1
EXHIBIT 10G
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT (this "Amendment") dated as of February 27, 1997 is made to
the Employment Agreement (the "Agreement") effective as of the first day of May,
1992, by and between ROCHESTER & PITTSBURGH COAL COMPANY, a Pennsylvania
corporation (hereinafter called the "Company"), and Xxxxxx X. Xxxxxx, Xx.
(hereinafter called "Xxxxxx"). All capitalized terms used herein but not defined
herein shall have the respective meanings assigned to them in the Agreement.
RECITAL
Xxxxxx is presently employed by the Company as its President and Chief
Executive Officer pursuant to the Agreement. The Board of Directors of the
Company believes it is in the best interests of the Company and the stockholders
of the Company to seek the sale of the Company, and, in connection therewith,
wishes to provide incentive to Xxxxxx to cooperate in the efforts to sell the
Company and maximize the consideration payable to the Company's stockholders.
It is the purpose of this Amendment to set forth the severance benefits
that will be provided to Xxxxxx in the event of a change in control of the
Company under the circumstances as described herein. Except as expressly amended
by this Amendment, the terms and conditions of the Agreement shall remain in
full force and effect and are hereby ratified and confirmed.
1. Section 2 of the Agreement is hereby amended so that as amended Section
2 shall read in its entirety as follows:
"2. Term. Until notice of termination has been given by either
party, the term of Xxxxxx' employment under the Agreement shall be extended
automatically each day for one additional day so that at all times after
the date hereof and until notice of termination has been given, the term of
the employment shall be for a period of three years. In the event that one
party gives notice of termination to the other, then the terms of Xxxxxx'
employment will expire on that day which is three years after the day on
which the notice is given, provided, however, that if such notice is given
after a change in control of the Company (as defined herein), the term of
Xxxxxx' employment hereunder shall expire on that day which is 90 days
after the day on which the notice of termination is received by the party
to whom or to which the notice is given. For the purposes of this
Amendment, a "change in control of the Company" shall be deemed to have
occurred if during the term of the Agreement (a) any "person" or "group"
(as such terms are used in Rule 13d-3 under the Securities Exchange Act of
1934) other than Xxxxxx or a group of which Xxxxxx is a member acquires
shares of the Company in a transaction or series of transactions that
result in such person or group directly or indirectly first owning
beneficially more than 50% of the outstanding shares of the Company's
Common Stock after the date of this Amendment or (b) as the result of or in
connection with any cash tender offer or exchange offer, merger or other
business combination, sale of assets or contested election of directors or
any combination of the foregoing transactions (a "Transaction"), the
persons who were the directors of the Company before the Transaction shall
cease to constitute a majority of the Board of Directors of the Company or
any successor to the Company."
2. Section 5 of the Agreement is hereby amended so that as amended Section
5 shall read in its entirety as follows:
"5. Compensation
"(a) For all services rendered by Xxxxxx under this Agreement,
during the term of his employment the Company shall pay Xxxxxx a base
salary at such annual rate as shall be determined by the Board of
Directors from time to time, provided that the base salary shall not be
less that $300,000 per year. In addition, Xxxxxx shall be paid such
bonuses and other additional compensation, if any, as the Company's
Board of Directors may determine from time to time in its sole
2
discretion; provided that Xxxxxx in his sole discretion may elect, by
notice to the Company given within ten (10) days after he is awarded a
bonus, to have any bonus paid to him wholly in stock in such proportions
as he may determine. Xxxxxx' base salary shall be paid to him in equal
monthly installments or in such other manner as may be mutually agreed.
(b) Upon the date of consummation of a change in control of the
Company as defined herein and without regard to whether Xxxxxx continues
in the employ of the Company or any successor to the Company following a
change in control of the Company, the Company shall make a payment on
such date to Xxxxxx equal to three times his then annual rate of salary.
(c) For the 90-day period during which the employment of Xxxxxx
will continue following a notice of termination given after a change in
control of the Company as provided in Section 1 of this Amendment,
Xxxxxx shall be paid at his annual rate of salary as in effect on the
day before the date of the change in control of the Company and during
such 90-day period Xxxxxx shall continue to receive the same medical
benefits he was receiving on the day before the date of the change in
control of the Company.
(d) For 36 consecutive months following the date of the change in
control of the Company or the death of Xxxxxx, which ever is earlier,
Xxxxxx shall continue to be treated as an employee of the Company under,
and shall be entitled to all medical benefits, programs and arrangements
of the Company, as if Xxxxxx were still employed by the Company during
such period and such benefits, programs and arrangements were maintained
during such period on terms and conditions no less favorable to Xxxxxx
than those which existed immediately prior to the change in control of
the Company or the death of Xxxxxx. If, despite the provisions of this
Section 5(d), medical benefits under any such plan, program or
arrangement shall not be payable or provided under any such plan,
program or arrangement to Xxxxxx or his dependents, because of any
change in the terms or conditions of such plan, program or arrangement
or because Xxxxxx is no longer an employee of the Company, the Company
itself shall to the extent necessary pay or provide for payment of such
benefits to Xxxxxx and his dependents.
(e) For purposes hereof, any salary or other payments made to
Xxxxxx by any wholly or majority owned subsidiary of the Company shall
be treated as having been made by the Company."
3. Section 8 of the Agreement is hereby amended so that as amended Section
8 of the Agreement shall read in its entirety as follows:
"8. Pension Matters.
(a) Xxxxxx is a participant in the Company's pension plan, as the
same may be amended hereafter from time to time (the "Plan") and shall
be entitled to receive such benefits thereunder as are provided pursuant
to the terms and conditions thereof.
(b) Xxxxxx shall also be entitled to receive a pension supplement,
except in the circumstances described in paragraph (d) of this Section 8
or Section 9 of the Agreement, whereby the Company will pay to Xxxxxx or
his spouse upon the commencement of the payment of the pension benefit
under the Plan, as a monthly supplement to the monthly benefit payable
under the Plan, an amount equal to the sum of the following:
(i) an amount equal to the monthly pension benefit which would have
been payable to Xxxxxx or his spouse pursuant to the Plan at Xxxxxx'
normal retirement age of 62, without regard to the limitations imposed
by Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as
now or hereafter amended or supplemented (hereinafter referred to as the
"Statutory Limitations"); plus
(ii) an amount equal to the difference between (A) the monthly
pension benefit actually payable to Xxxxxx at age 62 pursuant to the
Plan and (B) the monthly pension benefit which would have been payable
to Xxxxxx or his spouse at Xxxxxx' normal retirement age of 62 pursuant
to the Plan without application of the Statutory Limitations.
3
The supplemental payments hereunder shall be calculated in
conformity with the benefit option selected by Xxxxxx under the Plan.
Such supplemental payments will terminate at the earlier of (A) the
expiration of ten years from the date of the first monthly supplemental
payment or (B) the termination of pension payments pursuant to the Plan
to Xxxxxx, his spouse or the survivor of them, if applicable.
(c) If the date of consummation of a change in control of the
Company occurs before the commencement of the pension supplement
provided in paragraph (b) of this Section 8, in lieu of that pension
supplement the Company shall: (i) calculate the amount of Xxxxxx'
accrued monthly pension supplement as of such consummation date assuming
that Xxxxxx elects to begin receiving his pension benefit under the Plan
at age 62 in the form of a qualified joint and survivor annuity and that
Xxxxxx' service with the Company is equal to the sum of (x) Xxxxxx'
actual service with the Company to the day before such consummation date
and (y) three additional years and (ii) make a payment to Xxxxxx on such
consummation date equal to the present value of the accrued monthly
pension supplement calculated under clause (i) of this paragraph (c)
using a discount rate of 120% of the applicable federal rate in effect
on such date determined under Section 1274(d) of the Internal Revenue
Code of 1986, as amended (the "Code") compounded semiannually.
(d) In the event that Xxxxxx' spouse becomes entitled to receive
pension benefits under the Plan as a result of Xxxxxx' death while
employed by the Company prior to July 22, 2001, no monthly supplemental
benefit shall be paid to his widow."
4. A new Section 17 shall be added to the Agreement which Section 17 shall
read in its entirety as follows:
"17. Miscellaneous General Provisions.
(a) Non-Alienation. Xxxxxx shall not have any right to pledge,
hypothecate, anticipate or in any way create a lien upon any amounts
provided under the Agreement as amended hereby, and no benefits payable
hereunder shall be assignable in anticipation of payment either by
voluntary or involuntary acts or by operation of law.
(b) Deductibility of Payments. In the event that any payment or
benefit received or to be received by Xxxxxx hereunder, whether payable
pursuant to the terms of the Agreement as amended hereby or any other
plan, arrangement or agreement with the Company or any corporation
affiliated with the Company (an "Affiliate") within the meaning of
Section 1504 of the Code would not be deductible, in whole or in part,
by the Company or an Affiliate as a result of Section 280G of the Code
the payments to be made pursuant to the Agreement as amended hereby
shall be reduced until no portion of the payments is not deductible as a
result of Section 280G of the Code or the payments are reduced to zero.
For purposes of this limitation, (i) no portion of the payments, the
receipt or enjoyment of which Xxxxxx shall have effectively waived in
writing prior to the date of payment, shall be taken into account and
(ii) no portion of the payments shall be taken into account which in the
opinion of tax counsel selected by the Company's independent auditors
and acceptable to Xxxxxx does not constitute a "parachute payment"
within the meaning of Section 280G(b)(2) of the Code.
(c) Non-Mitigation. Xxxxxx shall not be required to mitigate the
amount of any payment or benefit provided for under the Agreement as
amended hereby by seeking other employment or otherwise, nor shall the
amount of any payment provided for under the Agreement as amended hereby
be reduced by any compensation received subsequent to the date of the
change in control of the Company by Xxxxxx as a result of any employment
or retirement benefits from any other source, provided, however, that
the Company shall not be required to provide Xxxxxx and his eligible
dependents with medical insurance coverage as long as Xxxxxx and his
eligible dependents are receiving comparable medical insurance coverage
from another employer.
4
(d) Interest on Amounts Due Under the Agreement. Any amount due to
Xxxxxx under the Agreement as amended hereby which is not paid when due
shall bear interest at the rate of one percent per month from the date
such amount was due until the date when paid."
5. In all other respects, the Agreement shall remain in full force and
effect and is hereby ratified and confirmed.
IN WITNESS WHEREOF, the undersigned parties have hereunto set their hands
and seals to this Agreement the day and year first above written.
[SEAL]
Attest: ROCHESTER & PITTSBURGH COAL COMPANY
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxx
V.P.
--------------------------------------------- ---------------------------------------------
Assistant Secretary Xxxxx Xxxxxx
Vice President -- Finance & Secretary
Witness:
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx,
Xx.
--------------------------------------------- ---------------------------------------------
Xxxxxx X. Xxxxxx, Xx. [SEAL]
