EXECUTIVE SEVERANCE AGREEMENT
Eljer Industries, Inc.
July, 1995
Eljer Industries, Inc.
Executive Severance Agreement
TABLE OF CONTENTS
Article Section Page
1 Definitions 2
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2 Severance Benefits
2.1 Right to Severance Benefits 9
2.2 Services During Certain Events 9
2.3 Qualifying Termination 10
2.4 Description of Severance Benefits 10
2.5 Termination for Total and Permanent
Disability 11
2.6 Termination for Retirement or Death 12
2.7 Termination for Cause or by the
Executive Other Than for Good Reason 12
2.8 Notice of Termination 12
3 Form and Timing of Severance Benefits
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3.1 Form and Timing of Severance Benefits 13
3.2 Withholding of Taxes 13
4 Tax Indemnity
4.1 Limitation on Termination Payment 13
4.2 Subsequent Imposition of Excise Tax 15
5 The Company's Payment Obligation
5.1 Payment Obligations Absolute 16
5.2 Contractual Rights to Benefits 17
6 Term of Agreement 17
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7 Legal Remedies
7.1 Payment of Legal Fees 17
7.2 Arbitration 18
8 Successors 18
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Article Section Page
9 Miscellaneous
9.1 Employment Status 19
9.2 Beneficiaries 20
9.3 Entire Agreement 20
9.4 Gender and Number 20
9.5 Severability 20
9.6 Modification 20
9.7 Applicable Law 21
Eljer Industries, Inc.
Executive Severance Agreement
THIS AGREEMENT is made and entered into as of this 1st day of July,
1995, by and between Eljer Industries, Inc., a Delaware corporation (hereinafter
referred to as the "Company") and [NAME OF OFFICER] (hereinafter referred to as
the "Executive").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has approved the Company
entering into severance agreements with certain key executives of the Company;
WHEREAS, the Executive is a key executive of the Company;
WHEREAS, should the possibility of a Change-in-Control of the Company
arise, the Board believes it imperative that the Company and the Board should be
able to rely upon the Executive to continue in his position, and that the
Company should be able to receive and rely upon his advice, if it requests it,
as to the best interests of the Company and its shareholders without concern
that he might be distracted by the personal uncertainties and risks created by
the possibility of a Change-in-Control;
WHEREAS, should the possibility of a Change-in-Control arise, in
addition to the Executive's regular duties, he may be called upon to assist in
the assessment of such possible Change-in-Control, advise management and the
Board as to whether such Change-in-Control would be in the best interests of the
Company and its shareholders, and to take such other actions as the Board might
determine to be appropriate; and
WHEREAS, the Executive and the Company desire that the terms of this
Agreement, with the terms of the Eljer Industries, Inc. Long-Term Executive
Incentive Compensation Plan and the Eljer Industries 1991 Long-Term Incentive
Plan, to the extent
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that the Executive has an award under either or both of such plans, shall
constitute the entire understanding of the parties regarding the Executive's
entitlement to payment and benefits following a Change in Control of the
Company;
NOW THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat, or occurrence of a Change-in-Control of
the Company, and to induce the Executive to remain in the employ of the Company,
and for other good and valuable consideration, the Company and the Executive
agree as follows:
Article 1. Definitions
Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized:
(a) "Agreement" means this Executive Severance Agreement.
(b) "Base Salary" means the salary of record paid to the Executive
as annual salary, excluding amounts received under incentive
or other bonus plans, whether or not deferred.
(c) "Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
(d) "Beneficiary" means the persons or entities designated or
deemed designated by the Executive pursuant to Section 9.2
herein.
(e) "Board" means the Board of Directors of the Company.
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(f) "Cause" shall be determined by the Committee, in exercise of
good faith and reasonable judgment, and shall mean the
occurrence of any one or more of the following:
(i.) The willful and continued failure by the
Executive to substantially perform his
duties (other than any such failure
resulting from the Executive's Disability),
after a written demand for substantial
performance is delivered by the Committee to
the Executive that specifically identifies
the manner in which the Committee believes
that the Executive has not substantially
performed his duties, and the Executive
has failed to remedy the situation within
thirty (30) calendar days of receiving such
notice; or
(ii.) The Executive's conviction for committing an
act of fraud, embezzlement, theft, or other
act constituting a felony; or
(iii.) The willful engaging by the Executive in
gross misconduct materially and demonstrably
injurious to the Company, as determined by
the Committee. However, no act or failure to
act, on the Executive's part shall be
considered "willful" unless done, or omitted
to be done, by the Executive not in good
faith and without reasonable belief that his
action or omission was in the best interest
of the Company.
(g) "Change-in-Control" of the Company shall be deemed to have
occurred as of the first day that any one or more of the
following conditions shall have been satisfied:
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(i.) Any Person (other than those Persons in
control of the Company as of the Effective
Date, or other than a trustee or other
fiduciary holding securities under an
employee benefit plan of the Company, or a
corporation owned directly or indirectly by
the stockholders of the Company in
substantially the same proportions as their
ownership of stock of the Company), becomes
the Beneficial Owner, directly or
indirectly, of securities of the Company
representing twenty-five percent (25%) or
more of the combined voting power of
the Company's then outstanding securities;
or
(ii.) During any period of two (2) consecutive
years (not including any period prior to the
execution of this Agreement), individuals
who at the beginning of such period
constitute the Board (and any new Director,
whose election by the Company's stockholders
was approved by a vote of at least
two-thirds (2/3) of the Directors then
still in office who either were Directors at
the beginning of the period or whose
election or nomination for election was so
approved), cease for any reason to
constitute a majority thereof; or
(iii.) The stockholders of the Company approve:
(A) a plan of complete liquidation of the
Company; or (B) an agreement for the sale
or disposition of all or substantially all
the Company's assets; or (C) a merger,
consolidation, or reorganization of the
Company with or involving any other
corporation, other than a merger,
consolidation, or reorganization that would
result in the voting securities of the
Company outstanding immediately
prior thereto continuing to represent
(either by remaining outstanding or by
being converted into voting securities of
the
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surviving entity), at least fifty percent
(50%) of the combined voting power of the
voting securities of the Company (or such
surviving entity) outstanding immediately
after such merger, consolidation, or
reorganization.
However, in no event shall a Change-in-Control be deemed to
have occurred, with respect to the Executive, if the Executive
is part of a purchasing group which consummates the
Change-in-Control transaction. The Executive shall be deemed
"part of a purchasing group" for purposes of the preceding
sentence if the Executive is an equity participant in the
purchasing company or group (except for: (i) passive ownership
of less than three percent (3%) of the stock of the purchasing
company; or (ii) ownership of equity participation in the
purchasing company or group which is otherwise not
significant, as determined prior to the Change-in-Control by a
majority of the nonemployee continuing Directors).
(h) "Code" means the Internal Revenue Code of 1986, as amended.
(i) "Committee" means the Compensation Committee of the Board, or
any other committee appointed by the Board to perform the
functions of the Compensation Committee.
(j) "Company" means Eljer Industries, Inc., a Delaware corporation
(including any and all subsidiaries), or any successor thereto
as provided in Article 8 herein.
(k) "Disability" means permanent and total disability, within the
meaning of Code Section 22(e)(3), as determined by the
Committee in the exercise of good faith and reasonable
judgment, upon receipt of and in reliance on sufficient
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competent medical advice from one or more individuals,
selected by the Committee, who are qualified to give
professional medical advice.
(l) "Effective Date" means the date this Agreement is approved by
the Board, or such other date as the Board shall designate in
its resolution approving this Agreement.
(m) "Effective Date of Termination" means the date on which a
Qualifying Termination occurs which triggers the payment of
Severance Benefits hereunder.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(o) "Executive" means [NAME OF OFFICER].
(p) "Good Reason" means, without the Executive's express written
consent, the occurrence after a Change-in-Control of the
Company of any one or more of the following:
(i.) The assignment of the Executive to duties
materially inconsistent with the Executive's
authorities, duties, responsibilities, and
status (including offices, titles, and
reporting requirements) as an officer of the
Company, or a reduction or alteration in the
nature or status of the Executive's
authorities, duties, or responsibilities
from those in effect as of ninety (90) days
prior to the Change-in-Control, other than
an insubstantial and inadvertent act that is
remedied by the Company promptly after
receipt of notice thereof given by the
Executive, and other than any such
alteration primarily
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attributable to the fact that the Company
may no longer be a public company;
(ii.) The Company's requiring the Executive to be
based at a location in excess of thirty-five
(35) miles from the location of the
Executive's principal job location or office
immediately prior to the Change-in-Control;
except for required travel on the Company's
business to an extent substantially
consistent with the Executive's present
business obligations;
(iii.) A reduction by the Company of the
Executive's Base Salary as in effect on the
Effective Date, or as the same shall be
increased from time to time.
(iv.) The failure of the Company to continue in
effect any of the Company's short- and/or
long-term incentive compensation plans,
or employee benefit or retirement plans,
policies, practices, or arrangements in
which the Executive participates, or the
failure by the Company to continue the
Executive's participation therein on
substantially the same basis, both in
terms of the amount of benefits provided and
the level of the Executive's participation
relative to other participants, as
existed immediately prior to the Change-in-
Control of the Company;
(v.) The failure of the Company to obtain a
satisfactory agreement from any successor to
the Company to assume and agree to perform
the Company's obligations under this
Agreement, as contemplated in Article 8
herein; and
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(vi.) Any purported termination by the Company of
the Executive's employment that is not
affected pursuant to a Notice of Termination
satisfying the requirements of Section 2.8
herein, and for purposes of this Agreement,
no such purported termination shall be
effective.
The Executive's right to terminate employment for Good Reason
shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued
employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good
Reason herein.
(q) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, including a "group" as defined in Section
13(d).
(r) "Qualifying Termination" means any of the events described in
Section 2.3 herein, the occurrence of which triggers the
payment of Severance Benefits hereunder.
(s) "Severance Benefits" means the payment of severance
compensation as provided in Section 2.4 herein.
Article 2. Severance Benefits
2.1 Right to Severance Benefits. The Executive shall be entitled to
receive from the Company Severance Benefits as described in Section 2.4 herein,
if there has been a Change-in-Control of the Company and if, within twenty-four
(24) calendar months thereafter, the Executive's employment with the Company
shall end for any reason specified in Section 2.3 herein as being a Qualifying
Termination.
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The Executive shall not be entitled to receive Severance Benefits if he
is terminated for Cause, or if his employment with the Company ends due to
death, Disability, retirement (as defined under the then established rules of
the Company's tax-qualified retirement plan), or due to a voluntary termination
of employment by the Executive without Good Reason.
2.2. Services During Certain Events. In the event a Person begins
tender or exchange offer, circulates a proxy to shareholders of the Company, or
takes other steps seeking to effect a Change-in-Control, the Executive agrees
that he will not voluntarily leave the employ of the Company and will render
services until such Person has abandoned or terminated his or its efforts to
effect a Change-in-Control, or until six (6) months after a Change-in-Control
has occurred; provided, however, that the Company may terminate the Executive
for Cause at any time, and the Executive may terminate his employment any time
after the Change-in-Control for Good Reason.
2.3. Qualifying Termination. The occurrence of any one or more of
the following events within twenty-four (24) calendar months after a Change-in-
Control of the Company shall trigger the payment of Severance Benefits to the
Executive under this Agreement:
(a) A termination of the Executive's employment with the Company
for reasons other than death, Disability, normal retirement
(as such term is defined under the then established rules of
the Company's tax-qualified retirement plan), a voluntary
termination of employment by the Executive without Good
Reason, or termination of the Executive's employment by the
Company for Cause;
(b) A successor company fails or refuses to assume the Company's
obligations under this Agreement, as required by Article 8
herein; or
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(c) The Company or any successor company breaches any of the
provisions of this Agreement.
2.4. Description of Severance Benefits. In the event that the Executive
becomes entitled to receive Severance Benefits, as provided in Sections 2.1 and
2.3 herein, and subject to the limits set forth in Article 4 herein, the Company
shall pay to the Executive and provide him with the following:
(a) An amount equal to two (2) times the highest rate of the
Executive's annual Base Salary in effect at any time up to and
including the Effective Date of Termination.
(b) An amount equal to two (2) times the greater of: (i) the
Executive's average annual bonus earned over the last three
(3) years; or (ii) the Executive's target bonus established
for the bonus plan year in which the Executive's Effective
Date of Termination occurs.
(c) An amount equal to the Executive's unpaid Base Salary and
accrued vacation pay through the Effective Date of
Termination.
(d) A continuation of all benefits pursuant to any and all welfare
benefit plans under which the Executive and/or the Executive's
family is eligible to receive benefits and/or coverage as of
the effective date of the Change-in-Control, including, but
not limited to, group life insurance, hospitalization,
disability, medical, dental, pension, and profit sharing.
These benefits shall be provided by the Company to the
Executive immediately upon the Effective Date of Termination
and shall continue to be provided for two (2) full
calendar years from the Effective Date of Termination. Such
benefits shall be provided to the Executive at the same
premium cost, and at the same
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coverage level, as in effect as of the Executive's Effective
Date of Termination.
The welfare benefits described in this Subsection 2.4(d) shall
continue for two (2) full years following the Effective Date
of Termination; provided, however, that such benefits shall be
discontinued prior to the end of the two (2) year period in
the event the Executive receives substantially similar
benefits from a subsequent employer, as determined by the
Committee.
2.5. Termination for Total and Permanent Disability. Following a
Change-in- Control of the Company, if the Executive's employment is terminated
due to Disability, the Executive shall receive his Base Salary through the
Effective Date of Termination, at which point in time the Executive's benefits
shall be determined in accordance with the Company's retirement, insurance, and
other applicable plans and programs then in effect.
2.6. Termination for Retirement or Death. Following a Change-in-Control
of the Company, if the Executive's employment is terminated by reason of his
retirement (as defined under the then established rules of the Company's
tax-qualified retirement plan), or death, the Executive's benefits shall be
determined in accordance with the Company's retirement, survivor's benefits,
insurance, and other applicable programs of the Company then in effect.
2.7. Termination for Cause or by the Executive Other Than for Good
Reason. Following a Change-in-Control of the Company, if the Executive's
employment is terminated either: (i) by the Company for Cause; or (ii) by the
Executive other than for Good Reason, the Company shall pay the Executive his
full Base Salary and accrued vacation through the Effective Date of Termination,
at the rate then in effect, plus all other amounts to which the Executive is
entitled under any compensation plans of the Company, at the time such payments
are due, and the Company shall have no further obligations to the Executive
under this Agreement.
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2.8. Notice of Termination. Any termination by the Company for Cause or
by the Executive for Good Reason shall be communicated by Notice of Termination
to the other party. For purposes of this Agreement, a "Notice of Termination"
shall mean a written notice which shall indicate the specific termination
provision in this Agreement relied upon, and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated.
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Article 3. Form and Timing of Severance Benefits
3.1. Form and Timing of Severance Benefits. The Severance Benefits
described in Sections 2.4(a), 2.4(b), and 2.4(c) herein shall be paid in cash to
the Executive in a single lump sum as soon as practicable following the
Effective Date of Termination, but in no event beyond thirty (30) days from such
date.
3.2. Withholding of Taxes. The Company shall withhold from any
amounts payable under this Agreement all federal, state, city, or other taxes as
legally shall be required.
Article 4. Tax Indemnity
4.1. Limitation on Termination Payment.
(a) Determination of Termination Payment Limit.
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Notwithstanding any other provision of this
Agreement, if any portion of the Severance Benefits
Benefits or any other payment under this Agreement,
or under any other agreement with or plan of the
Company (in the aggregate "Total Payments") would
constitute an "excess parachute payment," then
the payments to be made to the Executive under this
Agreement shall be reduced such that the value of the
aggregate Total Payments that the Executive is
entitled to receive shall be one dollar ($1) less
than the maximum amount which the Executive may
receive without becoming subject to the tax imposed
by Section 4999 of the Code, or which the Company may
pay without loss of deduction under Section
280G(a) of the Code.
However, the payments to be made to the Executive
under this Agreement shall be reduced if and only if
so reducing the payments
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results in the Executive receiving a greater net
benefit than he would have received had a reduction
not occurred and an excise tax been paid pursuant to
Code Section 4999.
For purposes of this Agreement, the terms "excess
parachute payment" and "parachute payments" shall
have the meanings assigned to them in Section 280G of
the Code, and such "parachute payments" shall be
valued as provided therein.
(b) Procedure for Establishing Limitation on Termination
----------------------------------------------------
Payment.
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Within sixty (60) days following delivery of the
Notice of Termination (as described in Section 2.8
herein) or notice by the Company to the Executive of
its belief that there is a payment or benefit due the
Executive which will result in an "excess parachute
payment" as defined in Section 280G of the Code, the
Executive and the Company, at the Company's expense,
shall obtain the opinion of such legal counsel, which
need not be unqualified, as the Executive may choose,
which sets forth: (i) the amount of the Executive's
"annualized includible compensation for the base
period" (as defined in Code Section 280G(d)(1));
(ii) the present value of the Total Payments; and
(iii) the amount and present value of any "excess
parachute payment." The opinion of such legal
counsel shall be supported by the opinion of a
certified public accounting firm and, if necessary,
a firm of recognized executive compensation
consultants. Such opinion shall be binding upon the
Company and the Executive.
In the event that such opinion determines that there
would be an "excess parachute payment," the Severance
Benefits hereunder or any other payment determined by
such counsel to be includible in Total Payments shall
be reduced or eliminated as specified by the
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Executive in writing delivered to the Company within
thirty (30) days of his receipt of such opinion, or,
if the Executive fails to so notify the Company, then
as the Company shall reasonably determine, so that
under the basis of calculations set forth in such
opinion, there will be no "excess parachute payment."
The provisions of this Section 4.1(b), including the
calculations, notices, and opinion provided for
herein shall be based upon the conclusive presumption
that: (i) the compensation and benefits provided for
in Section 2.4 herein; and (ii) any other
compensation earned prior to the Effective Date of
Termination by the Executive pursuant to the
Company's compensation programs (if such payments
would have been made in the future in any event, even
though the timing of such payment is triggered by the
Change-in- Control), are reasonable.
4.2. Subsequent Imposition of Excise Tax. If, notwithstanding
compliance with the provisions of Sections 4.1(a), and 4.1(b) herein, it is
ultimately determined by a court or pursuant to a final determination by the
Internal Revenue Service that any portion of the Total Payments is considered to
be a "parachute payment," subject to excise tax under Section 4999 of the Code,
which was not contemplated to be a "parachute payment" at the time of payment
(so as to accurately determine whether a limitation should have been applied to
the Total Payments to maximize the net benefit to the Executive, as provided in
Section 4.1(b) hereof), the Executive shall be entitled to receive a lump sum
cash payment sufficient to place the Executive in the same net after-tax
position, computed by using the "Special Tax Rate" as such term is defined
below, that the Executive would have been in had such payment not been subject
to such excise tax, and had the Executive not incurred any interest charges or
penalties with respect to the imposition of such excise tax. For purposes of
this Agreement, the "Special Tax Rate" shall be the highest effective
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federal and state marginal tax rates applicable to the Executive in the year in
which the payment contemplated under this Section 4.2 is made.
Article 5. The Company's Payment Obligation
5.1. Payment Obligations Absolute. The Company's obligation to make the
payments and the arrangements provided for herein shall be absolute and
unconditional, and shall not be affected by any circumstances, including,
without limitation, any offset, counterclaim, recoupment, defense, or other
right which the Company may have against the Executive or anyone else. All
amounts payable by the Company hereunder shall be paid without notice or demand.
Each and every payment made hereunder by the Company shall be final, and the
Company shall not seek to recover all or any part of such payment from the
Executive or from whomsoever may be entitled thereto, for any reasons
whatsoever.
The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in Section 2.4(d) herein.
5.2. Contractual Rights to Benefits. This Agreement establishes and
vests in the Executive a contractual right to the benefits to which he is
entitled hereunder. However, nothing herein contained shall require or be deemed
to require, or prohibit or be deemed to prohibit, the Company to segregate,
earmark, or otherwise set aside any funds or other assets, in trust or
otherwise, to provide for any payments to be made or required hereunder.
Article 6. Term of Agreement
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This Agreement will commence on the Effective Date and shall continue
in effect for two (2) full calendar years, the last day of which shall be the
"Expiration Date." However, at the end of such two-year period and, if extended,
at the end of each additional year thereafter, the term of this Agreement shall
be extended automatically for one (1) additional year, unless the Committee
delivers written notice three (3) months prior to the end of such term, or
extended term, to the Executive, that the Agreement will not be extended. In
such case, the Agreement will terminate at the end of the term, or extended
term, then in progress.
However, in the event a Change-in-Control occurs during the original or
any extended term, this Agreement will remain in effect for the longer of: (i)
twenty-four (24) months beyond the month in which such Change-in-Control
occurred; or (ii) until all obligations of the Company hereunder have been
fulfilled, and until all benefits required hereunder have been paid to the
Executive.
Article 7. Legal Remedies
7.1. Payment of Legal Fees. To the extent permitted by law, the Company
shall pay all legal fees, costs of litigation, prejudgment interest, and other
expenses incurred in good faith by the Executive as a result of the Company's
refusal to provide the Severance Benefits to which the Executive becomes
entitled under this Agreement, or as a result of the Company's contesting the
validity, enforceability, or interpretation of this Agreement, or as a result of
any conflict between the parties pertaining to this Agreement.
7.2. Arbitration. The Executive shall have the right and option to
elect (in lieu of litigation) to have any dispute or controversy arising under
or in connection with this Agreement settled by arbitration, conducted before a
panel of three (3) arbitrators sitting in a location selected by the Executive
within fifty (50) miles from the location of his job with the Company, in
accordance with the rules of the American Arbitration Association then in
effect.
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Judgment may be entered on the award of the arbitrator in any court
having proper jurisdiction. All expenses of such arbitration, including the fees
and expenses of the counsel for the Executive, shall be borne by the Company.
Article 8. Successors
The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) of all or substantially all of
the business and/or assets of the Company or of any division or subsidiary
thereof to expressly assume and agree to perform the Company's obligations under
this Agreement in the same manner and to the same extent that the Company would
be required to perform them if no such succession had taken place. Failure of
the Company to obtain such assumption and agreement prior to the effective date
of any such succession shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on the same
terms as he would be entitled to hereunder if he had terminated his employment
with the Company voluntarily for Good Reason. Except for the purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Effective Date of Termination.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. If the Executive should
die while any amount would still be payable to him hereunder had he continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement, to the Executive's Beneficiary. If
the Executive has not named a Beneficiary, then such amounts shall be paid to
the Executive's devisee, legatee, or other designee, or if there is no such
designee, to the Executive's estate.
Article 9. Miscellaneous
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9.1. Employment Status. The Executive and the Company acknowledge that,
except as may be provided under any other agreement between the Executive and
the Company, the employment of the Executive by the Company is "at will," and,
prior to the effective date of a Change-in-Control, may be terminated by either
the Executive or the Company at any time. Upon a termination of the Executive's
employment by the Company or the Executive or by reason of the Executive's death
before the occurrence of a Change in Control, there shall be no further rights
under this Agreement; provided, however, that if the Company terminates the
Executive's employment for any reason other than Disability or Cause in
connection with, or in anticipation of, a proposed Change in Control, then the
Executive's rights under this Agreement shall be the same as if the termination
had occurred within twenty-four (24) calendar months after a Change in Control.
9.2. Beneficiaries. The Executive may designate one or more
persons or entities as the primary and/or contingent Beneficiaries of any
Severance Benefits owing to the Executive under this Agreement. Such
designation must be in the form of a signed writing acceptable to the Committee.
The Executive may make or change such designation at any time.
9.3. Entire Agreement. Except as described in the following sentence of
this Section 9.3, this Agreement contains the entire understanding of the
Company and the Executive with respect to the Executive's entitlement to
payments and benefits arising as a result of a Change in Control of the Company.
Nothing in this Agreement shall, however, negate or impair any rights that the
Executive may have under the Eljer Industries, Inc. Long-Term Executive
Incentive Compensation Plan or the Eljer Industries 1991 Long-Term Incentive
Plan, or both, upon the occurrence of a Change in Control of the Company.
9.4. Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular, and the singular shall include the plural.
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9.5. Severability. In the event any provision of this Agreement shall
be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Agreement, and the Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.
9.6. Modification. No provision of this Agreement may be modified,
waived, or discharged unless such modification, waiver, or discharge is agreed
to in writing and signed by the Executive and by an authorized member of the
Committee, or by the respective parties' legal representatives and successors.
9.7. Applicable Law. To the extent not preempted by the laws of
the United States, the laws of the state of Texas shall be the controlling law
in all matters relating to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on this
______ day of August, 1995.
------------------------
Signature
ATTEST:
Eljer Industries, Inc.
(Corporate Seal)
By:
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