World Fuel Services 2008 Annual Report Download - page 88

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
have to be repaid upon de-branding at these locations was $13.8 million. Of this amount, approximately $11.9
million would be due to us from the branded dealers under similar agreements between us and such dealers. No
liability is recorded for the amount of obligations which would become payable upon debranding.
Agreements with Executive Officers and Key Employees
In March 2008, we entered into new agreements with both our Chairman and Chief Executive Officer
(“CEO”) and President and Chief Operating Officer (“COO”) containing identical terms, which, among other
things, provide for such base salary, incentives and other compensation and amounts as our Compensation
Committee may determine from time to time in its sole discretion and certain termination severance benefits. The
CEO and COO agreements expire four years from the execution date, unless terminated earlier, and will
automatically extend for successive one-year terms unless either party provides written notice to the other at least
one year prior to the expiration of the term that such party does not want to extend the term.
Pursuant to their agreements, our CEO and COO are entitled to receive a cash severance payment if: (a) we
terminate the executive’s employment without cause following a change of control or for any reason other than
death, disability or cause; (b) the executive resigns for good reason (generally a reduction in his responsibilities
or compensation, or a breach by us), or resigns for good reason following a change of control; or (c) either the
executive elects or we elect not to extend the term of the agreement. The severance payment is equal to $5.0
million for a termination following a change of control and $3.0 million in the other scenarios described above, a
portion of which will be payable two years after the termination of the executive’s employment. Upon any such
termination, we will continue to provide coverage to the executive under our group insurance plans until he is no
longer eligible for coverage under COBRA. Thereafter, we will reimburse the executive for the cost of obtaining
private health insurance coverage for a certain period of time.
All of the executive’s outstanding Option Awards, restricted stock and RSU awards will immediately vest in
each scenario described in (a), (b) and (c) above except for awards assumed or substituted by a successor
company in the event of a change of control and awards with multiple annual performance conditions. Any
awards assumed or substituted will vest over a two-year period following termination of the executive’s
employment while awards with multiple annual performance conditions must satisfy certain other requirements
in order to have their vesting terms accelerated.
The agreements also provide that in the event that any amount or benefit payable under the agreements,
taken together with any amounts or benefits otherwise payable to the executive by us or any affiliated company,
are subject to excise tax payments or parachute payments under Section 4999 of the Internal Revenue Code, such
amounts or benefits will be reduced but only if and to the extent that the after-tax present value of such amounts
or benefits as so reduced would exceed the after-tax present value received by the executive before such
reduction.
We have also entered into employment agreements or separation agreements with certain of our other
executive officers and key employees. These agreements provide for minimum salary levels, and, in most cases,
bonuses which are payable if specified performance goals are attained. Some executive officers and key
employees are also entitled to severance benefits upon termination or non-renewal of their contracts under certain
circumstances.
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