SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): May 22, 2009
Icahn
Enterprises L.P.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-9516
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13-3398766
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification
No.)
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767
Fifth Avenue, Suite 4700, New York, NY
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10153
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
Telephone Number, Including Area Code: (212) 702-4300
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[ ]
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Written
communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01 Entry into a Material Definitive Agreement
On May
21, 2009, Keith Meister (the “Employee”) entered
into an employment agreement (the “Employment
Agreement”) with Icahn Enterprises L.P. (“Icahn Enterprises”)
and Icahn Capital, L.P. (the “Employer”), which is
effective June 1, 2009. See Item 5.02 below for a further description
of the Employment Agreement.
Item
5.02 Departure of Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers
On May
21, 2009, the Employee entered into the Employment Agreement with Icahn
Enterprises and the Employer, which is effective June 1, 2009. Except
as set forth in this Item 5.02, the Employment Agreement will terminate the
Employee’s prior employment agreement dated as of December 31, 2004 (the “Prior Employment
Agreement”). The Employee is employed to act as a senior
executive officer with the title of Senior Managing Director of the Employer and
of certain Icahn Enterprises-affiliated hedge funds (the “Hedge
Funds”). He will continue to be Vice Chairman of the Board of
Directors of Icahn Enterprises G.P. Inc. and the Principal Executive Officer of
Icahn Enterprises G.P. Inc. The Employee agrees to work for any or
all of the Icahn Enterprises-related entities for the aggregate consideration
described below. The Employee also is entitled to paid vacation
annually, and participates in all benefits programs and plans for which he is
entitled which are made available to all senior executive employees of Icahn
Enterprises-related entities.
The
Employee is entitled to receive cash compensation during his employment that
includes a base salary at the rate of $300,000 per year from the Employer and a
yearly salary at the rate of $100,000 per year from Icahn Enterprises for
serving as the Principal Executive Officer of Icahn Enterprises G.P.
Inc. On June 1, 2009, the Employee will receive $972,602.74 (less
withholding) in respect of his prorated $1.0 million bonus plus, on or about
June 20, 2009, the Employee will receive fully vested non-deferred profits
participation through May 31, 2009 in an amount to be determined. The
Employee will continue to defer the deferred management fees from fiscal years
2005, 2006 and 2007 under the Prior Employment Agreement, which are payable at
the end of the deferral period. The Employee will retain the right to
receive from the general partners of the Hedge Funds 2.5% of their special
profits interests allocations, if any, net of the general partners’ and/or their
affiliates’ expenses incurred in providing services to the Hedge
Funds. The existing special profits interest allocations are deemed
100% vested and payable as profits are generated (with no additional accrual
after April 1, 2009).
So long
as the Employee continues to be employed by the Employer under the Employment
Agreement, the Employee shall be entitled to be paid by the Employer, as
additional salary, (i) an amount equal to 4.0% of the special profits interests
allocations to the general partners of the Hedge Funds, net of expenses, and
(ii) 4.0% of the incentive allocations to the general partners of the Hedge
Funds. The Employee will be 100% vested in these rights.
From and
after the date on which at least an aggregate of $375.0 million is contributed
to a new Icahn Enterprises-affiliated fund (the “New Fund”), if such
New Fund shall be created, the Employee will receive, as additional salary, 6.0%
of the income stream of the Employer from such new fund, net of expenses,
subject to vesting at 20.0% per year (and paid at the end of the Employee’s
employment). The Employee will also be entitled to, as additional
salary, 6.0% of the income stream of the Employer from other Icahn
Enterprises-affiliated funds (other than Hedge Funds) (the “Other Funds”) for
services that the Employee performs at the written request of the Employer, net
of expenses, subject to vesting at 20.0% per year (and paid at the end of the
Employee’s employment). In addition, the Employee will be entitled
to, as additional salary, 6.0% of the applicable management fees from the New
Fund and/or the Other Funds, if any, net of expenses. Each June 1
throughout the Term of the Employment Agreement, beginning June 1, 2010, the
Employer will pay to the Employee the lesser of (A) $2.0 million and (B) 20.0%
of all vested amounts (as defined therein). There can be no
assurances that the New Fund or any Other Fund will be
established.
The
Employer or any of the Icahn Enterprises-related entities may terminate the Term
and the employment of the Employee under the Employment Agreement on behalf of
and in respect of all persons employing the Employee, at any time, with cause or
in their sole discretion without cause. In the event that the
Employee’s employment is terminated: (i) (x) for cause, (y) by his action such
as by resignation (other than a permitted resignation (as defined therein)) or
retirement or (z) by virtue of the continuance of the Employee’s employment
through the end of a five-year term ending May 31, 2014 (the “Term”), then the
Employee will be paid the entire amount of his base salary earned through the
date of termination but not yet paid plus the unpaid vested amounts; or (ii) (w)
by the Employer without cause, (x) by the Employee making a permitted
resignation, (y) due to the Employee’s death or disability or (z) due to the
shutdown of the New Fund, then the Employee (1) will be paid the entire amount
of his base salary earned through the date of termination but not yet paid, (2)
will be paid all unpaid vested amounts (all of the Employee’s participation
automatically will be fully vested) and (3) will, until the end of the Term,
continue to accrue the compensation on the income stream from the New Fund, but
only to the extent of money contributed by third party investors in the New Fund
prior to the date of cessation of the Employee’s employment.
The
foregoing is only a summary of the terms of the Employment Agreement and is
subject to the complete terms thereof. The Employee is subject to a
covenant not to solicit any employees of, or to compete with, the general
partners of the Hedge Funds, the Employer or any other Icahn Enterprises-related
entity during the Term and for one year thereafter, except that his
non-competition covenant shall not extend beyond the end of the Term if the
Employment Agreement is terminated by the Employee for failure to pay him any
amounts due thereunder.
A copy of
the Employment Agreement is attached hereto as Exhibit 10.1 and incorporated
herein by reference.
Item
9.01. Financial Statements and Exhibits
(d)
Exhibit 10.1 – Employment Agreement
[Remainder
of page intentionally left blank; signature page follows]
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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ICAHN
ENTERPRISES L.P.
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(Registrant)
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By:
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Icahn
Enterprises G.P. Inc.
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its
General Partner
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By:
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/s/ Dominick Ragone
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Dominick
Ragone
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Principal
Financial Officer
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Date: May
22, 2009
AGREEMENT
Agreement
made as of the 1st day of June 2009 (the “Execution Date”) by and between Icahn
Enterprises LP, Icahn Capital, L.P. (the “Employer”), and Keith Meister (the
“Employee”). The obligations of the Employer hereunder shall be joint
and several obligations of the Employer and Icahn Enterprises
L.P. Unless otherwise defined herein (including in Section 20 hereof)
a capitalized term used herein shall have the meaning attributed to it in the
Prior Employment Agreement (as defined below), the Letter (as defined in Section
20) or the exhibits thereto.
RECITALS:
Employee
is a party to a series of agreements with Carl C. Icahn and his Affiliates
including the following: An Agreement dated as of December 31, 2004,
which was subsequently amended pursuant to Amendment No. 1 effective as of
January 1, 2006, letter agreements dated June 1, 2005, March 14, 2006, April 11,
2006, February 1, 2007 and April 19, 2007, an Amendment in Relation to
Management Fee Participation dated August 8, 2007, an Amendment to Agreement
dated December 31, 2004 which is dated January 1, 2008 (the “Special Profits
Amendment”) an Amendment in Relation to Section 409A of The Internal Revenue
Code dated December, 2008 (the “Section 409A Amendment”) and various agreements
of partnership and limited partnerships (all of the foregoing together with all
other partnership, limited liability company and other agreements relating to
the employment and other service relationship of Employee with any of the Icahn
Group (other than any confidentiality agreement or indemnity agreement)
collectively, the “Prior Employment Agreement”).
Pursuant
to the Prior Employment Agreement, Employee was entitled to
receive: (a) base salary, (b) bonus payments, as well as (c) a
participation (subject in part to vesting) in incentive allocations and (d) an
amount (the “Management Fee
Participation”) equal to a portion of the Management Fees earned by the
Management Company from certain funds to which the Management Company provided
management services, including Icahn Partners LP (“Icahn Partners”), Icahn Fund
Ltd., Icahn Fund II Ltd. and Icahn Fund III Ltd. (together with the Master Funds
( as defined below) the “Existing Funds”) and, pursuant to the Special Profits
Agreement, certain payments relating to Special Profits Interest Allocations (as
defined in the documents of each applicable Existing Fund).
Pursuant
to the Prior Employment Agreement, payment of a portion of Employee’s Management
Fee Participation with respect to each of the 2005, 2006 and 2007 calendar years
was deferred and payable, together with hypothetical gains and losses thereon
(collectively, the “Deferred Amounts”) as if invested in the Master Fund, Master
Fund II and Master Fund III (together, the “Master Funds”), on
January 30, 2012, subject to earlier payment upon a Terminating Event, as set
forth in Section 12 and Schedule A of the Prior Employment Agreement as amended
by the Section 409A Amendment.
Pursuant
to a Management Contribution, Assignment and Assumption Agreement dated as of
August 8, 2007 between Icahn Management LP (the “Management Company”) and Icahn
Capital Management LP, the Management Company assigned to Icahn Capital
Management LP, effective as of August 8, 2007, all of its right, title and
interest in the Prior Employment Agreement, and Icahn Capital Management LP
assumed and agreed to perform the liabilities and obligations of the Management
Company under the Prior Employment Agreement, other than liabilities and
obligations arising prior to August 8, 2007, including the liabilities and
obligations of the Management Company arising prior to August 8, 2007 with
respect to Employee’s deferred Management Fee Participation (all such
obligations arising prior to August 8, 2007, including those relating to the
portion of such Management Fee Participation arising prior to August 8, 2007,
the “Retained Obligations”). Such obligations of Icahn Capital
Management LP were assumed by Employer.
The
purpose of this Agreement is to terminate the Prior Employment Agreement (while
preserving, as set forth herein, the rights of Employee in the Deferred Amounts
and certain of the Fund GP’s Special Profit Interests Allocations), to provide
for certain payments to Employee relating to the Prior Employment Agreements,
and to set forth a new arrangement between Icahn Enterprises, certain of its
subsidiaries, and Employee.
The
employment of Employee hereunder is not for any specific time period and the
word “Term” as defined in this Agreement, is utilized to set forth the effects
of the cessation of such employment at any particular time and not to provide
any obligation of employment by either party for any definite period of
time.
In
addition to the Existing Funds, Employer is currently planning to create a new
investment vehicle (which may have an on-shore and off-shore counterpart)
commonly known as a hedge fund (such on- and off-shore counterparts of such fund
collectively, the “New Fund”). Employer currently expects that the
New Fund generally will have the characteristics set forth in Exhibit A to the
Letter (“Exhibit A”), but all matters concerning the terms and structure of the
New Fund are subject to change or abandonment at any time in the sole discretion
of Employer.
Employer
and its Affiliates may also organize and operate other hedge funds in addition
to the New Fund and the Existing Funds (such hedge funds, other than the New
Fund and the Existing Funds, collectively, the “Additional Funds”) and Employee
will, at the request of Employer, provide services to such Additional Funds to
the extent required by this Agreement.
NOW
THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, desiring to be legally bound, hereby agree as
follows:
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1.
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Termination
of Prior Employment Agreements. In consideration for the payments
to be made pursuant to Section 2 below, effective as of the Execution
Date, the Prior Employment Agreement (other than the Surviving Partnership
Relationship (as defined below) which shall survive only to the extent set
forth in Section 2 (d) below) (and other than Employee’s right to payment
of the Deferred Amounts, as set forth in Section 2(b) and Exhibit B) is
hereby terminated in all respects and shall be null and void and have no
further force or effect and all rights and interests of the parties
thereunder are hereby terminated and the right and interests of the
Employee in all payments, Profit Participation, interests in any
partnership, limited liability company or other entity contemplated in the
Prior Employment Agreement or relating thereto, are hereby extinguished in
all respects.
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2
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2.
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Payments
to Employee In Respect of Prior Employment Agreement.
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(a)
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Cash
Payment. On June 1, 2009 Employer shall pay to Employee
$3,197,054.60 (in respect of 100% of non-deferred Incentive Allocation
(vested and unvested through April 30, 2009), plus $972,602.74 (less
withholding) in respect of prorated $1 million annual
bonus). 100% of non-deferred Incentive Allocation (vested and
unvested from May 1, 2009 through May 31, 2009) will be paid promptly (on
or about June 20, 2009) following the determination
thereof. Such Incentive Allocation payments will be paid from
Icahn Onshore LP and Icahn Offshore LP and will reduce the capital account
of Employee in such partnerships with respect to Incentive Allocations to
zero.
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(b)
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Deferred Management
Fees. The aggregate value of the Deferred Amounts of the Management
Fee Participation in which Employee has an interest under the Prior
Employment Agreement equals $3,813,669.73 as of April 30, 2009 (of which
as of April 30, 2009, $3,446,450.72 is attributable to Retained
Obligations and $ 367,219.01 is attributable to management fees accruing
on or after August 8, 2007) and as of the date of this Agreement Employee
is, and shall be deemed to be, 100% vested in such amounts. The
Deferred Amounts shall continue to be deferred in accordance with the
terms of the Prior Employment Agreement, as memorialized in Exhibit B to
the Letter (“Exhibit B”), and the right of Employee in such Deferred
Amounts, and any right to receive payment thereof, shall be governed
exclusively by the terms of this Section 2(b) and the terms of Exhibit
B. Until the payment of such Deferred Amounts, such amounts
shall continue to be indexed to the return of the Master Fund, Master Fund
II and Master Fund III, as applicable (or in certain circumstances U.S.
Treasury obligations) as set forth on Exhibit
B.
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(c)
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Special Profits
Interests. Pursuant to Section 5 of the Special Profits Amendment
amending Section 9(i) of the Prior Employment Agreement for all periods on
or after January 1, 2008, Employee is entitled to receive 2.5% of the Fund
GP Net Special Profits Interests Allocations allocated to the Fund GP’s
(as such terms are used in Section 3 of the Special Profits Amendment)
during the period from January 1, 2008 until the last day of the “Term”
(in this single instance, as “Term” is defined in the Prior Employment
Agreement). As of April 30, 2009 the amount that would be
allocable to Employee if each applicable Existing Fund had sufficient Net
Increase to make such allocation is $532,850.97 with respect to Icahn
Partners; $ 1,114,186.87 with respect to the Master Fund, $ 233,085.54
with respect to Master Fund II and $ 97,805.30 with respect to Master Fund
III (each such amount, an “Accrued Amount”), it being understood that such
Accrued Amount fluctuates from time to time because the amounts in each
Special Profits Memorandum Account (as defined under the documents of each
applicable Existing Fund) on which such Accrued Amount is
based, are treated as if they are invested in the applicable Existing Fund
and so fluctuate with the value of the investments of such
fund. The dollar amount of each Accrued Amount at any
particular time, after taking into account such fluctuations in value, and
as reduced by any payments contemplated in the following paragraph (in
each case to the extent attributable to such Accrued Amount) is referred
to, individually herein as a “Employee Special Interest
Amount.” Employee is and shall be deemed to be, 100% vested in
such amounts.
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3
In
satisfaction of the payments that would be payable under the Prior Employment
Agreement as contemplated in this clause (c) above, Employee will be paid an
amount equal to 2.5% of each of the Fund GP’s Net Special Profits Interests
Allocations that are made by an Existing Fund with respect to an Employee
Special Profits Interest Amount, until such Employee Special Profits Interest
Amount is reduced to zero (with respect to each such Employee Profits Interest
Amount, the “Accrued Special Profits End Point”). The parties
acknowledge and agree that except for the fact that the dollar amount of the
Accrued Amount may fluctuate after the date hereof due to investment profits and
losses on such amount (and the reductions due to the payments to Employee
contemplated in this clause (c)) no further Target Special Interest Amounts or
other amounts or allocations shall accrue to Employee pursuant to this Section
(c) after April 1, 2009 (it being understood and agreed that the Accrued Amount
includes the applicable amounts for January 1, 2009 and April 1,
2009).
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(d)
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Partnership
Interest. Employee shall continue to be a partner in Icahn Onshore
LP and Icahn Offshore LP (each of such partnerships, “Special Profits
Partnership”) until the Accrued Special Profits End Point relating to such
partnership. The rights of Employee as a partner shall be limited solely
and exclusively, to his right to be paid the Employee Special Profits
Interest Amount (the “Surviving Partnership Relationship”). At
the Accrued Special Profits End Point the rights of Employee as a partner
in the applicable Special Profits Partnership shall terminate and Employee
shall cease to be a partner in such Special Profits Partnership and shall
have no further right in respect
thereof.
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(e)
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No Other
Rights. Employee acknowledges and agrees that except for: (i) his
right to receive the payments set forth above in this Section 2: (ii) his
right under any indemnity agreement or obligation; and (iii) the other
rights of Employee expressly set forth in this Agreement, Employee has no
other rights or claims against or relating to, any of the members of the
Icahn Group or any of their respective officers, directors, employees,
agents or representatives of any kind or character, direct or indirect and
any and all such rights and claims, if any, are hereby waived and released
in all respect.
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(f)
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Survival. The
rights and obligations of Employee and Employer under this Section 2 will
survive any cessation of Employee’s employment for any reason or no reason
and the provision of Section 12 of this Agreement shall not apply to this
Section 2 in any respect.
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3.
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Employment/Title/Benefits: Subject
to the terms of this Agreement, Employer hereby employs Employee to
perform the duties described in Section 4 below, and Employee hereby
accepts such employment. Employee’s title shall be Senior
Managing Director of Employer and of the Existing Funds as well as Vice
Chairman of the Board of Directors of Icahn Enterprises G.P. Inc. and
Principal Executive Officer of Icahn Enterprises G.P.
Inc. Until such time as Employee is no longer employed by
Employer hereunder, Employee shall be entitled to paid vacation annually
in accordance with the policies of the Employer and shall participate in
all benefit programs and plans for which he is eligible, which are made
available to all executives.
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4.
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Duties. Employee
shall be employed to act as a senior executive officer to provide the
types of services he has previously provided during his employment under
the Prior Employment Agreement to any member of the Icahn Group as may be
requested by Carl C. Icahn or the Board of Icahn Enterprises G.P. Inc.
including but not limited to: (i) providing,
performing and reviewing equity, debt, credit, transaction and investment
analysis and research; (ii) providing advice and performing duties
regarding structuring, financing and conduct of business and
activities; (iii) engaging in raising funds and conducting ongoing
investor relations; and (iv) otherwise providing his expertise in
connection with investment, business and financing and investor relations
activities.
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So long
as Employee remains employed by any member of the Icahn Group and at all times
thereafter Employee agrees that he will (i) not resign as a director of any
public corporation on whose board he is currently serving or on which, during
his employment hereunder he begins to serve, at the request of Carl C. Icahn or
at the request of any person or entity included in the Icahn
Group and will continue to accept ongoing appointments and election
to such boards for a period of 2 years following the last day of his employment
by any person or entity included in the Icahn Group; and (b) resign from any
such positions within five (5) business days following the request of Employer
that he do so.
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5.
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Base
Salary.Until such time as the Employment of Employee hereunder
ceases, Employee will be paid a salary at the rate of $300,000 per annum
(payable every 2 weeks) (the “Base Salary”). Employee is also
currently paid $100,000 per year as the Principal Executive Officer of
Icahn Enterprises G.P.
Inc.
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5
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6.
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Profit
Participation/Existing Funds. Subject to all of the terms and
provisions of this Agreement, so long as Employee continues to be employed
by Employer under this Agreement the Employee shall be entitled to be paid
by Employer, as additional salary, an amount equal to 4% of the Fund GP’s
Target Special Profits Interests Amounts (as defined in the applicable
limited partnership agreements of each of Icahn Partners and each Master
Fund) of the limited partners in each Existing Fund net of the “Fund GP
Expenses” (as defined in Section 20) and 4% of the Incentive Allocations,
made by the following funds: Icahn Partners, Master Fund, Master Fund II,
and Master Fund III (each a “Covered Fund”), in each case only with
respect to Target Special Profits Interests Amounts accrued and Incentive
Allocations allocated, on and after July 1, 2009 and prior to the last day
of the employment of Employee hereunder, which amount will be paid to
Employee, as follows:
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(i)
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with
respect to Target Special Profits Interests Amounts of the limited
partners in each Existing Fund, such amounts shall be paid to Employee in
advance on the first business day of each calendar quarter (but only through
any such first business day of a quarter day occurring prior to the last
day of Employee’s employment hereunder), beginning with July 1, 2009,
based on Employer’s good faith estimate of the Fund GP Expenses that will
be incurred by the Fund GPs during such quarter (all of which will be
“trued-up” upon a determination of actual expenses which shall be
calculated as soon as administratively practicable);
and
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(ii)
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with
respect to Incentive Allocations, such amounts shall be paid to Employee
only when such Incentive Allocations are in fact allocated to the capital
account of the general partner of the applicable Covered Fund (and only if such
allocation occurs on or prior to the last day of Employees employment
hereunder).
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provided that if, amounts paid
under this Section 6 are at any time required to be returned or otherwise paid
over to any of the Existing Funds or their investors or Affiliates, due to any
miscalculation, mis-estimation or other error, then the Employee shall be
required (within 180 days following written notice thereof by Employer) to
return, its pro rata share of such amounts so returned or paid over even if such
amounts are returned or paid over following termination of employment of
Employee hereunder and this provision shall survive any termination or
expiration of Employee’s employment hereunder.
Employee
is and shall be deemed to be 100% vested in the rights set forth in this Section
6.
6
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7.
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Profit
Participation/New Fund From and after the date on which
at least an aggregate of $375 million is contributed to the New Fund
(other than amounts contributed by Related Persons), Employee
will participate, as additional salary, in 6% of the Fund I Income Stream
from the New Fund net of Expenses (as defined in Exhibit A to the Letter)
during the Term (as defined in Section 20), which will be subject to
vesting, payment and termination as set forth in Sections 11 and 12
below. The applicable amount shall be credited to the Notional
Account on the date, during the Term that such amounts are earned by the
Employer or its Affiliates without giving effect to any deferral elections
by the Employer or its Affiliates and without regard to any potential
future “claw backs”; however, the Notional Account will be subject to the
calculations and changes contemplated in Section 12(k)
below.
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8.
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Profit
Participation/Additional Funds. Employee will be
entitled to participate as additional salary in any Additional Fund to
which he provides services at the written request of Employer (such
participation as contemplated in this Section 8, the “Additional Fund
Participation”) in an amount equal to a 6% participation in the income
stream, during the Term and a 6% participation in the management fees,
during the Term associated with that particular fund, such participation
in such income stream to be on terms similar in all material respects to
those that apply to the New Fund as contemplated in Section 7, and such
participation of Employee will be (net of Expenses) credited to the
Notional Account and subject to the vesting, payment and termination
provisions as set forth in Sections 11 and 12 below. Additional
Fund Participation in “management fees” will be net of Expenses and will
be paid as contemplated in Section 9. Any such compensation
will be more fully set forth in detail applicable to such Additional Fund
and contemplating the activities of Employee with respect thereto, in a
letter agreement to be entered into by Employee and Employer prior to the
time such services are to be rendered. In the absence of such
letter agreement Employee shall not be required to provide such services
and Employee will not be entitled to any compensation with respect to
services he may provide to an Additional Fund, unless the following
sentence applies. At any time the Employer or one of its
Affiliates agrees in writing to pay to Employee such 6% participation in
the income stream associated with such fund as contemplated above with
regard to which Employee is asked to provide services, then Employee shall
be obligated to provide such
services.
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9.
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Management
Fees The Additional Fund Participation as contemplated
in Section 8 will include participation in “management fees” to the extent
provided in Section 8 (net of Expenses). Although it is not
anticipated that the New Fund will charge management fees, if the New Fund
does charge management fees, Employee will receive 6% of such fees (net of
Expenses)on the same basis as set forth in this Section
9. “Management Fees” will include “special profits interests”
structured like (but not including)
those contemplated under the Existing Funds of Employer and its
Affiliates (other than management fees or “special profits interests”, if
any, paid by any Related Persons); provided that with
respect to: (i) amount such as “special profits interests”
Employee will participate therein as such amounts are accrued by Employer
or its Affiliates; and (ii) if Employer elects to defer the receipt of any
such fees, Employer shall pay Employee 6% of such deferred fees (net of
Expenses) on the date such fees would otherwise have been
paid. Employee will be paid any Additional Fund Participation
in such fees as they are paid by the Additional Fund (or at the time they
are accrued as contemplated in clause (i) above with respect to the
Additional Fund or would have otherwise have been paid by the Additional
Fund as contemplated in clause (ii) above). For the avoidance
of doubt, Employee must remain an employee of Employer hereunder through
the date that such management fees are payable to him in order to be
eligible for such payments.
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7
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10.
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Other
Payments.
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During
the Term, Employee will be paid from Vested Amounts (as defined below), if any,
on each one year anniversary of the Execution Date, the lesser of: (x) $2
million; and (y) an amount equal to A minus B, where A equals 20% of the sum of:
(i) the Vested Amounts as of such date (after taking into account any increase
in the vested percentage occurring on such date), plus (ii) all amounts
previously paid to Employee pursuant to this Section 10, and B equals the sum of
all amounts previously paid to Employee under this Section 10. The
aggregate of all payments made under this Section 10 are referred to herein as
the “Section 10 Payments”.
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11.
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Vesting. There
shall be established a notional account (the “Notional Account”) to which
shall be added the amounts of Employee’s compensation contemplated in
Sections 7, and 8. The right of Employee to receive any amounts
or payments pursuant to Sections 7 and 8 shall be subject to and limited
by, all of the terms and provisions of this Agreement. Employee
shall have no rights to receive any amounts or payments in respect of the
Notional Account or any amounts deemed to be held therein (other than
Section 10 Payments in accordance with Section 10 above) unless, and then
only to the extent that, Employee is vested therein in accordance with the
terms of this Section 11 (taking into consideration any accelerations
expressly provided for in clause (a), (b), (c) or (d) below) (such amounts
so vested, minus any Section 10 Payments; the “Vested Amount”) and such
payments shall only be made as expressly set forth in Section 10 or 12
hereof. The Employee’s rights in the Notional Account shall
vest 100% on the Scheduled Expiration Date (as defined in Section 20
below) if he continues to be an employee of Employer hereunder through
that date. Vesting of the Notional Account shall accelerate
such that the Notional Account shall be 100% vested upon the occurrence of
any of the following events during the
Term:
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|
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(a)
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the
employment of Employee is terminated by Employer without Cause;
or
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(b)
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Employee
resigns by means of a Permitted Resignation (as defined in Section 17
below); or
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(c)
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the
employment of Employee is terminated due to Employee’s death or disability
(as contemplated in Section 12(f));
or
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(d)
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a
Shutdown.
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8
Except as
provided in the final sentence of the paragraph immediately prior hereto
(including clauses (a), (b), (c) and (d)) above), 20% of the Notional Account
will vest on (and only on) each one year anniversary of the Execution Date and
only if Employee continues to be an employee of Employer hereunder through that
date, and no acceleration or other vesting will occur. All unvested
amounts will be forfeited in all respects by Employee on any cessation of his
employment under this Agreement (after taking into consideration any
accelerations expressly provided for in clause (a), (b), (c) or (d)
above). If Employee resigns (other than by means of a Permitted
Resignation) or if his employment otherwise terminates as contemplated in
Section 12(d) then he will not be entitled to any payment in respect of any
unvested portion of the Notional Account and his unvested interest therein will
not vest and will be forfeited.
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12.
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Termination.
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(a)
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Power of
Termination. The Employer may terminate the employment
of Employee under this Agreement at any time, with Cause, or in the sole
and absolute discretion of Employer, without Cause. “Cause”
shall mean any of the following:(a) conviction of any crime (other than
traffic violations and similar minor infractions of law); (b) failure to
follow the lawful directions given by Employer to Employee or the written
policies or procedures adopted by the Employer from time to time that are
made available to Employee; (c) failure to come to work on a full-time
basis, other than on holidays, vacation days, sick days, or other days off
under Employer's business policies; (d) impairment due to alcoholism, drug
addiction or similar matters; and (e) a material breach of this Agreement,
including, without limitation, any breach of Section 15 or 17 hereof.
Prior to termination for “Cause” as a result of failure as contemplated in
clause (b) or (c) above, Employee shall be given notice of his activity
giving rise to such failure and will have 3 business days to correct such
activity; provided that
Employer shall only be required to provide notice under this sentence one
time during any calendar year.
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(b)
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Payment of Earned Base
Salary. In the event that Employee’s employment under
this Agreement with Employer ceases (whether: (i) for Cause; (ii) without
Cause; (iii) due to death or disability; (iv) by the action of Employee
such as resignation or retirement or (v) due to Shutdown), the Employee
shall be entitled to receive any Base Salary earned and not yet paid
through the date of cessation of employment and his right to Base Salary
shall cease.
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9
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(c)
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Termination Without
Cause/Permitted Resignation/
Death/Disability/Shutdown. In the event of the cessation
of Employee’s employment under this Agreement due to any of the matters
set forth in Sections 11(a) through (d): (i) the Base Salary will end
immediately; (ii) the Notional Account will be fully vested and the
Employee will be paid within thirty (30) days following such cessation of
employment, the Vested Amounts (which Vested Amounts will be calculated
based on the value of the New Fund or any Additional Fund at the time of
termination taking into account any “claw backs”1 that would then be
applicable on a hypothetical termination of the New Fund or any Additional
Fund at that time) and (iii) Employee shall continue to accrue the
compensation provided for in Section 7 above through the Scheduled
Expiration Date (such date being the “End of the 5 Year Period”) but only on money
contributed by third party investors (other than Related Persons) that
have invested such money in the New Fund prior to the date of such
cessation of employment (subject to the “claw backs”* and other
adjustments consistent with Section 12(k) below) which amount will,
notwithstanding any other provisions of this Agreement, not be paid to
Employee until the End of the 5 Year Period, at which time such amounts
will be paid to Employee within thirty (30) days following the End of the
5 Year Period.
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(d)
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Other
Termination. In the event of: (x) a voluntary
termination of employment by Employee (which shall not be deemed to
include a Permitted Resignation) prior to the End of the 5 Year Period,
(y) termination by Employer for Cause, or (z) termination of the Term by
virtue of the continuance of the Employment of Employee under this
Agreement through the occurrence of the Scheduled Expiration
Date: (i) the Base Salary will end immediately; and (ii) the
Employee will be paid within thirty (30) days following such cessation of
employment, the Vested Amounts (which Vested Amounts will be calculated
based on the value of the New Fund or any Additional Fund at the time of
cessation of employment taking into account any “claw backs”* that would then be
applicable on a hypothetical termination of the New Fund or any Additional
Fund at that time). In such event no further vesting will occur after the
date of termination in any Notional Account and Employee will lose any
interest in such unvested amounts. The Employer acknowledges
that the payment to be made on account of clause (z) above is
required to be made thirty (30) days following the Scheduled
Expiration Date, even if the Employee continues to be employed by Employer
or one of its Affiliates on or after such date, and so is required be made
on a “date certain” as contemplated by Internal Revenue Code Section
409A.
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(e)
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Release/Notice by
Employer. As a condition to payment of the amounts
contemplated in clause (c) or (d) above Employer must receive from
Employee a release in the form of Exhibit 1 hereto and the same shall
have become fully effective and non-revocable. Within five (5)
business days following the cessation of the employment of Employee
hereunder (including the occurrence of the Scheduled Maturity Date as the
last day of the Term) Employer will provide written notice to Employee
informing him of the requirement to provide the release contemplated in
this Section 12(e).
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10
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(f)
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Disability. For
purposes of this Agreement, disability shall be deemed to occur only if so
declared in a written notice by Employer to Employee, following illness or
injury to Employee that results in Employee being unable to perform his
duties hereunder at the offices of Employer for a period of 30 consecutive
business days or for 45 business days during any 60 business-day
period.
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(g)
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No Other Rights of
Employee. In the event of the cessation of the
employment of the Employee for any reason or no reason whether as
contemplated in clauses (c) and (d) above or otherwise, the Employee shall
cease to have any right to cash compensation or any other payment or
consideration or any other rights other than: (i) as expressly set
forth in this Section 12; and (ii) as expressly set forth in Section
2. To the extent that any provision of this Agreement may
result in any duplication of any calculation, allocation, payment or
amount, such consequence is not intended and no such duplicate amount
shall be included in any calculation, allocation, payment or
amount.
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(h)
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Resignation. Employee
may resign from his employment hereunder (but will remain subject to
applicable terms of this Agreement, including, without limitation,
Sections 14, 15, 16, 17 and 18 hereof). Any such resignation will not be
on less than four (4) weeks prior written notice to
Employer.
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(i)
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Valuation. If
the assets of the New Fund are not sold at the End of the 5 Year Period,
or if any valuation or calculation on a hypothetical termination of a fund
is required to be made at any other time, then all amounts payable to
Employee at that time will be based upon a good faith valuation made by
the Employer calculated in a manner consistent in all material respects
with the valuation methods applied to the New Fund or Additional Fund in
past periods for purposes of the conduct of the business of the New Fund
and reporting to New Fund or Additional Fund investors, taking into
account any “ claw backs” that would then be applicable on a hypothetical
termination of the New Fund or Additional
Fund.
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(j)
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Section 10
Payments. In the event of cessation of the Employment of
Employee hereunder any amount payable by Employer to Employee within
ninety (90) days following such cessation of employment (the “Employer
Payment Amounts”) shall be reduced and offset by an amount equal to the
amounts payable by Employee to Employer pursuant to clause (k)
below.
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11
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(k)
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Calculations and
Clawbacks.
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(i)
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Subject
to clause (ii) below, the participation of the Employee pursuant to
Sections 7 or 8 in any amounts in the Notional Account that are based upon
the income stream of the Employer derived from the funds referred to in
Sections 7 or 8 (other than those relating to the investments of Related
Persons in such funds) will be subject to any calculations of the Fund I
Income Stream and any other applicable income streams, under the
applicable fund documents, and any “clawbacks” under the terms of the
documents creating any such funds will be applied by determining the
amount that would have been credited to the Notional Account if
the Fund I Income Stream and any other applicable income stream were
calculated from the Commencement Date to the date of such “claw
back”. As a result, the balance in the Notional Account may
fluctuate from time to time as the economic rights of the Employer or its
Affiliates in any fund (exclusive of capital invested by the Employer or
its Affiliates therein) varies with changes in values and returns on such
funds. Such fluctuations will also be taken into account for
purposes of calculating the amount of the Vested Amounts (including the
calculation of the “20%” contemplated in clause 10(y)). In
addition, in the event that any calculation is to be made under this
Agreement at the time of, or at any time or times following the cessation
of, the employment of Employee under this Agreement to the extent that,
after taking such calculations and “clawbacks” into account, Employee has
received more payments as a result of receiving Section 10 Payments, then
he would have received under this Agreement had such Section 10 Payments
not have been paid to Employee (the amount of any such excess, the “Excess
Payments to Employee”), then Employee shall pay to Employer the Net
Determined Repayment Amount ( as defined below). Such payment
will be made by Employee within 10 days of notice of the amount due given
by Employer to Employee.
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(ii)
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For
the avoidance of doubt, the income stream of one fund will not diminish
the income stream of another in calculating the amount to be added to the
Notional Account. For example, if in year 1 the New Fund loses
money, but a newly formed Additional Fund in which Employee has an
Additional Fund Participation makes money which would (in accordance with
the terms of this Agreement) result in a $50,000 credit to the Notional
Account, then the Notional Account will be credited with such $50,000
regardless of the fact that there was a loss in the New
Fund.
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12
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(iii)
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Exhibit
C to the Letter (“Exhibit C”) shows examples of the application of the
Notional Account calculation methodology, Section 10 Payments, “clawback”
and repayment obligations of Employee and the operations of those concepts
under this Agreement and in interpreting this Agreement and its
application to the value of the Notional Account, and payments to be made
and received by the parties hereto, the principles set forth and reflected
in Exhibit C shall be followed and shall be controlling, absent manifest
error. (Exhibit C does not reflect, and has no application to,
the payments contemplated in Sections 2 or 6
hereof.)
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(iv)
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The
term “ Net Determined Repayment Amount” shall mean the amount of any
Excess Payment to Employee minus 50% of the federal, state and local
income tax that would be payable on an amount of taxable income equal to
such Excess Payment to Employee by an individual residing in New York City
paying taxes at the highest marginal rate of tax to which an
individual’s income is subject (such rates to be determined on a
weighted- average basis as of the time that Section 10 Payments were paid
to Employee hereunder). For example, if the applicable federal,
state and local combined income tax rate is 40% on the date that a $1,000
Section 10 Payment is paid to Employee, but 35% on the date that a $500
Section 10 Payment is paid to Employee, then the rate to be used in the
foregoing calculation would be
38.333%.
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(v)
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For
the avoidance of doubt, relevant “claw backs” will be determined at the
time a particular payment is made to Employee pursuant to this Section 12
so that the Employee will not be required to pay “claw backs” with respect
to amounts that he is paid under Section 12 of this Agreement (“Previously
Made Payments”) after such payments are made to Employee. In
other words, if the New Fund had a positive return at the time Employee
ceases to be employed hereunder but subsequently (i.e., after employment
ceases) has a negative return that would trigger “claw back” payments by
Employer, Employee would not be subject to that subsequent “claw back”
with respect to the Previously Made
Payments.
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13.
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Shutdown. A
“Shutdown” shall be deemed to occur upon the first to occur of
either: (x) the liquidation of all funds in the New Fund and
the distribution of at least 90% of the assets of the New Fund to the
investors therein (other than Related Persons) or (y) the date that is
announced to the investors in the New Fund by written notice by Employer
or its Affiliates of the date upon which all of those funds still
operating will cease to conduct
operations.
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14.
|
Representations
and Warranties. Employee represents as
follows:
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(a)
|
To
the best of his knowledge, except as known to Employer, he is not a party
to, or involved in, or under investigation in, any pending or threatened
litigation, proceeding or investigation of any governmental body or
authority or any private person, corporation or other
entity.
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13
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(b)
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Employee
has never been suspended, censured or otherwise subjected to any
disciplinary action or other proceeding by any State, other governmental
entities, agencies or self-regulatory
organizations.
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(c)
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Employee
is not subject to any restriction whatsoever which would cause him to not
be able fully to fulfill his duties under this
Agreement.
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15.
|
Confidential
Information. During the term of this Agreement and at
all times thereafter, Employee shall hold in a fiduciary capacity for the
benefit of the Existing Funds and Employer, and their respective
Affiliates all secret or confidential information, knowledge or data,
including without limitation trade secrets, investments, contemplated
investments, business opportunities, valuation models and methodologies,
relating to the business of the Existing Funds, Employer, or their
respective Affiliates, and their respective businesses: (i)
obtained by Employee during Employee’s employment hereunder and during his
previous employment with any of the foregoing persons or entities and (ii)
not otherwise in the public domain. Employee shall not, without
prior written consent of the Employer (which may be granted or withheld in
its sole and absolute discretion provided that Employee shall be permitted
to use Confidential Information in connection with the performance of his
duties with the Employer and its Affiliates without being required to
obtain the written consent of Employer), communicate or divulge any of the
types of information described in the two previous sentences, knowledge or
data to anyone other than the Existing Funds, Employer and their
respective Affiliate and those designated by Employer, except to the
extent compelled pursuant to the order of a court or other body having
jurisdiction over such matter or based upon the advice of his counsel that
such disclosure is legally required; provided, however, that Employee will
assist Employer at Employer expense, in obtaining a protective order,
other appropriate remedy or other reliable assurance that confidential
treatment will be accorded such information so disclosed pursuant to the
terms of this Agreement.
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All
processes, technologies, investments, contemplated investments, business
opportunities, valuation models and methodologies, and inventions (collectively,
“Inventions”), including without limitation new contributions, improvements,
ideas, business plans, discoveries, trademarks and trade names, conceived,
developed, invented, made or found by Employee, alone or with others, during the
period the Employee is employed hereunder, whether or not patentable and whether
or not on the Employer’s time or with the use of its facilities or materials,
shall be the property of Employer or its designee, and shall be promptly and
fully disclosed by Employee to Employer. Employee shall perform all
necessary acts (including, without limitation, executing and delivering any
confirmatory assignments, documents, or instruments requested by Employer) to
vest title to any such Invention in Employer or in any person designated by
Employer and to enable such person, at its expense, to secure and maintain
domestic and/or foreign patents or any other rights for such
Inventions.
14
Without
limiting anything contained above, Employee agrees and acknowledges that all
personal and not otherwise public information about the Existing Funds,
Employer, and their respective Affiliates, including, without limitation, their
respective investments, investors, transactions, historical performance, or
otherwise regarding or concerning Carl Icahn, Mr. Icahn’s family and employees
of the Existing Funds, Employer and their respective Affiliates, shall
constitute confidential information for purposes of this
Agreement. In no event shall Employee during or after his employment
hereunder, disparage the Existing Funds, Employer, their respective Affiliates
or any of their respective officers, directors or employees.
Any
reference above to “Affiliates” shall include, without limitation, the New Fund,
the Additional Funds and all persons and entities that are included in the Icahn
Group, in each case, on the date hereof and from time to time.
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16.
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Remedy
for Breach. Employee
hereby acknowledges that the provisions of Sections 15 and 17 of this
Agreement are reasonable and necessary for the protection of the Icahn
Group and are not unduly burdensome to Employee, and the Employee also
acknowledges such obligations under such covenants. Employee
further acknowledges that the Icahn Group will be irreparably harmed if
such covenants are not specifically enforced. Accordingly,
Employee agrees that, in addition to any other relief to which the
Employer may be entitled, including claims for damages, each of the
persons and entities that are included in the Icahn Group shall be
entitled to seek and obtain injunctive relief (without the requirement of
any bond) from a court of competent jurisdiction for the purpose of
restraining Employee from an actual or threatened breach of such
covenants.
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17.
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Competitive
Services. During the period that Employee is employed
under this Agreement and for a period of one (1) year after Employee
ceases to be employed under this Agreement for any reason, including, but
not limited to, the expiration of the term of employment hereunder,
Employee will not:
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15
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(i)
|
invest
in, participate in, engage in the business of investing, managing, raising
or pooling, of cash or other assets for investment in private or public
debt or equity, either individually or with any person, entity, venture,
vehicle, limited liability company, business, fund, partnership,
corporation, agency, proprietorship or any other enterprise (whether or
not conducted for profit) (each a “Covered Business”) or group of
Affiliated Covered Businesses (including, without limitation, any hedge
fund, mutual fund, investment company, managed account, fund of funds or
other vehicles for the investment or management of money or assets),
whether for his own account or with, for or on behalf of any Covered
Business in any capacity, directly indirectly, whether as an individual,
investor, stockholder, partner, owner, equity owner, lender, agent,
trustee, consultant, employee, advisor, manager, franchisee or in any
other relationship or capacity, and will not enter into the employ of such
Covered Business, render any services to such Covered Business, raise
capital for such Covered Business, or otherwise become interested in or
aid, represent or assist such Covered Business directly or indirectly in
any manner; provided, however, that the provisions in this Section 17(i)
shall not be deemed to preclude Employee, after cessation of his
employment under this Agreement, from acquiring securities of any Covered
Business solely as a passive investment which may be engaged in activities
competitive with the investment or investment management business of the
Icahn Group so long as such securities do not, in the aggregate,
constitute more than one percent (1%) of any class or series of
outstanding securities of such corporation or entity and the securities of
such entity are: (i) registered under Section 12 of the
Securities Exchange Act of 1934; or (ii) are purchased without reduction
or waiver of management fees, incentive allocations or other costs and
reflect solely the proportionate economic interests of the Employee based
only upon his invested capital on a pro rata
basis.
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The
preceding paragraph of this Section 17(i) shall not be applicable if the
employment of Employee ceases as the result of Employee’s written resignation (a
“Permitted Resignation”) delivered by hand to Carl C. Icahn within 10 business
days following an Uncured Employer Breach. An “Uncured Employer
Breach” shall mean and be limited to, the failure of any of Employer to make any
allocation, distribution or payment expressly required to be made under the
terms of this Agreement or any amendment hereto, if such failure continues for
15 business days following written notice detailing the amount and circumstances
of such failure given personally by hand by the Employee to Carl C. Icahn,
provided that if such failure is the result of a good faith dispute with respect
to such allocation, distribution or payment then such failure shall not
constitute or be deemed to constitute an “Uncured Employer Breach”, in which
event the first paragraph of this Section 17(i) shall continue to be applicable
in full force and effect and no Permitted Resignation shall be deemed to have
occurred.
The
Employee acknowledges and agrees that the Icahn Group has a worldwide reputation
and operates on a worldwide basis and that the scope of this covenant will and
is intended to prohibit his activities as set forth above throughout the
world. The Employee acknowledges and agrees that the provisions of
this Section 17(i) are fair and reasonable and necessary to protect the
business, reputation, goodwill and franchise of the Icahn
Group. Employee acknowledges that, in light of the significant
compensation of Employee, Employee is voluntarily entering into this provision
and is well able to comply with its provisions without
hardship.
16
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18.
|
Miscellaneous.
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(i)
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Amendments and
Waivers. No provisions of this Agreement may be amended,
modified, waived or discharged except as agreed to in writing by Employee
and Employer. The failure of a party to insist upon strict
adherence to any term or provision of this Agreement on any occasion shall
not be considered a waiver thereof or deprive that party of the right
thereafter to insist upon strict adherence to that term or provision or
any other term or provision of this Agreement. Notwithstanding
anything herein to the contrary, the Employer may amend this Agreement
(and such amendment shall be binding upon Employee) at any time,
retroactively or otherwise, without Employee’s consent, to comply with
Section 409A of the Code and the Regulations
thereunder. Employer will take such actions as Employer
considers reasonable (without any obligation to pay money) in order to
help mitigate the adverse effect of any such
amendment.
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(ii)
|
Governing
Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to
agreements made and/or to be performed in that State, without regard to
any choice of law provisions thereof. All disputes arising out
of or related to this Agreement shall be submitted to the state and
federal courts of New York, and each party irrevocably consents to such
personal jurisdiction and waives all objections thereto, but does so only
for the purposes of this Agreement.
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(iii)
|
Severability. If
any provision of this Agreement is invalid or unenforceable, the balance
of this Agreement shall remain in
effect.
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(iv)
|
Judicial
Modification. If any court determines that any of the
covenants in Section 17 or any part of any of them, is invalid or
unenforceable, the remainder of such covenants and parts thereof shall not
thereby be affected and shall be given full effect, without regard to the
invalid portion. If any court determines that any of such
covenants, or any part thereof, is invalid or unenforceable because of the
geographic or temporal scope of such provision, such court or arbitrator
shall reduce such scope to the extent necessary to make such covenants
valid and enforceable.
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17
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|
(v)
|
Successors; Binding
Agreement. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the
Employer. Employee may not sell, convey, assign, transfer or
otherwise dispose of, directly or indirectly, any of the rights, claims,
powers or interest established hereunder or under any related agreements
or documents (including, without limitation, any Profit Participation or
partnership or membership interest) other than with the prior written
consent (which may be granted or withheld in their sole and absolute
discretion) of the Employer provided that the same may, upon the death of
Employee, be transferred by will or intestate succession, to his estate,
executors, administrators or heirs, whose rights therein shall for all
purposes be deemed subject to the terms of this
Agreement.
|
Notwithstanding
any provision to the contrary herein, no provision in this Agreement shall
create or be construed to create any claim, right or cause of action against the
Employer or advisors arising from any diminution in value in connection with any
failure to generate, obtain or charge any Management Fee or the Incentive
Allocation for any reason, including any waiver or reduction of the
same.
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(vi)
|
Taxes. All
payments to Employee shall be subject to applicable deductions, payroll
and withholdings taxes, to the extent required by law, as determined by
Employer.
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(vii)
|
No Assignment of
Deferred Compensation. The right of the Employee to the
Deferred Amounts and to any other amounts payable hereunder that
constitute nonqualified deferred compensation subject to Code Section 409A
(including, without limitation, any such amount standing to the credit of
the Notional Account) shall in no event be assigned, transferred, pledged
or encumbered by Employee, and any attempted assignment, transfer, pledge
or encumbrance shall be null and void. Such amounts may not be
subject to seizure for the payment of any debts or judgments against
Employee or be transferable by operation of law in the event the Employee
becomes insolvent or bankrupt.
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18
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(viii)
|
Unfunded Nature of
Deferred Compensation. Title to and beneficial ownership
of the Deferred Amounts and any other amounts payable hereunder that
constitute nonqualified deferred compensation subject to Code Section 409A
(including, without limitations any such amounts standing to the credit of
the Notional Account) shall at all times remain with the Management
Company and Employer, as applicable, and shall continue for all purposes
to be part of the general assets of the Management Company or Employer, as
applicable. Neither Employee nor any person other than the
Management Company and Employer shall by virtue of the provisions of this
Agreement have any property interest whatsoever in any specified assets of
the Management Company or Employer until such deferred amounts are paid to
Employee. Neither the Management Company nor Employer shall be
required to purchase, hold or dispose of any investments pursuant to this
Agreement; however, any amount which may be invested under the provisions
of this Agreement shall continue for all purposes to be a part of their
general assets and subject to the claims of their respective general
creditors. To the extent that Employee acquires a right to
receive such deferred compensation payments from the Management Company or
Employer under this Agreement, such right shall be unsecured and unfunded
and shall be no greater than the right of any unsecured creditor of the
Management Company or Employer, as
applicable.
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(ix)
|
Application of
Expenses. In allocating and determining any expenses
relating to the any funds and their Affiliates for purposes of this
Agreement, the Employer may make such calculation and allocation of
expenses at such time and from time to time, as it deems
appropriate.
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(x)
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Determinations. Any
calculation, allocation, expense, estimate or other amount to be
determined under this Agreement, or for the purpose of the Agreement, for
any period or portion of a period, and any amount payable or allocable to
Employee under this Agreement for any period or portion of a period, shall
be determined by Employer, whose determination shall be final and binding
on all parties.
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(xi)
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409A. The
intent of the parties is that payments and benefits under this Agreement
which are subject to the provisions of Section 409A of the Internal
Revenue code of 1986, as amended (the “Code”) and the regulations and
guidance promulgated thereunder (collectively "Code Section 409A") shall
comply with Code Section 409A and, accordingly, to the maximum extent
permitted, this Agreement shall be interpreted to be in compliance
therewith. If the Employee notifies the Employer (with
specificity as to the reason therefor) that the Employee believes that any
provision of this Agreement (or of any award of compensation, including
equity compensation or benefits) would cause the Employee to incur any
additional tax or interest under Code Section 409A and the Employer
concurs with such belief or the Employer (without any obligation
whatsoever to do so) independently makes such determination, the Employer
shall, after consulting with the Employee, reform such provision to
attempt to comply with Code Section 409A through good faith modifications
to the minimum extent reasonably appropriate to conform with Code Section
409A. To the extent that any provision hereof is modified in
order to comply with Code Section 409A, such modification shall be made in
good faith and shall, to the maximum extent reasonably possible, maintain
the original intent and economic benefit to the Employee and the Employer
of the applicable provision without violating the provisions of Code
Section 409A.
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19
A
termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the payment of any amounts or
benefits subject to Code Section 409A upon or following a termination of
employment unless such termination is also a "Separation from Service" as
defined in Exhibit B hereto and, for purposes of any such provision of this
Agreement, references to a "termination," "termination of employment" or like
terms shall mean such "Separation from Service." If the Employee is
deemed on the date of termination to be a "specified employee" within the
meaning of that term under Code Section 409A(a)(2)(B), then with regard to any
payment or the provision of any benefit that is considered deferred compensation
under Code Section 409A payable on account of a "Separation from
Service," no such payment or benefit shall be made or provided prior
to the earlier of (A) the expiration of the six (6)-month period measured from
the date of such "Separation from Service" of the Employee, and (B) the date of
the Employee’s death, to the extent required under Code Section
409A. Upon the expiration of the foregoing delay period, all payments
and benefits delayed pursuant to this Section 18(x) (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to the Employee in a lump sum, and any
remaining payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them
herein.
For
purposes of Code Section 409A, the Employee’s right to receive any installment
payments pursuant to this Agreement shall be treated as a right to receive a
series of separate and distinct payments. Whenever a payment under
this Agreement specifies a payment period with reference to a number of days,
the actual date of payment within the specified period shall be within the sole
discretion of the Employer.
Notwithstanding
any other provision of this Agreement to the contrary, in no event shall any
payment under this Agreement that constitutes "nonqualified deferred
compensation" for purposes of Code Section 409A be subject to offset by any
other amount unless otherwise permitted by Code Section 409A.
20
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(xii)
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Survival. This
Agreement shall survive the termination of the employment of Employee
hereunder in all circumstances and the provisions hereof (including
Sections 14, 15, 16, 17 and 18), shall be and remain fully effective in
accordance with their terms.
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19.
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Other.
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(a)
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Employee
shall follow all written policies and procedures and written compliance
manuals adopted by or in respect of any or all of Employer and its
Affiliates that have been delivered to Employee, including, without
limitation, those applicable to investments by employees. In addition,
Employee shall not, personally or on behalf of any other person or entity,
invest in or provide advice with respect to, any investment made or
actively being considered by Employer or its Affiliates, unless disclosed
to Employer in writing by Employee and approved in writing by Employer
which approval may be granted or withheld by them in their sole and
absolute discretion, and which approval, if granted, may be with
limitations, including on the amount of any investment which Employee may
make at any time or from time to time and may impose restrictions on the
sale of any such investment.
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(b)
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Employee
agrees to provide to Employer a written list of all existing investments
of Employee, directly or
indirectly.
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20.
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Definitions.
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“Affiliate” and
“Control” shall have the meanings set forth in Rule 405 of Regulation C
of the Securities Act of 1933, as amended.
“Annual Expense Cap”
shall mean the Base (as defined and adjusted pursuant to the definition thereof
set forth in this Section 20).
“Associate” shall have
the meaning set forth in Rule 14a-1 promulgated under the Securities Exchange
Act of 1934
“Base” shall mean
$25,000,000 per annum if the aggregate 3rd party
fee paying assets of the Existing Funds from time to time are $3 billion or
less. If the aggregate 3rd party
fee paying assets of the Existing Funds from time to time are over $3 billion,
then the Base shall be adjusted upward, proportionally (based on $100 million
investment increments) to reflect the dollar amount by which aggregate of the
Existing Funds from time to time exceed $3 billion.
21
“Fund GP Expense”
shall mean in respect of each year the smaller of: (a) the sum of (i) all the
costs and expenses (including but not limited to allocated overhead) borne
directly or indirectly by the Fund GPs and their Affiliates with respect to the
Exisiting Funds, including but not limited to those incurred in providing
administrative and back office services to the funds pursuant to the applicable
limited partnership agreement of such fund (as reasonably determined and, to the
extent applicable, consistent with past practices of the Fund GPs and their
Affiliates) plus (ii) the amount of all Incentive Allocations and Fund GPs’ Net
Special Profit Interest Allocations allocated to Aegis Capital Corp. (“Aegis”)
pursuant to the agreement among, inter alia, Aegis and the Fund GPs dated April
1, 2006 as amended plus (iii) all employment related payments to any other
persons of any kind or character, whether as compensation, allocation straight
salary, bonus or otherwise, including any payment to Michael C. Mauer under his
employment agreement dated as of May 12, 2009 as amended, in each case to the
extent reasonably and proportionately allocable to the activities of the
Existing Funds and (b) the amount of the Annual Expense Cap in effect with
respect to such year pursuant to the Agreement. Without limiting the
generality of the parenthetical contained in clause (a)(i) above, no incremental
cost, if any, that may be incurred by the Fund GPs and that is attributable to
the compensation, bonus or expenses of Carl C. Icahn under his employment
agreement dated August 8, 2007, as amended from time to time, with Icahn Capital
Management LP and Icahn Enterprises L.P. or to the earn-out payable to Mr. Icahn
and his Affiliates under the Contribution Agreement executed on August 8, 2007
in connection therewith, or to any expenses incurred because the Fund GPs will
be owned by Icahn Enterprises L.P. and its Affiliates (that is, dealing with
Icahn Enterprises L.P. accounting and reporting requirements), will diminish any
amount to be accrued or paid to Employee pursuant to the Agreement.
“Icahn
Group” means Mr. Icahn and his Affiliates (including those now or hereafter his
Affiliates) including, without limitation, Icahn Enterprises and all of its
Affiliates), individually and collectively.
“Letter”
a notarized letter from Employee to Employer dated May 21, 2009.
“Related
Persons” means Carl C. Icahn, his Affiliates and Associates, or any of their
respective officers, directors, agents, employees or family members, including
all natural persons, and all entities, corporations, limited liability
companies, trusts, partnership and other business vehicles.
“Scheduled
Expiration Date” means the date of the 5-year anniversary of the Execution
Date.
“Term” shall mean the
period commencing on the Execution Date hereof and shall end on the earlier of
(i) such date as Employee is no longer employed by Icahn Capital L.P., or (ii)
the Scheduled Expiration Date.
22
In
WITNESS WHEREOF, undersigned have executed this Agreement as of June 1,
2009.
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EMPLOYEE
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/s/
Keith Meister
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Keith
Meister
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Icahn
Enterprises L.P.
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By:
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/s/
Keith Meister
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Name:
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Title:
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EMPLOYER
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Icahn
Capital LP.
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By:
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/s/
Carl Icahn
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Name:
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Title:
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The
undersigned acknowledges that they shall continue to be responsible for the
payment and performance of the Retained Obligations (all of which shall be
deemed to be 100% vested as of the date hereof) as contemplated in Section 2(b)
above.
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Icahn
Management LP.
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By:
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/s/
Carl Icahn
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Name:
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Date:
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/s/
Carl Icahn
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Carl
C. Icahn
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23
[FORM
OF RELEASE]
Exhibit
1
GENERAL RELEASE OF ALL
CLAIMS
This
General Release of All Claims (the “General Release”)
dated as of ________ __, 20__ is made by the undersigned employee (“Employee”)
under the Employment Agreement by and between Icahn Capital, L.P. Inc. (the
“Company”) and
Employee and dated as of May __, 2009 (the “Employment
Agreement”) for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged. Unless otherwise defined
herein, the terms defined in the Employment Agreement shall have the same
defined meaning in this General Release.
1. Employee,
for himself, his spouse, heirs, administrators, children, representatives,
executors, successors, assigns, and all other persons claiming through Employee,
if any (collectively, “Releasers”), does
hereby release, waive, and forever discharge the Employer and the Employer’s
Affiliates and Associates and their respective former, present or future
subsidiaries, parents, affiliates and related organizations, and its and their
employees, beneficial owners, officers, directors, equity holders, attorneys,
successors and assigns as well as all Related Persons (collectively, the “Releasees”) from, and
does fully waive any obligations of Releasees to Releasers for, any and all
liability, actions, charges, causes of action, demands, damages, or claims for
relief, remuneration, sums of money, accounts or expenses (including, without
limitation, attorneys’ fees and costs) of any kind whatsoever, whether known or
unknown or contingent or absolute, which heretofore has been or may have been
suffered or sustained, directly or indirectly, by Releasers in consequence of,
arising out of, or in any way relating to Employee’s employment with the Company
(whether pursuant to the Employment Agreement or otherwise) or any of its
affiliates and the termination of Employee’s employment. The
foregoing release, discharge and waiver includes, but is not limited to, all
claims, and any obligations or causes of action arising from such claims, under
common or statutory law including, without limitation, any state or federal
discrimination, fair employment practices or any other employment-related
statute or regulation (as they may have been amended through the date of this
General Release) prohibiting discrimination or harassment based upon any
protected status including, without limitation, race, color, religion, national
origin, age, gender, marital status, disability, handicap, veteran status or
sexual orientation. Without limitation, specifically included in this
paragraph are any claims arising under the Federal Rehabilitation Act of 1973,
Age Discrimination in Employment Act of 1967, as amended (“ADEA”), the Older
Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, as
amended by the Civil Rights Act of 1991, the Equal Pay Act, the Americans With
Disabilities Act, the National Labor Relations Act, Employee Retirement Income
Security Act of 1974, the Family Medical Leave Act of 1993, the Consolidated
Omnibus Budget Reconciliation Act of 1985, and any similar state statutes (all
as amended). The foregoing release and discharge also expressly
includes, without limitation, any claims under any state or federal common law
theory, including, without limitation, wrongful or retaliatory discharge, breach
of express or implied contract, promissory estoppel, unjust enrichment, breach
of covenant of good faith and fair dealing, violation of public policy,
defamation, interference with contractual relations, intentional or negligent
infliction of emotional distress, invasion of privacy, misrepresentation,
deceit, fraud or negligence, claims for alleged physical or personal injury,
emotional distress relating to or arising out of Employee’s employment with the
Company or the termination of that employment; and any claims under the WARN Act
or any similar law, which requires, among other things, that advance notice be
given of certain work force reductions. All of the claims,
liabilities, actions, charges, causes of action, demands, damages, remuneration,
sums of money, accounts or expenses described in this Section 1 shall be
described, collectively as the “Released
Claims”. Employee waives Employee’s right to any monetary recovery
should any agency (such as the Equal Employment Opportunity Commission) pursue
any claims on Employee’s behalf. Nothing in this General Release
shall be deemed to waive Employee’s right to file a charge with or participate
in any investigation or proceeding conducted by the U.S. Equal Employment
Opportunity Commission or other government agency, except that even if Employee
files a charge or participates in such an investigation or proceeding, Employee
will not be able to recover damages or equitable relief of any kind from the
Releasees with respect to the Released Claims.
24
2. Excluded
from this General Release are the following: (i) claims and rights
that arise after the date Employee signs this General Release; (ii) any claims
for payments to which Employee is entitled under the express language of
Sections 2, 6 and 12 of the Employment Agreement; (iii) claims for vested
employee benefits (e.g., medical claims and 401(k) benefits); and (iv) claims
for indemnity or contribution.
3. Any
unresolved dispute arising out of this General Release shall be litigated in any
court of competent jurisdiction in the Borough of Manhattan in New York City;
provided that the Company may elect to pursue a court action to seek injunctive
relief in any court of competent jurisdiction to terminate the violation of its
proprietary rights, including but not limited to trade secrets, copyrights or
trademarks and to protect any Confidential Information. Each party
shall pay its own costs and fees in connection with any litigation
hereunder.
4. Employee
acknowledges and recites that:
(a) Employee
has executed this General Release knowingly and voluntarily;
(b) Employee
has read and understands this General Release in its entirety;
(c) Employee
has been advised and directed orally and in writing (and this subparagraph (c)
constitutes such written direction) to seek legal counsel and any other advice
he wishes with respect to the terms of this General Release before executing
it;
25
(d) Employee’s
execution of this General Release has not been forced by any employee or agent
of the Company, and Employee has had an opportunity to negotiate about the terms
of this General Release and that the agreements and obligations herein are made
voluntarily, knowingly and without duress, and that neither the Company nor its
agents have made any representation inconsistent with the General Release;
and
(e) Employee
has been offered 21 calendar days after receipt of this General Release to
consider its terms before executing it.
5. This
General Release shall be governed by, and construed in accordance with, the laws
of the United States applicable thereto and the internal laws of the State of
New York, without giving effect to the conflicts of law principles
thereof.
6. Employee
represents that he has returned all property belonging to the Company required
to be returned under the Employment Agreement including, without limitation,
keys, access cards, computer software and any other equipment or
property. Employee further represents that he has delivered to the
Company all documents or materials of any nature belonging to it, whether an
original or copies of any kind, including any Confidential
Information, required to be returned under the Employment
Agreement
7. Employee
agrees to keep confidential the existence of the Employment Agreement, the
existence of this General Release, as well as all of their terms and conditions
and not to disclose to any person or entity the existence, terms and conditions
of the Employment Agreement or this General Release except as required by law,
to a government agency in connection with any charge or investigation that such
agency is conducting or may conduct and except to his attorney, financial
advisors and/or members of his immediate family provided they agree to keep
confidential the existence, terms and conditions of the Employment Agreement and
this General Release. In the event that Employee believes that he is
compelled by law to divulge the existence, terms or conditions of the Employment
Agreement or this General Release in a manner prohibited by the following
sentence, he agrees to notify Company (by notifying counsel to the Company) of
the basis for the belief before actually divulging such
information. Employee hereby confirms that as of the date of signing
this General Release, he has not disclosed the existence, terms or conditions of
the Employment Agreement or this General Release, except as provided for
herein. Nothing herein shall preclude Employee from providing
truthful information to any government agency concerning this General Release or
his employment in accordance with law.
8. Employee
shall have seven days from the date he signs this General Release to revoke it
by providing written notice of the revocation to the Employer, in which event
this General Release shall be unenforceable and null and void. Provided
Employee does not revoke this General Release, it shall become effective on the
eighth day after Employee signs this General Release.
26
I,
____________, represent and agree that I have carefully read this General
Release; that I have been given ample opportunity to consult with my legal
counsel or any other party to the extent, if any, that I desire; and that I am
voluntarily signing by my own free act.
PLEASE
READ THIS GENERAL RELEASE CAREFULLY. IT CONTAINS A RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.
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EMPLOYEE:
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By:
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Name:
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Title:
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Date: ________________,
200_
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27