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Exhibit 3
AGREEMENT
THIS AGREEMENT between CBI INDUSTRIES, INC., a Delaware corporation ("CBI")
and Xxxx X. Xxxxxxxxx ("Executive"), dated this 3rd day of January, 1995.
WITNESSETH THAT
WHEREAS, CBI wishes to attract and retain well-qualified executives for
itself and for its wholly-owned subsidiaries and both CBI and the Executive
desire continuity of management in the event of any Change in Control of CBI;
NOW, THEREFORE, it is hereby agreed by and between the parties as follows:
1. Effective Date. The "Effective Date" of this Agreement shall be the
date on which a Change in Control of CBI (as defined in Section 2) occurs.
2. Change in Control. The term "Change in Control" shall mean the
occurrence at any time of any of the following events:
(a) An Acquiring Person (as defined below), has become such; or
(b) Continuing Directors (as defined below) cease to comprise a
majority of the board of directors of CBI.
For purposes of this Agreement, the terms "Acquiring Person" and "Continuing
Directors" shall have the respective meanings ascribed to such terms in that
certain Rights Agreement dated March 4, 1986, between CBI and Xxxxxx Guaranty
Trust Company of New York as rights agent, the relevant portions of which for
convenience of reference are reproduced as Exhibit I to this Agreement.
3. Employment. CBI hereby agrees that if the Executive continues as an
employee of CBI or any wholly-owned subsidiary from the date of execution hereof
until the Effective Date, CBI shall continue the Executive in its employ for the
period commencing on the Effective Date and ending on the earlier to occur of
the third anniversary of such date or the 65th birthday of the Executive (the
"Employment Period"), to exercise such authority and perform such executive
duties as are requested of him by CBI, which authority and duties shall be
commensurate with the authority being exercised and duties being performed by
the Executive immediately prior to the Effective Date. The Executive shall
perform such requested services at the location where the Executive was employed
immediately prior to the Effective Date, except for required travel on CBI's
business to an extent substantially consistent with the Executive's business
travel obligations prior to the Effective Date. The Executive agrees that while
an employee during the Employment Period he
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shall, to the extent required, devote substantially all of his business time to
his executive duties as described herein and perform such duties faithfully and
efficiently.
4. Compensation, Compensation Plans, Benefits. During the Employment
Period, the Executive shall be compensated as follows:
(a) He shall receive an annual salary (to be paid in equal biweekly
installments) which is not less than his rate of annual salary in effect
immediately prior to the Effective Date, increased on each January 1 within
the remainder of the Employment Period by at least the greater of (i) the
average annual percentage salary increase for the Executive during the
period of three full calendar years immediately preceding the Effective
Date, or (ii) the percentage increase in the Implicit Price Deflator for
Gross National Product for the calendar year immediately preceding such
January 1, as published by the United States Department of Commerce in its
Survey of Current Business in December of each year, over such Implicit
Price Deflator for the calendar year next preceding such year.
(b) He shall be awarded and receive bonus, restricted stock award,
stock option, and other incentive compensation for each calendar year (or
other applicable bonus or incentive compensation period) any part of which
is included in the Employment Period, which in the aggregate shall not in
value be a lesser percentage of his annual salary, as determined in
subsection (a) above, for such calendar year (or period), than the aggregate
bonus, restricted stock award, stock option, and other incentive
compensation during the period of three full calendar years immediately
preceding the Effective Date was of the Executive's aggregate base salary
for such three year period.
(c) He shall be entitled to receive all employee benefits to the extent
of the greater of the employee benefits provided by CBI to executives with
comparable duties or the employee benefits to which he was entitled
immediately prior to the Effective Date.
(d) During any period that Executive is unable to perform the services
for CBI specified in Section 3, whether as a result of total disability or
as a result of a physical or mental disability that is not total or is not
permanent and therefore is not a total disability, Executive shall continue
to receive base salary at the rate in effect at the commencement of any such
period, together with all other compensation and benefits that are payable
under this Agreement.
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(e) He shall be furnished at CBI's expense with an automobile, office,
reasonable secretarial help, club memberships, reimbursement for reasonable
entertainment expenses, and such other supplies, equipment, facilities,
services and emoluments appertaining to his position to the extent of the
greater of such emoluments provided by CBI to executives with comparable
duties or the emoluments to which he was entitled immediately prior to the
Effective Date.
(f) He shall be covered by directors and officers liability and
indemnity insurance or equivalent protection to the extent of the greatest
level of protection arranged and funded by CBI, and by corporate indemnity
protection afforded to such Executive under any and all policies of
directors and officers liability and indemnity insurance, by-law provisions
or any other arrangements or agreements, at any time within the period of
three full calendar years immediately preceding the Effective Date.
5. Termination. The term "Termination" shall mean the occurrence
during the Employment Period of:
(a) termination by CBI of the employment of the Executive for any
reason other than (i) death, (ii) physical or mental incapacity which would
entitle Executive to permanent disability benefits under CBI's appropriate
plans, or (iii) a willful and material breach of this Agreement by the
Executive which causes a direct and substantial injury to CBI or to its
business, which is not cured by Executive within 30 days after receiving
written notice of such breach and reasonable directions for cure from CBI;
or
(b) the resignation of the Executive from his employment upon 30 days
written notice to CBI at any time following (i) a significant change in the
nature or scope of the Executive's authorities or duties from those
described in Section 3, a reduction in total compensation from that provided
in Section 4, or the breach by CBI of any other provision of this Agreement,
which change, reduction or breach is not restored or cured by CBI within 30
days after receiving written notice of such change, reduction or breach and
reasonable directions for restoration or cure from the Executive; or (ii) a
reasonable determination by the Executive that, as a result of the Change in
Control and a change in circumstances thereafter significantly affecting his
position, he is unable to exercise the authorities, powers, functions or
duties attached to his position as contemplated by Section 3.
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A Termination as contemplated by this Section 5, whether or not a breach of
this Agreement by CBI, shall entitle the Executive to Termination benefits as
provided by this Agreement. Nothing in this Agreement shall prevent the
Executive from voluntarily resigning from his Employment upon 90 days written
notice to CBI under circumstances which do not constitute Termination as defined
in this Section 5, and no such resignation shall be deemed a breach of this
Agreement by the Executive.
6. Termination Payment. In the event of Termination of Executive
during the Period of Employment, CBI shall pay to the Executive a lump sum
amount equal (without discount to present value) to the sum of the amounts
determined in accordance with subsections (a), (b), (c) and (d) below, and
provide the additional benefits described in subsections (w), (x), (y) and (z)
below:
(a) An amount equal to the aggregate salary which would have been paid
to the Executive during the remainder of the Employment Period if he had
received the base salary specified in Section 4(a) above, increased by
assuming the salary increase on each January 1 during the remainder of the
Employment Period to be the greatest of the average annual percentage salary
increase or the percentage increase in the Implicit Price Deflator,
whichever is applicable, as of any January 1 within the three calendar years
including or preceding the Termination date.
(b) Bonus and incentive compensation for any calendar year (or other
applicable bonus or incentive compensation period) ending prior to the
Termination date but not previously paid.
(c) An amount equal to the aggregate bonus and incentive compensation
which would have been paid to the Executive during each calendar year (or
other applicable bonus or incentive compensation period) any part of which
is included in the remainder of the Employment Period if he had received
bonus and incentive compensation for any such year (or period) in the
minimum amount specified by Section 4(b) based on his increased salary
determined under subsection (a) above; provided, however, that in the event
any bonus year (or period) extends beyond the end of the Employment Period,
bonus or other incentive compensation for such year (or period) shall be
pro-rated in proportion to the number of days within and without the
Employment Period.
(d) In the event any shares of CBI common stock (or other securities
into which such shares may have been converted) previously awarded to
Executive under any restricted
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stock award plans of CBI or separate agreements between Executive and CBI
are forfeited by reason of such Termination, an amount in cash equal to the
fair market value of such forfeited common stock (or other securities) as of
the date of Termination. The rights afforded to Executive under this
subsection (d) are without prejudice to any other rights Executive has to
shares of CBI common stock (or other securities) under such plans or
agreements or by reason of the action of the CBI Board of Directors
heretofore taken in causing restrictions on such shares to be removed under
certain circumstances including Termination of the Executive.
CBI shall also provide to the Executive:
(w) In addition to the benefits provided under any pension benefit
plan, benefit restoration plan, profit sharing plan, or employee stock
ownership plan (whether or not funded or qualified under the Internal
Revenue Code) maintained by CBI ("Retirement Plans"), the difference (the
"Benefit Enhancement") between such benefits and the benefits (the "Enhanced
Benefits") that would have been provided under such Retirement Plans if
Executive had remained in the employ of CBI throughout the Employment Period
at the salary determined under subsection (a) above accruing additional age
and service credits under such Retirement Plans accordingly. If after giving
effect to such additional age and service credit Executive shall not have
the necessary age or credited service at the end of the Employment Period to
qualify under the CBI Pension Plan (the "Pension Plan") for an early
retirement pension, the Enhanced Benefits under this subsection (w) shall
nevertheless include an early retirement pension under the Pension Plan
beginning upon Executive attaining age 55 or upon the date Executive would
have attained 30 years of credited service had Executive remained
continuously employed by CBI but for Termination (whichever occurs first)
(the "Enhanced Early Retirement Pension"). The Enhanced Early Retirement
Pension shall be payable to the Executive or to the spouse of the Executive
(if applicable) commencing at the time Executive attains (or would have
attained) age 55 or would have otherwise attained 30 years of credited
service as provided aforesaid (whichever occurs first). The Enhanced Early
Retirement Pension shall only be subject to reduction at the rate of four
(4) percentum for each year by which the Executive's age is less than age 65
or the Executive's credited service is less than 40 years, whichever
produces the lesser reduction, pursuant to the first sentence of Section
5.2.3 of the Pension Plan (as in effect on the date hereof). If Executive
shall die
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after the end of the Employment Period but before the date the Enhanced
Early Retirement Pension is payable, the spouse of Executive shall be
entitled to an enhanced survivor's pension under the Pension Plan as if
Executive had died as an employee of CBI, giving effect to service through
the date of Executive's death and Executive's earnings through the end of
the Employment Period. Such Benefit Enhancement will be paid beginning on
the date the Enhanced Benefits would have commenced and thereafter
concurrently with the benefits actually provided under such Retirement
Plans; except that if the Executive receives a distribution from any profit
sharing or employee stock ownership plan before the Benefit Enhancement
required by this subsection in respect of such Retirement Plan become
determinable, the Benefit Enhancement in respect of such plan shall be paid
as soon thereafter as such benefits become determinable. Nothing in this
subsection (w) shall prevent the actual commencement of benefits under any
Retirement Plan, and the Benefit Enhancements required by this subsection
(w), before the end of the Employment Period to the extent required or
permitted under the terms of the applicable Retirement Plan, giving effect
to the additional age and service credit required by this subsection (w).
(x) Participating in or coverage by all other employee benefits,
including, but not limited to, coverage under any health or medical benefit
insurance, plans, or arrangements, supplemental survivors' benefit plans, or
life insurance arrangements or programs, to the same extent to which he
would have been entitled under all employee benefit plans, programs,
arrangements or practices maintained by CBI if he had remained in the employ
of CBI through the Employment Period at the salary determined under
subsection (a) above.
(y) Continuation of disability income benefits pursuant to Section 4(d)
for so long as any disability may continue and continuation of directors and
officers liability and indemnity insurance and corporate indemnity
protection pursuant to Section 4(f) for so long as any liability may arise;
in either case without regard to the Termination of the Employment Period.
(z) Within 30 days after each written request therefor by the
Executive, cash advances or reimbursement for any fees or expenses actually
incurred or reasonably expected to be incurred by the Executive in seeking
other employment, including without limitation all travel and relocation
expenses and all fees charged by any executive recruitment firm or firms or
employment consulting or counseling firm or firms selected by the Executive
in his sole discretion.
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The amount of Termination payments described in subsections (a), (b), (c) and
(d) of this Section 6 shall be determined and paid in a lump sum within 30 days
of the Termination date by cashier's check or certified check of CBI or any of
its affiliated corporations delivered to the Executive together with such
calculations, worksheets, or other information as may be necessary or
appropriate to ascertain the correctness of the computation of such amount and,
if applicable, of any reduction pursuant to Section 7. Any Termination payment
(or the value thereof) not paid on or before the date provided therefor by this
Section 6 shall bear interest after such date until paid at a rate per annum
during each month such amount remains unpaid of five percentage points in excess
of the prime rate as publicly announced by the First National Bank of Chicago or
its successor from time to time as in effect on the first day of each such
month.
7. Overall Limitations. Solely for the purposes of the computation of
benefits under this Agreement and notwithstanding any other provisions hereof,
payments to any Executive under this Agreement shall be reduced (but not below
zero) so that the present value, as determined in accordance with Section
280G(d)(4) of the Code, of such payments plus any other payments that must be
taken into account for purposes of any computation relating to Executive under
Section 280G(b)(2)(A)(ii) of the Code, shall not, in the aggregate, exceed 2.99
times Executive's "base amount," as that term is defined in Section 280G(b)(3)
of the Code. Notwithstanding any other provision hereof no reduction in payments
under the limitation contained in the immediately preceding sentence shall be
applied to payments hereunder which do not constitute "excess parachute
payments" within the meaning of the Code. Any payments in excess of the
limitation of this Section 7 or otherwise determined to be "excess parachute
payments" made to Executive hereunder are deemed to be overpayments which shall
constitute an amount owing from the Executive receiving them to CBI with
interest from the date of receipt by the Executive to the date of repayment (or
offset) at the applicable federal rate under Section 1274(d) of the Code,
compounded semi-annually, which shall be payable to CBI upon demand; provided,
however, that no repayment shall be required under this sentence if in the
written opinion of tax counsel satisfactory to the Executive and delivered to
the Executive and CBI such repayment does not allow such overpayment to be
excluded for federal income and excise tax purposes from the Executive's income
for the year of receipt or afford the Executive a compensating federal income
tax deduction for the year of repayment.
8. Non-Competition. Whether or not a Termination occurs, the Executive
agrees to continue all non-competition and confidentiality provisions, as
specified in any other agreement
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in effect on the Effective Date between the Executive and CBI relating to
confidential information, during (and to the extent specified in such agreement,
after) the Employment Period.
9. Mitigation. The Executive shall not be required to mitigate the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise; provided, however, that if during the Employment Period
Executive accepts other employment in a position substantially equivalent to or
better than the position held by him with CBI, current cash compensation
actually received by the Executive during the Employment Period from such other
employment shall be applied to reduce Termination payments otherwise due under
subsections (a) and (c) of Section 6 of this Agreement.
10. Legal Fees and Expenses.
(a) It is the intent of CBI that no Executive be required to incur the
expenses associated with the enforcement of his rights under this Agreement
by litigation or other legal action because the cost and expense thereof
would substantially detract from the benefits intended to be extended to the
Executive hereunder. Accordingly, if it should appear to the Executive that
CBI has failed to comply with any of its obligations under this Agreement,
or in the event that CBI or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any litigation designed
to deny, or to recover from, the Executive the benefits intended to be
provided to Executive hereunder, CBI irrevocably authorizes Executive from
time to time to retain counsel of his choice, at the expense of CBI as
hereafter provided, to represent Executive in connection with the initiation
or defense of any litigation, arbitration or other legal action, whether by
or against CBI or any director, officer, stockholder or other person
affiliated with CBI, in any jurisdiction. CBI shall advance to the Executive
within 30 days after each written request therefor any and all attorneys'
and related fees and expenses actually incurred or reasonably expected to be
incurred by the Executive in any such proceeding or otherwise as a result of
CBI's failure to perform this Agreement or any provision hereof or as a
result of CBI or any person contesting the validity or enforceability of
this Agreement or any provision hereof; provided, however, that to the
extent the Executive does not prevail in any such litigation, arbitration,
or other legal action, the Executive shall repay to CBI the amount (without
interest) of such attorney's fees and related fees and expenses previously
advanced.
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(b) CBI shall at its sole cost and expense obtain a commitment for an
irrevocable clean letter of credit, substantially in the form of that
attached hereto as Exhibit II and incorporated herein by reference (the
"Letter of Credit"), to be issued by a commercial bank selected by CBI
having total assets equivalent to at least $6 billion and either
incorporated under the laws of, or having an office in, the United States or
any State (the "Bank"), to secure for the benefit of Executive the total
value of performance of CBI's obligations under this Agreement by providing
that the total amount of all payments due to be paid by CBI to Executive
under this Agreement shall be paid on a regular, periodic basis upon
presentation by Executive to the Bank of a statement or statements prepared
by Executive's counsel that such payments are due and owing, and that CBI
has not performed its obligations to make such payments. CBI shall at its
sole cost and expense obtain the issuance of the Letter of Credit pursuant
to such commitment not later than the Effective Date and shall pay all
amounts and take all action necessary to maintain such Letter of Credit
during the Employment Period and for two years thereafter and if,
notwithstanding CBI's complete discharge of such obligations, such Letter of
Credit shall be terminated or not renewed, CBI shall obtain a replacement
irrevocable clean letter of credit on substantially the same terms and
conditions as contained in the Letter of Credit drawn upon a commercial bank
having total assets equivalent to at least $6 billion and either
incorporated under the laws of, or having an office in, the United States or
any State, which assures the Executive the benefits of this Agreement.
11. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with CBI or, in the case of CBI, at its principal executive offices.
12. Non-Alienation. The Executive shall not have any right to pledge,
hypothecate, anticipate or in any way create a lien upon any amounts provided
under this Agreement; and no benefits payable hereunder shall be assignable in
anticipation of payment either by voluntary or involuntary acts, or by operation
of law.
13. Governing Law. The provisions of this Agreement shall be construed
in accordance with the laws of the State of Illinois.
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14. Amendment. This Agreement may be amended or cancelled by mutual
agreement of the parties in writing without the consent of any other person and,
so long as the Executive lives, no person, other than the parties hereto, shall
have any rights under or interest in this Agreement or the subject matter
hereof.
15. Successors to the Company. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of CBI and any
successor of CBI.
16. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect.
CBI INDUSTRIES, INC. EXECUTIVE
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxxxx
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Title: Pres, CEO, & Chairman Title: VP and Controller
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ATTEST:
/s/ CCT
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Secretary
(SEAL)
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EXHIBIT I
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
1.1 "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is hereinafter defined)
of 20% or more of the shares of Common Stock then outstanding, but shall not
include the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, or any entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan.
1.3 "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act
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of 1934, as amended (the "Exchange Act"), as in effect on the date of this
Agreement.
1.4 A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(a) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(b) which such Person or any of such Person's Affiliates or
Associates has (i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the
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"Beneficial Owner" of, or to "beneficially own," securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (ii) the right to vote pursuant to any
agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," any security under this clause (ii) if the
agreement, arrangement or understanding to vote such security: (A) arises
solely from a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations of the Exchange Act, and (B) is not also then reportable by
such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(c) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with
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which such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing), for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy
as described in clause (ii) of paragraph (b) of this subsection 1.4) or,
disposing of any voting securities of the Company.
1.7 "Common Stock" shall mean the common stock, $2.50 par value per
share, of the Company, except that "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock of such Person
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such Person.
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1.8 "Continuing Director" shall mean any member of the Board, while
such person is a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, and was a member of the
Board prior to the date of this Agreement. A "Continuing Director" shall also
mean any person who subsequently becomes a member of the Board, while such
person is a member of the Board, who is not an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, or a representative of an Acquiring person
or of any such Affiliate or Associate, if (a) such person's nomination for
election or election to the Board is recommended or approved by resolution of a
majority of the Continuing Directors or (b) such person is included as a nominee
in a proxy statement of the Company distributed when a majority of the Board
consists of Continuing Directors.
1.9 "Person" shall mean any individual, firm, corporation, partnership
or other entity.
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ADDENDUM TO AGREEMENT
THIS ADDENDUM dated this 3rd day of January, 1995 to the Agreement between
CBI Industries, Inc., a Delaware corporation ("CBI") and Xxxx X. Xxxxxxxxx
("Executive") of January 3, 1995 (the "Agreement").
WITNESSETH THAT
WHEREAS, the Board of Directors of CBI approved an early retirement change
in the CBI Pension Plan effective September 8, 1987, and CBI desires to make
such change applicable to the Agreement.
NOW, THEREFORE, it is hereby agreed by and between the parties to this
Addendum as follows:
1. The sentence appearing in Subsection 6(w) of the Agreement commencing in
the seventeenth line of page 5 presently reading:
"The Enhanced Early Retirement Pension shall only be subject to
reduction at the rate of four (4) percentum for each year by which
the Executive's age is less than age 65 or the Executive's credited
service is less than 40 years, whichever produces the lesser
reduction, pursuant to the first sentence of Section 5.2.3 of the
Pension Plan (as in effect on the date hereof)."
Is hereby amended to read:
"The Enhanced Early Retirement Pension shall only be subject to
reduction at the rate of four (4) percentum for each year by which
the Executive's age is less than age 62 or the Executive's credited
service is less than 35 years, whichever produces the lesser
reduction, pursuant to the first sentence of Section 5.2.3 of the
Pension Plan (as in effect on the date hereof)."
CBI INDUSTRIES, INC. EXECUTIVE
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxxxx
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Title: Pres, CEO & Chairman
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ATTEST:
/s/ CCT
---------------------
Secretary
[Seal]
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ADDENDUM TO AGREEMENT
THIS ADDENDUM dated this 3rd day of January, 1995 to the Agreement between
CBI Industries, Inc., a Delaware corporation ("CBI") and Xxxx X. Xxxxxxxxx
("Executive") dated the 3rd day of January, 1995 (the "Agreement").
WITNESSETH THAT
WHEREAS, CBI and the Executive mutually desire to modify the Agreement in
light of the enactment of the Tax Reform Act of 1986;
NOW, THEREFORE, in consideration of the premises, it is hereby agreed by and
between CBI and the Executive that the Agreement shall be modified as follows:
1. Section 3 of the Agreement is amended by adding the following new
sentence immediately after the first sentence thereof:
CBI shall maintain the position of Executive such that Executive is able
to exercise the authorities, powers, functions and duties attached
thereto as contemplated by this Section 3.
2. Subsection (b) of Section 5 of the Agreement is amended to read as
follows:
(b) the resignation of the Executive from his employment upon 30
days written notice to CBI at any time following a significant change in
the nature or scope of the Executive's authorities or duties from those
described in Section 3, a reduction in total compensation from that
provided in Section 4, or the breach by CBI of any other provision of
this Agreement, which change, reduction or breach is not restored or
cured by CBI within 30 days after receiving written notice of such
change, reduction or breach, reasonable directions for restoration or
cure, and an offer to work from the Executive.
3. Section 5 of the Agreement is amended by deleting the words ", whether
or not a breach of this Agreement by CBI," from the sentence following
subsection (b).
4. Section 6 of the Agreement is amended (i) by deleting from the
introductory material preceding subsection (a) the words "equal (without
discount to present value) to the sum of" and substituting in lieu thereof the
words "equal to the present value (discounted at the greatest rate of interest
then payable by the First National Bank of Chicago on any federally insured
account into which Executive could deposit such lump sum amount and made
withdrawals therefrom without
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penalty at least as rapidly as compensation under Section 4 would have been
payable) of"; (ii) deleting from subsections (a) and (c) the words "An amount
equal to the aggregate" and substituting in lieu thereof the word "The"; and
(iii) deleting from the sentence following subsection (z) the word "reduction"
and substituting in lieu thereof the word "enhancement".
5. The first sentence of subsection (d) of Section 6 is amended to read as
follows:
In the event any shares of CBI common stock (or other securities into
which such shares may have been converted) previously awarded to
Executive under any restricted stock award plans of CBI or separate
agreements between Executive and CBI are forfeited by reason of such
Termination, or in the event any stock option previously granted to
Executive under any stock option plan of CBI terminates or ceases to be
exercisable by reason of such Termination, an amount in cash equal to
the fair market value of such forfeited common stock (or other
securities) as of the date of Termination plus the excess of the fair
market value as of the date of Termination of stock subject to any such
terminated option over the exercise price of such terminated option.
6. Section 7 of the Agreement is amended to read as follows:
7. Overall Indemnity. The parties intend that the payments in the
nature of compensation to be made by CBI to Executive under this
Agreement shall be reasonable compensation for personal services to be
rendered on or after the date of the Change in Control, including
payments to an individual as damages for breach of contract, within the
meaning of Section 280G(b)(4)(A) of the Internal Revenue Code of 1986,
as amended (the "Code"). In the event that notwithstanding the previous
sentence any excise tax under Section 4999 of the Code is imposed on
Executive as a direct or indirect result of payments made by CBI or its
affiliates, whether or not such payments are made pursuant to this
Agreement, CBI shall pay Executive an amount or, from time to time,
amounts, equal to (i) the sum of all excise taxes imposed on Executive
in respect of such payments, plus (ii) the aggregate amount of any
interest, penalties, fines or additions to any tax which are imposed in
connection with the imposition of such excise tax, plus (iii) all
income and excise taxes
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imposed on Executive under the laws of any United States Federal, state
or local government or taxing authority by reason of the payments
required under clause (i) and (ii) and this clause (iii). CBI's
obligation to pay such amounts to Executive pursuant to this Section 7
shall continue for the period specified in Section 6501 of the Code
during which a tax may be assessed under Section 4999 of the Code
(including any extensions of such period provided under Section
6503(a)(1) of the Code or requested by the Internal Revenue Service in
connection with an audit of one or more of Executive's tax returns).
If the Internal Revenue Service makes a claim against Executive
which, if successful, would require CBI to make a payment under this
Section 7, Executive agrees to contest the claim on request of CBI
subject to the following conditions:
(a) Executive shall notify CBI of any such claim within 10 days of
becoming aware thereof. In the event CBI desires the claim to be
contested, it shall promptly (but in no event more than 30 days after
the notice from Executive or such shorter time as the Internal Revenue
Service may specify for responding to such claim) request Executive to
contest the claim. Executive shall not make any payment of any tax
which is the subject of the claim before Executive has given the notice
or during the 30-day period thereafter unless Executive receives
written instructions from CBI to make such payment together with an
advance of funds sufficient to make the requested payment plus any
amounts determined pursuant to clause (ii) and clause (iii) above as if
such advance were an amount described in clause (i) above, in which
case Executive will act promptly in accordance with such instructions.
(b) If CBI so requests, Executive will contest the claim by, at the
direction of CBI, either paying the tax claimed and suing for a refund
in the appropriate court or contesting the claim in the United States
Tax Court; provided, however, that any request by CBI for
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Executive to pay the tax shall be accompanied by an advance from CBI to
Executive of funds sufficient to make the requested payment plus any
amounts determined pursuant to clause (ii) and clause (iii) above as if
such advance were an amount described in clause (i) above. If directed
by CBI in writing Executive will take all action necessary to
compromise or settle the claim, but in no event will Executive
compromise or settle the claim or cease to contest the claim without
the written consent of CBI; provided, however, that Executive may take
any such action if Executive waives in writing his right to a payment
under this Section 7 for any amounts payable in connection with such
claim. Executive agrees to cooperate in good faith with CBI in
contesting the claim and to comply with any reasonable request from CBI
concerning the contest of the claim, including the pursuit of
administrative remedies, the appropriate forum for any judicial
proceeding, and the legal basis for contesting the claim. Upon request
of CBI, Executive shall take appropriate appeals of any judgment or
decision that would require CBI to make a payment under this Section 7.
Provided that Executive is in compliance with the provisions of this
section, CBI shall be liable for and indemnify Executive against any
loss in connection with all costs and expenses, including attorneys'
fees, which may be incurred as a result of contesting the claim, and
shall provide to Executive within 30 days after each written request
therefor by the Executive cash advances or reimbursement for all such
costs and expenses actually incurred or reasonably expected to be
incurred by the Executive as a result of contesting the claim.
(c) If CBI requests that Executive contest a claim and otherwise
complies with its obligations under this Section 7, it shall, except as
otherwise stipulated in this Section 7, have no obligation to pay any
amounts under Section 7 in respect of the claim until final
determination occurs regarding Executive's liability under the claim.
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CBI's obligation to pay amounts under this Section 7 will be reduced by
any refund obtained by Executive and interest paid thereon.
7. Section 9 of the Agreement is amended to read as follows:
If during the Employment Period Executive accepts other employment
in a position substantially equivalent to or better than the position
held by him with CBI, compensation actually received by the Executive
during the Employment Period from such other employment shall be
applied to reduce Termination payments otherwise due under subsections
(a) and (c) of Section 6 of this Agreement; and coverage of the
Executive under employee benefit plans described in subsection (x) of
Section 6 of this Agreement shall be reduced or eliminated to the
extent Executive is covered under similar plans incident to such other
employment. In the event of any reduction under this Section 9 of
Termination payments already paid by CBI to Executive, Executive shall
upon 30 days written request from CBI repay to CBI the amount by which
such Termination payment is reduced, without interest, and further
reduced by any taxes attributable to such Termination payments to the
extent Executive cannot recover such taxes through deductions of
equivalent or greater value. Nothing in this Section 9 shall be
construed to require Executive in mitigation of damages to accept
employment in a position not substantially equivalent to or better than
position held by him with CBI or to accept employment more than
reasonable daily commuting distance from the principal residence of the
Executive as of the date of Termination.
CBI INDUSTRIES, INC. EXECUTIVE
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxxxx
------------------------ -----------------------
Title: Pres., CEO & Chairman
---------------------
ATTEST:
/s/ CCT
----------------------------
Secretary
[SEAL]
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ADDENDUM TO AGREEMENT
THIS ADDENDUM effective the 3rd day of January, 1995 to the Agreement
between CBI Industries, Inc., a Delaware Corporation ("CBI") and Xxxx X.
Xxxxxxxxx ("Executive") dated the 3rd day of January, 1995, as previously
amended (the "Agreement").
WITNESSETH THAT
WHEREAS, CBI and the Executive mutually desire to modify the Agreement
to eliminate the requirement for CBI to provide an irrevocable clean letter of
credit to secure for the benefit of the Executive the total value of performance
of CBI's obligations under the Agreement;
NOW, THEREFORE, in consideration of $10 and the premises herein and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, it is hereby AGREED by and between CBI and the Executive
that the Agreement shall be modified as follows:
1. Subsection 10(b) is deleted.
2. Exhibit II is deleted.
CBI INDUSTRIES, INC. EXECUTIVE
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxxxx
------------------------ ----------------------
Title: Pres., CEO & Chairman
---------------------
ATTEST:
/s/ CCT
----------------------------
Secretary
[SEAL]
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ADDENDUM TO AGREEMENT
THIS ADDENDUM effective the 4th day of January, 1995 to the Agreement
between CBI Industries, Inc., a Delaware Corporation ("CBI") and Xxxx X.
Xxxxxxxxx ("Executive") dated the 3rd day of January, 1995, as previously
amended (the "Agreement").
WITNESSETH THAT
WHEREAS, CBI and the Executive mutually desire to modify the Agreement
to include a requirement that CBI provide an irrevocable clean letter of credit
to secure for the benefit of the Executive the payment of up to $100,000 for
attorneys fees incurred in enforcing the Agreement following a Change in
Control;
NOW, THEREFORE, it is hereby agreed by and between the parties to this
Addendum that the Agreement shall be modified as follows:
1. Section 10 of the Agreement is amended by adding a new subsection (b)
to read as follows:
(b) CBI shall at its sole cost and expense obtain a commitment for an
irrevocable clean letter of credit, substantially in the form of that
attached hereto as Exhibit II and incorporated herein by reference (the
"Letter of Credit"), to be issued by a commercial bank selected by CBI
having total assets equivalent to at least $6 billion and either
incorporated under the laws of, or having an office in, the United States or
any State (the "Bank"), to secure for the benefit of Executive the payment
of up to $100,000 for attorneys fees incurred in enforcing the Agreement
pursuant to Section 10(a) upon presentation by Executive to the Bank of a
statement or statements prepared by Executive's counsel that such payments
are due and owing and that CBI has not performed its obligations to make
such payments. CBI shall at its sole cost and expense obtain the issuance of
the Letter of Credit pursuant to such commitment not later than the
Effective Date and shall pay all amounts and take all action necessary to
maintain such Letter of Credit during the Employment Period and for two
years thereafter and if, notwithstanding CBI's complete discharge of such
obligations, such Letter of Credit shall be terminated or not renewed, CBI
shall obtain a replacement irrevocable clean letter of credit on
substantially the same terms and conditions as contained in the Letter of
Credit drawn upon a commercial bank having
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total assets equivalent to at least $6 billion and either incorporated
under the laws of, or having an office in, the United States or any State,
which assures the Executive the benefits of this Agreement. Nothing in this
subsection (b) shall limit in any way CBI's obligations under subsection
10(a).
CBI INDUSTRIES, INC. EXECUTIVE
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxxxx
------------------------ -----------------
Title: Pres, CEO & Chairman
ATTEST:
/s/ CCT
----------------------------
Secretary
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EXHIBIT II
ROYAL BANK OF CANADA, NEW YORK BRANCH
IRREVOCABLE STANDBY LETTER OF CREDIT
_______________________ , 19__
Letter of Credit No. ______________
(Beneficiary's Name and Address)
Dear ___________________:
At the request and for the account of CBI Industries, Inc., 000 Xxxxx
Xxxxxxxxx, Xxx Xxxxx, Xxxxxxxx, we hereby establish our Irrevocable Standby
Letter of Credit No. _______________ (this "Letter of Credit") in your favor in
an aggregate amount of One Hundred Thousand Dollars ($100,000), representing
support of the "Agreement") dated ________________, by and between yourself and
CBI Industries, Inc., as it may be amended from time to time, available by your
draft drawn at sight, presented to this Bank, bearing this Letter of Credit
Number and accompanied by this Letter of Credit and both:
1. Your signed certificate dated the date of such draft indicating the
name, address and signature of your designated counsel, with both your
signature and your designated counsel's signature notarized; and
2. Your designated counsel's signed and notarized statement dated the
date of such draft stating: "Payments are due and payable to (Beneficiary)
under the Agreement dated ______________ between (Beneficiary) and CBI
Industries, Inc., as such Agreement may have been amended from time to time,
and CBI Industries, Inc. has not performed its obligation to make such
payments. (Beneficiary) through the undersigned counsel is enforcing his/her
rights under such Agreement."
Only one draft, in the amount of $100,000 may be presented under this Letter of
Credit.
We hereby agree that all drafts drawn under and in compliance with the
terms of this Letter of Credit will be honored upon presentation at Royal Bank
of Canada, New York Branch, New York Operations Center, Pierrepont Plaza, 000
Xxxxxx Xxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000-0000, Attention: Loan
Administration Manager, facsimile number (___)___-_______, Presentation is to be
27
made by facsimile transmission of all required documents to this Bank, followed
by overnight courier delivery of all originals as provided in this paragraph:
Any Draft hereunder must be presented on or before _________________.
This Letter of Credit shall automatically expire and be null and void at the
close of business on _________________ or, in the event the expiry date hereof
is extended by us in writing, at the close of business upon such extended expiry
date.
This Letter of Credit sets forth in full the terms of our undertaking,
and this undertaking shall not in any way be modified, amended, amplified or
limited by reference to any document, instrument or agreement referred to herein
or in which this Letter of Credit is referred to or to which this Letter of
Credit relates, except for the certificates, statements and the sight drafts
referred to therein. This Letter of Credit is not transferrable.
This irrevocable Letter of Credit is subject to The Uniform Customs and
Practices for Documentary Credits (1983 Revision), ICC Publication 400:
ROYAL BANK OF CANADA,
NEW YORK BRANCH
By
------------------------------
Its
-----------------------------
By
------------------------------
Its
-----------------------------
28
ADDENDUM TO AGREEMENT
THIS ADDENDUM dated this 12th day of January, 1995 to the Agreement between
CBI Industries, Inc., a Delaware corporation ("CBI") and Xxxx X. Xxxxxxxxx
("Executive") of January 3, 1995 (the "Agreement").
WITNESSETH THAT
WHEREAS, the Board of Directors of CBI on January 11, 1995, adopted a
resolution amending Section 2 of the Agreement, and CBI and the Executive
mutually desire to modify the Agreement by incorporating said amendment into the
Agreement.
NOW THEREFORE, it is hereby agreed by and between the parties to this
Addendum as follows:
1. Section 2 of the Agreement is hereby amended to read as follows:
Change in Control. The Term "Change in Control" shall mean the
occurrence at any time of any of the following events:
(a) An "Acquiring Person" (as defined below) has become such; or
(b) "Continuing Directors" (as defined below) cease to comprise a
majority of the Board of Directors of CBI.
For purposes of this Agreement, the terms "Acquiring Person" and
"Continuing Directors" shall have the same meaning as ascribed to such
terms in that certain Amendment and Restatement dated as of August 8,
1989, of Rights Agreement dated as of March 4, 1986,
29
between CBI and First Chicago Trust Company of New York, as Rights
Agent, as has been or may be amended from time to time.
CBI INDUSTRIES, INC. EXECUTIVE
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxxxx
------------------------ -------------------------
Title:
---------------------
ATTEST
/s/ CCT
---------------------------
Secretary
[Seal]
