Item 14(c) Exhibit (i) (10) (d)
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement
(this "Agreement"), dated as of August 5, 1998, by and
between M.A. XXXXX COMPANY, a Delaware corporation (the
"Company") and (the "Executive");
WITNESSETH:
WHEREAS, the Executive is an executive officer of
the Company and has made and is expected to continue to make
major contributions to the short- and long-term
profitability, growth and financial strength of the Company;
WHEREAS, the Company recognizes that, as is the
case for most publicly held companies, the possibility of a
Change in Control (as that term is hereafter defined)
exists;
WHEREAS, the Company desires to assure itself of
both present and future continuity of management in the
event of a Change in Control and, having established certain
employment rights of its key executive officers applicable
in the event of a Change in Control, now desires to include
the Executive among the key senior executives with such
employment rights;
WHEREAS, the Company wishes to ensure that its
executive officers are not practically disabled from
discharging their duties in respect of a proposed or actual
transaction involving a Change in Control;
WHEREAS, this Agreement is not intended to alter
materially the compensation and benefits which the Executive
could reasonably expect to receive from the Company absent a
Change in Control and, accordingly, although effective and
binding as of the date hereof, this Agreement shall become
operative only upon the occurrence of a Change in Control;
WHEREAS, the Executive is willing to render
services to the Company on the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, the Company desires to take action to
provide additional inducement for the Executive to continue
to remain in the ongoing employ of the Company;
NOW, THEREFORE, the Company and the Executive
agree as
follows:
1. Operation of Agreement: (a) This Agreement
shall be effective and binding immediately upon its
execution, but, anything in this Agreement to the contrary
notwithstanding, this Agreement shall not become operative
unless and until a Change in Control occurs. For purposes
of this Agreement, a "Change in Control" shall have occurred
if at any time during the Term (as that term is hereafter
defined) any of the following events shall occur:
(i) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 15% or more of
either: (A) the then-outstanding shares of common stock
of the Company (the "Company Common Stock") or (B) the
combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in
the election of directors ("Voting Stock"); provided,
however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change of
Control: (A) any acquisition directly from the Company,
(B) any acquisition by the Company, (C) any acquisition
by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any
Subsidiary of the Company, or (D) any acquisition by
any Person pursuant to a transaction which complies
with clauses (A), (B) and (C) of subsection (iii) of
this Section 1(a); or
(ii) Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for
any reason (other than death or disability) to
constitute at least a majority of the Board; provided,
however, that any individual becoming a director
subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (either
by a specific vote or by approval of the proxy
statement of the Company in which such person is named
as a nominee for director, without objection to such
nomination) shall be considered as though such
individual were a member of the Incumbent Board, but
excluding for this purpose, any such individual whose
initial assumption of office occurs as a result of an
actual or threatened election contest (within the
meaning of Rule 14a-11 of the Exchange Act) with
respect to the election or removal of directors or
other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the
Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a
"Business Combination"), in each case, unless,
following such Business Combination, (A) all or
substantially all of the individuals and entities who
were the beneficial owners, respectively, of the
Company Common Stock and Voting Stock immediately prior
to such Business Combination beneficially own, directly
or indirectly, more than 66.6% of, respectively, the
then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting
securities entitled to vote generally in the election
of directors, as the case may be, of the entity
resulting from such Business Combination (including,
without limitation, an entity which as a result of such
transaction owns the Company or all or substantially
all of the Company's assets either directly or through
one or more subsidiaries) in substantially the same
proportions relative to each other as their ownership,
immediately prior to such Business Combination, of the
Company Common Stock and Voting Stock of the Company,
as the case may be, (B) no Person (excluding any entity
resulting from such Business Combination or any
employee benefit plan (or related trust) sponsored or
maintained by the Company or such entity resulting from
such Business Combination) beneficially owns, directly
or indirectly, 15% or more of, respectively, the then-
outstanding shares of common stock of the entity
resulting from such Business Combination, or the
combined voting power of the then-outstanding voting
securities of such corporation except to the extent
that such ownership existed prior to the Business
Combination and (C) at least a majority of the members
of the board of directors of the corporation resulting
from such Business Combination were members of the
Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board,
providing for such Business Combination; or
(iv) Approval by the shareholders of the Company
of a complete liquidation or dissolution of the
Company.
(b) Upon the occurrence of a Change in Control at
any time during the Term, without further action, this
Agreement shall become immediately operative.
(c) The period during which this Agreement shall
be in effect (the "Term") shall commence as of the date
hereof and shall expire as of the later of (i) the close of
business on December 31, 2001 and (ii) the expiration of the
Period of Employment (as that term is hereafter defined),
provided, however, that (A) commencing on the first day of
the first calendar year after the year in which this
Agreement is executed and each January 1 thereafter, the
term of this Agreement shall automatically be extended for
an additional year unless, not later than September 30 of
the immediately preceding year, the Company or the Executive
shall have given written notice that it or he, as the case
may be, does not wish to have the Term extended, and (B)
subject to Section 10 hereof, if, prior to a Change in
Control, the Executive ceases for any reason to be an
officer of the Company or any Subsidiary, thereupon the
Term, without further action, shall be deemed to have
expired and this Agreement shall immediately terminate and
be of no further effect.
2. Employment; Period of Employment: (a)
Subject to the terms and conditions of this Agreement, upon
the occurrence of a Change in Control, the Company shall
continue the Executive in its employ and the Executive shall
remain in the employ of the Company for the period set forth
in Section 2(b) hereof (the "Period of Employment"), in the
position and with substantially the same duties and
responsibilities that he had immediately prior to the Change
in Control, or to which the Company and the Executive may
hereafter mutually agree in writing. Throughout the Period
of Employment, the Executive shall devote substantially all
of his time during normal business hours (subject to
vacations, sick leave and other absences in accordance with
the policies of the Company as in effect for senior
executives immediately prior to the Change in Control) to
the business and affairs of the Company, but nothing in this
Agreement shall preclude the Executive from devoting
reasonable periods of time during normal business hours to
(i) serving as a director, trustee or member of or
participant in any organization or business as long as such
activity would not constitute Competitive Activity if
conducted by the Executive after the Executive's Termination
Date, (ii) engaging in charitable and community activities,
or (iii) managing his personal investments. For purposes of
this Agreement, the term "Competitive Activity" shall mean
the Executive's participation in the management of any
business enterprise if such enterprise engages in
substantial and direct competition with the Company.
"Competitive Activity" shall not include the mere ownership
of securities in any such enterprise and the exercise of
rights appurtenant thereto.
(b) The Period of Employment shall commence on
the date of an occurrence of a Change in Control and,
subject only to the provisions of Sections 1(b) and 5
hereof, shall continue until the earlier of (i) the
expiration of the third anniversary of the occurrence of the
Change in Control, (ii) the Executive's death, or (iii) the
Executive's attainment of age 65; provided, however, that
commencing on each anniversary of the Change in Control, the
Period of Employment shall automatically be extended for an
additional year unless, not later than 90 calendar days
prior to such anniversary date, either the Company or the
Executive shall have given written notice to the other that
the Period of Employment shall not be so extended.
3. Compensation During Period of Employment: (a)
For his services pursuant to Section 2(a) hereof, upon the
occurrence of a Change in Control, the Executive shall
receive during the Period of Employment (i) annual base
salary at the highest rate in effect in the twelve months
prior to the occurrence of the Change in Control (payable
monthly or otherwise as in effect for senior executives of
the Company immediately prior to the occurrence of the
Change in Control) or such higher rate as may be determined
from time to time by the Board of Directors of the Company
(the "Board") or the Compensation and Organization Committee
thereof (the "Committee") (which base salary at such rate is
herein referred to as "Base Pay") and (ii) an annual amount
equal to not less than the average aggregate annual bonus,
incentive or other payments of cash compensation in addition
to the amounts referred to in clause (i) above made or to be
made in regard to services rendered during the three
calendar years immediately preceding the year in which the
Change in Control occurred pursuant to any bonus, short-term
incentive, profit-sharing, performance, discretionary pay or
similar policy, plan, program or arrangement of the Company
or any successor thereto ("Incentive Pay"), provided,
however, that, (x) with the prior written consent of the
Executive, nothing herein shall preclude a change in the mix
between Base Pay and Incentive Pay so long as the aggregate
cash compensation received by the Executive in any one
calendar year is not reduced in connection therewith or as a
result thereof, (y) the aggregate of the Executive's Base
Pay and Incentive Pay may be reduced as provided in Section
6(a)(iii) hereof, and (z) in no event shall any increase in
the Executive's aggregate cash compensation or any portion
thereof in any way diminish any other obligations of the
Company under this Agreement.
(b) For his services pursuant to Section 2(a)
hereof, during the Period of Employment the Executive shall
be a full participant in, and shall be entitled to the
perquisites, benefits and service credit for benefits as
provided under any and all employee retirement income and
welfare benefit policies, plans, programs or arrangements in
which senior executives of the Company were entitled to
participate immediately prior to the Change in Control,
including without limitation any stock option, stock
purchase, stock appreciation, savings, pension, supplemental
executive retirement or other retirement income or welfare
benefit, deferred compensation, long-term incentive
compensation, group and/or other executive life, health,
medical/hospital or other insurance (whether funded by
actual insurance or self-insured by the Company),
disability, salary continuation, expense reimbursement and
other policies, plans, programs or arrangements providing
perquisites, benefits and service credit for benefits at
least as great as are payable thereunder prior to a Change
in Control (collectively, "Employee Benefits"), provided,
however, that except as expressly provided in, and subject
to the terms of, Sections 6(b)(ii) and (iii) hereof, the
Executive's rights thereunder shall be governed by the terms
thereof and shall not be enlarged hereunder or otherwise
affected hereby. Subject to the proviso in the immediately
preceding sentence, if and to the extent such perquisites,
benefits or service credit for benefits are not payable or
provided under any such policy, plan, program or arrangement
as a result of the amendment or termination thereof, then
the Company shall itself pay or provide therefor. Nothing
in this Agreement shall preclude improvement or enhancement
of any such Employee Benefits, provided that no such
improvement shall in any way diminish any other obligation
of the Company under this Agreement.
4. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event that this Agreement shall
become operative and it shall be determined (as hereafter
provided) that any payment or distribution by the Company or
any of its affiliates to or for the benefit of the
Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or
similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of
the foregoing (a "Payment"), would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") (or any successor provision
thereto) by reason of being considered "contingent on a
change in ownership or control" of the Company, within the
meaning of Section 280G of the Code (or any successor
provision thereto) or to any similar tax imposed by state or
local law, or any interest or penalties with respect to such
tax (such tax or taxes, together with any such interest and
penalties, being hereafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to
receive an additional payment or payments (collectively, a
"Gross-Up Payment"); provided, however, that no Gross-up
Payment shall be made with respect to the Excise Tax, if
any, attributable to (i) any incentive stock option, as
defined by Section 422 of the Code ("ISO") granted prior to
the execution of this Agreement, or (ii) any stock
appreciation or similar right, whether or not limited,
granted in tandem with any ISO described in clause (i). The
Gross-Up Payment shall be in an amount such that, after
payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payment.
(b) Subject to the provisions of Section 4(f)
hereof, all determinations required to be made under this
Section 4, including whether an Excise Tax is payable by the
Executive and the amount of such Excise Tax and whether a
Gross-Up Payment is required to be paid by the Company to
the Executive and the amount of such Gross-Up Payment, if
any, shall be made by a nationally recognized accounting
firm (the "Accounting Firm") selected by the Executive in
his sole discretion. The Executive shall direct the
Accounting Firm to submit its determination and detailed
supporting calculations to both the Company and the
Executive within 30 calendar days after the Termination
Date, if applicable, and any such other time or times as may
be requested by the Company or the Executive. If the
Accounting Firm determines that any Excise Tax is payable by
the Executive, the Company shall pay the required Gross-Up
Payment to the Executive within five business days after
receipt of such determination and calculations with respect
to any Payment to the Executive. If the Accounting Firm
determines that no Excise Tax is payable by the Executive,
it shall, at the same time as it makes such determination,
furnish the Company and the Executive an opinion that the
Executive has substantial authority not to report any Excise
Tax on his federal, state or local income or other tax
return. As a result of the uncertainty in the application
of Section 4999 of the Code (or any successor provision
thereto) and the possibility of similar uncertainty
regarding applicable state or local tax law at the time of
any determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been
made by the Company should have been made (an
"Underpayment"), consistent with the calculations required
to be made hereunder. In the event that the Company
exhausts or fails to pursue its remedies pursuant to Section
4(f) hereof and the Executive thereafter is required to make
a payment of any Excise Tax, the Executive shall direct the
Accounting Firm to determine the amount of the Underpayment
that has occurred and to submit its determination and
detailed supporting calculations to both the Company and the
Executive as promptly as possible. Any such Underpayment
shall be promptly paid by the Company to, or for the benefit
of, the Executive within five business days after receipt of
such determination and calculations.
(c) The Company and the Executive shall each
provide the Accounting Firm access to and copies of any
books, records and documents in the possession of the
Company or the Executive, as the case may be, reasonably
requested by the Accounting Firm, and otherwise cooperate
with the Accounting Firm in connection with the preparation
and issuance of the determinations and calculations
contemplated by Section 4(b) hereof. Any determination by
the Accounting Firm as to the amount of the Gross-Up Payment
shall be binding upon the Company and the Executive.
(d) The federal, state and local income or other
tax returns filed by the Executive shall be prepared and
filed on a consistent basis with the determination of the
Accounting Firm with respect to the Excise Tax payable by
the Executive. The Executive shall make proper payment of
the amount of any Excise Payment, and at the request of the
Company, provide to the Company true and correct copies
(with any amendments) of his federal income tax return as
filed with the Internal Revenue Service and corresponding
state and local tax returns, if relevant, as filed with the
applicable taxing authority, and such other documents
reasonably requested by the Company, evidencing such
payment. If prior to the filing of the Executive's federal
income tax return, or corresponding state or local tax
return, if relevant, the Accounting Firm determines that the
amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company
the amount of such reduction.
(e) The fees and expenses of the Accounting Firm
for its services in connection with the determinations and
calculations contemplated by Section 4(b) hereof shall be
borne by the Company. If such fees and expenses are
initially paid by the Executive, the Company shall reimburse
the Executive the full amount of such fees and expenses
within five business days after receipt from the Executive
of a statement therefor and reasonable evidence of his
payment thereof.
(f) The Executive shall notify the Company in
writing of any claim by the Internal Revenue Service or any
other taxing authority that, if successful, would require
the payment by the Company of a Gross-Up Payment. Such
notification shall be given as promptly as practicable but
no later than 10 business days after the Executive actually
receives notice of such claim and the Executive shall
further apprise the Company of the nature of such claim and
the date on which such claim is requested to be paid (in
each case, to the extent known by the Executive). The
Executive shall not pay such claim prior to the earlier of
(i) the expiration of the 30-calendar-day period following
the date on which he gives such notice to the Company and
(ii) the date that any payment of amount with respect to
such claim is due. If the Company notifies the Executive in
writing prior to the expiration of such period that it
desires to contest such claim, the Executive shall:
(i) provide the Company with any written records
or documents in his possession relating to such claim
reasonably requested by the Company;
(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 competent in respect of the
subject matter and reasonably selected by the Company;
(iii) cooperate with the Company in good faith in
order effectively to contest such claim; and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including interest and
penalties) incurred in connection with such contest and
shall indemnify and hold harmless the Executive, on an
after-tax basis, for and against any Excise Tax or income
tax, including interest and penalties with respect thereto,
imposed as a result of such representation and payment of
costs and expenses. Without limiting the foregoing
provisions of this Section 4(f), the Company shall control
all proceedings taken in connection with the contest of any
claim contemplated by this Section 4(f) 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 (provided,
however, that the Executive may participate therein at his
own cost and expense) and may, at its option, either direct
the Executive to pay the tax claimed and xxx for a refund or
contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however, that if
the Company directs the Executive to pay the tax claimed and
xxx for a refund, the Company shall advance the amount of
such payment to the Executive on an interest-free basis and
shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income or other tax,
including interest or penalties with respect thereto,
imposed with respect to such advance; and provided further,
however, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the
Executive with respect to which the contested amount is
claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of any such
contested claim shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(g) If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 4(f)
hereof, the Executive receives any refund with respect to
such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 4(f) hereof)
promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after
any taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to
Section 4(f) hereof, a determination is made that the
Executive shall not be entitled to any refund with respect
to such claim and the Company does not notify the Executive
in writing of its intent to contest such denial or refund
prior to the expiration of 30 calendar days after such
determination, then such advance shall be forgiven and shall
not be required to be repaid and the amount of any such
advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid by the Company to the
Executive pursuant to this Section 4.
5. Termination Following a Change in Control:
In the event of the occurrence of a Change in Control, the
Executive's employment may be terminated by the Company
during the Period of Employment and the Executive shall be
entitled to the damages provided by Section 6(b) hereof
unless such termination is solely the result of the
occurrence of one or more of the following events:
(a) The Executive's death;
(b) If the Executive shall become
permanently disabled within the meaning of,
and begins actually to receive disability
benefits pursuant to, the long-term
disability plan in effect for senior
executives of the Company immediately prior
to the Change in Control; or
(c) "Cause", which for purposes of this
Agreement shall mean that, prior to any
termination pursuant to Section 5 hereof, the
Executive shall have committed:
(i) an intentional
act of fraud, embezzlement or theft
in connection with his duties or in
the course of his employment with
the Company;
(ii) intentional
wrongful damage to property of the
Company;
(iii) intentional wrongful
disclosure of proprietary or
confidential information of the
Company; or
(iv) intentional wrongful
engagement in any Competitive
Activity;
and any such act shall have been materially harmful to the
Company. "Cause" shall also mean that, prior to such
termination, the Executive shall have been convicted for a
crime involving moral turpitude, which conviction if
appealed shall have been sustained on appeal. For purposes
of this Agreement, no act, or failure to act, on the part of
the Executive shall be deemed "intentional" if it was due
primarily to an error in judgment or negligence, but shall
be deemed "intentional" only if done, or omitted to be done,
by the Executive not in good faith and without reasonable
belief that his action or omission was in, or not opposed
to, the best interest of the Company. Notwithstanding the
foregoing, the Executive shall not be deemed to have been
terminated for "Cause" hereunder unless and until there
shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less
than three-quarters of the Board then in office at a meeting
of the Board called and held for such purpose (after
reasonable notice to the Executive and an opportunity for
the Executive, together with his counsel (if the Executive
chooses to have counsel present at such meeting), to be
heard before the Board, finding that, in good faith opinion
of the Board, the Executive had committed an act
constituting "Cause" as herein defined and specifying the
particulars thereof in detail. Nothing herein shall limit
the right of the Executive or his beneficiaries to contest
the validity or propriety of any such determination.
6. Damages for Breach by Company: (a) Each and
every term of Executive's employment set forth in Sections
2, 3 and 4 hereof is deemed to be a material term of this
Agreement, and any failure by the Company to perform any
term thereof precisely as provided herein shall be deemed a
material breach of this Agreement and a rejection of an
offer by the Executive to work for the Company on the terms
provided in this Agreement, entitling Executive to repudiate
this Agreement and to cease performing any services for the
Company, and thereupon Executive shall be entitled to the
damages provided in Section 6(b) hereof. Without limiting
the generality of the foregoing, the taking of any of the
following actions by the Company during the Period of
Employment, following the occurrence of a Change in Control,
shall be a material breach of this Agreement by the Company:
(i) Any termination by the Company of the
employment of the Executive prior to the date upon
which the Executive shall have attained age 65, which
termination shall be for any reason other than for
Cause or as a result of the death of the Executive or
by reason of the Executive's permanent disability and
the actual receipt of disability benefits in accordance
with Section 6(b) hereof;
(ii) Failure to elect, reelect or otherwise
maintain the Executive in the office or position, or a
substantially equivalent office or position, of or with
the Company or a Subsidiary which the Executive held
immediately prior to a Change in Control, or the
removal of the Executive as a Director of the Company
(or any successor thereto) if the Executive shall have
been a Director of the Company immediately prior to the
Change in Control;
(iii) Action effecting a significant adverse
change in the nature or scope of the authorities,
powers, functions, responsibilities or duties attached
to the position with the Company which the Executive
held prior to the Change in Control, a reduction in the
aggregate of the Executive's Base Pay and Incentive Pay
received from the Company, if such reduction does not
affect all senior executives of the Company
proportionately (such Base Pay and Incentive Pay shall
be the higher of (x) the Base Pay and Incentive Pay at
the time of the Change in Control and (y) the Base Pay
and Incentive Pay at the date of the Executive's
termination), or the termination or denial of the
Executive's rights to Employee Benefits to which he was
entitled immediately prior to the Change in Control or
a significant reduction in scope or value thereof, any
which situation is not remedied within 10 calendar days
after receipt by the Company of written notice from the
Executive;
(iv) A determination by the Executive (which
determination shall be conclusive and binding upon the
parties hereto provided that it was made in good faith
and in all events shall be presumed to have been made
in good faith unless otherwise shown by the Company by
clear and convincing evidence) that a change in
circumstances has occurred following a change in
control, including without limitation, a change in the
scope of the business or other activities for which the
Executive was responsible immediately prior to the
Change in Control, a substantial reduction in any of
the authorities, powers, functions, responsibilities or
duties attached to the position held by the Executive
immediately prior the Change in Control, or a
significant hindrance to the Executive's ability to
perform his duties, any which situation is not remedied
within 10 calendar days after receipt by the Company of
written notice of such determination from the
Executive;
(v) The liquidation, dissolution, merger,
consolidation or reorganization of the Company or
transfer of all or a significant portion of its
business and/or assets, unless the successor or
successors (by liquidation, merger, consolidation,
reorganization, transfer or otherwise) to which all or
a significant portion of its business and/or assets
have been transferred (directly or by operation of law)
shall have assumed all duties and obligations of the
Company under this Agreement pursuant to Section 12
hereof;
(vi) The Company shall relocate its principal
executive offices, or require the Executive to have his
principal location of work changed, to any location
which is in excess of 25 miles from the location
thereof immediately prior to the Change in Control or
the Company shall require the Executive to travel away
from his office in the course of discharging his
responsibilities or duties hereunder significantly more
(in terms of either consecutive days or aggregate days
in any calendar year when annualized for purposes of
comparison to any prior year) than was required of him
prior to the Change in Control without, in either case,
his prior written consent; or
(vii)Without limiting the generality or effect of
the foregoing, any other material breach of this
Agreement by the Company or any successor thereto.
(b) If, following the occurrence of a Change in
Control, the Company shall terminate the Executive's
employment during the Period of Employment other than
pursuant to Section 5 hereof, or if there shall be a
material breach of this Agreement by the Company as provided
in Section 6(a) hereof, the Company shall pay or provide to
the Executive the following, as liquidated damages:
(i) the amount specified below within five
business days after the date (the "Termination Date")
that the Executive's employment is terminated (the
effective date of which shall be the date of
termination or such other date that may be specified by
the Executive if the termination is pursuant to Section
6(a) hereof): In lieu of any further payments to the
Executive for periods subsequent to the Termination
Date, but without affecting the rights of the Executive
referred to in Section 6(b)(ii) or 6(b)(iii) hereof, a
lump sum payment (the "Lump Sum Damages") in an amount
equal to the present value (using a discount rate
prescribed for purposes of valuation computations under
Section 280G of the Code or any successor provision
thereto (the "Discount Rate")) of the sum of (A) Base
Pay (at the highest rate in effect for any year prior
to the Termination Date), which the Executive would
have received had such termination or breach not
occurred, for the longer of (1) 18 months or (2) the
remainder of the Period of Employment, plus (B)
Incentive Pay (based upon the average amount of
Incentive Pay earned in the three fiscal years
immediately preceding the year in which the Change in
Control occurred), which the Executive would have
received pursuant to this Agreement during or with
respect to the longer of (1) 18 months or (2) the
remainder of the Period of Employment, had such
termination or breach not occurred; and
(ii) For the longer of (A) 18 months or (B) the
remainder of the Period of Employment (the
"Continuation Period"), Employee Benefits that are
health or welfare benefits (but not stock option, stock
purchase, stock appreciation or similar compensatory
benefits) substantially similar to those which the
Executive was receiving or entitled to receive
immediately prior to the Termination Date. If and to
the extent that such benefits shall not or cannot be
paid or provided under any policy, plan, program or
arrangement of the Company, then the Company shall
itself pay or provide for the payment to the Executive,
his dependents and beneficiaries, such Employee
Benefits. Notwithstanding the foregoing, or any other
provision of the Agreement, for purposes of determining
the period of continuation coverage to which the
Executive or any of his dependents is entitled pursuant
to Section 4980B of the Code (or any successor
provision thereto) under the Company's medical, dental
and other group health plans, or successor plans, the
Executive's "qualifying event" shall be the termination
of the Continuation Period and the Executive shall be
considered to have remained actively employed on a full-
time basis through that date. Without otherwise
limiting the purposes or effect of Section 7 hereof,
Employee Benefits payable to the Executive pursuant to
this Section 6(b)(ii) by reason of any "welfare benefit
plan" of the Company (as the term "welfare benefit
plan" is defined in Section 3(l) and any successor
provision thereto of the Employee Retirement Income
Security Act of 1974, as amended) shall be reduced to
the extent comparable welfare benefits are actually
received by the Executive from another employer during
such period following the Executive's Termination Date
until the expiration of the Continuation Period and any
such benefits actually received by the Executive shall
be reported to the Company.
(iii) The Executive shall also be entitled to
receive from the Company, within five business days
after the Termination Date, a lump sum payment equal to
the sum of (I) the present value (determined using a
discount rate prescribed for purposes of valuation
computations under Section 280G of the Code in any
successor provision thereto) of the excess of (X) what
the Executive's aggregate accrued benefits under all of
the Company's defined benefit plans in which the
Executive participates, whether or not such plans are
intended to be qualified under Section 401(a) of the
Code (including without limitation the M.A. Xxxxx
Company Salaried Employees Retirement Income Plan and
the M.A. Xxxxx Company Supplemental Retirement Benefit
Plan (the "Supplemental Plan")), would be if determined
after the Executive was given service credit thereunder
(at the rate of pay provided for in Section 3(a)) for
the 36-month period following the Termination Date over
(Y) the Executive's actual aggregate accrued benefit
under such plans as of the Termination Date, plus (II)
the aggregate employer contributions that the Company
would be required to make to the Executive's accounts
under all of the Company's defined contribution plans
in which the Executive participates, whether or not
such plans are intended to be qualified under Section
401(a) of the Code (including, without limitation, the
M.A. Xxxxx Company Capital Accumulation Plan and the
Supplemental Plan), for the 36-month period following
the Termination Date if (1) the Executive remained
employed by the Company for such period, (2) the
Executive continued during such period to authorize his
own elective contributions to such plans at the highest
rate selected by the Executive during either the three-
year period preceding the Termination Date or the three-
year period preceding the Change in Control and (3) the
rate at which the Company made matching, discretionary
or nondiscretionary employer contributions to such
plans during such period was at the highest rate for
each such type of contribution that was in effect at
any time during either the three-year period preceding
the Termination Date or the three-year period preceding
the Change in Control.
(c) A termination by the Company pursuant to
Section 5 or 6(a)(i) hereof or by the Executive pursuant to
Section 6(a) hereof shall not affect any rights which the
Executive may have pursuant to any agreement, policy, plan,
program or arrangement of the Company providing Employee
Benefits, which rights shall be governed by the terms
thereof. If this Agreement or the employment of the
Executive is terminated under circumstances in which the
Executive is not entitled to any payments under this
Agreement, the Executive shall have no further obligation or
liability to the Company hereunder with respect to his prior
or any future employment by the Company.
(d) Upon written notice given by the Executive to
the Company prior to the occurrence of a Change in Control,
the Executive, at his sole option, without reduction to
reflect the present value of such amounts as aforesaid, may
elect to have all or any of the Lump Sum Damages payable
pursuant to Section 6(b)(i) hereof paid to him on a
quarterly or monthly basis during the remainder of the
Period of Employment.
(e) There shall be no right of set-off or
counterclaim in respect of any claim, debt or obligation
against any payment to or benefit for the Executive provided
for in this Agreement.
(f) Without limiting the rights of the Executive
at law or in equity, if the Company fails to make any
payment required to be made hereunder on a timely basis, the
Company shall pay interest on the amount thereof at an
annualized rate of interest equal to the then applicable
interest rate prescribed by the Pension Benefit Guarantee
Corporation for benefit valuations in connection with non-
multiemployer pension plan terminations assuming the
immediate commencement of benefit payments. Such interest
shall be payable as it accrues on demand.
7. Mitigation: In the event that this Agreement
or the employment of the Executive by the Company hereunder
is terminated other than by the Company pursuant to Section
5 hereof, the Executive shall use reasonable efforts to
mitigate his damages by seeking other employment, provided,
however, that in no event shall the Executive be required
hereby to accept a position of less importance or dignity or
of substantial different character than the position held as
of the Termination Date or a position that would call upon
the Executive to engage in Competitive Activity (as that
term is hereafter defined), nor shall he be required hereby
to accept a position other than in a location within 25
miles of his principal location of work immediately prior to
the Change in Control. Subject to the foregoing provisions
of this Section 7, in the event that the Executive secures
other permanent employment with another Person, he shall
promptly pay over to the Company, as received by him in his
new employment, an amount equal to the lesser of (i) the
total cash compensation actually paid to him in his new
employment during the period of Employment, and (ii) the
amount of Lump Sum Damages received by him pursuant to
Section 6(b)(i) hereof (plus interest thereon using the
Discount Rate as in effect when the payment was made under
Section 6(b)(i) hereof as the annualized interest rate) or
Section 6(d) hereof in respect of the comparable period.
Except as otherwise expressly provided in this Section 7,
the Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking
other employment or otherwise.
8. Competitive Activity: If the Executive shall
have received or shall be receiving benefits under Section
6(b) or 6(d) hereof, then for the longer of (i) one year, or
(ii) the period of time that the Executive receives benefits
under Section 6(b) or 6(d) hereof, the Executive shall not
engage in any Competitive Activity. For purposes of this
Agreement, the term "Competitive Activity" shall mean the
Executive's participation in the management of any business
enterprise if such enterprise engages in substantial and
direct competition with the Company. "Competitive Activity"
shall not include the mere ownership of securities in any
such enterprise and the exercise of rights appurtenant
thereto.
9. Legal Fees and Expenses: (a) It is the
intent of the Company that the Executive not 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 the Company has failed
to comply with any of its obligations under this Agreement
or in the event that the Company or any other Person takes
any action to declare this Agreement void or unenforceable,
or institutes any litigation to deny, or to recover from,
the Executive the benefits intended to be provided to the
Executive hereunder, the Company irrevocably authorizes the
Executive from time to time to retain counsel of his choice,
at the expense of the Company as hereafter provided, to
represent the Executive in connection with the initiation or
defense of any litigation or other legal action, whether by
or against the Company or any Director, officer, stockholder
or other person affiliated with the Company, in any
jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such
counsel, the Company irrevocably consents to the Executive's
entering into an attorney-client relationship with such
counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist
between the Executive and such counsel. The Company shall
pay or cause to be paid and shall be solely responsible for
any and all attorneys' and related fees and expenses
incurred by the Executive as a result of the Company's
failure to perform this Agreement or any provision thereof
or as a result of the Company or any Person contesting the
validity or enforceability of this Agreement or any
provision hereof as aforesaid.
(b) Without limiting the obligations of the
Company pursuant to this Agreement, in the event a Change in
Control occurs, the performance of the Company's obligations
under this Agreement shall be secured by amounts deposited
or to be deposited in trust pursuant to certain trust
agreements to which the Company shall be a party, providing,
among other things for the payment of severance compensation
to the Executive pursuant to Section 6 hereof, and the Gross-
Up Payment to the Executive pursuant to Section 4 hereof,
and providing that the reasonable fees and related expenses
of one or more professionals selected from time to time by
the Executive pursuant to Section 9(a) hereof shall be paid,
or reimbursed to the Executive if paid by the Executive,
either in accordance with the terms of such trust
agreements, or, if not so provided, on a regular, periodic
basis upon presentation by the Executive to the trustee of a
statement or statements prepared by such professional in
accordance with its customary practices. Any failure by the
Company to satisfy any of its obligations under this Section
9(b) shall not limit the rights of the Executive hereunder.
Upon the earlier to occur of (i) a Change in Control or (ii)
a declaration by the Board that a Change in Control is
imminent, the Company shall promptly to the extent it has
not previously done so, and in any event within five
business days:
(A) transfer to trustees of such trust
agreements to be added to the principal of the
trusts a sum equal to (I) the present value on the
date of the Change in Control (or on such fifth
business day if the Board has declared a Change in
Control to be imminent) of the payments to be made
to the Executive under the provisions of Sections
6 and 4 hereof, less (II) the balance in the
Executive's accounts provided for in such trust
agreements as of the most recent completed
valuation thereof, as certified by the trustee
under each trust agreement; provided, however,
that if the trustee under any trust agreement,
respectively, does not so certify by the end of
the fourth business day after the earlier of such
Change in Control or declaration, then the balance
of such respective account shall be deemed to be
zero. Any payments of severance compensation or
other benefits hereunder by the trustee pursuant
to any trust agreement shall, to the extent
thereof, discharge the Company's obligation to pay
severance compensation and other benefits
hereunder, it being the intent of the Company that
assets in such trusts be held as security for the
Company's obligation to pay severance compensation
and other benefits under this Agreement; and
(B) transfer to the trustees to be added to
the principal of the trusts under the trust
agreements the sum of one hundred thousand dollars
($100,000), less any principal in such trusts, on
such fifth business day dedicated to the payment
of the Company's obligations under Section 9(a)
hereof. Any payments of the Executive's
reasonable professional fees and related expenses
by the trustees pursuant to the trust agreements
shall, to the extent thereof, discharge the
Company's obligation hereunder, it being the
intent of the Company that assets in such trust be
held as security for the Company's obligation
under Section 9(a) hereof. The Executive
understands and acknowledges that the corpus of
the trust, or separate portion thereof, dedicated
to the payment of the Company's obligations under
Section 9(a) hereof will be $100,000 and that such
amount will be available to discharge not only the
obligations of the Company to the Executive under
Section 9(a) hereof, but also similar obligations
of the Company to other executives and employees
under similar provisions of other agreements.
(c) Subject to the foregoing, the Executive
shall have the status of a general unsecured
creditor of the Company and shall have no right
to, or security interest in, any assets of the
Company or any Subsidiary.
10. Employment Rights: Nothing expressed or
implied in this Agreement shall create any right or duty on
the part of the Company or the Executive to have the
Executive remain in the employment of the Company prior to
any Change in Control, provided, however, that any
termination of employment of the Executive or the removal of
the Executive from the office or position in the Company
following the commencement of any discussion with a third
Person that ultimately results in a Change in Control shall
be deemed to be a termination or removal of the Executive
after a Change in Control for purposes of this Agreement.
11. Withholding of Taxes: The Company may
withhold from any amounts payable under this Agreement all
federal, state, city or other taxes as shall be required
pursuant to any law or government regulation or ruling.
12. Successors and Binding Agreement: (a) The
Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization
or otherwise) to all or substantially all of the business
and/or assets of the Company, by agreement in form and
substance satisfactory to the Executive, expressly to assume
and agree to perform this Agreement in the same manner and
to the same extent the Company would be required to perform
if no such succession had taken place. This Agreement shall
be binding upon and inure to the benefit of the Company and
any successor to the Company, including without limitation
any Persons acquiring directly or indirectly all or
substantially all of the business and/or assets of the
Company whether by purchase, merger, consolidation,
reorganization or otherwise (and such successor shall
thereafter be deemed the "Company" for the purposes of this
Agreement), but shall not otherwise be assignable,
transferable or delegable by the Company.
(b) This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors,
heirs, distributees and/or legatees.
(c) This Agreement is personal in nature and
neither of the parties hereto shall, without the consent of
the other, assign, transfer or delegate this Agreement or
any rights or obligations hereunder except as expressly
provided in Sections 11(a) and 11(b) hereof. Without
limiting the generality of the foregoing, the Executive's
right to receive payments hereunder shall not be assignable,
transferable or delegable, whether by pledge, creation of a
security interest or otherwise, other than by a transfer by
his will or by the laws of descent and distribution and, in
the event of any attempted assignment or transfer contrary
to this Section 12(c), the Company shall have no liability
to pay any amount so attempted to be assigned, transferred
or delegated.
(d) The Company and the Executive recognize that,
except as provided in Section 6 hereof, each party will have
no adequate remedy at law for breach by the other of any of
the agreements contained herein and, in the event of any
such breach, the Company and the Executive hereby agree and
consent that the other shall be entitled to a decree of
specific performance, mandamus or other appropriate remedy
to enforce performance of this Agreement.
13. Notice: For all purposes of this Agreement,
all communications including without limitation notices,
consents, requests or approvals provided for herein shall be
in writing and shall be deemed to have been duly given when
delivered or five business days after having been mailed by
United States registered or certified mail, return receipt
requested, postage prepaid, addressed to the Company (to the
attention of the Corporate Secretary of the Company) at its
principal executive office and to the Executive at his
principal residence, or to such other address as any party
may have furnished to the other in writing and in accordance
herewith, except that notices of change of address shall be
effective only upon receipt.
14. Governing Law: The validity, interpretation,
construction and performance of this Agreement shall be
governed by the laws of the State of Ohio, without giving
effect to the principles of conflict of laws of such State.
15. Validity: If any provision of this Agreement
or the application of any provision hereof to any Person or
circumstances is held invalid, unenforceable or otherwise
illegal, the remainder of this Agreement and the application
of such provision to any other Person or circumstances shall
not be affected, and the provision so held to be invalid,
unenforceable or otherwise illegal shall be reformed to the
extent (and only to the extent) necessary to make it
enforceable, valid and legal.
16. Miscellaneous: No provisions of this
Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing
signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other
party hereto or compliance with any condition or provision
of this Agreement to be performed by such other party shall
be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter
hereof have been made by either party which are not set
forth expressly in this Agreement. Whenever the context
requires or permits, the masculine gender shall include the
feminine gender.
17. Counterparts: This Agreement may be executed
in one or more counterparts, each of which shall be deemed
to be an original but all of which together will constitute
one and the same agreement.
18. Prior Agreement: This Agreement amends and
restates the Employment Agreement, dated as of __________
("Prior Agreement"), between the Company and the Executive,
which Prior Agreement shall, without further action, be
superseded as of the date first above written.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed and delivered as of the date
first above written.
M.A. XXXXX COMPANY
By:___________________________
Chairman and Chief
Executive Officer
___________________________
Executive
