EXHIBIT 10.47
1996 Amendment to
UNC-Colussy Employment Agreement
WHEREAS, pursuant to the terms of Sec.1(b) of the Employment Agreement
between UNC Incorporated (formerly UNC Resources, Inc.) (the "Company") and
Xxx X. Xxxxxxx dated as of November 1, 1984, as since amended in October
1987, December 1989 and March 1995 and as extended from time to time (the
"Agreement"), Xx. Xxxxxxx'x current Renewal Employment Period has been
extended to December 31, 1997, subject to such further extensions (if any)
as may hereafter occur in accordance with Sec.1(b); and
WHEREAS, the Board now wishes to update certain provisions in the
Agreement to more fully reflect pre-1996 changes in the Corporate SERP
applicable to the Company's key executives; to refer to Xx. Xxxxxxx'x
position as Chairman of the Board; to reflect certain Change in Control
protections already provided to other key executives and to otherwise update
such provisions; to clarify or amend certain provisions in the Agreement as
they relate to Xx. Xxxxxxx'x continued employment by the Company after
attaining his 65th birthday in 1996; and to otherwise update the Agreement;
and
WHEREAS, the Board also wishes to amend the Pension Benefit formula in
Schedule 5A to include Xx. Xxxxxxx'x annual bonus awards in his pensionable
compensation for purposes of calculating his Pension Benefit under Sec. 5 of
the Agreement;
NOW THEREFORE, the Agreement is hereby amended, with Xx. Xxxxxxx'x
consent, effective as of July 1, 1996, as follows:
1. Sec.2, Sec. 10(a) and (b), Sec.13(b)(i) and Sec.15(c)(ii) and (iv) are
amended to add the phrase "and Chairman of the Board" after the phrases
"President and Chief Executive Officer of the Company" and "President
and Chief Executive Officer" wherever used therein.
In addition, Sec. 13(b)(ii), Sec. 15(c)(iii) and the second paragraph
of Sec. 17 (as amended in 1987) are amended to add the phrase "and
chairman of the board" after the phrases "president and chief executive
officer" or "chief executive officer" wherever used therein.
2. Sec. 3(a) is amended to reflect the fact that Xx. Xxxxxxx'x annual base
salary rate (his "Base Compensation"), as previously increased from
time to time prior to 1996, was increased by the Board, effective as
of July 1, 1996, to $650,000, subject to such further increases (if
any) as may hereafter be approved by the Board.
3. Schedule 5A, as amended to date (pursuant to the provision in Sec.
5(a)(i) of the Agreement incorporating by reference any increases in
the benefit formula under the Company's Supplemental Executive
Retirement Plan as restated in 1987 and since amended (the "SERP")),
is hereby amended and restated as set forth in Attachment A hereto to
more fully reflect the elimination in 1987 and 1991, respectively, of
both the prior $150,000 cap on benefits and the prior RISP-related
offset provision, and to revise the definition of "Final Average Base
Compensation" in such Schedule 5A (i) to include prior and future
annual bonus awards (based on the year in which such awards are paid
(rather than when they are earned), as well as prior and future base
salary in the year paid, and (ii) to permit compensation paid after Xx.
Xxxxxxx'x 65th birthday to be included, in each case, in determining
Xx. Xxxxxxx'x high-3-year pensionable compensation for purposes of
calculating Xx. Xxxxxxx'x Pension Benefits under the Agreement.
4. Consistent with the SERP as amended in 1987, the first paragraph of
Sec. 5(a)(iii) is amended to read:
"The vested Pension Benefit payable to Xx. Xxxxxxx shall be
paid, commencing on the first day of the month next following
the later of his 65th birthday or the effective date of the
termination of his status as Chief Executive Officer of the
Company (for any reason)."
5. The following new paragraph is inserted in between the second and third
paragraphs of Sec. 5(a)(iii):
"In the event that the payment of Xx. Xxxxxxx'x Pension Benefit
commences after Xx. Xxxxxxx'x 65th birthday, the vested Pension
Benefit payable hereunder shall be actuarially adjusted to
reflect such delayed benefit commencement only if and to the
extent so determined by the Board in writing at such time."
6. Based on, and consistent with, the Survivor Death Benefit provisions
in Sec. 2(q) of the SERP as amended and restated in 1987, the first
paragraph of Sec. 5(a)(iv) is amended to read as follows:
"(iv) Death Benefits. In the event of Xx. Xxxxxxx'x death prior to
the commencement of payment of his Pension Benefit but after
becoming partially or fully vested in accordance with this
Section 5 or Sections 10(c)(iv), 13(a)(iv) or 15(e)(iii), Xx.
Xxxxxxx'x surviving spouse (if any) at the time of his death
shall be entitled to receive a monthly benefit equal to 100% of
the vested portion of Xx. Xxxxxxx'x Pension Benefit at the time
of his death for the first 15 years following his death or, if
less, for the rest of her life, with such benefit continuing
after the 15th year, if she is then still living, at 75% of the
full benefit for the rest of her life."
In addition, based on, and consistent with, the provisions of the SERP
as amended and restated in 1987, the second paragraph of Sec. 5(a)(iv)
is amended to replace the phrase "Xx. Xxxxxxx'x spouse as of November
1, 1984" with the phrase "Xx. Xxxxxxx'x Surviving Spouse at the time
of his death (defined as the person to whom he is married at the time
of his death)", and to add at the end of such paragraph the language:
"... provided that, if such Surviving Spouse is not the same
person as Xx. Xxxxxxx'x spouse at the time of Pension Benefit
commencement, any benefit payable after the initial 15-year
period certain period referred to in this paragraph beginning
with Xx. Xxxxxxx'x benefit commencement date shall be determined
in a manner consistent with the last sentence of Sec. 2(i) of
the SERP as in effect on July 1, 1996."
7. Sec. 5(b) is amended to add at the end of the first paragraph of such
provision the language: "except where application of any individual
provision of the SERP would produce a result more favorable to Xx.
Xxxxxxx."
Sec. 5(b) is also amended to clarify the application of Sec. 9 of the
SERP to the Pension Benefit provided under Sec. 5 of the Agreement, by
adding a new paragraph at the end of Sec. 5(b) that reads as follows:
"In the event of a Change in Control of the Company as defined
in Sec. 2(d) of the SERP as amended through July 1, 1996, the
Pension Benefit provided by this Section 5 shall be subject to
and fully covered by the annuitization provisions of Sec. 9 of
the SERP (as amended through July 1, 1996) relating to the
consequences of a Change in Control, provided that Xx. Xxxxxxx
shall also have the right, in the event of a Change in Control,
to elect (i) to have a cash surrender feature included as part
of any annuity policy purchased and distributed to him pursuant
to Sec.9 of the SERP, or (ii) to receive an immediate lump sum
cash payment in lieu of all or any portion of any annuity policy
that would otherwise be purchased and distributed under Sec. 9
of the SERP, with such lump sum cash amount being equal to the
actuarial equivalent of the portion of the Pension Benefit
covered by such lump sum amount (but not less than the purchase
price of an annuity policy providing a benefit equal to such
cashed-out benefit and satisfying the insurance company rating
provisions in Sec. 9 of the SERP). Pursuant to Sec. 19 of this
Agreement, any resulting annuity policy and related benefit
payments and any such lump sum cash payment shall be subject to,
and fully covered by, the provisions of Sec. 19 relating to Xx.
Xxxxxxx'x entitlement to a full tax gross-up on any IRC Sec.
4999 excise tax liabilities incurred as a result of payments
made pursuant to this Agreement or otherwise."
8. Pursuant to the amended life insurance arrangements approved by the
Management Development and Compensation Committee in 1991, the current
$1 million life insurance coverage referred to in Sec. 6 shall continue
to be provided on a whole-life, fully-paid-at-age-71 basis, with the
Company paying an agreed-on portion of the annual premiums due, and Xx.
Xxxxxxx paying the balance of premiums due, for each year until Xx.
Xxxxxxx attains age 71, subject to such terms and conditions as are set
forth in the separate documents relating to such insurance arrangement,
provided (i) that the Company shall continue to pay an amount equal,
on an after-tax basis to Xx. Xxxxxxx, to its share of any premiums due
on such policy in the event that Xx. Xxxxxxx'x employment by the
Company is terminated due to Disability, retirement or by the Company
without Cause, and (ii) that, in the event of a Change in Control, the
Company shall immediately pay to Xx. Xxxxxxx an amount equal, on an
after-tax basis to Xx. Xxxxxxx, to the Company's share of the lump-sum
premium required to be paid to provide for an immediately fully paid-up
policy.
9. The end of the last paragraph of Sec. 14(a) is amended to change the
phrase "clauses (i) or (ii) above" to read "clause (i), (ii), (iii) or
(iv) above".
10. Sec. 15(e)(ii), as amended in 1987, is amended to revise the phrase
"including Life Insurance" to read "including (but not limited to)
life, disability and medical/hospitalization insurance" and any
executive perquisites; to add the following language at the end of the
first sentence:
"and provided further that any medical insurance continuation
coverage shall, to the extent practical, be accomplished on a
non-Company-self-insured basis, and provided further that, in
..."
and to delete the word "In" at the start of the second sentence in Sec.
15(e)(ii), to add the rest of such second sentence to the end of such
first sentence, and to add a semi-colon at the end of Sec. 15(e)(ii).
11. Sec.15(e)(iv) is amended to read as follows:
"(iv) to the extent greater than the prorated Incentive Compensation
amount (if any) paid under Sec. 13(a)(ii), a prorated Incentive
Compensation award for the fiscal year in which the termination
occurs equal to:
(A) the number of full or partial months that Xx. Xxxxxxx is
employed by the Company in such year prior to such
termination, and
(B) 1/12 of the higher of (x) the Incentive Compensation award
(if any) paid or payable to Xx. Xxxxxxx for the fiscal
year of the Company immediately preceding the year in
which the Change in Control occurs, or (y) the average of
the three highest Incentive Compensation awards paid or
payable to him for years preceding such Change in Control
regardless of the fiscal year with regard to which such
awards were paid; and"
and Sec. 13(a) is amended to delete the phrase "to the extent not
otherwise payable under Section 15 below" from the start of Sec.
13(a)(ii), as amended in October 1987.
In addition Sec. 15(e) is also amended to add a new Sec.15(e)(v) to
read as follows:
"(v) an amount equal to 1/12 of the highest Incentive Compensation
award amount referred to Sec.15(e)(iv) above, multiplied by the
number of full months remaining, as of the date of such
termination, in the initial 36-month period commencing on the
effective date of the Change in Control."
12. The "$10 million" amount referred to in clauses (i) and (ii) in the
second paragraph of Sec. 18 is amended to read "$50 million" in both
cases.
13. Sec. 25(a) is amended to change the clause "if Xx. Xxxxxxx does not
prevail in any proceeding..." to read "if Xx. Xxxxxxx does not prevail
at least in part in any proceeding...".
14. The governing law language in the fifth paragraph of Sec. 26 shall be
amended to refer to "the laws of Delaware without reference to
conflict-of-law principles", rather than Virginia law.
IN WITNESS WHEREOF, the Board of Directors of UNC Incorporated has
caused this Amendment to be executed on behalf of the Company by a duly
authorized director of the Company, and Xx. Xxxxxxx has executed this
Amendment, all as of September 27, 1996.
UNC INCORPORATED
by
/s/ XXXXXXX XXXXX
______________________________ ______________________________
[Corporate Secretary] [Name] XXXXXXX XXXXX
[Title] Senior Vice President,
General Counsel & Secretary
/s/ XXX X. XXXXXXX
______________________________
XXX X. XXXXXXX
Attachment A
Schedule 5A
Pension Benefit Formula
The monthly Pension Benefit payable to Xx. Xxxxxxx under Section 5
above (subject to the vesting provisions of Section 5(a)(ii) above) shall be
equal to one-twelfth (1/12th) of sixty percent (60%) of Xx. Xxxxxxx'x Final
Average Base Compensation.
For this purpose, Xx. Xxxxxxx'x "Final Average Base Compensation"
("FABC") shall be defined as Xx. Xxxxxxx'x average annual cash compensation
as an employee of the Company:
(i) including all base salary paid in a given year (including for
this purpose any salary amounts payable in such year but
deferred to a later year) and all regular and special annual
bonus awards (based on the year in such bonus awards are paid
out rather than on when they are earned), but
(ii) excluding stock compensation, long-term incentive compensation
and other non-salary, non-bonus compensation
in each case for those three (3) calendar years (whether or not consecutive)
out of the last ten (10) years ending with the year (after 1995) in which Xx.
Xxxxxxx ceases to be the Chief Executive Officer of the Company for any
reason, which produces the highest average annual cash compensation.
Consistent with Sec. 2(j) of the SERP as in effect on July 1, 1996, for
purposes of determining FABC in the event that Xx. Xxxxxxx'x status as Chief
Executive Officer terminates other than as of the last day of the calendar
year, his salary for such final partial year (based on the salary rate in
effect immediately prior to such termination) shall be annualized before
adding any bonus actually paid in such year.
Actuarial Factors and Assumptions
For purposes of determining actuarial equivalence with respect to the
monthly Pension Benefit payable to Xx. Xxxxxxx under Section 5 above, such
actuarial equivalence shall be determined on the basis of such reasonable
actuarial factors and assumptions as are in use under the SERP at the time
that actuarial equivalence needs to be determined.
