EXHIBIT 10(iii)(f)
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CHANGE OF CONTROL AGREEMENT WITH
SELECTED EXECUTIVE OFFICERS OTHER THAN CHAIRMAN
AGREEMENT made as of January 1, 1996, between
XXXXXXXXX-XXXX COMPANY, a New Jersey corporation (the "Company"),
and _______________ (the "Employee"). Unless otherwise
indicated, terms used herein and defined in Schedule A hereto
shall have the meanings assigned to them in said Schedule.
The Company and the Employee agree as follows:
1. OPERATION OF AGREEMENT.
This Agreement shall be effective immediately upon its
execution and shall continue thereafter from year to year prior
to a Change of Control Event unless terminated as of any
anniversary of the date hereof by either party upon written
notice to the other party given at least 60 days, but not more
than 90 days, prior to such anniversary date. Notwithstanding
the foregoing, this Agreement may not be terminated after the
occurrence of a Change in Control Event.
2. AGREEMENT TERM.
The term of this Agreement shall begin on the date
hereof and, unless terminated pursuant to paragraph 1 prior to a
Change of Control Event, shall end on the fifth anniversary of
the occurrence of a Change of Control Event.
3. EMPLOYEE'S POSITION AND RESPONSIBILITIES.
(a) The Employee will continue to serve the Company
upon the occurrence of a Change of Control Event in the same
capacity as he serves the Company immediately prior thereto, or
in such other comparable executive, administrative or management
capacities, requiring substantially equivalent expertise and
responsibility, as the Board or Chief Executive Officer of the
Company shall determine and deem suitable and in the best
interests of the Company in accordance with the Employee's
experience, expertise and capabilities.
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(b) During the term of this Agreement the Employee
shall devote his entire business time and attention exclusively
to the business and affairs of the Company and shall use his best
efforts to promote the interests of the Company. The
participation of the Employee in outside directorships and civic
activities not otherwise inconsistent with Company policy and the
management of the Employee's personal investments in public
companies in which the Employee holdings do not exceed 5% of the
voting power or value of such companies shall not be deemed a
violation of this paragraph 3.
4. COMPENSATION AND OTHER BENEFITS UPON CHANGE OF
CONTROL EVENT.
The Company and the Employee agree that, upon the
occurrence of any Change of Control Event, the Employee shall
receive basic annual salary, bonus and fringe and other benefits
as follows:
(a) Basic Annual Salary and Bonus. The Employee's
basic annual salary shall be at a rate not less than the
rate of annual salary, which has been paid to the Employee
immediately prior to the Change of Control Event, with such
annual increases (but not decreases) equal to the greater of
(i) salary increases as may be contemplated by any salary
adjustment programs of the Company in effect immediately
prior to the Change of Control Event and applicable to the
Employee and such further increases as shall be determined
from time to time by the Board or (ii) a percentage equal to
the percentage increase (if any) in the "Consumer Price
Index for All Urban Consumers" published by the United
States Department of Labor's Bureau of Labor Statistics for
the then most recently ended 12-month period. In addition,
the Employee shall be entitled to receive an annual bonus in
an amount not less than the highest annual bonus received
by, or accrued on behalf of, the Employee during the lesser
of (i) the five full Fiscal Years immediately preceding the
Change of Control Event, or (ii) the number of full Fiscal
Years immediately preceding the Change in Control Event
during which the Employee has been employed by the Company.
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(b) Fringe Benefits; Business Expenses. The Employee
shall be entitled to receive benefits, including but not
limited to pension (and supplemental pension), savings and
stock investment plan (and supplemental savings and stock
investment plan), stock award, stock option, welfare benefit
plans and programs including, but not limited to, life,
medical, prescription drugs, dental, disability, and
accidental death and travel accident coverage plans on terms
no less favorable than those in effect under each such plan
immediately prior to the Change of Control Event, and at no
less than the same benefit levels (and no more than the same
employee contribution levels) then in effect under each such
plan and to receive all other fringe benefits and
perquisites (or their equivalent) from time to time in
effect for the benefit of any executive, management or
administrative group for which the employment position then
held by the Employee entitles the Employee to participate.
The Company shall provide for the payment of, or reimburse
the Employee for, all travel and other out-of-pocket
expenses reasonably incurred by him in the performance of
his duties hereunder.
(c) Management Incentive Unit Award Plan. The Company
and the Employee further agree that immediately upon the
occurrence of any Change of Control Event, all amounts
theretofore credited to the Employee under the Company's
Management Incentive Unit Award Plan, as amended (the "MIU
Plan"), shall become fully vested and all such amounts
thereafter credited shall become fully vested immediately
upon such crediting.
5. PAYMENTS AND BENEFITS UPON TERMINATION.
The Employee shall be entitled to the following
payments and benefits upon Termination:
(a) Salary and Bonus. The Company shall pay to the
Employee, in a cash lump sum on the Termination Date, an
amount equal to the sum of (i) the basic annual salary and
any annual bonus in respect of a completed fiscal year,
which have not yet been paid to, the Employee through the
Termination Date; (ii) an amount equal to the last annual
bonus received by, or awarded to, the Employee for the full
Fiscal Year immediately preceding the Termination Date
multiplied by a fraction the numerator of which shall be the
number of full months the Employee was employed by the
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Company during the Fiscal Year containing the Employee's
Termination Date and the denominator of which shall be 12;
and (iii) an amount equal to the number of unused vacation
days to which the Employee is entitled as of the Termination
Date and any other amounts normally paid to an employee by
the Company upon termination of employment. For these
purposes, any partial month during which the Employee is
employed shall be deemed a full month.
(b) Severance. The Company shall pay to the Employee,
in a cash lump sum not more than 30 days following the
Termination Date, an amount equal to three times the sum of
(i) the highest basic annual salary in effect at any time
during the period beginning immediately prior to the Change
in Control Event and ending on the Termination Date; and
(ii) the highest annual bonus received by, or accrued on
behalf of, the Employee during the period beginning five
full Fiscal Years immediately preceding the Change in
Control Event and ending on the Termination Date.
(c) Employee Benefit Plans. For the three-year period
following the Termination Date (or, if sooner,until the
Employee is covered under a comparable plan offered by a
subsequent employer), the Company shall continue to cover
the Employee under those employee welfare benefit plans and
programs (including, but not limited to, life, medical,
prescriptions, dental, accidental death and travel accident
and disability coverage, but not including any severance pay
plan or program other than that provided pursuant to this
Agreement or any pension plan) applicable to the Employee on
the Termination Date at the same benefit levels then in
effect (or shall provide their equivalent); provided,
however, that if the Employee becomes employed by a new
employer that maintains any welfare plan that either (i)
does not cover the Employee with respect to a pre-existing
condition which was covered under the applicable Company
welfare plan, or (ii) does not cover the Employee for a
designated waiting period, the Employee's coverage hereunder
under the applicable Company welfare plan (or the
equivalent) shall continue (but shall be limited in the
event of noncoverage due to a preexisting condition, to the
preexisting condition itself) until the earlier of the end
of the applicable period of noncoverage under the new
employer's plan or the third anniversary of the Termination
Date.
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(d) Savings and Retirement Account Plans. As soon as
practicable following the determination thereof (but in any
event no later than 30 days following the Termination Date),
the Company shall pay the Employee an amount (in one lump
sum cash payment) equal to the value (measured as of the
last day of the month containing the Employee's Termination
Date) of the sum of: (i) the number of Common Stock
equivalents credited to the Employee's account under the
Supplemental Savings and Stock Investment Plan at the
Termination Date multiplied by the Company Stock Value (as
defined in Section 5(g) below); (ii) the amount credited to
the Employee's account under the Supplemental Retirement
Account Plan at the Termination Date; (iii) all
contributions to, or amounts credited to, the Company's
Savings and Stock Investment Plan, Supplemental Savings and
Stock Investment Plan, Retirement Account Plan and
Supplemental Retirement Account Plan (and earnings and
appreciation attributable thereto) that theretofore were
made by the Company on behalf of the Employee and are
forfeited as a result of the Employee's Termination; and
(iv) three percent of the aggregate amount payable pursuant
to subparagraphs 5(a) and 5(b) for each of the Savings and
Stock Investment Plan and the Supplemental Savings and Stock
Investment Plan and two percent for each of the Retirement
Account and the Supplemental Retirement Account Plan.
(e) Pension Benefits.
(i) No later than 30 days following the
Termination Date, the Company shall pay the Employee an
amount (in one lump sum cash payment) equal to the Present
Value of the sum of the pension benefits the Employee is
entitled to receive under (A) the Restated Xxxxxxxxx-Xxxx
Company Supplemental Pension Plan (the "Section 415 Excess
Plan"), (B) the Xxxxxxxxx-Xxxx Company Elected Officers
Supplemental Program (the "Sixty-five Percent Program" or
the "Program"), and (C) the Executive Supplementary
Retirement Agreement (the "Ten Year Annuity), all as in
effect immediately prior to the Change in Control Event
(collectively the "Pension Benefit").
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(ii) In calculating the portion of the Pension
Benefit under section 1.1 of the Section 415 Excess Plan the
Company shall credit the Employee with five additional years
of Credited Service (within the meaning of the Plan and
including wage, vesting and age credit) and five additional
years of age for purposes of the Section 415 Excess Plan but
not the Qualified Pension Plan. (If, after crediting five
years of age, the Employee is less than fifty-five years
old, it will be assumed that the benefit commencement date
is the first date on which the Employee becomes eligible to
begin receiving payment of benefits under the Qualified
Pension Plan).
(iii) In calculating the portion of the Pension
Benefit under the Sixty-five Percent Program, the Company
shall: (A) credit the Employee with an additional five Years
of Service and an additional five years of age for purposes
of computing the amount of the Pension Benefit; (B) reduce
age 65 to age 62 in Section 5.1 (b) (i) of the Program; (C)
define "Final Average Salary" in Section 1.8 of the Program
as 1/3 of the severance amount determined pursuant to
Section 5(b) of this Agreement; and (D) for purposes of
benefit offset determinations compute retirement account
amounts invested in Company stock and the account balance
from employer matching contributions made in Company stock
in Appendix A, paragraph (a)(2) and (3) of the Program using
the lowest closing sale price of the Company stock on the
New York Stock Exchange during the twelve months preceding
the Change in Control Event.
(iv) In calculating the portion of the Pension
Benefit under the Ten-Year Annuity the Company shall credit
the Employee with five additional years of age but to an age
no greater than 65.
(v) The Present Value of the Pension Benefit
and the annuity value of the offsets referred to in
(e)(iii)(D) above shall be calculated using (A) an interest
rate equal to the product of (I) the 10-year Treasury Note
rate as used in the Sixty-five Percent Program's definition
of Actuarial Equivalent and (II) 1 minus the federal income
tax rate at the highest bracket of income for individuals in
effect for the year containing the date of payment, (B) the
mortality rate used to determine lump sum values in the
Sixty-five Percent Program, and (C) actual age without the
five year addition to age except that the Ten-Year Annuity
Present Value shall be calculated using no mortality
assumption and actual age plus the additional five years.
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(vi) Calculation of all pension benefits amounts
hereunder shall be made, at the expense of the Company, by
the Wellesley Hills, Massachusetts office of Xxxxxx Xxxxx
(or the Company's then actuary immediately prior to the
change of Control Event).
(f) Retiree Welfare Benefits. For purposes of
determining the Employee's eligibility for post-retirement
benefits under any welfare benefit plan (as defined in
section 3(1) of the Employee Retirement Income Security Act
of 1974, as amended) maintained by the Company prior to the
occurrence of a Change of Control Event, the Employee shall
be credited with an additional five years of service and
five years of age (or any combination of years of service
and age not exceeding 10 years, to the extent necessary to
qualify for benefits). If, after taking into account such
additional age and service, the Employee is eligible for the
Company's post-retirement welfare benefits (or would have
been eligible under the terms of such plans as in effect
prior to the occurrence of the Change of Control Event), the
Employee shall receive, commencing on the third anniversary
of the Termination Date, post-retirement welfare benefits no
less favorable than the benefits the Employee would have
received under the terms and conditions of the applicable
plans in effect immediately prior to the occurrence of the
Change of Control Event.
(g) Employee Stock Awards, Options, SARs and MIUs. No
later than 30 days following the Termination Date, the
Company shall pay the Employee an amount (in one lump sum
cash payment) equal to the aggregate Company Stock Value
(defined below) of 100% of the Employee's then outstanding
and unpaid stock and stock based awards under the Company's
Incentive Stock Plan of 1990, the Incentive Stock Plan of
1995, the MIU Plan and any similar plans of the Company (or
any other company) hereafter adopted (at which time such
stock and stock based awards shall be cancelled and be of no
further force or effect). In addition, all options to
purchase shares of Common Stock of the Company (or the stock
of any company in respect of which options have been granted
to the Employee) ("Company Stock") and all stock
appreciation rights held by the Employee immediately prior
to Termination shall become exercisable at any time on and
after the Termination Date, whether or not otherwise
exercisable in accordance with the terms of the employee
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benefit plans pursuant to which such options and stock
appreciation rights were granted. For purposes of this
Agreement, Company Stock Value shall be deemed to be the
highest of: (i) the closing sale price of the Company Stock
on the New York Stock Exchange on the Change in Control
Event; (ii) the closing sale price of the Company Stock on
the New York Stock Exchange on the Termination Date; and
(iii) the highest closing sale price of the Company Stock on
the New York Stock Exchange during the 30 trading days
immediately preceding the acquisition of more than 50% of
the outstanding Company Stock by any person or group
(including affiliates of such person or group). If, as of
any valuation date, the Company Stock is not traded on the
New York Stock Exchange, the Company Stock Value shall be
the closing sale price of the Company Stock on the principal
national securities exchange on which the Common Stock is
traded or, if the Common Stock is not traded on any national
securities exchange, the closing bid price of the Common
Stock in the over-the-counter market.
(h) Valuation of Common Stock Equivalents. The
Employee's Common Stock Equivalents under the MIU Plan
shall, for purposes of payments pursuant thereto, be valued
at the Company Stock Value.
(i) Outplacement Expenses. For the three year period
following the Termination Date, the Company shall reimburse
the Employee for all reasonable expenses (up to a maximum of
$15,000 per 12 month period) incurred by the Employee for
professional outplacement services by qualified consultants
selected by the Employee.
6. PARACHUTE EXCISE TAX GROSS-UP.
(a) If, as a result of any payment or benefit provided
under this Agreement, either alone or together with other
payments and benefits which the Employee receives or is then
entitled to receive from the Company, the Employee becomes
subject to the excise tax imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"),
(together with any income, employment or other taxes,
interest and penalties thereon an "Excise Tax"), the Company
shall pay the Employee an amount (the "Gross-Up Payment")
sufficient to place the Employee in the same after-tax
financial position that he would have been in if he had not
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incurred any tax liability under Section 4999 of the Code.
For purposes of determining whether the Employee is subject
to an Excise Tax, (i) any payments or benefits received by
the Employee (whether pursuant to the terms hereof or
pursuant to any plan, arrangement or other agreement with
the Company or any entity affiliated with the Company) which
payments ("Contingent Payments") are deemed to be contingent
on a change described in Section 280G(b)(2)(A)(i) of the
Code shall be taken into account, (ii) the amount of
payments or benefits under this Agreement treated as subject
to the Excise Tax shall be equal to the lesser of (A) the
total amount of all such payments and benefits hereunder as
are Contingent Payments and (B) the amount of excess
parachute payments within the meaning of 280G(b)(1) of the
Code payable to the Employee, and (iii) the Employee shall
be deemed to pay the taxes at the highest marginal
applicable rates of such taxation for the calendar year in
which the Gross-Up Payment is to be made, net of the maximum
deduction in federal income taxes which could be obtained
from deduction of such state and local taxes.
(b) The determination of whether the Employee is
subject to Excise Tax and the amounts of such Excise Tax and
Gross-Up Payment, as well as other calculations hereunder,
shall be made at the expense of the Company by the
independent auditors of the Company immediately prior to the
Change of Control Event, which shall provide the Employee
with prompt written notice (the "Company Notice") setting
forth their determinations and calculations. Within 30 days
following the receipt by the Employee of the Company Notice,
the Employee may notify the Company in writing (the
"Employee Notice") if the Employee disagrees with such
determinations or calculations, setting forth the reasons
for any such disagreement. If the Company and the Employee
do not resolve such disagreement within 10 business days
following receipt by the Company of the Employee Notice, the
Company and the Employee shall agree upon a nationally
recognized accounting or compensation firm (the "Resolving
Firm") to make a determination with respect to such
disagreement. If the Employee and the Company are unable to
agree upon the Resolving Firm within 20 business days
following the Employee Notice, the New York office of
Towers, Xxxxxx shall be the Resolving Firm. Within 30
business days following the Employee Notice, if the
disagreement is not resolved by such time, each of the
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Employee and the Company shall submit its position to the
Resolving Firm, which shall make a determination as to all
such disagreements within 30 days following the last of such
submissions, which determination shall be binding upon the
Employee and the Company. The Company shall pay all
reasonable expenses incurred by either party in connection
with the determinations, calculations, disagreements or
resolutions pursuant to this paragraph, including, but not
limited to, reasonable legal, consulting or other similar
fees.
(c) The Employee shall notify the Company in writing
of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of a
Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than 10 business days after the
Employee is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date
on which such claim is requested to be paid. The Employee
shall not pay such claim prior to the expiration of the 30
day period following the date on which the Employee gives
such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in
writing prior to the expiration of such period that it
desires to contest such claim, the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim;
(ii) take such action in connection with
contesting such claim as the Company 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 the Company and reasonably satisfactory to
the Employee;
(iii) cooperate with the Company in good faith in
order to effectively contest such claim; and
(iv) permit the Company to participate in any
proceedings relating to such claim;
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provided, however, that the Company shall bear and pay
directly all costs and expenses (including, but not limited
to, additional interest and penalties and related legal,
consulting or other similar fees) incurred in connection
with such contest and shall indemnify and hold the Employee
harmless, on an after-tax basis, for any Excise Tax or other
tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of
costs and expenses.
(d) The Company shall control all proceedings taken in
connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole
option, either direct the Employee to pay the tax claimed
and xxx for a refund or contest the claim in any permissible
manner, and the Employee 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 the Company shall determine; provided, however,
that if the Company directs the Employee to pay such claim
and xxx for a refund, the Company shall advance the amount
of such payment to the Employee on an interest-free basis,
and shall indemnify and hold the Employee harmless, on an
after-tax basis, from any Excise Tax or other tax (including
interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed
income with respect to such advance; and provided, further,
that if the Employee is required to extend the statute of
limitations to enable the Company to contest such claim, the
Employee may limit this extension solely to such contested
amount. The Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee 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. In addition, no position may be taken nor
any final resolution be agreed to by the Company without the
Employee's consent if such position or resolution could
reasonably be expected to adversely affect the Employee
(including any other tax position of the Employee unrelated
to the matters covered hereby).
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(e) As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial
determination by the Company or the Resolving Firm
hereunder, it is possible that Gross-Up Payments which will
not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required
to be made hereunder. In the event that the Company
exhausts its remedies and the Employee thereafter is
required to pay to the Internal Revenue Service an
additional amount in respect of any Excise Tax, the Company
or the Resolving Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment
shall promptly be paid by the Company to or for the benefit
of the Employee.
(f) If, after the receipt by Employee of an amount
advanced by the Company in connection with the contest of
Excise Tax claim, the Employee becomes entitled to receive
any refund with respect to such claim, the Employee shall
promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company in connection
with an Excise Tax claim, a determination is made that
Employee shall not be entitled to any refund with respect to
such claim and the Company does not notify the Employee in
writing of its intent to contest the denial of such refund
prior to the expiration of 30 days after such determination,
such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall be offset, to
the extent thereof, by the amount of the Gross-Up Payment.
7. EFFECT ON OTHER ARRANGEMENTS.
Except to the extent expressly provided herein, no
provision of this Agreement shall affect or limit any interests
or rights vested in the Employee under any other agreement or
arrangement with the Employee or under any pension, profit-
sharing, medical or other insurance or other benefit plans of the
Company which may be in effect and in which the Employee may be
participating at any time.
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8. CONFIDENTIALITY.
The Employee agrees to hold in confidence any and all
confidential information known to him concerning the Company and
its businesses so long as such information is not otherwise
publicly disclosed.
9. MISCELLANEOUS.
(a) Legal Expenses. The Company shall pay all costs
and expenses, including attorneys' fees, of the Company and, at
least quarterly, the Employee, in connection with any legal
proceedings, whether or not instituted by the Company, relating
to the interpretation or enforcement of this Agreement. In the
event that the provisions of this paragraph shall be determined
to be invalid or unenforceable in any respect, such declaration
shall not affect the remaining provisions of this Agreement,
which shall continue in full force and effect.
(b) Mitigation. All payments or benefits required by
the terms of this Agreement shall be made or provided without
offset, deduction, or mitigation on account of income the
Employee may receive from other employment or otherwise and the
Employee shall not have any obligation or duty to seek any other
employment or otherwise earn any amounts to reduce or mitigate
any payments required hereunder.
(c) Death of the Employee. In the event of the
Employee's death subsequent to Termination, all payments called
for hereunder shall be paid to the Employee's designated
beneficiary or beneficiaries, or to his estate if he has not
designated a beneficiary or beneficiaries.
(d) Notices. Any notice or other communication
provided for in this Agreement or contemplated hereby shall be
sufficiently given if given in writing and delivered by certified
mail, return receipt requested, and addressed, in the case of the
Company, to the Company at:
000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Chairman of the Board
of Directors
and, in the case of the Employee, to the Employee at:
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Either party may designate a different address by giving notice
of change of address in the manner provided above.
(e) Waiver. No waiver or modification in whole or in
part of this Agreement, or any term or condition hereof, shall be
effective against any party unless in writing and duly signed by
the party sought to be bound. Any waiver of any breach of any
provision hereof or any right or power by any party on one
occasion shall not be construed as a waiver of, or a bar to, the
exercise of such right or power on any other occasion or as a
waiver of any subsequent breach.
(f) Binding Effect; Successors. This Agreement shall
be binding upon and shall inure to the benefit of the Company and
the Employee and their respective heirs, legal representatives,
successors and assigns. If the Company shall be merged into or
consolidated with another entity, the provisions of this
Agreement shall be binding upon and inure to the benefit of the
entity surviving such merger or resulting from such
consolidation. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets
of the Company, by agreement in form and substance satisfactory
to the Employee, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place. The provisions of this paragraph shall continue to
apply to each subsequent employer of the Employee hereunder in
the event of any subsequent merger, consolidation or transfer of
assets of such subsequent employer.
(g) Plan Limitations. In the event the Company is
unable to provide any benefit required to be provided under this
Agreement through a plan sponsored by the Company or its
Affiliates, the Company shall, at its own cost and expense, take
appropriate actions to insure that alternative arrangements are
made so that equivalent benefits can be provided to the Employee,
including to the extent appropriate purchasing for the benefit of
the Employee (and if applicable the Employee's dependents)
individual policies of insurance providing benefits, which on an
after-tax basis, are equivalent to the benefits required to be
provided hereunder.
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(h) Controlling Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New
Jersey applicable to contracts made and to be performed therein.
10. EFFECT ON PRIOR AGREEMENTS.
This Agreement contains the entire understanding
between the parties hereto and supersedes in all respects any
prior employment or severance agreement or understanding between
the Company (or any affiliate thereof) and the Employee.
IN WITNESS WHEREOF, the Company and the Employee have
executed this Agreement as of the day and year first above
written.
XXXXXXXXX-XXXX COMPANY
By
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Schedule A
CERTAIN DEFINITIONS
As used in this Agreement, and unless the context
requires a different meaning, the following terms have the
meanings indicated:
"Affiliate", used to indicate a relationship with a
specified person, means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled
by, or is under common control with, such a specified person.
"Associate", used to indicate a relationship with a
specified person, means (i) any corporation, partnership, or
other organization of which such specified person is an officer
or partner; (ii) any trust or other estate in which such
specified person has a substantial beneficial interest or as to
which such specified person serves as trustee or in a similar
fiduciary capacity; (iii) any relative or spouse of such
specified person, or any relative of such spouse who has the same
home as such specified person, or who is a director or officer of
the Company or any of its parents or subsidiaries; and (iv) any
person who is a director, officer, or partner of such specified
person or of any corporation (other than the Company or any
wholly-owned subsidiary of the Company), partnership or other
entity which is an Affiliate of such specified person.
"Beneficial Owner" means the same as such term is
defined by Rule 13d-3 under the Securities Exchange Act of 1934,
as amended (or any successor provision at the time in effect);
provided, however, that any individual, corporation, partnership,
group, association, or other person or entity which has the right
to acquire any of the Company's outstanding securities entitled
to vote generally in the election of directors at any time in the
future, whether such right is contingent or absolute, pursuant to
any agreement, arrangement, or understanding or upon exercise of
conversion rights, warrants or options, or otherwise, shall be
deemed the Beneficial Owner of such securities.
"Board" means the Board of Directors of the Company
(or, if the Company is then a subsidiary of any other company, of
the ultimate parent company).
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EXHIBIT 10(iii)(f)
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"Cause" means (i) any action by the Employee involving
willful malfeasance or willful gross misconduct having a
demonstrable adverse effect on the Company; (ii) substantial and
continuing refusal by the Employee in willful breach of this
Agreement to perform his employment duties hereunder; or
(iii) the Employee being convicted of a felony under the laws of
the United States or any state.
Termination of the Employee for Cause shall be
communicated by a Notice of Termination given within one year
after the Board (i) has knowledge of conduct or an event
allegedly constituting Cause; and (ii) has reason to believe that
such conduct or event could be grounds for Cause. For purposes
of this Agreement a "Notice of Termination" shall mean delivery
to the Employee of a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire
membership of the Company's Board at a meeting of that Board
called and held for the purpose (after reasonable notice to the
Employee ("Preliminary Notice") and reasonable opportunity for
the Employee, together with the Employee's counsel, to be heard
before the Board prior to such vote) of finding, in the good
faith opinion of the Board, that the Employee has engaged in the
conduct constituting Cause and specifying the particulars thereof
in detail. Upon the receipt of the Preliminary Notice, the
Employee shall have 30 days in which to appear with counsel or
take such other action as he desires on his behalf, and such 30-
day period is hereby agreed to by the parties as a reasonable
opportunity for the Employee to be heard. The Board shall no
later than 45 days after the receipt of the Preliminary Notice by
the Employee communicate its findings to Employee. A failure by
the Board to make its finding of Cause or to communicate its
conclusion within such 45-day period shall be deemed to be a
finding that the Employee has not engaged in the conduct
described herein. Any termination of the Employee's employment
(other than by death or Permanent Disability) within 45 days
after the date that the Preliminary Notice has been given to the
Employee shall be deemed to be a termination for Cause; provided,
however, that if during such period the Employee voluntarily
terminates other than for Good Reason or the Company terminates
the Employee other than for Cause, and the Employee is found (or
is deemed to be found) not to have engaged in the conduct
described herein, such termination shall not be deemed to be for
Cause.
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EXHIBIT 10(iii)(f)
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"Change of Control Event" means the date (i) any
individual, corporation, partnership, group, association or other
person or entity, together with its Affiliates and Associates
(other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Company), is or becomes the
Beneficial Owner of securities of the Company representing 20% or
more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election
of directors, unless a majority of the Continuing Directors
determines in their sole discretion that a Change of Control
Event has not occurred; (ii) the Continuing Directors fail to
constitute a majority of the members of the Board; (iii) of any
sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of
the assets of the Company, other than any sale, lease, exchange
or other transfer to any person or entity where the Company owns,
directly or indirectly, at least 80 percent of the outstanding
voting securities of such person or entity after any such
transfer.
"Continuing Director" means a director who either was a
member of the Board on the date hereof or who became a member of
the Board subsequent to such date and whose election, or
nomination for election by the Company's shareholders, was Duly
Approved by the Continuing Directors on the Board at the time of
such nomination or election, either by a specific vote or by
approval of the proxy statement issued by the Company on behalf
of the Board in which such person is named as nominee for
director, without due objection to such nomination.
"Duly Approved by the Continuing Directors" means an
action approved by the vote of at least a majority of the
Continuing Directors then on the Board, except, if the votes of
such Continuing Directors in favor of such action would be
insufficient to constitute an act of the Board if a vote by all
of its members were to have been taken, then such term shall mean
an action approved by the unanimous vote of the Continuing
Directors then on the Board so long as there are at least three
Continuing Directors on the Board at the time of such unanimous
vote.
"Fiscal Year" means the fiscal year of the Company.
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EXHIBIT 10(iii)(f)
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"Good Reason" means (i) a material adverse change in
the Employee's job responsibilities, title or status from those
in effect prior to the Change of Control Event which change
continues for a period of at least 15 days after written notice
from the Employee; (ii) a reduction of the Employee's base salary
or target bonus, the failure to pay Employee's salary or bonus
when due, or the failure to maintain on behalf of the Employee
(and his or her dependents) benefits which are at least as
favorable in the aggregate to those provided for in paragraph
4(b); (iii) the relocation of the principal place of the
Employee's employment to a location that is more than 35 miles
further from the Employee's residence than such principal place
of employment immediately prior to the Change in Control Event,
or the imposition of travel requirements on the Employee not
substantially consistent with such travel requirements existing
immediately prior to the Change in Control Event; (iv) the
failure of the Company to obtain the assumption of, and the
agreement to perform, this Agreement by any successor as
contemplated in paragraph 8(f); or (v) the failure of the Company
to perform any of its other material obligations under this
Agreement and the continuation of such failure for a period of 15
days after written notice from the Employee.
"Permanent Disability", as applied to the Employee,
means that (i) he has been totally incapacitated by bodily injury
or disease so as to be prevented thereby from performing his
duties hereunder; (ii) such total incapacity shall have continued
for a period of six consecutive months; and (iii) such total
incapacity will, in the opinion of a qualified physician, be
permanent and continuous during the remainder of the Employee's
life.
"Termination" means (i) following the occurrence of a
Change in Control Event, (A) the termination of the Employee's
employment without Cause or (B) the resignation by an Employee
for Good Reason upon ten days' prior written notice (or such
shorter period as may be agreed upon between the Employee and the
Company), and (ii) prior to the occurrence of a Change in Control
Event, the termination of the Employee's employment or a material
adverse change in the Employee's job responsibilities, title or
status at the request of any individual or entity acquiring
ownership and control of the Company; provided, that such term
shall not include any termination of employment for Cause, any
resignation without Good Reason, or any termination of employment
on account of an Employee's death or Permanent Disability.
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EXHIBIT 10(iii)(f)
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"Termination Date" shall mean the effective date of an
Employee's Termination; provided, that with respect to a
Termination that occurs prior to a Change of Control Event, the
effective date of such Termination shall be deemed to be the date
immediately following the Change of Control Event.
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