RE: Change in Control Agreement
EXHIBIT 10.11
Date
Name
& Address
Dear
_____:
Ashland
Inc. considers the establishment and maintenance of a sound and vital management
to be essential to protecting and enhancing the best interest of the Company and
its shareholders. In this regard, the Company recognizes that, as is the case
with many publicly-held corporations, the possibility of a Change in Control of
the Company does exist and that such possibility, and the uncertainty and
questions which a Change in Control of the Company may raise among management,
may result in the departure or distraction of management personnel to the
detriment of the Company and its shareholders. In addition, difficulties in
attracting and retaining new senior management personnel may be experienced.
Accordingly, on the basis of the recommendation of the Personnel and
Compensation Committee of the Board, the Board has determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of certain members of the Company's management, including you, to
their assigned duties without distraction in the face of the potentially
disruptive circumstances arising from the possibility of a Change in Control of
the Company.
In order
to encourage you to remain in the employ of the Company, this Agreement sets
forth those benefits which the Company will provide to you in the event your
employment with the Company terminates after or as a result of a Change in
Control under the circumstances specified in this Agreement.
SECTION
A. DEFINITIONS
1. "Agreement"
shall mean this letter agreement, which is a complete and entire substitute for
any prior agreement you may have had with the Company addressing the benefits
you would receive in the event of your termination from employment with the
Company, whether before or after a Change in Control.
2. "Board"
shall mean the Company's Board of Directors.
3. "Cause"
shall occur hereunder only upon (A) the willful and continued failure by you to
substantially perform your duties with the Company (other than any such failure
resulting from your incapacity that is less than 6 months in duration due to
physical or mental illness or injury) after a written demand for substantial
performance is delivered to you by the Board which specifically identifies the
manner in which the Board believes that you have not substantially performed
your duties, (B) the willful engaging by you in gross misconduct materially and
demonstrably injurious to the Company after a written demand to cease such
misconduct is delivered to you by the Board, or (C) your conviction of or the
entering of a plea of nolo contendre to the commission of a felony involving
moral turpitude. For purposes of this paragraph, no act, or failure to act, on
your part shall be considered "willful" unless done, or omitted to be done, by
you not in good faith and
without
reasonable belief that your action or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to you a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the Board
called and held for the purpose, among others, (after at least 20 days prior
notice to you and an opportunity for you, together with your counsel, to be
heard before the Board), of finding that (i) in the good faith opinion of the
Board you failed to perform your duties or engaged in misconduct as set forth
above in subparagraph (A) or (B) of this paragraph, and that you did not correct
such failure or cease such misconduct after being requested to do so
by the Board, or (ii) as set forth in subparagraph (C) of this paragraph, you
have been convicted of or have entered a plea of nolo contendre to the
commission of a felony involving moral turpitude.
4. "Change
in Control of the Company" shall be deemed to have occurred if (I) there shall
be consummated (A) any consolidation or merger of the Company (a "Business
Combination"), other than a consolidation or merger of the Company into or with
a direct or indirect wholly-owned subsidiary, in which the shareholders of the
Company own, directly or indirectly, less than 50% of the then outstanding
shares of common stock of the Business Combination that are entitled to vote
generally for the election of directors of the Business Combination or pursuant
to which shares of the Company's Common Stock would be converted into cash,
securities or other property, other than a merger of the Company in which the
holders of the Company's Common Stock immediately prior to the merger have
substantially the same proportionate ownership of common stock of the surviving
corporation immediately after the merger, or (B) any sale, lease, exchange or
transfer (in one transaction or a series of related transactions) of all or
substantially all the assets of the Company, provided, however, that no sale,
lease, exchange or other transfer of all or substantially all the assets of the
Company shall be deemed to occur unless assets constituting 80% of the total
assets of the Company are transferred pursuant to such sale, lease, exchange or
other transfer, or (ii) the shareholders of the Company shall approve any plan
or proposal for the liquidation or dissolution of the Company, or (iii) any
Person, other than the Company or a Subsidiary thereof or any employee benefit
plan sponsored by the Company or a Subsidiary thereof, shall become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company representing 25% or more of the combined voting power
of the Company's then outstanding securities ordinarily (and apart from rights
accruing in special circumstances) having the right to vote in the election of
directors, as a result of a tender or exchange offer, open market purchases,
privately-negotiated purchases or otherwise, without the approval of the Board
or (Iv) at any time during a period of two (2) consecutive years, individuals
who at the beginning of such period constituted the Board shall cease for any
reason to constitute at least a majority thereof, unless the election or the
nomination for election by the Company's shareholders of each new director
during such two-year period was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
two-year period.
5. "COBRA"
shall mean the Consolidated Omnibus Budget Reconciliation Act, as
amended.
6. "Common
Stock" shall mean the common stock, par value $.01 per share, of the
Company.
7. "Company"
shall mean Ashland Inc. and any successor to its business and/or assets which
executes and delivers the agreement provided for in Section D, paragraph 1
hereof or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
8. "Competitive
Activity" shall have the meaning as set forth in Section C, paragraph
4.
9. "Competitive
Operation" shall have the meaning as set forth in Section C, paragraph
4.
10. "Confidential
Information" shall mean information relating to the Company's, its divisions'
and Subsidiaries' and their successors' business practices and business
interests, including, but not limited to, customer and supplier lists, business
forecasts, business and strategic plans, financial and sales information,
information relating to products, process, equipment, operations, marketing
programs, research, or product development, engineering records, computer
systems and software, personnel records or legal records.
11. “Cutback”
shall have the meaning as set forth in Section D, paragraph 18.
12. "Date
Of Termination" shall mean: (A) if this Agreement is terminated for Disability,
thirty (30) days after the Notice of Termination is given by the Company to you
(provided that you shall not have returned to the performance of your duties on
a full-time basis during such thirty (30) day period), (B) if your employment is
terminated for Good Reason by you, the date specified in the Notice of
Termination, and (C) if your employment is terminated for any other reason, the
date on which a Notice of Termination is received by you unless a later date is
specified. For purposes of applying the provisions of this paragraph 11, except
in the case of Disability, your employment is terminated when you stop
performing active service for the Company, which shall be deemed to occur when
it is reasonably anticipated that your services to the Company will permanently
decrease to 20% or less of the average amount of services you performed for the
Company during the immediately preceding 36 month period (or your total
employment if less than 36 months).
13. "Disability"
shall occur when: if, as a result of your incapacity due to physical or mental
illness, you shall have been absent from your duties with the Company for six
(6) consecutive months and shall not have returned to full-time performance of
your duties within thirty (30) days after written notice is given to you by the
Company.
14. "Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended.
15. "Good
Reason" shall mean:
(a) without
your express written consent, the assignment to you after a Change in Control of
the Company, of any duties inconsistent with, or a significant diminution of,
your positions, duties, responsibilities or status with the
Company
immediately
prior to a Change in Control of the Company, or a diminution in your titles or
offices as in effect immediately prior to a Change in Control of the Company or
any removal of you from, or any failure to reelect you to, any of such
positions;
(b) a
reduction by the Company in your base salary in effect immediately prior to a
Change in Control of the Company;
(c) the
failure by the Company to continue in effect any incentive plan or arrangement
(including without limitation, the Company's Incentive Compensation plan, annual
bonus and contingent bonus arrangements and credits and the right to receive
performance awards and similar incentive compensation benefits) in which you are
participating at the time of a Change in Control of the Company (or to
substitute and continue other plans or arrangements providing you with
substantially similar benefits), except as otherwise required by the terms of
such plans as in effect at the time of any Change in Control of the
Company;
(d) the
failure by the Company to continue in effect any plan or arrangement to receive
securities of the Company (including, without limitation, any plan or
arrangement to receive and exercise stock options, stock appreciation rights,
restricted stock or grants thereof or to acquire stock or other securities of
the Company) in which you are participating at the time of a Change in Control
of the Company (or to substitute and continue plans or arrangements providing
you with substantially similar benefits), except as otherwise required by the
terms of such plans as in effect at the time of any Change in Control of the
Company, or the taking of any action by the Company which would adversely affect
your participation in or materially reduce your benefits under any such
plan;
(e) the
relocation after a Change in Control of your principal place of business to a
location that exceeds a 50 mile radius from your principal place of business
before the Change in Control, except for required travel on the Company's
business to an extent substantially consistent with your present business travel
obligations;
(f) any
breach by the Company of any material provision of this Agreement;
or
(g) any
failure by the Company to obtain the assumption of this Agreement by any
successor or assign of the Company.
16. "Notice
of Termination" shall mean a 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 your employment under the provision so indicated. For purposes of
applying the provisions of this paragraph 15, the determination of when your
employment is terminated shall be made consistent with the Section 409A
Provisions and the provisions of Section A, paragraph 11.
17. "Person"
shall have the meaning as set forth in the Sections 13(d) and 14(d)(2) of the
Exchange Act.
18. "Qualifying
Termination" shall mean the termination of your employment after a Change in
Control of the Company while this Agreement is in effect, unless such
termination is (a) by reason of your death or Disability, (b) by the Company for
Cause, or (c) by you other than for Good Reason.
19. "Section
409A Provisions" shall mean those statutory provisions of the Internal Revenue
Code of 1986 (as amended) contained in §409A thereof and the guidance
promulgated by the U.S. Department of Treasury or any subdivision thereof
interpreting §409A.
20. "Subsidiary"
shall mean any corporation of which more than 20% of the outstanding capital
stock having ordinary voting power to elect a majority of the board of directors
of such corporation (irrespective of whether or not at the time capital stock of
any other class or classes of such corporation shall or might have voting power
upon the occurrence of any contingency) is at the time directly or indirectly
owned by the Company, by the Company and one or more other Subsidiaries, or by
one or more other Subsidiaries.
SECTION
B. TERM AND BENEFITS
This
Agreement shall be in effect for two years from the date you accept this
Agreement and shall automatically renew for successive one (1) year periods on
the first day of each month. This Agreement may be terminated by either party
provided that at least fifteen (15) days advance written notice is given by
either party to the other party hereto prior to the commencement of the next
succeeding one (1) year period at which time the Agreement shall terminate at
the end of the next succeeding one (1) year period. During the term of
employment hereunder, you agree to devote your full business time and attention
to the business and affairs of the Company and to use your best efforts, skills
and abilities to promote its interests.
This
Agreement shall automatically terminate, without additional notice, in the event
of your death, Disability, or upon the effective date of your retirement in the
event you retire at your election or in accordance with the Company's generally
applicable retirement policies, as in effect from time to time. Notwithstanding
the first sentence of this paragraph and the first and second sentences of this
Section B, if a Change in Control of the Company should occur while you are
still an employee of the Company and while this Agreement is in effect, then
this Agreement shall continue in effect from the date of such Change in Control
of the Company for a period of two years. No benefits shall be payable hereunder
unless there shall have been a Change in Control of the Company and your
employment by the Company shall thereafter terminate in accordance with Section
C hereof.
SECTION
C. TERMINATION FOLLOWING CHANGE IN CONTROL
1. Qualifying
Termination. If your termination is a Qualifying Termination, you shall
be entitled to receive the payments and benefits provided in this
Section.
2. Notice of
Termination. Except as provided in Section D, paragraph 1, any
termination of your employment following a Change in Control of the Company
shall be communicated by written Notice of Termination to the other party
hereto. No termination shall be effective without such Notice of
Termination.
3. Compensation Upon
Termination After a Change in Control.
(a) If
your termination is a Qualifying Termination, then the Company shall pay to you
as severance pay (and without regard to the provisions of any benefit or
incentive plan), in a lump sum cash payment on the fifth (5th) day of the
seventh calendar month following the month in which occurs your Date of
Termination, an amount equal to two (2) times the sum of (i) your highest annual
base compensation plus (ii) the highest target annual incentive compensation
(expressed as a percentage of base compensation for all applicable incentive
compensation plans) in respect of the prior three (3) fiscal years preceding the
fiscal year in which your Date of Termination occurs.
(b) If
your termination is a Qualifying Termination, the Company shall, in addition to
the payments required by the preceding paragraph:
(i) provide
for continuation of your and your eligible dependents' participation at regular
employee rates, in effect from time to time, in all of the Company's medical,
dental and group life plans or programs in which you were participating
immediately prior to your Date of Termination for a period ending on the
December 31 of the second calendar year following the calendar year in which
your Date of Termination occurred and any entitlement to COBRA continuation
coverage under the medical and dental plans shall run concurrently with said
period; provided, however, that said continuation of coverage in the medical and
dental plans during all or part of such period shall be charged at the full cost
for such coverage (meaning the active employee contribution and the Company's
contribution) if the charging of active employee rates for such coverage during
all or part of such period would result in a violation of the Section 409A
Provisions. In the event that your continued participation in any such plan or
program is for whatever reason impossible, the Company shall arrange upon
comparable terms to provide you with benefits substantially equivalent on an
after-tax basis to those which you and your eligible dependents are, or become,
entitled to receive under such plans and programs;
(ii) provide
for full payment in cash of any performance unit/share awards in existence on
your Date of Termination less any amounts paid to you under the applicable
performance unit/share plan upon a Change in Control of the Company pursuant to
the provisions of such plan; provided, however, if the Company should determine
that the said payment would constitute deferred compensation under the Section
409A Provisions, then said payment shall be made no earlier than the first day
of the seventh calendar month after the calendar month in which the Date of
Termination occurs;
(iii) provide
for payment in cash of any incentive compensation (a) for the fiscal year during
which the Change in Control of the Company occurred and any prior fiscal years
for which you have not yet received payment, and (b) payment of the pro-rata
portion (up through your Date of Termination) of any incentive compensation for
the fiscal year in which your Date of Termination occurs calculated on the basis
of the target bonus percentage of base compensation in the applicable incentive
compensation plan (or plans); provided, however, if the Company should determine
that the said payment would constitute deferred compensation under the Section
409A Provisions, then said payment shall be made no earlier than the first day
of the seventh calendar month after the calendar month in which the Date of
Termination occurs;
(iv) provide
benefits or compensation under any compensation plan, arrangement or agreement
not in existence as of the date hereof but which may be established by the
Company prior to your Date of Termination at such time as payments are made
thereunder to the same extent as if you had been a full-time employee on the
date such payments would otherwise have been made or benefits vested; provided,
however, if the Company should determine that the said payment would constitute
deferred compensation under the Section 409A Provisions, then said payment shall
be made no earlier than the first day of the seventh calendar month after the
calendar month in which the Date of Termination occurs;
(v) for
one (1) year after your Date of Termination, provide and pay for outplacement
services, by a firm reasonably acceptable to you, that has historically been
offered to displaced employees generally by the Company under substantially the
same terms and fee structure (but limited in an amount not to exceed 15 percent
of your annual base compensation for the year in which your Date of Termination
occurs or your annual base compensation with the Company immediately before the
Change in Control, if greater) as is consistent with an employee in your then
current position (or, if higher, your position immediately prior to the Change
in Control of the Company);
(vi) for
one (1) year after your Date of Termination, provide and pay for financial
planning services, by a firm reasonably acceptable to you, that have
historically been offered to you under substantially the same terms and fee
structure as is consistent with an employee in your then current position (or,
if higher, your position immediately prior to the Change in Control of the
Company);
(vii) pay
to you an amount equal to the value of all unused, earned and accrued vacation
as of your Date of Termination pursuant to the company's policies in effect
immediately prior to the Change in Control of the Company; provided, however,
said payment shall be made no earlier than the first day of the seventh calendar
month after the calendar month in which the Date of Termination occurs;
and
(viii) provide
for the immediate vesting of all stock options and all restricted stock, stock
appreciation rights held by you, as of your Date of Termination, under any
Company incentive compensation plan or other
stock
option plan and stock appreciation rights plan and all such stock options and
stock appreciation rights shall be exercisable for the remaining terms of the
said options and rights.
(c) Unless
otherwise provided in this Agreement or in the applicable compensation or stock
option plan or program, all payments shall be made to you within thirty (30)
days after your Date of Termination. The benefits in this Agreement are in
addition to all accrued and vested benefits to which you are entitled under any
of the Company's plans and arrangements (to the extent accrued and vested
benefits are relevant under the particular plan or arrangement), including but
not limited to, the accrued vested benefits to which you are eligible and
entitled to receive under any of the Company's qualified and non-qualified
benefit or retirement plans, or any successor plans in effect on your Date of
Termination hereunder. For these purposes, accrued and vested benefits shall
include any extra, special or additional benefits under such qualified and
nonqualified benefit or retirement plans that become due because of the Change
in Control.
(d) You
shall not be required to mitigate the amount of any payment provided for in this
Section by seeking other employment or otherwise, nor shall the amount of any
payment provided for in this Section be reduced by any compensation earned by
you as the result of employment by another employer after your Date of
Termination, or otherwise. Except as provided herein, the Company shall have no
right to set off against any amount owing hereunder any claim which it may have
against you.
4. Certain
Restrictions
(a) Competitive
Activity. In consideration of the foregoing, you agree that if your termination
from employment is a Qualifying Termination, then during a period ending 24
months following your Date of Termination you shall not engage in any
Competitive Activity; provided, you shall not be subject to the foregoing
obligation if the Company breaches a material provision of this Agreement. If
you engage in any Competitive Activity during that period, the Company shall be
entitled to recover any benefits paid to you under this Agreement. For purposes
of this Agreement, "Competitive Activity" shall mean your participation, without
the written consent of the General Counsel of the Company, in the management of
any business operation of any enterprise if such operation (a "Competitive
Operation") engages in substantial and direct competition with any business
operation actively conducted by the Company or its divisions and Subsidiaries on
your Date of Termination. For purposes of this paragraph, a business operation
shall be considered a Competitive Operation if such business sells a competitive
product or service which constitutes (i) 15% of that business's total sales or
(ii) 15% of the total sales of any individual subsidiary or division of that
business and, in either event, the Company's sales of a similar product or
service constitutes (i) 15% of the total sales of the Company or (ii) 15% of the
total sales of any individual Subsidiary
or division of the Company. Competitive Activity shall not include (i) the mere
ownership of securities in any enterprise, or (ii) participation in the
management of any enterprise or any business operation thereof, other than in
connection with a Competitive Operation of such
enterprise.
(b) Non-Solicitation and
Non-Interference. In consideration of the foregoing, you agree that if your
termination from employment is a Qualifying Termination, then during a period
ending 24 months following your Date of Termination you shall not, without the
prior written consent of the General Counsel of the Company, directly or
indirectly, (1) solicit for employment (which shall include services as an
employee, independent contractor or in any other like capacity) any person
employed by the Company or its affiliated companies as of the date of such
solicitation, or (2) solicit any customer or other person with a business
relationship with the Company or any of its affiliated companies to terminate,
curtail or otherwise limit such business relationship, or (3) in any other
manner interfere in the business relationship the Company or any of its
affiliated companies have with any customer or any third party service provider
or other vendor.
(c) Injunctive
Relief. In the event of a breach or threatened breach of this paragraph 4 of
Section C, each party agrees that the non-breaching party shall be entitled to
injunctive relief in a court of appropriate jurisdiction to remedy any such
breach or threatened breach, the parties acknowledging that damages would be
inadequate and insufficient.
SECTION
D. MISCELLANEOUS
1. Assumption of
Agreement. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, share exchange or otherwise) to
all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to you, expressly to 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. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of a material provision
of this Agreement and shall entitle you to compensation in the same amount and
on the same terms as you would be entitled pursuant to Section C, except that
for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed your Date of Termination without a
Notice of Termination being given.
2. Confidentiality. All
Confidential Information which you acquire or have acquired in connection with
or as a result of the performance of services for the Company, whether under
this Agreement or prior to the effective date of this Agreement, shall be kept
secret and confidential by you unless (a) the Company otherwise consents, (b)
the Company breaches any material provision of this Agreement, or (c) you are
legally required to disclose such Confidential Information by a court of
competent jurisdiction. This covenant of confidentiality shall extend beyond the
term of this Agreement and shall survive the termination of this Agreement for
any reason. If you breach this covenant of confidentiality, the Company shall be
entitled to recover from any benefits paid to you under this Agreement its
damages resulting from such breach.
3. Employment. You agree
to be bound by the terms and conditions of this Agreement and to remain in the
employ of the Company during any period following any public announcement by any
person of any proposed transaction or transactions which, if
effected, would result in a Change in Control of the Company until a Change in Control of the Company has taken place. However, nothing contained in this Agreement shall impair or interfere in any way with the right of the Company to terminate your employment prior to a Change in Control of the Company.
effected, would result in a Change in Control of the Company until a Change in Control of the Company has taken place. However, nothing contained in this Agreement shall impair or interfere in any way with the right of the Company to terminate your employment prior to a Change in Control of the Company.
4. Arbitration. Any
controversy or claim arising out of or relating to this Agreement, or the breach
thereof, shall be settled exclusively by arbitration in accordance with the
Center for Public Resources' Model ADR Procedures and Practices, and judgment
upon the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Notwithstanding the foregoing, the Company shall not be
restricted from seeking equitable relief, including injunctive relief as set
forth in paragraph 5 of this Section, in the appropriate forum. Any cost of
arbitration will be paid by the Company. In the event of a dispute over the
existence of Good Reason or Cause after a Change in Control of the Company, the
Company shall continue to pay your salary, bonuses and plan benefits pending
resolution of the dispute. If you prevail in the arbitration, the amounts due to
you under this Agreement are to be immediately paid to you.
5. Injunctive Relief.
You acknowledge and agree that the remedy of the Company at law for any breach
of the covenants and agreements contained in paragraph 2 of this Section and in
Section C, paragraph 4 will be inadequate, and that the Company will be entitled
to injunctive relief against any such breach or any threatened, imminent,
probable or possible breach. You represent and agree that such injunctive relief
shall not prohibit you from earning a livelihood acceptable to you.
6. Notice. For the
purposes of this Agreement, notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth on
the first page of this Agreement, provided that all notices to the Company shall
be directed to the attention of the General Counsel of the Company, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
7. Indemnification. The
Company will indemnify you to the fullest extent permitted by the laws of the
Commonwealth of Kentucky and the existing By-laws of the Company, in respect of
all your services rendered to the Company and its divisions and Subsidiaries
prior to your Date of Termination. You shall be entitled to the protection of
any insurance policies the Company now or hereafter maintains generally for the
benefit of its directors, officers and employees (but only to the extent of the
coverage afforded by the existing provisions of such policies) to protect
against all costs, charges and expenses whatsoever incurred or sustained by you
in connection with any action, suit or proceeding to which you may be made a
party by reason of your being or having been a director, officer or employee of
the Company or any of its divisions or Subsidiaries during your employment
therewith.
8. Further Assurances.
Each party hereto agrees to furnish and execute such additional forms and
documents, and to take such further action, as shall be reasonably and
customarily required in connection with the performance of this Agreement or the
payment of benefits hereunder.
9. Miscellaneous. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed by you and such
officer(s) as may be specifically designated by the Board. No waiver by either
party hereto at any time of any breach by the other party hereto of, 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, express or implied, with respect to the
subject matter hereof have been made by either party, which are not set forth
expressly in this Agreement.
10. Termination of other
Agreements. Upon execution by both parties, this Agreement shall
terminate all prior employment and severance agreements between you and the
Company and its divisions or Subsidiaries, including, but not limited to the
agreement dated ________________ between you and the Company.
11. Severability. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
12. 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 instrument.
13. Legal Fees And
Expenses. Any other provision of this Agreement notwithstanding, the
Company shall pay all legal fees and expenses which you may incur as a result of
the Company's unsuccessful contesting of the validity, enforceability or your
interpretation of, or determinations under, any part of this
Agreement.
14. Section 409A Provisions And
Compliance. Notwithstanding any other provision of this Agreement to the
contrary, the parties shall in good faith amend this Agreement to the limited
extent necessary to comply with the requirements of the Section 409A Provisions
in order to ensure that any amounts paid or payable hereunder are not subject to
the additional 20% income tax thereunder while maintaining to the maximum extent
practicable the original intent of this Agreement.
15. Governing Law. This
Agreement shall be governed in all respects by the laws of the Commonwealth of
Kentucky.
16. Agreement Binding on
Successors. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. This
Agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you should die while any amounts would
still be payable to you hereunder if you had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to your devisee, legatee, or
other designee or, if there be no such designee, to your estate.
17. Headings. All
Headings are inserted for convenience only and shall not affect any construction
or interpretation of this Agreement.
18. Tax
Cutback. In the event that you shall become entitled to
payments and/or benefits provided by this Agreement or any other amounts in the
“nature of compensation” (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any person whose actions
result in a change of ownership or effective control covered by Section
280G(b)(2) of the Internal Revenue Code (“Code”) or any person affiliated with
the Company or such person) as a result of such change in ownership or effective
control (collectively the “Company Payments”), and such Company Payments will be
subject to the tax (“Excise Tax”) imposed by Section 4999 of the Code, the
Company Payments shall be reduced (such reduction the “Cutback”) to one dollar
less than the amount which would result in such Company Payments being subject
to the Excise Tax if after taking into account the Excise Tax and all U.S.
federal, state, and local income and payroll tax upon the Company Payments if
the net amount retained by you would be greater in the event of such reduction
in Company Payments then if such reduction in Company Payments did not
occur. To the extent this provision applies, the Company shall have
sole discretion in determining which Company Payments get
reduced. Notwithstanding anything in this provision or Agreement to
the contrary, you shall be solely liable for the Excise Tax, and shall hold the
Company harmless for any liability, not including penalties and interest on such
liability, for the Excise Tax including, but not limited to, for failing to
withhold or pay over any Excise Tax. If this provision applies but
for any reason you pay the Excise Tax, including any applicable interest and
penalties, then the Company shall pay you an amount equal to the Cutback, plus
interest on the Cutback amount at a reasonable market rate, plus any interest
and penalties relating to the Excise Tax paid by you (plus a tax gross-up only
on the Excise Tax interest and penalties). If this provision applies
but for any reason the Company pays the Excise Tax, including any applicable
interest and penalties, then the Company shall offset any amounts due from you,
under this provision or otherwise, by an amount equal to the Cutback, plus
interest on the Cutback amount at a reasonable market rate.
If this
Agreement correctly sets forth our agreement on the subject matter hereof,
please sign and return to the Company the enclosed copy of this Agreement which
will then constitute our agreement on this matter.
Sincerely,
By:
_______________________
ACCEPTED
this ____ day of
_____________,
2009.
_____________________________
NAME
