Employment Agreement

Severance Agreement

 

 

EX-10.5 6 b73546weexv10w5.htm EX-10.5 EMPLOYMENT AGREEMENT FOR MICHAEL DUBYAK

Exhibit 10.5

EMPLOYMENT AGREEMENT

          This Employment Agreement is made and entered intoamended and restated effective as of this the 28th day of October, 2005 (“Effective Date”) between Wright Express Corporation (“WEX”), a Delaware corporation headquartered in South Portland, Maine and Michael E. Dubyak (the “Executive”).

          WHEREAS, WEX desires to employ the Executive as its President and Chief Executive Officer, and the Executive desires to serve WEX in such capacity.

          NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

SECTION I
EMPLOYMENT

          WEX agrees to employ the Executive and the Executive agrees to be employed by WEX for the Period of Employment as provided in Section III below and upon the terms and conditions provided in this Agreement.

SECTION II
POSITION AND RESPONSIBILITIES

          During the Period of Employment, the Executive will serve as President and Chief Executive Officer of WEX and, subject to the direction of the Board of Directors of WEX (the “Board”), will perform such duties and exercise such supervision with regard to the business of WEX as are associated with such position, as well as such additional duties as may be prescribed from time to time by the Board. Further, the Executive will serve as a member of the Board; provided,however, that nothing contained in this Agreement shall require WEX to maintain the Executive’s status as a member of the Board or to re-nominate him for election for additional terms of service on the Board; however a removal of the Executive from the Board may be treated as a material and adverse change to the Executive’s titles, positions, duties and responsibilities a Constructive Discharge under Section VIII below.

          The Executive will, during the Period of Employment, devote substantially all of his time and attention during normal business hours to the performance of services for WEX. The Executive will maintain a primary office and conduct his business in South Portland, Maine, except for normal and reasonable business travel in connection with his duties hereunder. Nothing contained in this Agreement will prevent or be construed to prevent the Executive from devoting a reasonable amount of time to serving on civic and charitable boards and conducting his personal affairs.

          The Executive will, in accordance with WEX policy and procedures and applicable law, certify to the accuracy of WEX’s publicly filed financial statements.

 


 

SECTION III
PERIOD OF EMPLOYMENT

          The period of the Executive’s employment under this Agreement (the “Period of Employment”) will begin on the Effective Date and end on the third anniversary of such date, subject to earlier termination as provided in this Agreement;provided, however, that the Period of Employment will be automatically extended for an additional one year period on October 28, 2006, and on each anniversary of such date thereafter, unless written notice of intent not to extend or to reopen negotiations is provided by either party hereto to the other party hereto at least 30 days prior to such date or any such anniversary.

SECTION IV
COMPENSATION AND BENEFITS

          Compensation. For all services rendered by the Executive pursuant to this Agreement during the Period of Employment, including services as an executive, officer, director of committee member of WEX or any subsidiary or affiliate of thereof, the Executive will be compensated as follows:

     i.    Base Salary.

               WEX will pay the Executive a base salary of not less than $425,000 per year (“Base Salary”). From time to time, the Executive may be eligible to receive annual increases as WEX deems appropriate, in accordance with WEX’s customary policies and procedures regarding the salaries of senior officers, including pursuant to annual compensation reviews to occur no less than once per year. Base Salary will be payable according to the customary payroll practices of WEX, but in no event less frequently than semi-monthly.

     ii.   Annual Incentive Awards.

           The Executive will be eligible for discretionary annual incentive compensation awards; provided, that the Executive will be eligible to receive an Incentive Compensation Award in respect of each fiscal year of WEX during the Period of Employment based upon a target bonus equal to no less than 100% of his earned Base Salary during such fiscal year; provided, however, that such bonus will be subject to the attainment by WEX of applicable performance targets reasonably established and certified by or at the direction of the Board (as hereinafter defined) or the Compensation Committee of the Board (the “Committee”). For purposes of this Agreement, the term “Incentive Compensation Award” means the annual bonus paid pursuant to the Wright Express Corporation Short-Term Incentive Plan (STIP), as the Plan may be amended from time to time. The term “target” means the value of the STIP bonus payable in the event the Executive achieves the annual target goals established pursuant to the Plan.

     iii.   Long Term Incentive Awards

           At such times as the Board or the Committee determines to conduct annual or periodic grants of long term incentive awards to employees and officers of WEX, the Executive will be eligible to receive such grants, subject to the sole and complete discretion of the Board or the Committee, and upon such terms and conditions as determined by the Board or the Committee, but with due consideration given to the Executive’s position with WEX and the Executive’s historical performance and anticipated future contributions to WEX.

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     iv.   Additional Benefits

           The Executive will be entitled to participate in all other compensation and employee benefit plans or programs offered generally to employees of WEX, and will receive all perquisites offered to senior executive officers of WEX in positions comparable to the Executive’s position with WEX, in either case pursuant to any plan or program now in effect, or later established by WEX. The Executive will participate to the extent permissible under the terms and provisions of such plans or programs, and in accordance with the terms of such plans and programs.

SECTION V
BUSINESS EXPENSES

           WEX will reimburse the Executive for all reasonable travel and other expenses incurred by the Executive in connection with the performance of his duties and obligations under this Agreement. The Executive will comply with such limitations and reporting requirements with respect to expenses as may be established by WEX from time to time and will promptly provide all appropriate and requested documentation in connection with such expenses.

SECTION VI
DISABILITY

           If the Executive becomes Disabled, as defined below, during the Period of Employment, the Period of Employment may be terminated at the option of the Executive upon notice of resignation to WEX, or at the option of WEX upon 30 days’ advance notice of termination to the Executive. WEX’s obligation to make payments to the Executive under this Agreement will cease as of such date of termination, except for Base Salary and Incentive Compensation Awards earned but unpaid as of the date of such termination, and except for payment of a pro rata portion of his Incentive Compensation Award in respect of the year in which such Disability occurs (paid at target level). For purposes of this Agreement, “Disabled” means the first to occur of either (i) the Executive’s inability to perform his duties hereunder as a result of serious physical or mental illness or injury for a period of no less than 180 days, together with a determination by an independent medical authority after in person examination of the Executive and review of any relevant medical records that the Executive is currently unable to perform such duties, or (ii) a determination by the insurance carrier or third party administrator that the Executive is “Disabled” within the meaning of the WEX Long Term Disability Plan then in effect. Such independent medical authority shall be mutually and reasonably agreed upon by WEX and the Executive and such opinion shall be binding on WEX and the Executive. Nothing contained herein is intended to limit any of the Executive’s vested benefits under any WEX benefit plan or program.

SECTION VII
DEATH

           In the event of the death of the Executive during the Period of Employment, the Period of Employment will end and WEX’s obligation to make payments under this Agreement

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will cease as of the date of death, except for Base Salary and Incentive Compensation Awards earned but unpaid through the date of death, and except for payment of a pro rata portion of his Incentive Compensation Award in respect of the year in which his death occurs (paid at target level), which will be paid to the Executive’s surviving spouse, estate or personal representative, as applicable. Nothing contained herein is intended to limit any of the Executive’s vested benefits under any WEX benefit plan or program.

SECTION VIII
EFFECT OF TERMINATION OF EMPLOYMENT

           A. Without Cause Termination and Constructive Discharge Outside of a Change in Control. If the Executive’s employment terminates due to either a Without Cause Termination or a Constructive Discharge, as defined below, and Executive is not entitled to receive payment pursuant to Section VIII(B) hereof, WEX will pay the Executive (or his surviving spouse, estate or personal representative, as applicable) upon such Without Cause Termination or Constructive Discharge (i) a cash payment equal to the sum of the Executive’s then current Base Salary plus his then current target Incentive Compensation Award, multiplied by 200%, payable, at the Company’s option, in either one lump sum, or in equal installments not less frequently than once per month over a twelve month period, or a combination of lump sum and equal installments not less frequently than once per month over a twelve month period, and (ii) any and all Base Salary and Incentive Compensation Awards earned but unpaid through the date of such termination and any legitimate unreimbursed business expenses. In addition, upon such event, those of the Executive’s outstanding and unvested WEX stock options and WEX restricted stock units which would have otherwise become vested between the date of termination of employment and the second anniversary of such date of termination of employment (without regard for performance based vesting criteria) will immediately become vested. In addition, in the event that the Executive elects to continue medical and dental benefits pursuant to COBRA, the Executive’s cost for the first 12 months of such coverage will be no greater than the cost applicable to active full time employees of WEX, and the Company shall pay for the balance of the cost for the first 12 months of such coverage. Nothing contained herein is intended to limit any of the Executive’s vested benefits under any WEX benefit plan or program, including but not limited to rights with respect to stock options, restricted shares or long term incentive awards.

           B. Without Cause Termination and Constructive Discharge In Case of Change in Control. If the Executive’s employment terminates due to either a Without Cause Termination or a Constructive Discharge, in either case within the time period beginning 90 days before the Change in Control and ending 540 days after the Change in Control, then WEX will pay the Executive (or his surviving spouse, estate or personal representative, as applicable) (i) a cash payment equal to the sum of the Executive’s then current Base Salary plus his then current target Incentive Compensation Award, multiplied by 300%, payable, at the Company’s option, in either one lump sum, or in equal installments not less frequently than once per month over a twelve month period, or a combination of lump sum and equal installments not less frequently than once per month over a twelve month period, and (ii) any and all Base Salary and Incentive Compensation Awards earned but unpaid through the date of such termination and any legitimate unreimbursed business expenses. In addition, upon such termination, those of the Executive’s outstanding and unvested WEX stock options and unvested WEX restricted stock units held by the Executive as of the date of termination will immediately become vested. In addition, WEX shall pay to the Executive in a lump sum an amount equal to the present value of WEX’s share of the cost of medical and dental insurance premiums for a thirty-six (36) month period. Nothing contained

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herein is intended to limit any of the Executive’s vested benefits under any WEX benefit plan or program including but not limited to rights with respect to stock options, restricted shares or long term incentive awards. Payment of cash and benefits and accelerated vesting under this Section VIII(B) shall be in lieu of and not in addition to anything that might be owed to Executive under Section VIII(A).

           C. Termination for Cause; Resignation. If the Executive’s employment terminates due to a Termination for Cause or a Resignation, Base Salary and any Incentive Compensation Awards earned but unpaid as of the date of such termination will be paid to the Executive in a lump sum. Except as provided in this paragraph, WEX will have no further obligations to the Executive hereunder. Nothing contained herein is intended to limit any of the Executive’s vested benefits under any WEX benefit plan or program.

           D. For purposes of this Agreement, the following terms have the following meanings:

     i.    “Termination for Cause” means termination because of (i) the Executive’s willful failure to substantially perform his duties as an employee of WEX or any subsidiary thereof (other than any such failure resulting from incapacity due to physical or mental illness), (ii) any act of fraud, embezzlement, gross misconduct, dishonesty or similar conduct, in each case against WEX or any subsidiary thereof, (iii) the Executive’s conviction of or indictment for a felony or any crime involving moral turpitude, (iv) the Executive’s gross negligence in the performance of his duties, (v) the Executive’s knowing or negligent making of a false certification to WEX pertaining to its financial statements, or (vi) the Executive’s knowing or grossly negligent violation of any provision of Section IX of this Agreement or any knowing violation of WEX’s Code of Business Conduct and Ethics. WEX will provide the Executive a written notice that describes the circumstances being relied on for the termination with respect to this paragraph. In the event that WEX terminates the Executive’s employment without Cause but the Company later discovers evidence not known at the time of termination that would have justified a Termination for Cause under this paragraph, the Company may terminate the payment of all amounts to the Executive pursuant to Section VIII(A) or (B), excluding any and all Base Salary and Incentive Compensation Awards earned but unpaid through the date of such termination and any legitimate unreimbursed business expenses.

     ii.    “Constructive Discharge” means the Executive resigns in response to: (i) any material failure of WEX to fulfill its obligations under this Agreement (including without limitation any reduction of the Base Salary or any reduction in the target bonus percentage amount, as the same may be increased during the Period of Employment), (ii) a material and adverse change to the Executive’s titles, positions, duties and responsibilities with or to WEX, (iii) the relocation of the Executive’s primary business office to a location more than 50 miles from Portland, Maine or (iv) WEX’s failure to cause this Agreement to be assumed by any successor to the business of WEX. The Executive will provide WEX a written notice that describes the circumstances being relied on for the termination with respect to this paragraph within sixty (60) days after the event giving rise to the notice. WEX will have sixty (60) days after receipt of such notice to remedy the situation prior to the termination for Constructive Discharge.

     iii.    “Without Cause Termination” or “Terminated Without Cause” means termination of the Executive’s employment by WEX other than due to death, disability, or Termination for Cause.

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     iv.    “Resignation” means a termination of the Executive’s employment by the Executive, other than in connection with a Constructive Discharge.

v.     “Change in Control” means the happening of any of the following events:

(1)    An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (any of which, a “Person”) resulting in such Person having beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (i) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); excluding, however, the following: (A) Any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company, (B) Any acquisition by the Company, (C) Any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (D) Any acquisition pursuant to a transaction which complies with clauses (i), (ii) and (iii) of Section VIII(D)(v)(3);or

(2)    A change in the composition of the board of directors of the Company (the “Board”) such that the individuals who, as of the Effective Date, constitute the Board (such Board shall be hereinafter referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, for purposes of this definition, that any individual who becomes a member of the Board subsequent to the Effective Date, whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or

(3)    Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of shares or assets of another company (“Corporate Transaction”); excluding, however, such a Corporate Transaction pursuant to which (i) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock (or equity interests), and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or equivalent governing body, if applicable), as the case may be, of the entity resulting from such Corporate Transaction (including an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s

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assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (other than the Company, any employee benefit plan (or related trust) of the Company or such entity resulting from such Corporate Transaction) will beneficially own, directly or indirectly, 50% or more of, respectively, the outstanding shares of common stock (or equity interests) of the entity resulting from such Corporate Transaction or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors (or equivalent governing body, if applicable) except to the extent that such ownership existed prior to the Corporate Transaction, and (iii) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors (or equivalent governing body, if applicable) of the entity resulting from such Corporate Transaction; or

(4)    The approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

              E. Conditions to Payment. All payments due to the Executive under this Section VIII shall be made as soon as practicable in accordance with Section VIIIA; provided, however, that such payments, shall be subject to, and contingent upon, the execution by the Executive (or his beneficiary or estate) of a release of any and all claims against WEX and its affiliates in such reasonable form and substance adopted by WEX; provided further that such release shall not waive, release or limit any rights the Executive has, or may have, to indemnification under the Articles or Certificate of Incorporation, Bylaws, or other corporate governance documents of WEX to the extent arising out of claims asserted other than by the company or its affiliates, or under applicable law, or any coverage or rights to coverage the Executive may have under insurance maintained by WEX relating to the Executive’s actions on behalf of WEX within the scope of and during the course of his employment with WEX. The Company will provide Executive with a copy of such release not later than 21 days (45 days if Executive’s termination is part of an exit incentive or other employment termination program offered to a group or class of employees) before Executive’s termination of employment. Executive shall deliver the executed release to the Company not later than eight days before the payment date provided in Section VIIIA for termination payments to be made under this Agreement which are subject to 409A. The payments due to the Executive under this Section VIII shall be in lieu of any other severance benefits otherwise payable to the Executive under any severance plan of WEX or its affiliates and/or any other agreement or arrangement. Nothing herein shall be construed as limiting the Executive’s entitlement to any other vested accrued benefits to which he (or his estate if applicable) is then entitled under WEX’s applicable employee benefit plans, including without limitation any disability or life insurance plan benefits which may become payable. Any payments made under this agreement shall be compliant with IRS code 409A including the timing of such payments.

SECTION VIIIA
OTHER TERMS RELATING TO TERMINATION OF EMPLOYMENT PAYMENTS;
REIMBURSEMENTS; SECTION 409A EXEMPTIONS; DELAYED PAYMENTS UNDER
SECTION 409A

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     A.    Time of Payment. Amounts payable under Section VIII following Executive’s termination of employment, other than those expressly payable on a deferred basis, will be paid in the payroll period next following the payroll period in which termination of employment occurs except as otherwise provided in this Section VIIIA. Payment of any amount by reason of Executive’s termination of employment shall be made no later than the last day of Executive’s second taxable year following Executive’s taxable year in which the termination occurs.

     B.    Reimbursements. Any reimbursements made or in-kind benefits provided under this Agreement shall be subject to the following conditions:

        i.    the amount of expenses eligible for reimbursement or in-kind benefits provided in any one taxable year of Executive shall not affect the amount of expenses eligible for reimbursement or in-kind benefits provided in any other taxable year of Executive;

        ii.    the reimbursement of any expense shall be made no later than the last day of Executive’s taxable year following Executive’s taxable year in which the expense was incurred (unless this Agreement specifically provides for reimbursement by an earlier date);

        iii.   the right to reimbursement of an expense or payment of an in-kind benefit shall not be subject to liquidation or exchange for another benefit.

     C.    Short-Term Deferral Exemption. It is intended that payments made under this Agreement due to Executive’s termination of employment that are not otherwise subject to Section 409A of the Internal Revenue Code (“409A”) which are paid on or before the 15th day of the third month following the end of Executive’s taxable year in which his termination of employment occurs shall be exempt from compliance with 409A pursuant to the exemption for short-term deferrals set forth in Section 1.409A-1(b)(4) of the Treasury Regulations (“Regulations”).

     D.    Separation Pay Exemption. It is intended that payments made under this Agreement due to Executive’s Without Cause Termination or Constructive Discharge that are not otherwise subject to 409A which do not exceed two times the lesser of (a) the Executive’s annualized compensation (determined in accordance with the Regulations) or (b) the maximum amount that may be taken into account under Section 401(a)(17) of the Code ($230,000245,000 for 20098) shall be exempt from compliance with 409A pursuant to the exemption for separation pay set forth in Section 1.409A-1(b)(9) of the Regulations.

     E.    Six-Month Delay for Specified Employees. Anything in this Agreement to the contrary notwithstanding, payments to be made under this Agreement upon termination of Executive’s employment which are subject to 409A (“409A Payments”) shall be delayed for six months following such termination of employment if Executive is a Specified Employee as defined below on the date of termination of employment. Any 409A Payment due within such six-month period shall be delayed to the end of such six-month period.

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       i.    The Company will adjust the 409A Payment to reflect the deferred payment date by multiplying the payment or reimbursement by the product of the six-month CMT Treasury Bill annualized yield rate as published by the U.S. Treasury for the date on which such payment or reimbursement would have been made but for the delay multiplied by a fraction, the numerator of which is the number of days by which such payment or reimbursement was delayed and the denominator of which is 365.

       ii.    The Company will make the adjusted 409A Payment at the beginning of the seventh month following Executive’s termination of employment. Notwithstanding the foregoing, if calculation of the amounts payable by any payment date specified in this Subsection E is not administratively practicable due to events beyond the control of Executive (or Executive’s beneficiary or estate) and for reasons that are commercially reasonable, payment will be made as soon as administratively practicable in compliance with 409A and the Regulations thereunder. In the event of Executive’s death during such six-month period, payment will be made in the payroll period next following the payroll period in which Executive’s death occurs.

        iii.   “Specified Employee”. For purposes of this Agreement, a “Specified Employee” shall mean an employee of the Company who satisfies the requirements for being designated a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code at any time during a calendar year, in which case such employee shall be considered a Specified Employee for the twelve-month period beginning on the first day of the fourth month immediately following the end of such calendar year. Notwithstanding the foregoing, all employees who are nonresident aliens during an entire calendar year are excluded for purposes of determining which employees meet the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for such calendar year. The term “nonresident alien” as used herein shall have the meaning set forth in Regulations Section 1.409A-1(j). In the event of any corporate spinoff or merger, the determination of which employees meet the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for any calendar year shall be determined in accordance with Regulations Section 1.409A-1(i)(6).

SECTION IX
OTHER DUTIES OF THE EXECUTIVE
DURING AND AFTER THE PERIOD OF EMPLOYMENT

            A.   Cooperation with Legal Claims. The Executive will, with reasonable notice during or after the Period of Employment, furnish information as may be in his possession and reasonably cooperate with WEX and its affiliates as may reasonably be requested in connection with any claims or legal action in which WEX or any of its affiliates is or may become a party. The foregoing shall not unreasonably interfere with the Executive’s duties to any successor employer and the Company shall reimburse the Executive for any reasonable expenses incurred for providing such assistance.

            B.   Protection of Confidential Information.

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            i.   Acknowledgement. The Company and the Executive acknowledge that the services to be performed by the Executive under this Agreement are unique and extraordinary and that, as a result of the Executive’s employment, the Executive will be in a relationship of confidence and trust with the Company and will come into possession of Confidential Information (as defined below) that is (1) owned or controlled by the Company, (2) in the possession of the Company and belonging to third parties or (3) conceived, originated, discovered or developed, in whole or in part, by the Executive. “Confidential Information” means trade secrets and other confidential or proprietary business, technical, personnel or financial information, whether or not the Executive’s work product, in written, graphic, oral, electronic or other tangible or intangible forms, including specifications, samples, records, data, computer programs, drawings, diagrams, models, customer names, business or mailing addresses, ID’s or e-mail addresses, business or marketing plans, studies, analyses, projections and reports, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and software systems and processes. Any Confidential Information that is not readily available to the public shall be considered to be a trade secret and confidential and proprietary, even if it is not specifically marked as such, unless the Company advises the Executive otherwise in writing.

            ii.   Nondisclosure. The Executive agrees that the Executive will keep the Confidential Information in strictest confidence and trust, and will not, without the prior written consent of the Company, directly or indirectly, use or disclose Confidential Information to any person, during or after the Executive’s employment, except as may be necessary in the ordinary course of performing the Executive’s duties under this Agreement. This Section IX(B) shall apply indefinitely, both during and after the Period of Employment.

            iii.  Surrender Upon Termination. The Executive agrees that in the event of the termination of the Executive’s employment for any reason, at any time, the Executive will immediately deliver to the Company all property belonging to the Company, including documents and materials of any nature pertaining to the Executive’s work with the Company, and will not take with the Executive any documents or materials of any description, or any reproduction thereof of any description, containing or pertaining to any Confidential Information. It is understood that the Executive is free to use information that is in the public domain, but not as a result of a breach of this Agreement.

            C.   Restrictions.

            i.     During the Period of Employment and for the Post Termination Period thereafter (collectively, the “Restricted Period”), the Executive will not knowingly use his status with WEX or any of its affiliates to obtain loans, goods or services from another organization on terms that would not be available to him in the absence of his relationship to WEX or any of its affiliates. The Post Termination Period means a period of: (a) two (2) years following the Executive’s termination of employment if, in connection with such termination, the Executive receives a severance under Sections VIII(A) or VIII (B) of this Agreement; or (b) one (1) year following the Executive’s termination in all other cases, irrespective of the cause, manner or time of such termination.

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            ii.     During the Restricted Period, the Executive will not make any statements or perform any acts intended or reasonably calculated to advance the interest of any existing or prospective Competing Enterprise or in any way to injure the interests of or disparage WEX or any of its affiliates.

            iii.    During the Restricted Period, the Executive, without prior express written approval by the Board, will not become employed by, render services to or directly or indirectly (whether for compensation or otherwise) own or hold a proprietary interest in, manage, operate, or control, or join or participate in the ownership, management, operation or control of, or furnish any capital to or be connected in any manner with, any Competing Enterprise.

            iv.    For purposes of this Section IX, a “Competing Enterprise” means any entity, organization or person engaged, or planning to become engaged, in substantially the same or similar business to that being conducted or actively and specifically planned to be conducted within the Restricted Period by WEX or its subsidiaries, owned or controlled. It includes, without limitation: (i) the business of developing, managing, operating, marketing, processing, financing, or otherwise being involved in providing any products or services for the benefit of or use by commercial vehicle or aviation fleets through charge cards, credit cards, procurement cards or any other form of payment services or electronic commerce; (ii) the sale, distribution or publication of petroleum product pricing or management information or other products or services currently sold or contemplated to be sold by WEX or any of its owned or controlled subsidiaries, and (iii) the business of developing, managing, operating, marketing, processing, financing, or otherwise being involved in providing commercial travel, entertainment and purchasing credit cards. The restrictions in this Section shall not be construed to prevent the Executive from working for a business entity that does not compete with WEX or its subsidiaries simply because the entity is affiliated with a Competing Enterprise, so long as the entity is operationally separate and distinct from the Competing Enterprise and the Executive’s job responsibilities at that entity are unrelated to the Competing Enterprise. The Executive acknowledges that WEX’s and its subsidiaries’ businesses are conducted nationally and agrees that the provisions in this paragraph shall operate throughout the United States.

            v.     During the Restricted Period, the Executive, without express prior written approval from the Board, will not solicit any then-current clients, customers or private label, cobrand or similar strategic partners of WEX or any of its affiliates. In addition, during the Restricted Period, the Executive, without express prior written approval from the Board, will not discuss with any employee of WEX or any of its affiliates information related to the operation or potential operation of any Competing Enterprise.

            vi.    During the Restricted Period, the Executive will not interfere with the employees or affairs of WEX or any of its affiliates or solicit or induce any person who is an employee of WEX or any of its affiliates to terminate any relationship such person may have with WEX or any of its affiliates. In addition, neither the Executive nor any entity he controls or person he employs shall, during such period, directly or indirectly engage, employ or compensate, any employee of WEX or any of its affiliates. The Executive hereby represents and warrants that the Executive has not entered into any agreement, understanding or arrangement with any employee of WEX or any of its affiliates pertaining to any business in which the Executive has participated or plans to participate, or to the employment, engagement or compensation of any such employee.

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            vii.    For the purposes of this Agreement, “proprietary interest” means legal or equitable ownership, whether through stock holding or otherwise, of an equity interest in a business, firm or entity or ownership of more than 1% of any class of equity interest in a publicly-held company and the term “affiliate” will include without limitation all subsidiaries of WEX.

            D.    The Executive hereby acknowledges that damages at law may be an insufficient remedy to WEX if the Executive violates the terms of this Agreement and that WEX will be entitled, upon making the requisite showing, to preliminary and/or permanent injunctive relief in any court of competent jurisdiction to restrain the breach of or otherwise to specifically enforce any of the covenants contained in this Section IX without the necessity of showing any actual damage or that monetary damages would not provide an adequate remedy. Such right to an injunction will be in addition to, and not in limitation of, any other rights or remedies WEX may have. Without limiting the generality of the foregoing, neither party will oppose any motion the other party may make for any expedited discovery or hearing in connection with any alleged breach of this Section IX.

            E.     The Executive agrees that the restrictions contained in this Section IX are an essential element of the compensation the Executive is granted hereunder and but for the Executive’s agreement to comply with such restrictions, WEX would not have entered into this Agreement

SECTION X
DIRECTORS AND OFFICERS INSURANCE

            WEX will indemnify the Executive to the fullest extent permitted by the laws of the state of WEX’s incorporation in effect at that time, or the certificate of incorporation and by-laws of WEX, whichever affords the greater protection to the Executive. WEX will maintain D&O insurance for the Executive on a basis no less favorable than it maintains for other officers of WEX.

SECTION XI 
MITIGATION

            The Executive will not be required to mitigate the amount of any payment provided for hereunder by seeking other employment or otherwise, nor will the amount of any such payment be reduced by any compensation earned by the Executive as the result of employment by another employer after the date the Executive’s employment hereunder terminates or by offset against any amount claimed to be owed by the Executive to WEX, or otherwise. The parties’ respective obligations hereunder shall be absolute and unconditional and shall not be affected by any circumstances, including without limitation any setoff, counterclaim, recoupment, defense or other right which the other party hereto may have.

SECTION XII
WITHHOLDING TAXESTAXATION

            The Executive acknowledges and agrees that WEX may directly or indirectly withhold from any payments under this Agreement all federal, state, city or other taxes that will be required pursuant to any law or governmental regulation.Anything in this Agreement to the

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contrary notwithstanding, the terms of this Agreement shall be interpreted and applied in a manner consistent with the requirements of Section 409A of the Code and the Regulations so as not to subject Executive to the payment of any tax or interest which may be imposed under such section, and the Company shall have no right to accelerate or make any payment under this Agreement to the extent such action would subject Executive to the payment of any tax or interest under such section. If all or a portion of the benefits and payments provided under this Agreement constitute taxable income to Executive for any taxable year that is prior to the taxable year in which such payments and/or benefits are to be paid to Executive, as a result of the Agreement’s failure to comply with the requirements of Section 409A of the Code and the Regulations, the applicable payment or benefit shall be paid immediately to Executive to the extent such payment or benefit is required to be included in income.

            In the event it shall be determined that any payment or distribution of any type by WEX or its affiliates to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then WEX shall, within thirty days following the Executive’s incurrence thereof, pay the Executive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.

            Anything in this section to the contrary notwithstanding, any Gross-Up Payment to be made hereunder shall be subject to such delay in payment as may apply under Section VIIIA of this Agreement in the event that such payment is made in connection with the Executive’s termination of employment and is subject to Section 409A of the Code.

SECTION XIII
EFFECT OF PRIOR AGREEMENTS

            This Agreement will supersede any prior employment agreement between the Executive on the one hand, and WEX (or any of its affiliates or parents) on the other hand (including without limitation the Employment Agreement dated February 1, 2005, the Employment Agreement dated March 24,1998 and all amendments thereto), and any such prior employment agreement will be deemed terminated without any remaining obligations of either party thereunder, provided that nothing in this Agreement will supersede, modify or vitiate any obligation of Cendant Corporation or Executive to each other pursuant to the Employment Agreement dated February 1, 2005.

SECTION XIV
CONSOLIDATION, MERGER OR SALE OF ASSETS

            Nothing in this Agreement will preclude WEX from consolidating or merging into or with, or transferring all or substantially all of its assets to, another corporation that assumes this Agreement and all obligations and undertakings of WEX hereunder. Upon such a consolidation, merger or sale of assets the term “WEX” will mean the other corporation and this Agreement will continue in full force and effect.

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SECTION XV
MODIFICATION: WAIVER

            This Agreement may not be modified or amended except in writing signed by the parties. No term or condition of this Agreement will be deemed to have been waived except when waived in writing by the party charged with waiver. A waiver will operate only as to the specific term or condition waived and will not constitute a waiver for the future or have any impact on anything other than that which is specifically waived.

SECTION XVI
GOVERNING LAW

            This Agreement has been executed and delivered in the State of Maine and its validity, interpretation, performance and enforcement will be governed by the internal laws of that state.

SECTION XVII
ARBITRATION

            A.   Any controversy, dispute or claim arising out of or relating to this Agreement or the breach hereof which cannot be settled by mutual agreement (other than with respect to the matters covered by Section IX for which WEX may, but will not be required to, seek injunctive relief) will be finally settled by binding arbitration in accordance with the Federal Arbitration Act (or if not applicable, the applicable state arbitration law) as follows: Any party who is aggrieved will deliver a written notice to the other party setting forth the specific points in dispute. Any points remaining in dispute twenty (20) days after the giving of such written notice may be submitted by either party, upon ten (10) days prior written notice to the other party, to arbitration in Portland, Maine, to the American Arbitration Association, before a single arbitrator appointed in accordance with the arbitration rules of the American Arbitration Association, National Rules for the Resolution of Employment Disputes, modified only as herein expressly provided. The arbitrator may enter a default decision against any party who fails to participate in the arbitration proceedings.

            B.   The decision of the arbitrator on the points in dispute will be final and binding, and judgment on the award may be entered in any court having jurisdiction thereof.

            C.   Except as otherwise provided in this Agreement, the arbitrator will be authorized to apportion his/her fees and expenses as the arbitrator deems appropriate. In the absence of any such apportionment, the fees and expenses of the arbitrator will be borne equally by each party, and each party will bear the fees and expenses of its or his own attorney.

            D.   The parties agree that this Section XVII has been included to rapidly and inexpensively resolve any disputes between them with respect to this Agreement, and that this Section XVII will be grounds for dismissal of any court action commenced by either party with respect to this Agreement, other than post-arbitration actions seeking to enforce an arbitration award, or matters covered by Section IX. In the event that any court determines that this arbitration procedure is not binding, or otherwise allows any litigation regarding a dispute, claim,

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or controversy covered by this Agreement to proceed, the parties hereto hereby waive any and all right to a trial by jury in or with respect to such litigation and do hereby consent to the jurisdiction of the appropriate court within the State of Maine.

            E.   The parties will keep confidential, and will not disclose to any person, except as may be required by law, the existence of any controversy hereunder, the referral of any such controversy to arbitration or the status or resolution thereof.

SECTION XVIII
SURVIVAL

            Sections IX, X, XI, XII, XIV and XVII will continue in full force in accordance with their respective terms notwithstanding any termination of the Period of Employment.

SECTION XIX
SEPARABILITY

            All provisions of this Agreement are intended to be severable. In the event any provision or restriction contained herein is held to be invalid or unenforceable in any respect, in whole or in part, such finding will in no way affect the validity or enforceability of any other provision of this Agreement. The parties hereto further agree that any such invalid or unenforceable provision will be deemed modified so that it will be enforced to the greatest extent permissible under law, and to the extent that any court of competent jurisdiction determines any restriction herein to be unreasonable in any respect, such court may limit this Agreement to render it reasonable in the light or the circumstances in which it was entered into and specifically enforce this Agreement as limited.

            IN WITNESS WHEREOF, the undersigned have executed this Agreement this 31st day of December, 2008, and effective as of the date first above written.

 

 

 

 

 

 

 

WRIGHT EXPRESS CORPORATION
 

 

 

  

     /s/ Robert Cornett  

 

 

 

By:

Robert C. Cornett 

 

 

 

Title:  

SVP Human Resources 

 

 

 

 

 

MICHAEL E. DUBYAK
 

 

 

  

     /s/ Michael Dubyak  

 

 

 

 

 

 

 

 

 

 

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EX-10.4 5 b73546weexv10w4.htm EX-10.4 AMENDED AND RESTATED WRIGHT EXPRESS CORPORATION SEVERANCE PAY PLAN FOR OFFICERS

Exhibit 10.4

AMENDED AND RESTATED

                                                                               WRIGHT EXPRESS CORPORATION

SEVERANCE PAY PLAN

FOR

OFFICERS

Effective Date:—————  February 22, 2005

Amended and Restated February 1, 2008

Further Amended and Restated January 1, 2009

 


 

ARTICLE I — INTRODUCTION

          Wright Express Corporation and Wright Express Financial Services Corporation (referred to collectively herein as the “Company”), hereby establishes the Wright Express Corporation Severance Pay Plan for Officers (the “Plan”), effective as of February 1, 2008, to provide severance benefits to certain employees of the Company and its subsidiaries who suffer a loss of employment under the terms and conditions set forth in the Plan. The Plan replaces and supercedes (i) any and all severance plans, policies and/or practices of the Company or its subsidiaries, whether written or unwritten, in effect for covered employees prior to February 1, 2008 and (ii) any and all severance plans, policies and or practices of any business or entity acquired by the Company effective upon the consummation of any such acquisition, in the sole discretion of the Company. The Plan may not be amended or changed except in accordance with the provisions set forth below and is to be administered in the sole and absolute discretion of the Company.

ARTICLE II — DEFINITIONS AND INTERPRETATIONS

          The following definitions and interpretations of important terms apply to the Plan.

          (a) Agreement. The Agreement and General Release provided by the Company to an Eligible Employee as determined in the sole and absolute discretion of the Company in connection with his or her termination of employment with the Company, which if executed by the Eligible Employee (and not timely revoked), will acknowledge his or her termination of employment with the Company and release the Company from liability for any and all claims. By signing the Agreement and General Release, an Employee waives all rights he or she may have under state and federal employment statutes and all common law causes of action related to his or her employment and termination thereof.

          (b) Base Pay. For purposes hereof, Base Pay shall mean an employee’s annual base salary or wages from the Company. Base Pay shall be determined as reflected on the Company’s payroll records, and shall not include bonuses, overtime pay, shift premiums, commissions, employer contributions for benefits, incentive or deferred compensation or other additional compensation. For purposes hereof, an Eligible Employee’s Base Pay shall include any salary reduction contributions made on his or her behalf to any plan of the Company under section 125 or 401(k) of the Internal Revenue Code of 1986, as amended (“Code”). One week of Base Pay shall mean an employee’s annual Base Pay divided by fifty-two (52).

          (c) Cause. Termination for cause shall mean termination as a result of any of the following: (a) misappropriation or improper use or disclosure of any confidential or proprietary information of the Company; (b) failure to comply with any contractual obligations to the Company; (c) solicitation for hire away from the Company any current Company employees absent the Company’s consent; or (d) taking any action which the Company, in its sole discretion, deems to have been inimical or detrimental to the interests of the Company

 


 

          (d) Company. Wright Express Corporation and Wright Express Financial Services Corporation.

          (e) Effective Date. February 1, 2008

          (f) Eligible Employee. Any employee of the Company who: (i) is classified by the Company as an active, full-time employee of the Company and who is designated as Chief Executive Officer(“CEO”), Executive Vice President (“EVP”), Senior Vice President (“SVP”), or Vice President (“VP”), and, (ii) is involuntarily terminated from employment for one of the reasons set forth in Article III, Section A of the Plan. Notwithstanding the foregoing, an Eligible Employee shall not include any individual (i) classified as an independent contractor by the Company, (ii) being paid by or through an employee leasing company or other third party agency, (iii) any other person classified by the Company as a leased employee, during the period the individual is so paid or classified even if such individual is later retroactively reclassified as a common-law employee of the Company or an affiliate during all or any part of such period pursuant to applicable law or otherwise.

          (g) Participant. An Eligible Employee who meets all the requirements set forth in Article III of the Plan. An individual shall cease being a Participant once payment of all severance pay and other benefits due to such individual under the Plan has been completed (or upon the death of the Participant, if earlier) and no person shall have any further rights under the Plan with respect to such former Participant.

          (h) Plan Administrator. The Plan Administrator shall be SVP, Human Resources.

          (i) Taxation. The Participant acknowledges and agrees that the Company may directly or indirectly withhold from any payments under this Plan all federal, state, city or other taxes that will be required pursuant to any law or governmental regulation. Anything in this Plan to the contrary notwithstanding, the terms of this Plan shall be interpreted and applied in a manner consistent with the requirements of Section 409A of the Code and the Treasury Regulations (“Regulations”) so as not to subject Participants to the payment of any tax or interest which may be imposed under such section, and the Company shall have no right to accelerate or make any payment under this Plan to the extent such action would subject the Participant to the payment of any tax or interest under such section. If all or a portion of the benefits and payments provided under this Agreement constitute taxable income to Participants for any taxable year that is prior to the taxable year in which such payments and/or benefits are to be paid to the Participant, as a result of the Plan’s failure to comply with the requirements of Section 409A of the Code and the Regulations, the applicable payment or benefit shall be paid immediately to the Participant to the extent such payment or benefit is required to be included in income.

ARTICLE III — ELIGIBILITY

          A. WHO IS ELIGIBLE?

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          If you meet the criteria to be determined an Eligible Employee as that term is defined in Article II (f) above, you shall become eligible for the severance pay described in Article IV of the Plan (i.e., you will become a “Participant”) by meeting the requirements set forth below:

     (a) you are involuntarily terminated for one of the following reasons:

 

 

a reduction in the Company’s workforce;

 

 

 

elimination or discontinuation of your job or position provided that you are not offered a comparable position. Comparability shall be determined in the sole and absolute discretion of the Plan Administrator; or

 

 

 

other circumstances as the Plan Administrator, in its sole discretion, deems appropriate for the payment of severance;

     (b) you deliver a signed, dated and notarized Agreement to the individual whose signature appears on the cover letter accompanying the Plan and the Agreement by no later than the date (if any) set forth in the Agreement; provided, however, that the timing of such release shall be in compliance with Code Section 409A and shall not cause an impermissible delay of payment, and the time for you to revoke such Agreement (if any) as specified in the Agreement has expired; and

     (c) the Company has not determined that you, either prior or subsequent to your termination of employment, have (a) misappropriated or improperly used or disclosed any confidential or proprietary information of the Company; (b) failed to comply with any contractual obligations to the Company; (c) solicited for hire away from the Company, any current Company employees absent the Company’s consent; (d) taken any action which the Company, in its sole discretion, deems to have been inimical or detrimental to the interests of the Company; or (e) you meet the criteria to be determined an Eligible Employee as that term is defined in Article II (f) above.

     If you do not satisfy all of the above requirements, you shall not be considered a Participant, and you shall not be entitled to commence or continue to receive any benefits under the Plan. Additionally, you shall not become a Participant, and shall not become entitled to benefits while you continue to be employed by the Company.

          B. WHO IS NOT ELIGIBLE?

          You shall not be eligible for severance pay under this Plan if your employment is terminated for any reason other than set forth in paragraph A, including, but not limited to:

 

 

retirement;

 

 

 

voluntary termination;

 

 

 

termination by the Company either for cause or not for cause;

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elimination or discontinuation of your job or position, if you are offered a comparable position. Comparability shall be determined in the sole and absolute discretion of the Plan Administrator.

          In addition, if you have executed a separate employment agreement with the Company which expressly provides for severance pay, you shall not be eligible for benefits under this Plan, unless this Plan provides for greater benefits (as determined by the Plan Administrator). No employee of any subsidiary of the Company outside of those subsidiary(ies) defined as the Company by Article II (d) of this Plan shall be eligible for severance pay under this Plan unless provided for by separate written agreement.

ARTICLE IV — SEVERANCE PAY

          A. SCHEDULE OF BENEFITS

          If you become a Participant, you will receive the following benefits under the Plan:

          If you are an Officer of the Company and are designated by the Plan Administrator as Chief Executive Officer (“CEO”), then (i) if you have less than six (6) months employment service with the Company, you will receive twenty-six (26) weeks of Base Pay; and (ii) if you have been actively employed with the Company for a minimum of six (6) months, you will receive fifty-two (52) weeks of Base Pay.

          If you are an Officer of the Company and are designated by the Plan Administrator as Senior Vice President or Executive Vice President (“SVP”) or (“EVP”), then (i) if you have less than six (6) months of employment service with the Company, you will receive thirteen (13) weeks of Base Pay; and (ii) if you have been actively employed with the Company for a minimum of six (6) months, you will receive twenty-six (26) weeks of Base Pay.

          If you are an Officer of the Company and are designated by the Plan Administrator as Vice President (“VP”) then (i) if you have less than six (6) months of employment service with the Company, you will receive six (6) weeks of Base Pay; and (ii) if you have been actively employed with the Company for a minimum of six (6) months, you will receive thirteen (13) weeks of Base Pay.

          Notwithstanding the foregoing, if the amount of severance pay that you would have received if calculated pursuant to the most favorable formula set forth in the Wright Express Corporation Severance Pay Plan for Non-Officer Employees (assuming that you were an eligible participant of such plan) is greater than the amount of severance pay calculated hereunder, then you will receive hereunder, upon eligibility for severance pay hereunder, such higher amount.

          Notwithstanding any provision of this Plan to the contrary, the Plan Administrator, in its sole and absolute discretion and based on such criteria as the Administrator deems relevant, may, vary the severance benefits under this Plan. In no event, however, will a

7


 

Participant receive more than fifty-two (52) weeks of Base Pay. In addition, in no event will any employee be entitled to receive severance pay under this Plan in addition to severance pay provided for under a separate employment agreement or from any other source.

          B. HOW AND WHEN BENEFITS WILL BE PAID

          Severance pay benefits are payable at the discretion of the Company and may be paid to you in a lump sum payment, in equal installments not less frequently than once per month over a twelve month period, or a combination of lump sum and equal installments not less frequently than once per month over a twelve month period, subject to applicable federal, state and local tax deductions and withholding.

          Amounts payable under Article IV, Section A, following termination of employment, other than those expressly payable on a deferred basis, will be paid in the payroll period next following the payroll period in which termination of employment occurs except as otherwise provided in this Article IV, Section B. Payment of any amount by reason of Participant’s termination of employment shall be made no later than the last day of the Participant’s second taxable year following the Participant’s taxable year in which the termination occurs.

          Short-Term Deferral Exemption. It is intended that payments made under this Plan due to a Participant’s termination of employment that are not otherwise subject to Section 409A of the Internal Revenue Code (“409A”) which are paid on or before the 15th day of the third month following the end of the Participant’s taxable year in which his termination of employment occurs shall be exempt from compliance with 409A pursuant to the exemption for short-term deferrals set forth in Section 1.409A-1(b)(4) of the Regulations.

          Separation Pay Exemption. It is intended that payments made under this Plan due to a Participant’s involuntary termination that are not otherwise subject to 409A which do not exceed two times the lesser of (a) the Participant’s annualized compensation (determined in accordance with the Regulations) or (b) the maximum amount that may be taken into account under Section 401(a)(17) of the Code ($230,000245,000 for 20098) shall be exempt from compliance with 409A pursuant to the exemption for separation pay set forth in Section 1.409A-1(b)(9) of the Regulations.

          Six-Month Delay for Specified Employees. Anything in this Plan to the contrary notwithstanding, payments to be made under this Plan upon termination of Participant’s employment which are subject to 409A (“409A Payments”) shall be delayed for six months following such termination of employment if Participant is a Specified Employee as defined below on the date of termination of employment. Any 409A Payment due within such six-month period shall be delayed to the end of such six-month period. In addition, the following rules apply:

     i. The Company will adjust the 409A Payment to reflect the deferred payment date by multiplying the payment or reimbursement by the product of the six-month CMT Treasury Bill annualized yield rate as published by the U.S. Treasury for the date on which such payment or reimbursement would have been made but for the delay multiplied by a fraction, the numerator of which is the number of days by which such payment or reimbursement was delayed and the denominator of which is 365.

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     ii. The Company will make the adjusted 409A Payment at the beginning of the seventh month following Participant’s termination of employment. Notwithstanding the foregoing, if calculation of the amounts payable by any payment date specified in this subsection is not administratively practicable due to events beyond the control of the Participant (or the Participant’s beneficiary or estate) and for reasons that are commercially reasonable, payment will be made as soon as administratively practicable in compliance with 409A and the Regulations thereunder. In the event of Participant’s death during such six-month period, payment will be made in the payroll period next following the payroll period in which Participant’s death occurs.

     iii. “Specified Employee”. For purposes of this Plan, a “Specified Employee” shall mean an employee of the Company who satisfies the requirements for being designated a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code at any time during a calendar year, in which case such employee shall be considered a Specified Employee for the twelve-month period beginning on the first day of the fourth month immediately following the end of such calendar year. Notwithstanding the foregoing, all employees who are nonresident aliens during an entire calendar year are excluded for purposes of determining which employees meet the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for such calendar year. The term “nonresident alien” as used herein shall have the meaning set forth in Regulations Section 1.409A-1(j). In the event of any corporate spinoff or merger, the determination of which employees meet the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for any calendar year shall be determined in accordance with Regulations Section 1.409A-1(i)(6).

          You shall not be eligible after your date of termination for continued coverage under the Company’s medical/dental plans (except to the extent you elect to continue such coverage as under the Consolidated Omnibus Budget Reconciliation Act of 1985 “COBRA”).

ARTICLE V — GENERAL PROVISIONS OF THE PLAN

          (a) Termination of Your Coverage. Coverage under this Plan ends when you are no longer considered a Participant.

          (b) Re-employment. If you are re-employed by the Company after severance has been paid to you, you will have to make arrangements, prior to being rehired, to return any severance pay which you received in excess of one week’s pay plus the amount of your weekly salary multiplied by the number of weeks during the period of your separation. If, after being re-employed, your employment with the Company is terminated for a reason set forth Article III, you shall receive the severance pay calculated based upon your rehire date, plus the severance

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pay which was refunded by you to the Company upon your re-employment or the severance pay calculated before your rehire date which was not paid to you because you became re-employed with the Company.

          (c) Termination, Amendment and Modification. Notwithstanding anything in this Plan to the contrary, the Company expressly reserves the right, at any time, for any reason, without limitation, and in its sole and absolute discretion, to terminate, amend or modify the Plan and any or all of the benefits provided thereunder, either in whole or in part, whether as to all persons covered thereby or as to one or more groups thereof. The termination, amendment or modification of the Plan shall be effected by a document in writing.

          (d) No Additional Rights Created. Neither the establishment of this Plan, nor any modification thereof, nor the payment of any benefits hereunder, shall be construed as giving to any Participant, Eligible Employee (or any beneficiary of either), or other person any legal or equitable right against the Company or any Officer, director or employee thereof; and in no event shall the terms and conditions of employment by the Company of any Eligible Employee be modified or in any way affected by this Plan. There is no promise of employment of any kind by the Company contained in this Plan. Regardless of what this Plan provides, the Company remains free to change wages and all other working conditions without notice of agreement. The Company also continues to have the absolute right to terminate your employment with or without cause.

          (e) Records. The records of the Company with respect to employment history, Base Salary, Years of Service, absences, and all other relevant matters shall be conclusive for all purposes of this Plan.

          (f) Construction. The respective terms and provisions of the Plan shall be construed, whenever possible, to be in conformity with the requirements of ERISA, or any subsequent laws or amendments thereto. To the extent not in conflict with the preceding sentence or another provision in the Plan, the construction and administration of the Plan shall be in accordance with the laws of Maine (without reference to its conflicts of law provisions).

          (g) Severability. Should any provisions of the Plan be deemed or held to be unlawful or invalid for any reason, such fact shall not adversely affect the other provisions of the Plan unless such determination shall render impossible or impracticable the functioning of the Plan, and in such case, an appropriate provision or provisions shall be adopted so that the Plan may continue to function properly.

          (h) Unfunded Plan. The Company shall pay for benefits under the Plan out of its general assets. No Participant or any other person shall have any interest whatsoever in any specific asset of the Company. To the extent that any person acquires a right to receive payments under this Plan, such right shall not be secured by any assets of the Company. The obligations of the Company may be funded through contributions to a trust or otherwise, but the obligations of the Company are not required to be funded under this Plan unless required by law.

          (i) Nontransferability. In no event shall the Company make any payment under this Plan to any assignee or creditor of a Participant, except as otherwise required by law.

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Prior to the time of a payment hereunder, a Participant shall have no rights by way of anticipation or otherwise to assign or otherwise dispose of any interest under this Plan, nor shall rights be assigned or transferred by operation of law.

          (j) Incompetency. In the event that the Plan Administrator finds that a Participant is unable to care for his or her affairs because of illness or accident, then benefits payable hereunder, unless claim has been made therefor by a duly appointed guardian, committee, or other legal representative, may be paid in such manner as the Plan Administrator shall determine, and the application thereof shall be a complete discharge of all liability for any payments or benefits to which such Participant (or designated beneficiary) was or would have been otherwise entitled under this Plan.

          (k) Welfare Plan. The Company intends that this Plan constitute a “welfare plan” under ERISA and any ambiguities in this Plan shall be construed to effect that intent.

          (l) Termination, Amendment and Modification. Notwithstanding anything in this Plan to the contrary, the Company expressly reserves the right, at any time, for any reason, without limitation, and in its sole and absolute discretion, to terminate, amend or modify the Plan and any or all of the benefits provided thereunder, either in whole or in part, whether as to all persons covered thereby or as to one or more groups thereof. The termination, amendment or modification of the Plan shall be effected by a document in writing.

          (m) Exclusive Benefit. A Participant who receives severance benefits under this Plan shall not be eligible to receive severance benefits under the Wright Express Corporation Severance Pay Plan for Non-Officers.

ARTICLE VI — OTHER IMPORTANT INFORMATION

          (a) Claim Procedure.

          How to File a Claim. If you are a Participant in the Plan, you will automatically receive the benefits set forth under Article IV of the Plan. If you feel you have not been provided with all benefits to which you are entitled under the Plan, you may file a written claim with the Plan Administrator with respect to your rights to receive benefits from the Plan. If you wish to make a claim for payment of benefits under the Plan, a claim must be filed by contacting the Human Resources Department at the Company’s headquarter in South Portland, Maine within 90 days of the date you received notification from the Company that your benefits were denied. You may be required to provide additional information. After your claim has been processed, you will be notified in writing if any benefits are denied in whole or in part, or if any additional information is required by the office that processes your claim. You will receive this written notification within 90 days after it is filed. Under special circumstances, the Plan Administrator may require an additional period of not more than 90 days to review your claim. If this occurs, you will be notified in writing as to the length of the extension, the reason for the extension, and any other information needed in order to process your claim. If you are not notified within the 90-day (or 180-day, if so extended) period, you may consider your claim to be denied.

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          How to Appeal a Claim. If your claim is denied, in whole or in part, you will be notified in writing of the specific reason(s) for the denial, the exact plan provision(s) on which the decision was based, what additional material or information is relevant to your case, and what procedure you should follow to get your claim reviewed again. If you do not agree with the reason why your claim was denied in whole or in part, you then have sixty (60) days to appeal the decision to the Plan Administrator.

          Your appeal must be submitted in writing. You may request to review pertinent documents, and you may submit a written statement of issues and comments. You must state why you believe the claim should not have been denied and submit any data, questions or comments you think are appropriate.

          Your appeal will be reviewed by the Company, and a decision will be made within sixty (60) days after the appeal is received. Under special circumstances, the Plan Administrator may require an additional period of not more than 60 days to review your appeal. If this occurs, you will be notified in writing as to the length of the extension, not to exceed 120 days from the day on which your appeal was received.

          If your appeal is denied, in whole or in part, you will be notified in writing of the specific reason(s) for the denial and the exact plan provision(s) on which the decision was based. The decision on your appeal will be final and binding on all parties and persons affected thereby. If you are not notified within the 60-day (or 120-day, if so extended) period, you may consider your appeal as denied.

          (b) Plan Interpretation and Benefit Determination. The Plan is administered and operated by the Plan Administrator, who has the exclusive discretionary authority and power to determine eligibility for benefits and to construe the terms and provisions of the Plan, to determine questions of fact and law arising under the Plan, to direct disbursements pursuant to the Plan and to exercise all other powers specified herein or which may be implied from the provisions hereof. The Plan administrator may adopt such rules for the conduct of the administration of the Plan as it may deem appropriate. All interpretations and determinations of the Plan Administrator shall be final and binding upon all parties and persons affected thereby. The Plan Administrator may appoint one or more individuals and delegate such of its powers and duties as it deems desirable to any such individual(s), in which case every reference herein made to the Plan Administrator shall be deemed to mean or include the appointed individual(s) as to matters within their jurisdiction.

          (c) Your Rights Under ERISA. The following is a statement of your rights under Federal law as required by the U.S. Department of Labor:

          As a participant in this Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). ERISA provides that all Plan participants shall be entitled to:

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Examine, without charge, at the Plan Administrator’s office and at other specified locations, all Plan documents and copies of all documents filed by the Plan with the U.S. Department of Labor, such as detailed annual reports and Plan descriptions.

 

 

 

Obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator. The Plan Administrator may make a reasonable charge for the copies.

 

 

 

Receive a summary of the latest annual financial report of the Plan. The Plan Administrator is required by law to furnish each participant with a copy of such summary.

          In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit Plan. The people who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. The named fiduciary is Wright Express Corporation. It is illegal for anyone to prevent you from obtaining a benefit or exercising your rights under ERISA by firing you or discriminating against you in any way.

          If your claim for a benefit is denied in whole or in part, you must receive a written explanation of the reason for the denial. You have the right to a review and reconsideration of a denial of benefits under the Plan.

          Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Plan and do not receive them within thirty (30) days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the requested materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.

          If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. If you believe that Plan fiduciaries misused the Plan’s money, or that you have been discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The named fiduciary is Wright Express Corporation.

          If you file a suit, the court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if the court finds that your claim is frivolous.

          If you have questions about your Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest Area office of the U.S. Labor-Management Services Administration, Department of Labor, listed in your telephone directory.

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          (d) Plan Document. This document shall constitute both the plan document and summary plan description and shall be distributed to all Eligible Employees in this form.

          (e) Other Important Facts.

 

 

 

OFFICIAL NAME OF THE PLAN:

 

Wright Express Corporation Severance Pay Plan for Officers

 

 

 

SPONSOR:

 

Wright Express Corporation

 

 

97 Darling Avenue

 

 

South Portland, Maine 04106

 

 

(207) 773-8171

 

 

 

PLAN NUMBER:

 

516

 

 

 

TYPE OF PLAN:

 

Employee Welfare Severance Benefit Plan

 

 

 

TYPE OF ADMINISTRATION:

 

Employer Administered

 

 

 

PLAN ADMINISTRATOR:

 

SVP, Human Resources

 

 

Wright Express Corporation

 

 

97 Darling Avenue

 

 

South Portland, Maine 04106

 

 

(207) 773-8171

 

 

 

EFFECTIVE DATE:

 

February 22, 2005

 

 

 

RECORDS

 

The Plan Administrator keeps records of the Plan and is responsible for the administration of the Plan. The Plan Administrator will also answer any questions you may have about the Plan.

 

 

 

AGENT FOR SERVICE OF LEGAL PROCESS:

 

General Counsel
Wright Express Corporation

 

 

97 Darling Avenue
South Portland, Maine 04106

 

 

(207) 773-8171

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