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Exhibit 10.6
CHANGE IN CONTROL AGREEMENT
This Change In Control Agreement ("Agreement") is dated as of
_______________, 1997 and is entered into by and between ____________________
("Executive") and Furon Company, a California corporation ("Furon").
RECITALS
Furon considers it essential to the best interest of Furon and
its shareholders that Executive be encouraged to remain with Furon and continue
to devote full attention to Furon's business notwithstanding the possibility,
threat or occurrence of an Event (as defined below) involving Furon. Furon
believes that it is in the best interest of Furon and its shareholders to
reinforce and encourage the continued attention and dedication of Executive and
to diminish inevitable distractions arising from the possibility of an Event.
Accordingly, to assure Furon that it will have Executive's undivided attention
and services notwithstanding the possibility, threat or occurrence of an Event,
and to induce Executive to remain in the employ of Furon, and for other good and
valuable consideration, the Board of Directors of Furon has, at the
recommendation of its Compensation Committee, caused Furon to enter into this
Agreement.
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TERMS AND CONDITIONS
Executive and Furon hereby agree to the following terms and
conditions:
1. Term of Agreement/Expiration Date. This Agreement shall be
effective as of the date first indicated above and shall remain in effect until
the Expiration Date described below. The "Expiration Date" is the third
anniversary of the date either party gives written notice of the termination of
this Agreement. This Agreement supersedes the Change-in-Control Agreement dated
as of ________________ between the Executive and Furon (the "Prior Agreement").
The Prior Agreement shall have no further force or effect when this Agreement
becomes effective.
2. Event Date. The "Event Date" shall mean the first date
during the term of this Agreement on which an Event (as defined in Section 3)
occurs; provided, however, that if an Event occurs and if Executive's employment
with Furon is terminated within the six-month period prior to the date on which
the Event occurs, the "Event Date" shall mean the date immediately prior to the
date of such termination.
3. Event. "Event" shall mean any of the following:
(a) The dissolution or liquidation of Furon;
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(b) The merger, consolidation, or other reorganization of
Furon with or into one or more entities which are not "Subsidiaries"
(as defined below), as a result of which 50% or less of the outstanding
voting securities of the surviving or resulting entity are, or are to
be, owned by former shareholders of Furon;
(c) The sale or transfer of substantially all of Furon's
business and/or assets to a person or entity which is not a Subsidiary; or
(d) A Change in Control. A "Change in Control" shall be
deemed to have occurred if:
(i) any "person", alone or together with all
"affiliates" and "associates" of such person is or becomes (a)
an "Acquiring Person" as defined in the Rights Agreement,
originally dated as of March 21, 1989, by and between Furon
and The Bank of New York, successor Rights Agent, or (b) the
"beneficial owner" of 20% or more of the outstanding voting
securities of Furon (the terms "person", "affiliates",
"associates" and "beneficial owner" are used as such terms are
used in the Securities Exchange Act of 1934 and the General
Rules and Regulations thereunder); provided, however, that a
"Change in Control" shall not be deemed to have occurred if
such "person" is (x) Furon, any Subsidiary or any employee
benefit plan or employee stock plan of Furon or of any
Subsidiary, or any trust or other entity organized,
established or holding shares of such voting
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securities by, for or pursuant to, the terms of any such plan,
or (y) Executive or Executive and one or more other persons
acting as a partnership, limited partnership, syndicate, or
other group for the purpose of acquiring, holding or
disposing of securities of Furon; or
(ii) individuals who at the beginning of any period
of two consecutive calendar years constitute the Board cease
for any reason, during such period, to constitute at least a
majority thereof, unless the election, or the nomination for
election by Furon's shareholders, of each new Board member was
approved by a vote of at least three-quarters of the Board
members then still in office who were Board members at the
beginning of such period.
"Subsidiary" shall mean any corporation or other entity of
which more than 50% of the outstanding voting stock or voting power is
beneficially owned directly or indirectly by Furon. If the approval of
the shareholders of Furon for any of the occurrences set forth in
subsections (a) through (d) is obtained prior to such occurrence, then
such shareholder approval shall constitute the Event.
4. Effective Period. For the purpose of this
Agreement, the "Effective Period" is the period commencing on the Event Date,
and ending on the earlier of the
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Expiration Date or the [INSERT EXECUTIVE'S MULTIPLIER(1)] anniversary of the
Event Date.
5. Termination of Employment.
(a) General. Executive shall be entitled to the payments and
benefits described in Section 6(a) of this Agreement in the event
Executive's employment is terminated (i) by Furon during the Effective
Period for any reason, other than as a result of Executive's death or
for Disability or Cause in accordance with the terms of this Section 5,
or (ii) by Executive for Good Reason pursuant to a Notice of
Termination delivered during the Effective Period.
(1) Death. Executive's employment shall terminate
automatically upon Executive's death.
(2) Disability. If the Disability of Executive occurs
during the Effective Period (pursuant to the definition of
Disability set forth below), Furon may give Executive written
notice in accordance with Section 15 of this Agreement of its
intention to terminate Executive's employment. In such event,
Executive's employment with Furon shall terminate effective on
the 30th day after receipt of such notice by Executive (the
"Disability
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(1)FOOTNOTE FOR EXHIBIT PURPOSES ONLY: The Multiplier is three for the
Registrant's Chief Executive Officer And Chief Operational Officer and two for
its other executive officers.
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Effective Date"), provided that, within the 30 Days after such
receipt, Executive shall not have returned to full-time
performance of Executive's duties. For purposes of this
Agreement, "Disability" shall mean the absence of Executive
from Executive's duties with Furon on a full-time basis for
180 consecutive business days as a result of incapacity due
to mental or physical illness which is both (i) determined to
be total and permanent by a physician selected by Furon or
its insurers and acceptable to Executive or Executive's legal
representative, and (ii) entitles Executive to the payment of
long-term disability benefits from Furon's long-term
disability plan commencing immediately upon the Disability
Effective Date.
(3) Cause. Furon may terminate Executive's
employment during the Effective Period for Cause. For
purposes of this Agreement, "Cause" shall be limited to:
(i) The conviction of Executive for
commission of a felony, or
(ii) The willful engaging by Executive in
gross misconduct which materially and demonstrably
injures Furon. For purposes of this paragraph, no act
or failure to act on the part of Executive shall be
considered "wilful" unless done, or omitted to be
done, by Executive not in good faith and without
reasonable belief that Executive's action or omission
was in the best interest of Furon.
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(4) Good Reason. Executive's employment may be
terminated by Executive for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean:
(i) The assignment to Executive of any
duties inconsistent in any respect with Executive's
position (including status, offices, titles and
reporting requirements), authority, duties or
responsibilities as in effect on the Event Date, or
any other action by Furon which results in a
diminution in such position, authority, duties or
responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by Furon
promptly after receipt of notice thereof given by
Executive;
(ii) Any failure by Furon to reappoint
Executive to a position held by Executive on the
Event Date, except as a result of the termination of
Executive's employment by Furon for Cause or
Disability, the death of Executive, or the
termination of Executive's employment by Executive
other than for Good Reason;
(iii) Reduction by Furon in Executive's
base salary as in effect on the date hereof or as the
same may be increased from time-to-time;
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(iv) The taking of any action by Furon
(including the elimination of benefit plans without
providing substitutes therefore or the reduction of
Executive's benefits thereunder) that would
substantially diminish the aggregate value of
Executive's incentive awards and other fringe
benefits including executive benefits and perquisites
from the levels in effect prior to the Event Date;
(v) Furon's requiring Executive to be based
at any office or location which increases the
distance from Executive's home to the office or
location by more than 35 miles from the distance in
effect as of the Event Date;
(vi) Any purported termination by Furon of
Executive's employment otherwise than pursuant to
a Notice of Termination; or
(vii) Any failure by Furon to comply with
and satisfy Section 10(c) of this Agreement.
For purposes of this Section, any good faith determination of "Good
Reason" made by Executive shall be conclusive.
(b) Notice of Termination. Any termination of Executive's
employment by Furon during the Effective Period for any reason, or by
Executive for Good
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Reason, shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 15 of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the
provision so indicated and (iii) if the Date of Termination (as
defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than
thirty days after the giving of such notice). The facts and
circumstances set forth in any Notice of Termination given by Furon
pursuant to a purported termination of Executive for Cause shall
constitute the exclusive set of facts and circumstances upon which
Furon may rely to attempt to demonstrate that Cause for such
termination existed. The failure by Executive to set forth in the
Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason shall not waive any right of Executive
hereunder or preclude Executive from asserting such fact or
circumstance in enforcing Executive's rights hereunder.
(c) Date of Termination. "Date of Termination" means (i) if
Executive's employment is terminated by Furon for Cause, or by
Executive for Good Reason, the date of receipt of the Notice of
Termination or a later date (within the limit set forth in subsection
(b)) specified therein, as the case may be, (ii) if Executive's
employment is terminated by Furon other than for Cause or Disability,
the Date of
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Termination shall be the date on which Furon notifies Executive of
such termination and (iii) if Executive's employment is terminated by
reason of death or Disability, the Date of Termination shall be the
date of death of Executive or the Disability Effective Date, as the
case may be.
6. Obligations of Furon upon Termination.
(a) Good Reason, Other Than for Cause, Death or Disability. If
Furon shall terminate Executive's employment other than for Cause or
Disability during the Effective Period, or Executive shall terminate
employment for Good Reason pursuant to a Notice of Termination
delivered during the Effective Period, Furon agrees to make the
payments and provide the benefits described below. Furon shall not be
obligated to make such payments and provide such benefits if the
Executive's employment with Furon terminates as a result of Executive's
death.
(i) Furon shall pay to Executive in a lump sum in
cash within 10 days after the Date of Termination an amount
equal to the product of (1) and (2), where (1) is [INSERT
EXECUTIVE'S MULTIPLIER] and (2) is the sum of (x) Executive's
highest rate of annual base salary in effect at any time in
the two years preceding the Date of Termination and (y) the
highest annual amount of incentive compensation (including
both short and long term compensation) paid in respect of the
most recent three fiscal years ending before the Date of
Termination under Furon's Economic Value Added
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Incentive Compensation Plan or any other incentive
compensation plan of Furon; provided, however, that if the
incentive compensation otherwise payable under Furon's
Economic Value Added Incentive Compensation Plan or any other
incentive compensation plan of Furon in respect of the fiscal
year preceding the fiscal year in which the Date of
Termination occurs has not been paid in full on or before the
Date of Termination, "three" in this clause (y) shall be
replaced by "four." (The amount in this clause (y) is referred
to hereinafter as the "Incentive Compensation Payment.")
(ii) (A) Furon shall pay Executive his or her full
base salary through the Date of Termination at the rate in
effect at the time the Notice of Termination is given plus a
pro-rata share of the Incentive Compensation Payment. Such
pro-rata share shall equal the fraction of Furon's fiscal year
which preceded the Date of Termination. (B) In addition, if
the incentive compensation otherwise payable under Furon's
Economic Value Added Incentive Compensation Plan or any other
incentive compensation plan of Furon in respect of the fiscal
year preceding the fiscal year in which the Date of
Termination occurs has not been paid in full on or before the
Date of Termination, the Company shall pay Executive an amount
equal to the difference between the Incentive Compensation
Payment and the portion (if any) which was actually paid to
the Executive of such incentive compensation in respect of the
fiscal year preceding the fiscal year in which the Date of
Termination occurs.
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(iii) For [INSERT EXECUTIVE'S MULTIPLIER] years after
Executive's Date of Termination, or such longer period as may
be provided by the terms of the appropriate plan, program,
practice or policy, Furon shall continue to provide welfare
benefits and fringe benefits and other perquisites to
Executive and Executive's family at least equal to those which
would have been provided to them if Executive's employment had
not been terminated in accordance with the most favorable
plans, practices, programs or policies of Furon and its
affiliated companies applicable generally to other peer
executives and their families immediately preceding the Date
of Termination; provided, however, that if Executive becomes
reemployed with another employer and is eligible to receive
medical or other welfare benefits under another
employer-provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility.
For purposes of determining eligibility (but not the time of
commencement of benefits) of Executive for retiree benefits
pursuant to such plans, practices, programs and policies,
Executive shall be considered to have remained employed until
[INSERT EXECUTIVE'S MULTIPLIER] years after the Date of
Termination and to have retired on the last day of such
period. Following the period of continued benefits referred to
in this subsection, Executive and Executive's family shall be
given the right provided in Section 4980B of the Internal
Revenue Code to elect to continue benefits in all group
medical plans. In the event that Executive's
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participation in any of the plans, programs, practices or
policies of Furon referred to in this subsection is barred
by the terms of such plans, programs, practices or policies,
Furon shall provide Executive with benefits substantially
similar to those which Executive would be entitled as a
participant in such plans, programs, practices or policies.
At the end of the period of coverage, Executive shall have
the option to have assigned to Executive, at no cost and
with no apportionment of prepaid premiums, any assignable
insurance policy owned by Furon and relating specifically to
Executive.
(iv) Furon shall enable Executive to purchase the
automobile, if any, that Furon was providing for Executive at
the time Notice of Termination was given at the wholesale
value of such automobile at such time, as shown in the current
addition of the National Auto Research Publication Blue Book.
At Executive's election, Executive may retain any existing
club memberships upon reimbursement to Furon of any membership
purchase costs or initiation fees and related membership
assessments paid by Furon; provided, however, that Executive
need not repay Furon any periodic dues, food or beverage
charges or other costs previously paid by Furon in connection
with such memberships. Any outstanding relocation loans to
Executive from Furon shall not be accelerated. The obligations
set forth in this Section 6(a)(iv) are hereinafter referred to
as the "Special Obligations."
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(v) Any compensation previously deferred by the
Executive (together with any accrued earnings or interest
thereon) and any accrued vacation pay, in each case to the
extent not theretofore paid (the amount referred to in this
clause (v) and clause (ii) above being referred to as "Accrued
Obligations").
(vi) To the extent not theretofore paid or provided,
Furon shall timely pay or provide Executive any other amounts
or benefits required to be paid or provided or which Executive
is eligible to receive under any plan, program, policy,
practice, contract or agreement of Furon and its affiliated
companies, including but not limited to any benefits payable
to Executive under a plan, policy, practice, etc., referred to
in Section 7 below, (such other amounts and benefits being
hereinafter referred to as "Other Benefits") in accordance
with the terms of such plan, program, policy, practice,
contract or agreement.
(b) Death. If the Executive's employment is terminated by
reason of the Executive's death during the Effective
Period, this Agreement shall terminate without further
obligations to the Executive's legal representatives under
this Agreement, other than for timely performance of the
Special Obligations, payment of Accrued Obligations and
payment or provision of Other Benefits. Accrued
Obligations shall be
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paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 10 days of the
Date of Termination.
(c) Disability. If the Executives employment is terminated by
reason of the Executive's Disability during the Effective
Period, this Agreement shall terminate without further
obligations to the Executive, other than for timely
performance of the Special Obligations, payment of Accrued
Obligations and payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of
Termination.
(d) Cause. If Executive's employment shall be
terminated for Cause during the Effective Period, this
Agreement shall terminate without further obligations to
Executive (other than the obligation to pay to Executive
his base salary earned through the Date of Termination and
payment or provision of the Other Benefits).
(e) Other than for Good Reason.
(1) If Executive shall voluntarily terminate
employment, excluding a termination for Good Reason,
within the six month period following the Event Date, this
Agreement shall terminate without further obligations to
Executive, except that Furon shall (i) pay to Executive
his base salary earned through the Date of Termination and
pay or provide the Other
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Benefits, (ii) pay to Executive an additional lump sum
payment as of the Date of Termination equal to six months'
of the Executive's base salary as in effect on the Date of
Termination, and (iii) timely perform the Special
Obligations.
(2) If Executive shall voluntarily terminate
employment, excluding a termination for Good Reason,
within the Effective Period, but after the six month
period following the Event Date, this Agreement shall
terminate without further obligations to Executive, except
that Furon shall (i) pay to Executive his base salary
earned through the Date of Termination and pay or provide
the Other Benefits, and (ii) timely perform the Special
Obligations.
7. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in any plan,
program, policy or practice provided by Furon or any of its affiliated companies
and for which Executive may qualify, nor, subject to Section 19, shall anything
herein limit or otherwise affect such rights as Executive may have under any
contract or agreement with Furon or any of its affiliated companies. Amounts
which are vested benefits or which Executive is otherwise entitled to receive
under any plan, policy, practice or program of or any contract or agreement with
Furon or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement.
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8. Full Settlement. Furon's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which Furon may have against Executive
or others. In no event shall Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to Executive
under any of the provisions of this Agreement and, except as provided in Section
6(a)(iii), such amounts shall not be reduced whether or not Executive obtains
other employment. Furon agrees to pay, to the full extent permitted by law, all
legal fees and expenses which Executive may reasonably incur as a result of any
contest (regardless of the outcome thereof) by Furon, Executive or others of the
validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal Rate, provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code"). Executive shall be entitled to payment of such
legal fees and expenses on a monthly basis during the pendency of any contest.
Accordingly, Furon shall, on the tenth business day of each month following the
Executive's Date of Termination, pay Executive any legal fees and expenses
incurred by Executive as a result of a contest hereunder for which the Executive
presented invoices to Furon on or before the last business day of the preceding
month. Notwithstanding the foregoing, Furon shall be entitled to reimbursement
by the Executive (1) for any legal fees or expenses of Executive in any contest
by Executive about the amount of any payment under this Agreement if it is
determined that Furon did not breach this Agreement and
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Executive's claim was not made in good faith, and (2) to the extent it is
determined that the amount of such legal fees and expenses was not reasonable.
9. Certain Additional Payments by Furon.
(a) In the event that any payment or distribution by Furon to
or for the benefit of Executive (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional payments required under
this Section 9(a)) ("Payments") is determined to be subject to (1) the
excise tax imposed by Section 4999 of the Code or its successor, (2)
any corresponding state excise tax, or (3) any interest or penalties
are incurred by Executive with respect to such state or federal excise
tax (such state or federal excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the "Excise
Tax"), then Furon shall pay to Executive 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
any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including
whether and when a Gross-Up Payment is
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required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by a
certified public accounting firm as may be designated by Executive and
which is reasonably satisfactory to Furon (the "Accounting Firm"),
which shall provide detailed supporting calculations both to Furon and
Executive within 15 business days of the receipt of request from
Executive or Furon. All fees and expenses of the Accounting Firm shall
be borne solely by Furon. Any Gross-Up Payment, as determined pursuant
to this Section 9(b), shall be paid by Furon to Executive within five
days of the receipt of the Accounting Firm's determination. As a
result of the uncertainty in the application of Section 4999 of the
Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have
been made by Furon should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that
Furon exhausts its remedies pursuant to Section 9(c) and Executive
thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment shall be promptly paid by Furon
to or for the benefit of Executive.
(c) Executive shall notify Furon in writing of any written
claim actually received by Executive from the Internal Revenue Service
requesting the payment by Executive of an Excise Tax in respect of
Payments. Such notification shall be given as soon as practicable
(which shall be deemed to have occurred if it is given
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within 20 business days) after Executive actually receives such claim
and shall apprise Furon 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 30-day period following the date
on which it gives such notice to Furon (or such shorter period ending
on the date that any payment of taxes with respect to such claim is
due). If Furon notifies Executive in writing prior to the expiration
of such period that it desires to contest such claim, Executive shall:
(i) Give Furon any information reasonably requested
by Furon relating to such claim,
(ii) Take such action in connection with contesting
such claim as Furon 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 Furon,
(iii) Cooperate with Furon in good faith in order
to contest such claim effectively, and
(iv) Permit Furon to participate in any proceedings
relating to such claim; provided, however, that Furon 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
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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 9(c), Furon 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 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 Furon shall determine; provided, however, that if Furon
directs Executive to pay such claim and xxx for a refund,
Furon 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
further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year
of Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount.
Furthermore, Furon's control of the contest shall be limited
to issues with respect to which a Gross Up Payment would be
payable hereunder and
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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.
(d) If, after the receipt by Executive of an amount advanced
by Furon pursuant to Section 9(c), Executive becomes entitled to
receive any refund with respect to such claim, Executive shall (subject
to Furon's complying with the requirements of Section 9(c)) promptly
pay to Furon 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 Furon pursuant to Section
9(c), a determination is made that Executive shall not be entitled to
any refund with respect to such claim and Furon does not notify
Executive in writing of its intent to contest such denial of refund
prior to the expiration of 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.
10. Successors.
(a) This Agreement is personal to Executive and without the
prior written consent of Furon shall not be assignable by Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by
Executive's legal representatives.
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(b) This Agreement shall inure to the benefit of and be
binding upon Furon and its successors and assigns.
(c) Furon will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Furon to assume
expressly and agree to perform this Agreement in the same manner and to
the same extent that Furon would be required to perform it if no such
succession had taken place. As used in this Agreement, "Furon" shall
mean Furon as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
11. Arbitration.
(a) Because it is agreed that time will be of the essence in
determining whether any payments are due to Executive under this
Agreement, Executive may, if he desires, submit any claim for payment
under this Agreement or dispute regarding the interpretation of this
Agreement to arbitration. This right to select arbitration shall be
solely that of Executive, and Executive may decide whether or not to
arbitrate in his discretion. The "right to select arbitration" is not
mandatory on Executive, and Executive may choose in lieu thereof to
bring an action in an appropriate civil court. Once an arbitration is
commenced, however, it may not be
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discontinued without the mutual consent of both parties to the
arbitration. During the lifetime of Executive only he can use the
arbitration procedure set forth in this Section.
(b) Any claim for arbitration may be submitted as follows: If
Executive disagrees with Furon regarding the interpretation of this
Agreement and the claim is finally denied by Furon in whole or in part,
such claim may be filed in writing with an arbitrator of Executive's
choice who is selected by the method described in the next three
sentences. The first step of the selection shall consist of Executive's
submitting a list of five potential arbitrators to Furon. Each of the
five arbitrators must be either (1) a member of the National Academy of
Arbitrators located in the State of California or (2) a retired
California Superior Court or Appellate Court judge. Within two weeks
after receipt of the list, Furon shall select one of the five
arbitrators as the arbitrator for the dispute in question. If Furon
fails to select an arbitrator in a timely manner, Executive shall then
designate one of the five arbitrators as the arbitrator for the dispute
in question.
(c) The arbitration hearing shall be held in the county which
includes the address last given prior to the commencement of
arbitration by the Executive for notices under Section 15; provided
that if such is outside the United States, the arbitration hearing
shall be held in Orange County, California. The arbitration hearing
shall be held within thirty days (or as soon thereafter as possible)
after the picking of the arbitrator. No continuance of said hearing
shall be allowed without
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the mutual consent of Executive and Furon. Absence from or
nonparticipation at the hearing by either party shall not prevent the
issuance of an award. Hearing procedures which will expedite the
hearing may be ordered at the arbitrator's discretion, and the
arbitrator may close the hearing in his or her sole discretion when he
or she decides he or she has heard sufficient evidence to satisfy
issuance of an award.
(d) The arbitrator's award shall be rendered as expeditiously
as possible and in no event later than thirty days after the close of
the hearing. In the event the arbitrator finds that Furon has breached
this Agreement, he or she shall order Furon to immediately take the
necessary steps to remedy the breach. The award of the arbitrator shall
be final and binding upon the parties. The award may be enforced in any
appropriate court as soon as possible after its rendition. If an action
is brought to confirm the award, both Furon and Executive agree that no
appeal shall be taken by either party from any decision rendered in
such action.
(e) Furon will be considered the prevailing party in a dispute
if the arbitrator determines (1) that Furon has not breached this
Agreement and (2) the claim by Executive was not made in good faith.
Otherwise, Executive will be considered the prevailing party. In the
event that Executive is the prevailing party, the fee of the arbitrator
and all necessary expenses of the hearing (including all attorneys'
fees incurred by Executive in pursuing his claim and, if the
Executive's home on the Date of Termination was more than 70 miles from
the location of the
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arbitration, his reasonable travel and living expenses during the
arbitration), including the fees of a stenographic reporter if
employed, shall be paid by Furon.
12. Governing Law. The laws of California shall govern the
validity and interpretation of this Agreement, with regard to conflicts of laws.
13. Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
14. Amendment. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
15. Notices. All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
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If to Executive:
If to Furon:
Furon Company
00000 Xxx Xxxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee. Neither the failure of Executive to
give any notice required by this Agreement (including but not limited to the
notice specified in Section 9(c) hereof), nor defects or errors in any notice
given by Executive, shall relieve Furon of any corresponding obligation under
this Agreement unless, and only to the extent that, Furon is actually and
materially prejudiced thereby.
16. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
17. Withholding Taxes. Furon may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
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18. No Waiver. Executive's or Furon's failure to insist upon
strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right Executive or Furon may have
hereunder, including, without limitation, the right of Executive to terminate
employment for Good Reason shall not be deemed to be a waiver of such provision
or right or any other provision or right of this Agreement.
19. At-Will Employment. Executive and Furon acknowledge that,
except as may otherwise be provided under any other written agreement between
Executive and Furon, the employment of Executive by Furon prior to the Event
Date is "at will" and, prior to the Event Date, Executive's employment may be
terminated by either Executive or Furon at any time, in which case Executive
shall have no further rights under this Agreement. This Agreement shall
supersede any other agreement between the parties with respect to the subject
matter hereof.
20. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which shall together constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first written
above.
FURON COMPANY
By
_______________________________________
Title
_____________________________________
EXECUTIVE
__________________________________________
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