimed to provide the basis for the Executive's
termination.

(h) "Change in Control" shall be deemed to have occurred upon:

(i) the date that any Person is or becomes an Acquiring
Person;

(ii) the date that the Corporation's stockholders approve
a merger, consolidation or reorganization of the
Corporation with another corporation or other Person,

 

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