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EXHIBIT 10w
CONTINUITY AGREEMENT
This Agreement (the "Agreement") is dated as of December
27, 1999 by and between XXXXXXX INCORPORATED, a Connecticut corporation (the
"Company"), and XXXXX X. XXXXXXXXX (the "Executive").
WHEREAS, the Company's Board of Directors considers the
continued services of key executives of the Company to be in the best interests
of the Company and its stockholders; and
WHEREAS, the Company's Board of Directors desires to
assure, and has determined that it is appropriate and in the best interests of
the Company and its stockholders to reinforce and encourage the continued
attention and dedication of key executives of the Company to their duties of
employment without personal distraction or conflict of interest in circumstances
which could arise from the occurrence of a change in control of the Company; and
WHEREAS, the Company's Board of Directors has authorized
the Company to enter into continuity agreements with those key executives of the
Company and any of its respective subsidiaries (all of such entities, with the
Company hereinafter referred to as an "Employer"), such agreements to set forth
the severance compensation which the Company
agrees under certain circumstances to pay such executives; and
WHEREAS, the Executive is a key executive of an Employer
and has been designated by the Board as an executive to be offered such a
continuity compensation agreement with the Company.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Executive agree as follows:
1. Term. This Agreement shall become effective on the
date hereof and remain in effect until the second anniversary thereof; provided,
however, that, thereafter, this Agreement shall automatically renew on each
successive anniversary, unless an Employer provides the Executive, in writing,
at least 180 days prior to the renewal date, notice that this Agreement shall
not be renewed. Notwithstanding the foregoing, in the event that a Change in
Control occurs at any time prior to the termination of this Agreement in
accordance with the preceding sentence, this Agreement shall not terminate until
the second anniversary of the Change in Control (or, if later, until the second
anniversary of the consummation of the transaction(s) contemplated in the Change
in Control).
2. Change in Control.
(a) No compensation or other benefit pursuant to Section
4 hereof shall be payable under this Agreement unless and until either (i) a
Change in Control of the Company (as hereinafter defined) shall have occurred
while the Executive is an employee of an Employer and the Executive's employment
by an Employer thereafter shall have terminated in accordance with
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Section 3 hereof or (ii) the Executive's employment by the Company shall have
terminated in accordance with Section 3(a)(ii) hereof prior to the occurrence of
the Change in Control.
(b) For purposes of this Agreement:
(i) "Change in Control" shall mean any one of
the following:
(A) Continuing Directors no longer constitute at
least 2/3 of the Directors;
(B) any person or group of persons (as defined
in Rule 13d-5 under the Securities Exchange
Act of 1934), together with its affiliates,
becomes the beneficial owner, directly or
indirectly, of twenty (20%) percent or more
of the voting power of the then outstanding
securities of the Company entitled to vote
for the election of the Company's directors;
provided that this Section 2 shall not apply
with respect to any holding of securities by
(I) the trust under a Trust Indenture dated
September 2, 1957 made by Xxxxx X. Xxxxx,
(II) the trust under a Trust Indenture dated
August 23, 1957 made by Xxxxxx Xxxxxxx, and
(III) any employee benefit plan (within the
meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as
amended) maintained by the Company or any
affiliate of the Company;
(C) the approval by the Company's stockholders
of the merger or consolidation of the
Company with any other corporation, the sale
of substantially all of the assets of the
Company or the liquidation or dissolution of
the Company, unless, in the case of a merger
or consolidation, the incumbent Directors in
office immediately prior to such merger or
consolidation will constitute at least 2/3
of the Directors of the surviving
corporation of such merger or consolidation
and any parent (as such term is defined in
Rule 12b-2 under the Securities Exchange Act
of 1934) of such corporation; or
(D) at least 2/3 of the incumbent Directors in
office immediately prior to any other action
proposed to be taken by the Company's
stockholders determine that such proposed
action, if taken, would constitute a change
of control of the Company and such action is
taken.
(ii) "Continuing Director" shall mean any
individual who is a member of the Company's
Board of Directors on December 9, 1986 or
was designated (before such person's initial
election as a Director) as a Continuing
Director by 2/3 of the then Continuing
Directors.
(iii) "Director" shall mean any individual who is
a member of the Company's Board of Directors
on the date the action in question was
taken.
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(iv) "Change in Control Transaction" shall mean a
Change in Control or, if later, the
consummation of the transaction contemplated
by the Change in Control.
3. Termination of Employment; Definitions.
(a) Termination without Cause by the Company or for Good
Reason by the Executive. (i) The Executive shall be entitled to the
compensation provided for in Section 4 hereof, if within two years
after a Change in Control Transaction, the Executive's employment
shall be terminated (A) by an Employer for any reason other than (I)
the Executive's Disability or Retirement, (II) the Executive's death
or (III) for Cause, or (B) by the Executive with Good Reason (as
such terms are defined herein).
(ii) In addition, the Executive shall be entitled to the
compensation provided for in Section 4 hereof if, (A) in the event
that an agreement is signed which, if consummated, would result in a
Change of Control and the Executive is terminated without Cause by
the Company or terminates employment with Good Reason prior to the
Change in Control, (B) such termination is at the direction of the
acquiror or merger partner or otherwise in connection with the
anticipated Change in Control, and (C) such Change in Control
actually occurs.
(b) Disability. For purposes of this Agreement,
"Disability" shall mean the Executive's absence from the full-time performance
of the Executive's duties (as such duties existed immediately prior to such
absence) for 180 consecutive business days, when the Executive is disabled as a
result of incapacity due to physical or mental illness.
(c) Retirement. For purposes of this Agreement,
"Retirement" shall mean the Executive's voluntary termination of employment
pursuant to late, normal or early retirement under a pension plan sponsored by
an Employer, as defined in such plan, but only if such retirement occurs prior
to a termination by an Employer without Cause or by the Executive for Good
Reason.
(d) Cause. For purposes of this Agreement, "Cause" shall
mean:
(i) the willful and continued failure of the
Executive to perform substantially all of
his or her duties with an Employer (other
than any such failure resulting from
incapacity due to physical or mental
illness), after a written demand for
substantial performance is delivered to such
Executive by the Board of Directors (the
"Board") of the Company which specifically
identifies the manner in which the Board
believes that the Executive has not
substantially performed his or her duties,
(ii) the willful engaging by the Executive in
gross misconduct which is materially and
demonstrably injurious to the Company or any
Employer; or
(iii) the conviction of, or plea of guilty or nolo
contendere to, a felony.
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Termination of the Executive for Cause shall be made by delivery to the
Executive of a copy of a resolution duly adopted by the affirmative vote of not
less than a three-fourths majority of the non-employee Directors of the Company
or of the ultimate parent of the entity which caused the Change in Control (if
the Company has become a subsidiary) at a meeting of such Directors called and
held for such purpose, after 30 days prior written notice to the Executive
specifying the basis for such termination and the particulars thereof and a
reasonable opportunity for the Executive to cure or otherwise resolve the
behavior in question prior to such meeting, finding that in the reasonable
judgment of such Directors, the conduct or event set forth in any of clauses (i)
through (iii) above has occurred and that such occurrence warrants the
Executive's termination.
(e) Good Reason. For purposes of this Agreement, "Good
Reason" shall mean the occurrence, within the Term of this Agreement, of any of
the following without the Executive's express written consent:
(i) after a Change of Control, any reduction in the
Executive's base salary from that which was in effect immediately
prior to the Change of Control, any reduction in the Executive's
annual cash bonus below such bonus paid or payable in respect of the
calendar year immediately prior to the year in which the Change of
Control occurs, or any reduction in the Executive's aggregate annual
cash compensation (including base salary and bonus) from that which
was in effect immediately prior to the Change of Control; or
(ii) after a Change of Control, the failure to increase
(within 12 months of the last increase in base salary) the
Executive's salary in an amount which at least equals, on a
percentage basis, the average percentage of increase in base salary
effected in the preceding 12 months (which period may include some
period of time prior to the Change of Control) for all senior
executives of the Company (unless such reduction is offset by an
increase in the amount of annual cash bonus that is paid to the
Executive); or
(iii) any material and adverse diminution in the
Executives' duties, responsibilities, status, position or authority
with the Company or any of its affiliates following a Change of
Control; or
(iv) any relocation of the Executive's primary workplace
to a location that is more than 35 miles from the Executive's
primary workplace as of the date of this Agreement or the Company's
requiring the Executive to be based anywhere other than the location
at which the Executive performed his duties prior to the
commencement of the Term; or
(v) any failure by the Company to obtain from any
successor to the Company an agreement reasonably satisfactory to the
Executive to assume and perform this Agreement, as contemplated by
Section 10(a) hereof.
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Notwithstanding the foregoing, in the event Executive provides the Company with
a Notice of Termination (as defined below) referencing this Section 3(e), the
Company shall have 30 days thereafter in which to cure or resolve the behavior
otherwise constituting Good Reason. Any good faith determination by Executive
that Good Reason exists shall be presumed correct and shall be binding upon the
Company.
(f) Notice of Termination. Any purported termination of
the Executive's employment (other than on account of Executive's death) with an
Employer shall be communicated by a Notice of Termination to the Executive, if
such termination is by an Employer, or to an Employer, if such termination is by
the Executive. For purposes of this Agreement, "Notice of Termination" shall
mean a written notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provisions so indicated. For purposes of this Agreement, no
purported termination of Executive's employment with an Employer shall be
effective without such a Notice of Termination having been given.
4. Compensation Upon Termination.
Subject to Section 9 hereof, if within two years of a
Change in Control Transaction, the Executive's employment with an Employer shall
be terminated in accordance with Section 3(a) (the "Termination"), the Executive
shall be entitled to the following payments and benefits:
(a) Severance. The Company shall pay or cause to be paid
to the Executive a cash severance amount equal to three times the
sum of (i) the Executive's annual base salary on the date of the
Change in Control (or, if higher, the annual base salary in effect
immediately prior to the giving of the Notice of Termination) and
(ii) the highest of the actual bonuses paid or payable to the
Executive under the Company's annual incentive Compensation plan in
any of the three consecutive fiscal years prior to the year in which
the Change in Control occurs. This cash severance amount shall be
payable in a lump sum calculated without any discount.
(b) Additional Payments and Benefits. The Executive
shall also be entitled to:
(i) a lump sum cash payment equal to the sum
of (A) the Executive's accrued but unpaid annual base
salary through the date of Termination, (B) the unpaid
portion, if any, of bonuses previously earned by the
Executive pursuant to the Company's annual incentive
compensation plan, plus the pro rata portion of (I) the
Bonus or (II) if payable, the target bonus to be paid
for the year in which the date of Termination occurs, in
either case (calculated through the date of
Termination), and (C) an amount, if any, equal to
compensation previously deferred (excluding any
qualified plan deferral) and any accrued vacation pay,
in each case, in full satisfaction of Executive's rights
thereto; and
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(ii) an annual benefit under the Company's
Supplemental Retirement Plan (the "SERP"), calculated
based on 8 1/3 years of service and unreduced for early
retirement thereunder; provided, however, that this
provision does not entitle the Executive, if he did not
previously participate in the SERP, to participate in
such Plan absent the occurrence of the contemplated
Change of Control; and
(iii) unless otherwise provided under the
Key Man Supplemental Medical Plan, continued medical,
dental, vision, and life insurance coverage (excluding
accident, death, and disability insurance) for the
Executive and the Executive's eligible dependents or, to
the extent such coverage is not commercially available,
such other arrangements reasonably acceptable to the
Executive, on the same basis as in effect prior to the
Change in Control or the Executive's Termination,
whichever is deemed to provide for more substantial
benefits, for a period ending on the earlier of (A) the
end of the third anniversary of the date of the
Executive's Termination (B) the commencement of
comparable coverage by the Executive with a subsequent
employer (the "Continuation Period"); and
(iv) during the Continuation Period,
continuation of the Executive's perquisites, including
the provision of an automobile and payment of all
related expenses (including maintenance, other than
gas), annual social and/or health club dues, and tax and
financial planning services, as in effect immediately
prior to the Change of Control; and
(v) all other accrued or vested benefits in
accordance with the terms of the applicable plan (with
an offset for any amounts paid under Section 4(b)(i)(C),
above).
All lump sum payments under this Section 4 shall be paid
within 10 business days after Executive's date of
Termination; provided, however, that with respect to the
SERP benefit set forth in Section 4(b)(ii), above,
unless the Executive, during the ten day period after
the Company signs any agreement that would, upon the
consummation of the transactions contemplated therein,
result in a Change of Control, elects to receive a lump
sum payment equal to the present value of his SERP
benefit (as calculated in Section 4(b)(ii) and otherwise
in accordance with Exhibit A, as attached hereto), the
Executive shall be entitled to receive the SERP benefit
in installment payments (payable in accordance with the
terms of the SERP), beginning upon the later to occur of
(i) the date on which the Executive achieves age 55 and
(ii) the date on which Executive's employment terminates
in accordance with the terms hereunder.
(c) Outplacement. If so requested by the
Executive, outplacement services shall be provided by a
professional outplacement provider selected by
Executive; provided, however, that such outplacement
services shall be provided the Executive at a cost to
the Company of not more than fifteen (15) percent of
such Executive's annual base salary.
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(d) Withholding. Payments and benefits
provided pursuant to this Section 4 shall be subject to
any applicable payroll and other taxes required to be
withheld.
5. Compensation Upon Termination for Death, Disability
or Retirement.
If an Executive's employment is terminated by reason of
Death, Disability or Retirement prior to any other termination, Executive will
receive:
(a) the sum of (i) Executive's accrued but unpaid salary
through the date of Termination, (ii) the pro rata portion of the
Executive's target bonus for the year of Executive's Death or
Disability (calculated through the date of Termination), and (iii)
an amount equal to any compensation previously deferred and any
accrued vacation pay; and
(b) other accrued or vested benefits in accordance with
the terms of the applicable plan (with an offset for any amounts
paid under item (a)(iii), above.
6. Excess Parachute Excise Tax Payments.
(a) (i) If it is determined (as hereafter provided) that
any payment or distribution by the Company or any Employer 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 pursuant to or by reason of
any other agreement, policy, plan, program or
arrangement, including without limitation any stock option, stock appreciation
right or similar right, or the lapse or termination of any restriction on or the
vesting or exercisability of any of the foregoing (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the Code (or any successor
provision thereto) by reason of being "contingent on a change in ownership or
control" of the Company, within the meaning of Section 280G of the Code (or any
successor provision thereto) or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such excise tax (such tax or
taxes, together with any such interest and penalties, are hereafter collectively
referred to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment or payments (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 Payments; provided,
however, if the Executive's Payment is, when calculated on a net-after-tax
basis, less than $50,000 in excess of the amount of the Payment which could be
paid to the Executive under Section 280G of the Code without causing the
imposition of the Excise Tax, then the Payment shall be limited to the largest
amount payable (as described above) without resulting in the imposition of any
Excise Tax (such amount, the "Capped Amount").
(ii) Subject to the provisions of Section 6(a)(i)
hereof, all determinations required to be made under this Section 6, including
whether an Excise Tax is payable by the Executive and the amount of such Excise
Tax and whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by the nationally recognized firm of certified public
accountants (the "Accounting Firm") used by the Company
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prior to the Change in Control (or, if such Accounting Firm declines to serve,
the Accounting Firm shall be a nationally recognized firm of certified public
accountants selected by the Executive). The Accounting Firm shall be directed by
the Company or the Executive to submit its preliminary determination and
detailed supporting calculations to both the Company and the Executive within 15
calendar days after the Termination Date, if applicable, and any other such time
or times as may be requested by the Company or the Executive. If the Accounting
Firm determines that any Excise Tax is payable by the Executive and that the
criteria for reducing the Payment to the Capped Amount (as described in Section
6(a)(i) above) is met, then the Company shall reduce the Payment by the amount
which, based on the Accounting Firm's determination and calculations, would
provide the Executive with the Capped Amount, and pay to the Executive such
reduced Payment. If the Accounting Firm determines that an Excise Tax is
payable, without reduction pursuant to Section 6(a)(i), above, the Company shall
pay the required Gross-Up Payment to, or for the benefit of, the Executive
within five business days after receipt of such determination and calculations.
If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall, at the same time as it makes such determination, furnish
the Executive with an opinion that he has substantial authority not to report
any Excise Tax on his/her federal, state, local income or other tax return. Any
determination by the Accounting Firm as to the amount of the Gross-Up Payment
shall be binding upon the Company and the Executive absent a contrary
determination by the Internal Revenue Services or a court of competent
jurisdiction; provided, however, that no such determination shall eliminate or
reduce the Company's obligation to provide any Gross-Up Payment that shall be
due as a result of such contrary determination. As a result of the uncertainty
in the application of Section 4999 of the Code (or any successor provision
thereto) and the possibility of similar uncertainty regarding state or local tax
law at the time of any determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments that will not have been made by the Company
should have been made (an "Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts or fails
to pursue its remedies pursuant to Section 6(a) hereof and the Executive
thereafter is required to make a payment of any Excise Tax, the Executive shall
direct the Accounting Firm to determine the amount of the Underpayment that has
occurred and to submit its determination and detailed supporting calculations to
both the Company and the Executive as promptly as possible. Any such
Underpayment shall be promptly paid by the Company to, or for the benefit of,
the Executive within five business days after receipt of such determination and
calculations.
(iii) The Company and the Executive shall each
provide the Accounting Firm access to and copies of any books, records and
documents in the possession of the Company or the Executive, as the case may be,
reasonably requested by the Accounting Firm, and otherwise cooperate with the
Accounting Firm in connection with the preparation and issuance of the
determination contemplated by Section 6(a) hereof.
(iv) The federal, state and local income or other
tax returns filed by the Executive (or any filing made by a consolidated tax
group which includes the Company) shall be prepared and filed on a consistent
basis with the determination of the Accounting Firm with respect to the Excise
Tax payable by the Executive. The Executive shall make proper payment of the
amount of any Excise Tax, and at the request of the Company, provide to the
Company true and correct copies (with any amendments) of his/her federal income
tax return as filed with
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the Internal Revenue Service and corresponding state and local tax returns, if
relevant, as filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing such payment. If prior
to the filing of the Executive's federal income tax return, or corresponding
state or local tax return, if relevant, the Accounting Firm determines that the
amount of the Gross-Up Payment should be reduced, the Executive shall within
five business days pay to the Company the amount of such reduction.
(v) The fees and expenses of the Accounting Firm
for its services in connection with the determinations and calculations
contemplated by Sections 6(a)(ii) and (iv) hereof shall be borne by the Company.
If such fees and expenses are initially advanced by the Executive, the Company
shall reimburse the Executive the full amount of such fees and expenses within
five business days after receipt from the Executive of a statement therefor and
reasonable evidence of his/her payment thereof.
(b) In the event that the Internal Revenue Service
claims that any payment or benefit received under this Agreement constitutes an
"excess parachute payment," within the meaning of Section 280G(b)(1) of the
Code, the Executive shall notify the Company in writing of such claim. Such
notification shall be given as soon as practicable but no later than 10 business
days after the Executive is informed in writing of such claim and shall apprise
the Company of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior to the
expiration of the 30 day period following the date on which the Executive gives
such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall (i) give the Company any information
reasonably requested by the Company relating to such claim; (ii) take such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company and reasonably satisfactory to the Executive; (iii)
cooperate with the Company in good faith in order to effectively contest such
claim; and (iv) permit the Company to participate in any proceedings relating to
such claim; provided, however, that the Company shall bear and pay directly all
costs and expenses (including, but not limited to, additional interest and
penalties and related legal, consulting or other similar fees) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for and against any Excise Tax or other tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses.
(c) The Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive on an interest-free basis, and shall
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indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or other tax (including interest and penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and provided, further, that if the Executive is
required to extend the statute of limitations to enable the Company to contest
such claim, the Executive may limit this extension solely to such contested
amount. The Company's control of the contest shall be limited to issues with
respect to which a corporate deduction would be disallowed pursuant to Section
280G of the Code and the Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority. In addition, no position may be taken nor any final
resolution be agreed to by the Company without the Executive's consent if such
position or resolution could reasonably be expected to adversely affect the
Executive (including any other tax position of the Executive unrelated to
matters covered hereby).
(d) If, after the receipt by the Executive of an amount
advanced by the Company in connection with the contest of the Excise Tax claim,
the Executive becomes entitled to receive any refund with respect to such claim,
the Executive shall promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto); provided, however, if the amount of that refund exceeds the amount
advanced by the Company or it is otherwise determined for any reason that
additional amounts could be paid to the Named Executive without incurring any
Excise Tax, any such amount will be promptly paid by the Company to the named
Executive. If, after the receipt by the Executive of an amount advanced by the
Company in connection with an Excise Tax claim, a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its intent to contest the
denial of such refund prior to the expiration of 30 days after such
determination, such advance shall be forgiven and shall not be required to be
repaid and shall be deemed to be in consideration for services rendered after
the date of the Termination.
7. Expenses. In addition to all other amounts payable to
the Executive under this Agreement, the Company shall pay or reimburse the
Executive for legal fees (including without limitation, any and all court costs
and attorneys' fees and expenses) incurred by the Executive in connection with
or as a result of any claim, action or proceeding brought by the Company or the
Executive with respect to or arising out of this Agreement or any provision
hereof; provided, however, that in the case of an action brought by the
Executive, the Company shall have no obligation for any such legal fees, if the
Company is successful in establishing with the court that the Executive's action
was frivolous or otherwise without any reasonable legal or factual basis.
8. Obligations Absolute; Non-Exclusivity of Rights;
Joint Several Liability.
(a) The obligations of the Company to make the payment
to the Executive, and to make the arrangements, provided for herein shall be
absolute and unconditional and shall not be reduced by any circumstances,
including without limitation any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive or any third party
at any time.
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(b) Nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any benefit, bonus, incentive
or other plan or program provided by the Company or any other Employer and for
which the Executive may qualify, nor shall anything herein limit or reduce such
rights as the Executive may have under any agreements with the Company or any
other Employer.
(c) Each entity included in the definition of "Employer"
and any successors or assigns shall be joint and severally liable with the
Company under this Agreement.
9. Not an Employment Agreement; Effect On Other Rights.
(a) This Agreement is not, and nothing herein shall be
deemed to create, a contract of employment between the Executive and the
Company. Any Employer may terminate the employment of the Executive at any time,
subject to the terms of this Agreement and/or any employment agreement or
arrangement between the Employer and the Executive that may then be in effect.
(b) With respect to any employment agreement with the
Executive in effect immediately prior to the Change in Control, nothing herein
shall have any effect on the Executive's rights thereunder; provided, however,
that in the event of the Executive's termination of employment in accordance
with Section 3 hereof, this Agreement shall govern solely for the purpose of
providing the terms of all payments and additional benefits to which the
Executive is entitled upon such termination and any payments or benefit provided
thereunder shall reduce the corresponding type of payments or benefits
hereunder. Notwithstanding the foregoing, in the event that the Executive's
employment is terminated prior to the occurrence of a Change in Control under
the circumstances provided for in Section 3(a)(ii) and such circumstances also
entitle Executive to payments and benefits under any other employment or other
agreement as in effect prior to the Change in Control ("Other Agreement"), then,
until the Change in Control occurs, the Executive will receive the payments and
benefits to which he/she is entitled under such Other Agreement. Upon the
occurrence of the Change in Control, the Company will pay to the Executive in
cash the amount to which he/she is entitled to under this Agreement (reduced by
the amounts already paid under the Other Agreement) in respect of cash payments
and shall provide or increase any other noncash benefits to those provided for
hereunder (after taking into Account noncash benefits, if any, provided under
such Other Agreement). Amounts which are vested benefits or which the Executive
is otherwise entitled to receive under any plan or program of the Company or any
other Employer shall be payable in accordance with such plan or program, except
as explicitly modified by this Agreement.
(c) With respect to any limited stock appreciation
rights ("LSARs") granted to the Executive pursuant to the Company's 1973 Stock
Option Plan for Key Executives held, as of the date of this Agreement, by the
Executive, the Executive hereby agrees to the cancellation of such LSARs in the
event that the Change in Control contemplated hereunder is intended to be, and
is otherwise, eligible for pooling-of-interests accounting treatment under APB
No. 16.
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10. Successors; Binding Agreement, Assignment.
(a) The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business of the Company, by agreement to expressly,
absolutely and unconditionally assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
it if no such succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a material
breach of this Agreement and shall entitle the Executive to terminate the
Executive's employment with the Company or such successor for Good Reason
immediately prior to or at any time after such succession. As used in this
Agreement, "Company" shall mean (i) the Company as hereinbefore defined, and
(ii) any successor to all the stock of the Company or to all or substantially
all of the Company's business or assets which executes and delivers an agreement
provided for in this Section 10(a) or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law, including any parent
or subsidiary of such a successor.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amount would be payable to the Executive
hereunder if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's estate or designated beneficiary. Neither this
Agreement nor any right arising hereunder may be assigned or pledged by the
Executive.
11. Notice. For purpose of this Agreement, notices and
all other communications provided for in this Agreement or contemplated hereby
shall be in writing and shall be deemed to have been duly given when personally
delivered, delivered by a nationally recognized overnight delivery service or
when mailed United States certified or registered mail, return receipt
requested, postage prepaid, and addressed, in the case of the Company, to the
Company at:
Xxxxxxx Incorporated
000 Xxxxx Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000-0000
Attention: General Counsel
and in the case of the Executive, to the Executive at the address set forth on
the execution page at the end hereof.
Either party may designate a different address by giving notice of
change of address in the manner provided above, except that notices of change of
address shall be effective only upon receipt.
12. Confidentiality. The Executive shall retain in
confidence any and all confidential information concerning the Company and its
respective business which is now known or hereafter becomes known to the
Executive, except as otherwise required by law and except information (i)
ascertainable or obtained from public information, (ii) received by the
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Executive at any time after the Executive's employment by the Company shall have
terminated, from a third party not employed by or otherwise affiliated with the
Company or (iii) which is or becomes known to the public by any means other than
a breach of this Section 12. Upon the Termination of employment, the Executive
will not take or keep any proprietary or confidential information or
documentation belonging to the Company.
13. Miscellaneous. No provision of this Agreement may be
amended, altered, modified, waived or discharged unless such amendment,
alteration, modification, waiver or discharge is agreed to in writing signed by
the Executive and such officer of the Company as shall be specifically
designated by the Committee or by the Board of Directors of the Company. No
waiver by either party, at any time, of any breach by the other party of, or of
compliance by the other party with, any condition or provision of this Agreement
to be performed or complied with by such other party shall be deemed a waiver of
any similar or dissimilar provision or condition of this Agreement or any other
breach of or failure to comply with the same condition or provision at the same
time or at any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement.
14. Severability. If any one or more of the provisions
of this Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby. To the extent permitted by applicable
law, each party hereto waives any provision of law which renders any provision
of this Agreement invalid, illegal or unenforceable in any respect.
15. Governing Law; Venue. The validity, interpretation,
construction and performance of this Agreement shall be governed on a
non-exclusive basis by the laws of the State of Connecticut without giving
effect to its conflict of laws rules. For purposes of jurisdiction and venue,
the Company and each Employer hereby consents to jurisdiction and venue in any
suit, action or proceeding with respect to this Agreement in any court of
competent jurisdiction in the state in which Executive resides at the
commencement of such suit, action or proceeding and waives any objection,
challenge or dispute as to such jurisdiction or venue being proper.
16. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be an original and all of which shall
be deemed to constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
XXXXXXX INCORPORATED
By:___________________________
Title:_____________________
______________________________
Executive
_____________________________
______________________________
Address
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EXHIBIT A
ASSUMPTIONS
The assumptions to be used are those specified under Section 417(e) of the
Internal Revenue Code of 186, as amended, which assumptions are the minimum lump
sum factors permitted to be used for calculating pension benefits under
qualified defined benefit plans.
Benefit: Lump sum payment of unreduced benefit deferred to age
55, increased to reflect the 50% joint and survivor
form.
Mortality Rates: The 1983 Group Annuity Mortality (1983 GAM) blend of 50%
male and 50% female rates.
Interest Rate: 10-year treasury rate on the first day of the fourth
quarter of the calendar year immediately prior to the
date on which the Director retires or otherwise
separates from Service.
Other: 3% annual Social Security wage base increase.
2.5% annual CPI increase.
5% annual salary increase.
Qualified Plan
Offset: Amount actually payable at age 55 (or, if higher, the
participants actual age as of the date of termination of
employment).
