Exhibit 10.18
CHANGE OF CONTROL AGREEMENT
This Agreement is made this 30th day of March, 1995, by and
between Elco Industries, Inc., a Delaware corporation ("Elco") and Xxxx
X. Xxxx ("Executive").
RECITALS:
Executive is a skilled and dedicated employee who has important
management responsibilities and talents. Elco believes that its best
interests will be served if Executive is encouraged to remain with Elco.
Elco has determined that Executive's ability to perform his responsibilities
and utilize his talents for the benefit of Elco, as well as Elco's ability to
retain Executive as an employee, will be significantly enhanced if
Executive is provided with fair and reasonable protection from the risks
of a change in ownership or control of Elco. Accordingly, Elco and
Executive agree as follows:
1. Definitions.
When the following terms appear in this Agreement they shall have
the respective meanings set forth below, unless the context clearly
indicates to the contrary:
(a) "Base Salary" means the highest annual rate of
Executive's base salary in effect on either the date of the Change
of Control or the Termination Date, including any amounts by
which the base salary was reduced prior to the Change of Control
at the request of the person or entity acquiring control of Elco or
reasonably shown to be related to the Change of Control.
(b) "Bonus" means the highest amount payable to
Executive under Elco's annual bonus plan in effect on either the
date of the Change of Control or the Termination Date, assuming
the highest performance targets are met for such bonus plan,
including any amounts by which the Executive's annual bonus was
reduced prior to the Change of Control at the request of the person
or entity acquiring control of Elco or reasonably shown to be
related to the Change of Control.
(c) "Cause" means either of the following:
(i) Executive's willful malfeasance having a material
adverse effect on Elco; or
(ii) Executive's conviction of a felony;
provided, that any action or refusal by Executive shall not
constitute "Cause" if, in good faith, Executive believed such action
or refusal to be in, or not opposed to, the best interests of Elco,
or if Executive shall be entitled, under applicable law or under an
applicable Certificate of Incorporation or By-Laws, as they may be
amended or restated from time to time, to be indemnified with
respect to such action or refusal.
(d) "Change of Control" means the first to occur of any of
the following dates:
(i) the date the Elco Board of Directors votes to
approve:
(A) any consolidation or merger of Elco;
(B) any sale, lease, exchange or other
transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets
of Elco other than any sale, lease, exchange or other
transfer to any corporation where Elco owns, directly
or indirectly, at least seventy percent (70%) of the
outstanding voting securities of such corporation
after any such transfer; or
(C) any plan or proposal for the liquidation or
dissolution of Elco;
(ii) the date any person (as such term is used in
Section 13(d) of the Securities Exchange Act of 1934,
hereinafter the "1934 Act"), other than one or more trusts
established by Elco for the benefit of employees of Elco or its
subsidiaries, shall become the beneficial owner (within the
meaning of Rule 13d-3 under the 0000 Xxx) of thirty percent
(30%) or more of outstanding Common Stock;
(iii) the date the Board of Directors of Elco
authorizes and approves any transaction which has either a
reasonable likelihood or a purpose of causing, whether
directly or indirectly:
(A) Common Stock to be held of record by
less than [300] persons; or
(B) Common Stock to be neither listed on any
national securities exchange nor authorized to be
quoted on an inter-dealer quotation system of any
registered national securities association;
(iv) the date, during any period of twenty-four (24)
consecutive months, on which individuals who at the
beginning of such period constitute the entire Board of
Directors of Elco shall cease for any reason to constitute a
majority thereof unless the election, or the nomination for
election by Elco stockholders, of each new director
comprising the majority was approved by a vote of at least a
majority of the Continuing Directors as hereinafter defined,
in office on the date of such election or nomination for
election of the new director. For purposes hereof, a
"Continuing Director" shall mean:
(A) any member of the Board of Directors of
Elco at the close of business on March 30, 1995.
(B) any member of the Board of Directors of
Elco who succeeds any Continuing Director described
in subparagraph (A) above if such successor was
elected, or nominated for election by Elco
stockholders, by a majority of the Continuing
Directors then still in office; or
(C) any director elected, or nominated for
election by Elco stockholders, to fill any vacancy or
newly created directorship on the Board of Directors
of Elco by a majority of the Continuing Directors then
still in office; or
(v) the date of commencement by any entity,
person, or group (including any affiliate thereof, other than
Elco) of a tender offer or exchange offer for more than
twenty percent (20%) of the outstanding Common Stock.
(e) "Code" means the Internal Revenue Code of 1986, as
amended.
(f) "Common Stock" means the $5 par value common stock
of Elco.
(g) "Confidential Information" means nonpublic information
relating to the business plans, marketing plans, customers or
employees of Elco other than information the disclosure of which
cannot reasonably be expected to adversely affect the business of
Elco.
(h) "Elco" means Elco Industries, Inc., a Delaware
corporation, and any successor or successors thereto.
(i) "Fringe Benefits" means the fair market value of the
highest level of fringe benefits payable to Executive by Elco on
either the date of the Change of Control or the Termination Date,
including any amounts by which the Executive's fringe benefits
were reduced prior to the Change of Control at the request of the
person or entity acquiring control of Elco or reasonably shown to
be related to the Change of Control. For these purposes, "Fringe
Benefits" do not include welfare benefits, such as medical coverage
(including prescription drug coverage), dental coverage, life
insurance, disability insurance and accidental death and
dismemberment benefits.
(j) "Good Reason" means any of the following
actions,without Executive's express prior written approval, other
than due to Executive's Permanent Disability or death:
(i) any diminution in Executive's titles, duties,
responsibilities, status or reporting relationship from the
positions, duties, responsibilities, status or reporting
relationship existing immediately prior to a Change of
Control;
(ii) the removal of Executive from, or any failure to
re-elect Executive to, any of the positions Executive holds
immediately prior to a Change of Control;
(iii) the failure of Elco to pay Executive's Base
Salary when due;
(iv) any reduction of Executive's Base Salary, or
Bonus, or any reduction in the aggregate amount of Fringe
Benefits provided to Executive;
(v) the change of Executive's principal place of
employment to a location more than 50 miles from Executive's
principal place of employment immediately prior to the
Change of Control; or
(vi) any breach by Elco of any provision of this
Agreement;
(vii) the failure of Elco to obtain a satisfactory
agreement from any successor to assume and agree to
perform this Agreement, as contemplated by Section 12
hereof; or
(viii) any purported termination of Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 2(i)
hereof (and, if applicable, the requirements of Section 13
hereof); for purposes of this Agreement, no such purported
termination shall be effective.
provided, however, that if any of the actions described in
subparagraphs (i) - (viii) above occur prior to a Change of Control
at the request of any individual or entity acquiring ownership or
control of Elco, or is reasonably shown to be related to a
prospective Change of Control, and if such actions occur without
Executive's express prior written approval, other than due to
Executive's Permanent Disability or death, then the existence of
such actions shall also constitute "Good Reason."
(k) "Permanent Disability" means Executive's inability, by
reason of any physical or mental impairment, to substantially
perform the significant aspects of his regular duties which inability
is reasonably contemplated to continue for at least one (1) year
from its inception.
2. Change of Control Benefits.
If Executive's employment with Elco is terminated at any time within
the two (2) years following a Change of Control of Elco without Cause, or
by Executive for Good Reason (the effective date of either such
termination hereafter referred to as the "Termination Date"), Executive
shall be entitled to the benefits provided hereafter in this Section 2 and
as set forth in this Agreement. If Executive's employment with Elco is
terminated by Elco without Cause prior to a Change of Control at the
request of any individual or entity acquiring ownership or control of Elco,
or is reasonably shown to be related to a prospective Change of Control,
or by Executive for Good Reason, or if the person or entity acquiring
control fails to assume Elco's liabilities to Executive under this
Agreement, the Executive's Termination Date shall be deemed to have
occurred immediately upon the Executive's effective date of termination
(in the case of a termination of employment at the request of the
acquirer), or immediately following the Change of Control (in the case of
the acquirer's failure to assume Elco's liabilities under this Agreement),
and therefore Executive shall be entitled to the benefits provided
hereafter in this Section 2 and as set forth in this Agreement.
(a) Severance Benefits. Within five (5) business days
after the Termination Date, Elco shall pay Executive a lump sum
amount, in cash, equal to two (2) times the sum of:
(i) Executive's Base Salary;
(ii) Executive's Bonus; and
(iii) Executive's Fringe Benefits.
(b) Performance Award. Any unpaid Target Award
previously granted to an Executive under the Elco Industries, Inc.
1988 Performance Share Plan (the "Share Plan") shall be paid to the
Executive within five (5) days of the Termination Date as if such
Target Award was 100 earned during the relevant Performance
Period (as such term is defined in the Share Plan), irrespective of
Elco's actual performance during the relevant Performance Period.
(c) Welfare Benefits. Elco shall, until the second
anniversary of the Termination Date, and at its expense, provide
Executive with medical (including prescription drug coverage),
dental, life insurance and accidental death and dismemberment
benefits at the highest level provided to Executive, his dependents
and beneficiaries, either on the date of a Change of Control or the
Termination Date, including any coverage or benefits that were
reduced prior to the Change of Control at the request of the person
or entity acquiring control of Elco or reasonably shown to be
related to the Change of Control. During the period that Elco is
providing Executive, his dependents and beneficiaries, with these
benefits, Executive shall be entitled to elect such changes and take
such actions the same as a similarly situated active employee.
(d) Payment of Accrued But Unpaid Amounts. Within five
(5) business days after the Termination Date, Elco shall pay
Executive (i) any unpaid portion of Executive's Bonus accrued with
respect to the full fiscal year ended prior to the Termination Date;
and (ii) all compensation previously deferred by Executive but not
yet paid.
(e) Post-Retirement Welfare Benefits. On the Termination
Date, for purposes of determining Executive's eligibility for post-
retirement benefits under any welfare benefit plan (as defined in
section 3(1) of the Employee Retirement Income Security Act of
1974, as amended) maintained by Elco immediately prior to the
Change of Control and in which Executive participated, immediately
prior to the Change of Control (or, with respect to an Executive
who is terminated prior to a Change of Control, the Termination
Date), Executive shall be credited with the excess of two years of
participation in the applicable medical plan and two years of age
over the actual years and fractional years of participation and age
credited to Executive as of the Change of Control (or Termination
Date, as the case may be). If, after taking into account such
participation and age, Executive would have been eligible to
receive such post-retirement benefits had Executive retired
immediately prior to the Change of Control (or Termination Date,
as the case may be), Executive shall receive, commencing on the
Termination Date, post-retirement benefits based on the terms and
conditions of the applicable plans in effect immediately prior to the
Change of Control (or Termination Date, as the case may be).
(f) Retirement Benefits. For purposes of determining the
Executive's retirement benefits under the various Elco retirement
benefit plans, Executive shall be deemed to be an active employee
receiving his Base Salary and shall accordingly continue to earn
service and accrue benefits under such plans for an additional
period of two years following the Termination Date.
(g) Effect on Existing Plans. All Change of Control
provisions applicable to Executive and contained in any plan,
program, agreement or arrangement maintained on the Effective
Date (or thereafter) by Elco (including, but not limited to, any
stock option, restricted stock or pension plan) shall remain in
effect through the date of a Change of Control, and for such period
thereafter as is necessary to carry out such provisions and provide
the benefits payable thereunder, and may not be altered in a
manner which adversely affects Executive without Executive's prior
written approval.
(h) Cessation of Benefits. Notwithstanding the foregoing,
no service of the Executive for Elco after age 65 shall be taken into
account for purposes of determining the Executive's benefits under
this Agreement.
(i) Notice of Termination. Any purported termination of
Executive's employment by Elco or by Executive shall be
communicated by written Notice of Termination to the other party
hereto in accordance with Section 13 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a 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
Executive's employment under the provision so indicated.
3. Gross-Up Payment.
(a) In the event it shall be determined that any payment,
benefit or distribution (or combination thereof) by Elco or one or
more trusts established by Elco for the benefit of its employees, to
or for the benefit of Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement, or otherwise) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code, or any interest or
penalties are incurred by Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties,
hereinafter collectively referred to as the "Excise Tax"), Executive
shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that, after payment by Executive of
all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes and
excise taxes (and any interest and penalties imposed with respect
thereto) imposed upon the Gross-Up Payment itself, Executive
retains an amount of such additional payment equal to the Excise
Tax imposed upon the Payments.
(b) Subject to the provisions of Section 3(c), all
determinations required to be made under this Section 3, including
whether and when a Gross-Up Payment is required and the amount
of such Gross-up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by Coopers &
Xxxxxxx or such other nationally recognized certified public
accounting firm as may be designated by Executive (the
"Accounting Firm") which shall provide detailed supporting
calculations both to Elco and Executive within fifteen (15) business
days of the receipt of notice from Executive that there has been a
Payment, or such earlier time as it requested by Elco. In the event
that the Accounting Firm is serving as accountant or auditor for an
individual, entity or group effecting the change in ownership or
effective control (within the meaning of Section 280G of the Code),
Executive shall appoint another nationally recognized accounting
firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the "Accounting Firm"
hereunder). All fees and expenses of the Accounting Firm shall be
borne solely by Elco. Any Gross-Up Payment, as determined
pursuant to this Section 3, shall be paid by Elco to Executive
within five (5) days after the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise
Tax is payable by Executive, it shall so indicate to Executive in
writing. Any determination by the Accounting Firm shall be
binding upon Elco and Executive.
(c) For purposes of determining whether any of the
Payments will be subject to the Excise Tax and the amount of such
Excise Tax: (i) any payments or benefits received or to be
received by Executive pursuant to the terms of this Agreement
shall be treated as "parachute payments" within the meaning of
Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) shall be
treated as subject to the Excise Tax, unless in the opinion of tax
counsel selected by Elco's independent auditors and acceptable to
Executive such other payments or benefits (in whole or in part) do
not constitute parachute payments, or such excess parachute
payments (in whole or in part) represent reasonable compensation
for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the base amount within the
meaning of Section 280G(b)(3) of the Code, or are otherwise not
subject to the Excise Tax; (ii) the amount of the Payments which
shall be treated as subject to the Excise Tax shall be equal to the
lesser of: (1) the total amount of the Payments; or (2) the amount
of excess parachute payments within the meaning of Section
280G(b)(1) (after applying clause (i), above); and (iii) the value
of any non-cash benefits or any deferred payment or benefit shall
be determined by Elco's independent auditors in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code. For
purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed to pay Federal income taxes at the
highest marginal rate of Federal income taxation in the calendar
year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the
state and locality of Executive's residence on the Termination Date,
net of the maximum reduction in Federal income taxes which could
be obtained from deduction of such state and local taxes. In the
event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the time of
termination of Executive's employment, Executive shall repay to
Elco at the time that the amount of such reduction in Excise Tax is
finally determined the portion of the Gross-Up Payment attributable
to such reduction (plus the portion of the Gross-Up Payment
attributable to the Excise Tax and Federal and state and local
income tax imposed on the Gross-Up Payment being repaid by
Executive if such repayment results in a reduction in Excise Tax
and/or a Federal and state and local income tax deduction) plus
interest on the amount of such repayment at the rate provided in
Section 1274(b)(2)(B) of the Code. In the event that the Excise
Tax is determined to exceed the amount taken into account
hereunder at the time of the termination of Executive's employment
(including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment),
Elco shall make an additional gross-up payment in respect of such
excess (plus any interest payable with respect to such excess) at
the time that the amount of such excess is finally determined.
(d) Executive shall notify Elco in writing of any claim by
the Internal Revenue Service that, if successful, would require the
payment by Elco of the Gross-Up Payment. Such notification shall
be given as soon as practicable but no later than ten (10) business
days after Executive is informed in writing of such claim and shall
apprise Elco of the nature of such claim and the date on which such
claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the thirty (30) day period following the
date on which it gives such notice to Elco (or such shorter period
ending on the date that any payment of taxes with respect to such
claim is due). If Elco notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim,
Executive shall:
(i) give Elco any information reasonably requested
by Elco relating to such claim;
(ii) take such action in connection with contesting
such claim as Elco 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 Elco;
(iii) cooperate with Elco in good faith in order to
effectively contest such claim; and
(iv) permit Elco to participate in any proceedings
relating to such claim; provided, however, that Elco shall
bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with
such contest and shall indemnify and hold Executive
harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 3(d), Elco shall control
all proceedings taken in connection with such contest and,
at its sole option, may pursue or forego 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 Executive to
pay the tax claimed and xxx for a refund or contest the claim
in any permissible manner, and 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 Elco shall determine;
provided, however, that if Elco directs Executive to pay
such claim and xxx for a refund, Elco shall advance the
amount of such payment to Executive, on an interest-free
basis, and shall indemnify and hold Executive harmless, on
an after-tax basis, from any Excise Tax or income tax
(including interest or 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 Executive is required to extend the statute
of limitations to enable Elco to contest such claim, Executive
may limit this extension solely to such contested amount.
Elco's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable
hereunder and 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.
(e) If, after the receipt by Executive of an amount
advanced by Elco pursuant to Section 3(d), Executive becomes
entitled to receive any refund with respect to such claim, Executive
shall (subject to Elco complying with the requirements of
Section 3(d)) promptly pay to Elco the amount of such refund
(together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by Executive of an
amount advanced by Elco pursuant to Section 3(d), a determination
is made that Executive shall not be entitled to any refund with
respect to such claim and Elco does not notify Executive in writing
of its intent to contest such denial of refund prior to the expiration
of thirty (30) days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.
4. Indemnification; Director's and Officer's Liability Insurance.
Executive shall, after the Termination Date, retain all rights to
indemnification under applicable law or under Elco's Certificate of
Incorporation or By-Laws, as they may be amended or restated from time
to time, to the extent any such amendment or restatement expands the
Executive's rights to indemnification. In addition, Elco shall maintain
Director's and Officer's liability insurance on behalf of Executive,
provided Executive is eligible to be covered and has in fact been covered
by such insurance, at the highest level in effect immediately prior to
either the Date of a Change of Control or the Termination Date, including
any such insurance that was reduced prior to a Change of Control at the
request of the person or entity acquiring control of Elco or reasonably
shown to the related to the Change of Control, for the seven (7) year
period following the Termination Date.
5. Termination for Cause.
Nothing in this Agreement shall be construed to prevent Elco from
terminating Executive's employment for Cause. If Executive is terminated
for Cause, Elco shall have no obligation to make any payments under this
Agreement, except for payments that may otherwise be payable under
then existing employee benefit plans, programs and arrangements of Elco.
6. Mitigation.
Executive shall not be required to mitigate damages or the amount
of any payment provided for under this Agreement by seeking other
employment or otherwise, and compensation earned from such employment
or otherwise shall not reduce the amounts otherwise payable under this
Agreement. Except as provided in Section 10, no amounts payable under
this Agreement shall be subject to reduction or offset in respect of any
claims which Elco (or any other person or entity) may have against
Executive.
7. Restrictive Covenants.
(a) Confidential Information. During the two (2) year
period following the Termination Date, Executive shall not disclose
to any person, or use to the significant disadvantage of Elco any
Confidential Information; provided that nothing contained in this
Section 7 shall prevent Executive from being employed by a
competitor of Elco or utilizing Executive's general skills,
experience, and knowledge, including those developed while
employed by Elco.
(b) Release. In consideration for the protection and
benefits provided for under this Agreement, Executive hereby
agrees to execute a release substantially in the form of Schedule A.
8. Disputes.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Chicago, Illinois,
or, at the option of Executive, in the county where Executive then
resides, in accordance with the Rules of the American Arbitration
Association then in effect, except that if Executive institutes an action
relating to this Agreement, Executive may, at Executive's option, bring
that action in a court of competent jurisdiction. Judgment may be entered
on an arbitrator's award relating to this Agreement in any court having
jurisdiction. Notwithstanding the pendency of any dispute in connection
with this Agreement, Elco will continue to pay Executive his full
compensation in effect when the notice giving rise to the dispute was
given and continue Executive as a participant in all compensation, benefit
and insurance plans in which Executive was participating when the notice
giving rise to the dispute was given, until the dispute is finally resolved
in accordance with this Section 8. Amounts paid under this Section 8 are
in addition to all other amounts due under this Agreement and shall not
be offset against or reduce any other amounts due under this Agreement.
9. Costs of Proceedings.
Elco shall pay all costs and expenses, including attorneys' fees and
disbursements, at least monthly, of Executive in connection with any legal
proceeding (including arbitration), whether or not instituted by Elco or
Executive, relating to the interpretation or enforcement of any provision
of this Agreement, except that if Executive instituted the proceeding and
the judge, arbitrator or other individual presiding over the proceeding
affirmatively finds the Executive instituted the proceeding in bad faith,
Executive shall pay all costs and expenses, including attorney's fees and
disbursements, of Elco. Elco shall pay prejudgment interest on any
money judgment obtained by Executive as a result of such a proceeding,
calculated at the rate which Bank of America announces from time to time
as its prime lending rate as in effect from time to time, from the date that
payment should have been made to Executive under this Agreement.
10. Withholding.
Notwithstanding the provisions of Sections 3 and 6 hereof, Elco
may, to the extent required by law, withhold applicable federal, state and
local income and other taxes from any payments due to Executive
hereunder.
11. Beneficiary Designation.
In the event of the Executive's death prior to his receipt of all
payments and benefits due to him under this Agreement, all such amounts
shall be paid to his designated beneficiary, as set forth on the form
attached hereto as Schedule B.
12. Assignment; Successors.
Except as otherwise provided herein, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by Elco and
Executive and their respective heirs, personal or legal representatives,
executors, administrators, successors, assigns, distributees, divisees
and legatees. If Executive should die while any amount would still be
payable to Executive hereunder had Executive continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to Executive's devisee, legatee or other
designee or, if there is no such designee, to Executive's estate. If Elco
shall be merged into or consolidated with another entity, the provisions
of this Agreement shall be binding upon and inure to the benefit of the
entity surviving such merger or resulting from such consolidation. Elco
will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the
business or assets of Elco by agreement in form and substance
satisfactory to Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that Elco would be
required to perform it if no such succession had taken place. The
provisions of this Section 12 shall continue to apply to each subsequent
employer of Executive hereunder in the event of any subsequent merger,
consolidation or transfer of assets of such subsequent employer.
13. Notices.
Any notice to be provided under the terms of this Agreement shall
be in writing and shall be sufficient if delivered in person or sent by
registered or certified mail, return receipt requested, addressed as
follows:
If to the Executive:
Xxxx X. Xxxx
0000 XxXxxxx Xxxx
Xxxxxx, XX 00000
If to the Company:
Elco Industries, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attn: Secretary
or to such other place as either party may specify in writing, delivered
in accordance with the provisions of this Section.
14. Applicable Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois applicable to contracts made and to be
performed therein.
15. Effective Date; Term.
This Agreement shall be effective as of March 30, 1995 (the
"Effective Date"") and shall remain in effect thereafter until March 30,
1998, unless Elco and Executive agree in writing to continue this
Agreement for such additional period of time as the parties shall specify.
Notwithstanding the foregoing, this Agreement shall, if in effect on the
date of a Change of Control, remain in effect for at least two (2) years
following such Change of Control, and such additional time as may be
necessary to give effect to the terms of the Agreement.
16. Amendment.
This Agreement may be changed only by a written agreement
executed by Elco and Executive.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
ELCO INDUSTRIES, INC.
By: /s/ X. X. Xxxxx
Its Vice President
/s/ Xxxx X. Xxxx
Executive
/s/ Xxxxx Xxxxxxxx
Chairman,
Compensation Committee
Schedule A
CHANGE OF CONTROL AGREEMENT
RELEASE
For and in consideration of the payment of such amounts and
benefits as are set forth in the Change of Control Agreement dated March
30, 1995 by and between Xxxx X. Xxxx and Elco Industries, Inc. ("Elco"),
Executive, together with his heirs, beneficiaries, personal or legal
representatives, executors, administrators, successors, assigns,
distributees, devisees and legatees, hereby waives, releases, and
discharges Elco and the present, future, or former employees, agents,
officers, directors, successors, assigns and affiliated entities of Elco,
(herein referred to collectively as the "Released Parties"), with respect
to any and all causes of action, potential causes of action, suits,
disputes, liabilities, claims in law and equity, rights, damages, demands,
personal injuries, and attorney's fees and costs by reason of any matter,
cost, or thing whatsoever against and as to Elco, which in any way
results from, arises out of, or pertains to Executive's employment,
termination of employment, benefits, awards, insurance coverage, hiring,
wages, or any other terms and conditions of employment at Elco, or any
other events which are unknown, fixed or contingent, and by reason of
any matter, cause, thing, charge, claim, right or action whatsoever,
against and as to Elco and/or any of the other Released Parties, and
which are in any way related to any violation of any provision of federal
and state statutory or common law or regulation, including claims arising
under any federal, state, or local laws prohibiting employment
discrimination on any basis or claims arising out of any legal restrictions
on Elco's rights to terminate its employees, any contract claim for the
alleged breach of any implied, express, or other type of employment
contract, wrongful, abusive or retaliatory discharge, and any tort claim,
including, but not limited to, fraud, misrepresentation, deceit,
defamation, slander, libel, interference with employment relations,
intentional or negligent infliction of emotional distress, breach of any
fiduciary duties, or any other tort-type causes of action.
This Release applies to any relief or benefit sought by the
Executive, no matter how denominated, including, but not limited to,
claims for compensation for any physical or mental injury, pain and
suffering, reinstatement, back pay, front pay, prejudgment interest,
compensatory damages, punitive damages, insurance coverage, benefits,
premiums, medical expenses, or attorneys' fees and costs.
In addition, Executive together with his heirs, beneficiaries,
personal or legal representatives, executors, administrators, successors,
distributees, devisees and legatees, agrees and covenants not to file a
lawsuit or administrative complaint to assert any claim with respect to his
employment with Elco, the payment of wages to him by Elco, or the
cessation of his employment with Elco which occurred prior to the
execution of this Release. Any such lawsuit or administrative complaint
filed in violation of this Release shall automatically constitute a breach of
this Release. If any government agency or court assumes jurisdiction of
any charge, complaint, cause of action or claim covered by this Release
against Elco or any of the Released Parties, on behalf of or related to
Executive, Executive agrees and covenants he will withdraw from and/or
dismiss the matter with prejudice. Executive agrees he will not
participate or cooperate in such matter(s) except as required by law.
Executive understands and acknowledges that he has
expressly waived all his rights under this Release. Executive further
acknowledges that he understands the legal effect of this Release, and
that, to the extent he has deemed necessary, he has consulted with his
attorney or other counsel regarding the legal effect of this Release.
Executive represents and warrants to Elco that he has the
full power, capacity, and authority to enter into this Release, and that
no portion of any claim, right, demand, action, or cause of action that
Executive has, or might have had arising out of the acts, events,
transactions, and occurrences referred to herein has been assigned,
transferred, or conveyed to any person not a party to this Release, by
way of subrogation, operation of law, or otherwise, and that no releases
or settlement agreements are necessary or need to be obtained from any
other person or entity to release and discharge completely any of the
claims of Executive released in this Release.
IN WITNESS WHEREOF, Executive has signed this instrument
this 30th day of March, 1995.
/s/ Xxxx X. Xxxx
Executive
Schedule B
CHANGE OF CONTROL AGREEMENT
BENEFICIARY DESIGNATION FORM
TO: Elco Industries, Inc.
FROM: Xxxx X. Xxxx
DATE: March 30, 1995
In the event of my death prior to my receipt of all payments and
benefits due me under the Change of Control Agreement dated March 30,
1995, I hereby designate the person or persons named below who are
living at the time of my death to receive all amounts and benefits due me
under the terms of such Agreement as follows:
Relati % of
Name Address S.S. Number onship Total
1. Xxxxxxx X. Xxxx 0000 XxXxxxx Xxxx ###-##-#### Wife 50%
Roscoe, IL
2. Xxxxxxx X. Xxxx 4332 Pebble Beach Dr. Son 25%
Niwot, CO
3. Xxxxx X. Xxxx Son 25%
4.
Total: 100%
I hereby revoke all prior Beneficiary Designations made previously and
expressly reserve the right to change or revoke this Beneficiary
Designation, but understand that no such change or revocation shall be
effective unless it is signed by me and filed with Elco Industries, Inc.
/s/ Xxxx X. Xxxx
Signature
Accepted by Elco Industries, Inc.
By: /s/ X. X. Xxxxx 03/30/95
Date
