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EMPLOYMENT SECURITY AGREEMENT
THIS EMPLOYMENT SECURITY AGREEMENT is entered into this __________ day of
February, 1997, between ILLINOIS CENTRAL CORPORATION, a Delaware corporation
(the "Company"), and ____________________________ (the "Executive").
WITNESSETH THAT:
WHEREAS, Executive is employed by the Company or one of its wholly-owned
subsidiaries (referred to collectively as the "Company") and the Company desires
to provide certain security to Executive in connection with any potential change
in control of the Company;
NOW, THEREFORE, it is hereby agreed by and between the parties, for good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, as follows:
1. PAYMENTS AND BENEFITS UPON A CHANGE IN CONTROL. If within two (2) years
after a Change in Control (as defined below) or during the Period Pending a
Change in Control (as defined below), (i) the Company shall terminate
Executive's employment with the Company without Good Cause (as defined
below), or (ii) Executive shall voluntarily terminate such employment with
Good Reason (as defined below), the Company shall, within 30 days of
Executive's Employment Termination (as defined below), make the payments
and provide the benefits described below.
(a) SALARY PAYMENT. The Company shall make a lump sum cash payment to
Executive equal to two times the Executive's Annual Salary (as defined
below).
(b) BONUSES. The Company shall make a lump sum cash payment to Executive
equal to the sum of the following amounts: (i) Executive's full target
bonus for the year of Executive's Employment Termination (or, if
greater, the full target bonus for the year of the Change in Control)
under the Illinois Central Railroad Company Performance Compensation
Program or any successor plan (the "PCP"); plus (ii) a pro rata
portion of the target bonus for the fiscal year in which Executive's
Employment Termination occurs (or, if greater, the target bonus for
the year of the Change in Control) under the PCP (determined by
multiplying the target bonus amount by a fraction, the numerator of
which is the number of full months up to the date on which Executive's
Employment Termination occurs and the denominator of which is twelve).
(c) WELFARE BENEFIT PLANS. With respect to each Welfare Benefit Plan (as
defined below), for the period beginning on Executive's Employment
Termination and ending on the earlier of (i) twenty-four (24) months
following Executive's Employment Termination, or (ii) the date
Executive becomes covered by a welfare benefit plan or program
maintained by an entity other than the Company which provides coverage
or benefits substantially equivalent to such Welfare Benefit Plan,
Executive shall continue to participate in such Welfare Benefit Plan
on the same basis and at the same cost to
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Executive as was the case immediately prior to the Change in
Control (or, if more favorable to Executive, as was the case at
any time hereafter), or, if any benefit or coverage cannot be
provided under a Welfare Benefit Plan because of applicable law or
contractual provisions, Executive shall be provided with
substantially similar benefits and coverage for such period.
Immediately following the expiration of the continuation period
required by the preceding sentence, Executive shall be entitled to
continued group health benefit plan coverage (so-called "COBRA
coverage") in accordance with Section 4980B of the Internal
Revenue Code of 1986, as amended (the "Code"), it being intended
that COBRA coverage shall be consecutive to the benefits and
coverage provided for in the preceding sentence. Executive's
eligibility for, and premium contribution level under any plans or
programs maintained or contributed to by the Company which provide
health benefits to retirees shall be determined by adding two
years to Executive's age and years of service at Executive's
Employment Termination.
(d) SUPPLEMENTAL RETIREMENT PLANS. Executive's accrued benefit under
the Illinois Central Railroad Company Supplemental Executive
Retirement Plan (the "SERP"), shall be calculated by adding an
additional two years of Credited Service (as that term is defined
in the SERP) to Executive's number of Years of Credited Service
under the SERP as of the Employment Termination. All amounts
accrued or accumulated on behalf of Executive under the SERP and
the Illinois Central Railroad Company Executive Deferred
Compensation Plan (the "Deferred Compensation Plan") shall
immediately be fully vested upon the Change in Control, and the
Company shall promptly pay or distribute all such amounts to
Executive in accordance with the terms of such plans as in effect
on the date of this Agreement (or as of Executive's Employment
Termination, if more favorable to Executive).
2. DEFINITIONS. For purposes of this Agreement:
(a) "Good Cause" shall mean: (i) Executive's conviction of a felony,
(ii) Executive's commission of any act or acts of personal
dishonesty intended to result in substantial personal enrichment to
Executive to the material detriment of the Company; or (iii)
repeated violations of Executive's responsibilities which are
demonstrably willful and deliberate, provided that such violations
have continued more than ten days after the Board of Directors of
the Company has given written notice of such violations and of its
intention to terminate Executive's employment because of such
violations.
(b) "Good Reason" shall exist if, without Executive's express written
consent:
(i) The Company shall materially reduce the nature, scope or
level of Executive's responsibilities from the nature,
scope or level of such responsibilities prior to the Change
in Control (or prior to the Period Pending a Change in
Control), or shall fail to provide Executive with adequate
office facilities and support services to perform such
responsibilities;
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(ii) The Company shall require Executive to move Executive's
principal business office more than 50 miles from
Executive's principal business office at the time of this
Agreement, or assign to Executive duties that would
reasonably require such move;
(iii) The Company shall require Executive, or assign duties to
Executive which would reasonably require Executive, to
increase, by more than fifty, the number of normal
working days (determined at the time of this Agreement)
that Executive spends away from Executive's principal
business office during any consecutive twelve-month
period;
(iv) The Company shall reduce Executive's Annual Salary below
that in effect as of the date of this Agreement (or as of
the Change in Control, if greater), or
(v) The Company shall fail to continue in effect any cash or
stock-based incentive or bonus plan, retirement plan,
welfare benefit plan, or other benefit plan, program or
arrangement, unless the aggregate value (as computed by
an independent employee benefits consultant selected by
the Company) of all such incentive, bonus, retirement and
benefit plans, programs and arrangements provided to
Executive is not materially less than their aggregate
value as of the date of this Agreement (or as of the
Change in Control, if greater).
(c) "Change in Control" shall be deemed to have occurred if:
(i) any "person" or "group" as such terms are used in
section 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act, except that a person shall be deemed
to be the "beneficial owner" of all shares that any such
person has the right to acquire pursuant to any
agreement or arrangement or upon exercise of conversion
rights, warrants, options or otherwise, without regard
to the sixty day period referred to in such Rule),
directly or indirectly, of securities representing 25
percent or more of the combined voting power of the
Company's then outstanding securities; provided,
however, that for this purpose, beneficial ownership
shall not include shares acquired: (i) directly from the
Company; (ii) in any merger or other business
combination of the Company with one or more other
corporations as a result of which the holders of the
outstanding voting stock of the Company immediately
prior to such merger or other business combination own
60 percent or more of the voting stock of the surviving
or resulting corporation; or (iii) by any employee
benefit plan (or related trust) sponsored or maintained
by the Company;
(ii) at any time during any period of two consecutive years
(not including any period prior to January 1, 1997)
individuals who at the beginning of such period
constituted the Board (the "Incumbent Board") cease for
any reason to
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constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to
such date whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board
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 either an actual or threatened election contest (as
such terms are used in Rule 14a-11 or Regulation 14A
promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf
of a person other than the Board; or
(iii) there is a merger or other business combination of the Company
with one or more other corporations as a result of which the
holders of the outstanding voting stock of the Company
immediately prior to such merger or other business combination
own less than 60 percent of the voting stock of the surviving
or resulting corporation.
(d) "Annual Salary" shall mean Executive's salary at the greater of (i)
Executive's annualized monthly base salary in effect on the date of
the Change in Control, or (ii) Executive's annualized monthly base
salary in effect on Executive's Employment Termination.
(e) "Employment Termination" shall mean the effective date of (i)
Executive's voluntary termination of employment with the Company with
Good Reason; or (ii) the termination of Executive's employment by the
Company without Good Cause.
(f) "Welfare Benefit Plan" shall mean each welfare benefit plan maintained
or contributed so by the Company, including but not limited to a plan
that provides health (including medical and dental), life, accident or
disability benefits or insurance, or similar coverage in which
Executive was participating at the time of the Change in Control.
(g) "Period Pending a Change in Control" shall mean the period between the
time an agreement is entered into by the Company with respect to a
merger or other business combination of the Company which would
constitute a Change in Control, and the effective time of such merger
or other business combination of the Company.
3. SALARY TO DATE OF EMPLOYMENT TERMINATION. The Company shall pay to
Executive any unpaid salary or other compensation of any kind earned with
respect to any period prior to Executive's Employment Termination,
including but not limited to a lump sum cash payment for accumulated but
unused vacation earned through such Employment Termination.
4. OTHER INCENTIVE PLANS. Nothing in this Agreement shall impair or impact the
vesting of any restricted stock, stock options, cash incentives or other
form of compensation or benefits provided under any other plan, program or
arrangement.
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5. LIMITATION ON PAYMENTS BY THE COMPANY
(a) Anything in this Agreement to the contrary notwithstanding, it is
the intention of the Company and Executive that no portion of
any payment under this Agreement, or payments to or for the
benefits of Executive under any other agreement or plan, be
deemed to be an "Excess Parachute Payment" as defined in
Section 280G of the Code, or its successors. It is agreed that
the present value of and payments to or for the benefit of
Executive in the nature of compensation under this Agreement or
any other agreement or plan, the receipt of which is contingent
on occurrences of a Change in Control, and to which Section 280G
of the Code applies (in the aggregate "Total Payments") shall
not exceed an amount equal to one dollar less than the maximum
amount that the Company may pay without loss of deduction under
Section 280G(a) of the Code. Present value for purposes of this
Agreement shall be calculated in accordance with Section
280G(d)(4) of the Code. Within sixty (60) days following the
earlier of (i) Executive's Employment Termination or (ii) the
giving of notice by the Company to Executive of its belief that
there is a payment or benefit due Executive that will result in
an Excess Parachute Payment, the Company, at the Company's
expense, shall obtain the opinion of the public accounting firm
that serves as the Company's auditors (the "Accounting Firm"),
which opinion need not be unqualified, which sets forth: (A) the
amount of the Base Period Income of the Executive (as defined in
Code Section 280G), (B) the present value of Total Payments and
(C) the amount and present value of any Excess Parachute
Payments. In the event that such opinion determines that there
would be an Excess Parachute Payment, Executive shall specify in
writing delivered to the Company within thirty (30) days of his
receipt of such opinion, the form of payment from among the
Total Payments (which may, but need not be a payment under this
Agreement) that is to be modified, reduced or eliminated. If
Executive fails to specify the form of payment from among the
Total Payments that is to be modified, reduced or eliminated,
then the Company shall make such decision, so that under the
bases of calculation set forth in the Accounting Firm's opinion
there will be no Excess Parachute Payment. In the event that the
provisions of Sections 280G and 4999 of the Code are repealed
without succession, this Section shall be of no further force or
effect. All fees and expenses of the Accounting Firm shall be
borne solely by the Company.
(b) In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting or
participating in the Changes in Control, Executive shall
designate another nationally recognized accounting firm to make
the determinations required hereunder (which accounting firm
shall then be referred to as the Accounting Firm hereunder).
6. MITIGATION AND SET-OFF. Executive shall not be required to mitigate
Executive's damages by seeking other employment or otherwise. The
Company's obligations under this Agreement shall not be reduced in any
way by reason of any compensation or benefits received (or foregone) by
Executive from sources other than the Company after Executive's
Employment Termination, or any amounts that might have been received by
Executive in other employment
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had Executive sought such other employment. Except as expressly provided in
section 1(c) of this Agreement, Executive's entitlement to benefits and
coverage under this Agreement shall continue after, and shall not be
affected by, Executive's obtaining other employment after his Employment
Termination, provided that any such benefit or coverage shall not be
furnished if Executive expressly waives the specific benefit or coverage by
giving written notice of waiver to the Company.
7. LITIGATION EXPENSES. The Company shall pay to Executive all out-of-pocket
expenses, including attorneys' fees, incurred by Executive in the event
Executive successfully enforces any provision of this Agreement in any
action, arbitration or lawsuit.
8. ASSIGNMENT SUCCESSORS. This Agreement may not be assigned by the Company
without the written consent of Executive but the obligations of the Company
under this Agreement shall be the binding legal obligations of any
successor to the Company by merger or other business combination, and in
the event of any business combination or transaction that results in the
transfer of substantially all of the assets or business of the Company, the
Company will cause the transferee to assume the obligations of the Company
under this Agreement. This Agreement may not be assigned by Executive
during Executive's life, and upon Executive's death will inure to the
benefit of Executive's heirs, legatees and legal representatives of
Executive's estate.
9. INTERPRETATION. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of Illinois,
without regard to the conflict of law principles thereof. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.
10. WITHHOLDING. The Company may withhold from any payment that it is required
to make under this Agreement amounts sufficient to satisfy applicable
withholding requirements under any federal, state or local law.
11. AMENDMENT OR TERMINATION. This Agreement may be amended at any time by
written agreement between the Company and Executive. The Company may
terminate this Agreement by written notice given to Executive at least two
years prior to the effective date of such termination, provided that, if a
Change in Control occurs prior to the effective date of such termination,
the termination of this Agreement shall not be effective and Executive
shall be entitled to the full benefits of this Agreement. Any such
amendment or termination shall be made pursuant to a resolution of the
Company's Board of Directors.
12. FINANCING. Cash and benefit payments under this Agreement shall constitute
general obligations of the Company. Executive shall have only an unsecured
right to payment thereof out of the general assets of the Company.
Notwithstanding the foregoing, the Company may, by agreement with one or
more trustees to be selected by the Company, create a trust on such terms
as the Company shall determine to make payments to Executive in accordance
with the terms of this Agreement.
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13. SEVERABILITY. In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect.
14. ARBITRATION. The parties initially shall attempt to resolve by direct
negotiation any dispute, controversy or claim arising out of or relating to
this Agreement or its branch or interpretation (each a "Dispute"). If the
parties are unable to resolve the Dispute by direct negotiation within 30
days after written notice by one party to the other of the Dispute, either
party may initiate a confidential, binding arbitration to resolve the
Dispute. All such Disputes shall be arbitrated in Chicago, Illinois
pursuant to the arbitration rules of J.A.M.S. Endispute before a single
arbitrator. (If, at the time of any Dispute, J.A.M.S. Endispute has caused
to exist, all such Disputes shall be arbitrated in Chicago, Illinois
pursuant to the arbitration rules of the American Arbitration Association
before a single arbitrator.) Judgment upon any award rendered by the
arbitrator may be entered in any court having jurisdiction, and both
parties consent and submit to the jurisdiction of such court for purposes
of such action. Nothing in this Agreement shall preclude either party from
seeking equitable relief from a court of competent jurisdiction. The
statute of limitations, estoppel, waiver, laches and similar doctrines,
which would otherwise be applicable to any action brought by a party shall
be applicable in any arbitration proceeding, and the commencement of an
arbitration proceeding shall be deemed the commencement of an action for
those purposes. The Federal Arbitration Act shall apply to the
construction, interpretation and enforcement of this arbitration provision.
15. OTHER AGREEMENTS. This Agreement supersedes and cancels all prior written
or oral agreements and understanding relating to the terms of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first written above.
ILLINOIS CENTRAL CORPORATION
By: ____________________________ ______________________________
Its: _________________________ ______________________________
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EMPLOYMENT SECURITY AGREEMENT
THIS EMPLOYMENT SECURITY AGREEMENT is entered into this __________ day of
February, 1997, between ILLINOIS CENTRAL CORPORATION, a Delaware corporation
(the "Company"), and ____________________________ (the "Executive").
WITNESSETH THAT:
WHEREAS, Executive is employed by the Company or one of its wholly-owned
subsidiaries (referred to collectively as the "Company") and the Company desires
to provide certain security to Executive in connection with any potential change
in control of the Company;
NOW, THEREFORE, it is hereby agreed by and between the parties, for good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, as follows:
1. PAYMENTS AND BENEFITS UPON A CHANGE IN CONTROL. If within two (2) years
after a Change in Control (as defined below) or during the Period Pending a
Change in Control (as defined below), (i) the Company shall terminate
Executive's employment with the Company without Good Cause (as defined
below), or (ii) Executive shall voluntarily terminate such employment with
Good Reason (as defined below), the Company shall, within 30 days of
Executive's Employment Termination (as defined below), make the payments
and provide the benefits described below.
(a) SALARY PAYMENT. The Company shall make a lump sum cash payment to
Executive equal to three times the Executive's Annual Salary (as
defined below).
(b) BONUSES. The Company shall make a lump sum cash payment to Executive
equal to the sum of the following amounts: (i) Executive's full target
bonus for the year of Executive's Employment Termination (or, if
greater, the full target bonus for the year of the Change in Control)
under the Illinois Central Railroad Company Performance Compensation
Program or any successor plan (the "PCP"); plus (ii) a pro rata
portion of the target bonus for the fiscal year in which Executive's
Employment Termination occurs (or, if greater, the target bonus for
the year of the Change in Control) under the PCP (determined by
multiplying the target bonus amount by a fraction, the numerator of
which is the number of full months up to the date on which Executive's
Employment Termination occurs and the denominator of which is twelve).
(c) WELFARE BENEFIT PLANS. With respect to each Welfare Benefit Plan (as
defined below), for the period beginning on Executive's Employment
Termination and ending on the earlier of (i) twenty-four (24) months
following Executive's Employment Termination, or (ii) the date
Executive becomes covered by a welfare benefit plan or program
maintained by an entity other than the Company which provides coverage
or benefits substantially equivalent to such Welfare Benefit Plan,
Executive shall continue to participate in such Welfare Benefit Plan
on the same basis and at the same cost to
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Executive as was the case immediately prior to the Change in
Control (or, if more favorable to Executive, as was the case at
any time hereafter), or, if any benefit or coverage cannot be
provided under a Welfare Benefit Plan because of applicable law or
contractual provisions, Executive shall be provided with
substantially similar benefits and coverage for such period.
Immediately following the expiration of the continuation period
required by the preceding sentence, Executive shall be entitled to
continued group health benefit plan coverage (so-called "COBRA
coverage") in accordance with Section 4980B of the Internal
Revenue Code of 1986, as amended (the "Code"), it being intended
that COBRA coverage shall be consecutive to the benefits and
coverage provided for in the preceding sentence. Executive's
eligibility for, and premium contribution level under any plans or
programs maintained or contributed to by the Company which provide
health benefits to retirees shall be determined by adding three
years to Executive's age and years of service at Executive's
Employment Termination.
(d) SUPPLEMENTAL RETIREMENT PLANS. Executive's accrued benefit under
the Illinois Central Railroad Company Supplemental Executive
Retirement Plan (the "SERP"), shall be calculated by adding an
additional three years of Credited Service (as that term is defined
in the SERP) to Executive's number of Years of Credited Service
under the SERP as of the Employment Termination. All amounts
accrued or accumulated on behalf of Executive under the SERP and
the Illinois Central Railroad Company Executive Deferred
Compensation Plan (the "Deferred Compensation Plan") shall
immediately be fully vested upon the Change in Control, and the
Company shall promptly pay or distribute all such amounts to
Executive in accordance with the terms of such plans as in effect
on the date of this Agreement (or as of Executive's Employment
Termination, if more favorable to Executive).
2. DEFINITIONS. For purposes of this Agreement:
(a) "Good Cause" shall mean: (i) Executive's conviction of a felony,
(ii) Executive's commission of any act or acts of personal
dishonesty intended to result in substantial personal enrichment to
Executive to the material detriment of the Company; or (iii)
repented violations of Executive's resposibilities which are
demonstrably willful and deliberate, provided that such violations
have continued more than ten days after the Board of Directors of
the Company has given written notice of such violations and of its
intention to terminate Executive's employment because of such
violations.
(b) "Good Reason" shall exist if, without Executive's express written
consent:
(i) The Company shall materially reduce the nature, scope or
level of Executive's responsibilities from the nature,
scope or level of such responsibilities prior to the Change
in Control (or prior to the Period Pending a Change in
Control), or shall fail to provide Executive with adequate
office facilities and support services to perform such
responsibilities;
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(ii) The Company shall require Executive to move Executive's
principal business office more than 50 miles from
Executive's principal business office at the time of this
Agreement, or assign to Executive duties that would
reasonably require such move;
(iii) The Company shall require Executive, or assign duties to
Executive which would reasonably require Executive, to
increase, by more than fifty, the number of normal working
days (determined at the time of this Agreement) that
Executive spends away from Executive's principal business
office during any consecutive twelve-month period;
(iv) The Company shall reduce Executive's Annual Salary below
that in effect as of the date of this Agreement (or as of
the Change in Control, if greater); or
(v) The Company shall fail to continue in effect any cash or
stock-based incentive or bonus plan, retirement plan,
welfare benefit plan, or other benefit plan, program or
arrangement, unless the aggregate value (as computed by an
independent employee benefits consultant selected by the
Company) of all such incentive, bonus, retirement and
benefit plans, programs and arrangements provided to
Executive is not materially less than their aggregate value
as of the date of this Agreement (or as of the Change in
Control, if greater).
(c) "Change in Control" shall be deemed to have occurred if:
(i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act,
except that a person shall be deemed to be the "beneficial
owner" of all shares that any such person has the right to
acquire pursuant to any agreement or arrangement or upon
exercise of conversion rights, warrants, options or
otherwise, without regard to the sixty day period referred
to in such Rule), directly or indirectly, of securities
representing 25 percent or more of the combined voting power
of the Company's then outstanding securities; provided,
however, that for this purpose, beneficial ownership shall
not include shares acquired: (i) directly from the Company;
(ii) in any merger or other business combination of the
Company with one or more other corporations as a result of
which the holders of the outstanding voting stock of the
Company immediately prior to such merger or other business
combination own 60 percent or more of the voting stock of
the surviving or resulting corporation; or (iii) by any
employee benefit plan (or related trust) sponsored or
maintained by the Company;
(ii) at any time during any period of two consecutive years
(not including any period prior to January 1, 1997)
individuals who at the beginning of such period constituted
the Board (the "Incumbent Board") cease for any reason to
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constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent
to such date 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 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 either an
actual or threatened election contest (as such terms are
used in Rule 14a-11 or Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a person other than
the Board; or
(iii) there is a merger or other business combination of the
Company with one or more other corporations as a result of
which the holders of the outstanding voting stock of the
Company immediately prior to such merger or other business
combination own less than 60 percent of the voting stock of
the surviving or resulting corporation.
(d) "Annual Salary" shall mean Executive's salary at the greater of (i)
Executive's annualized monthly base salary in effect on the date of
the Change in Control, or (ii) Executive's annualized monthly base
salary in effect on Executive's Employment Termination.
(e) "Employment Termination" shall mean the effective date of (i)
Executive voluntary termination of employment with the Company with
Good Reason; or (ii) the termination of Executive's employment by
the Company without Good Cause.
(f) "Welfare Benefit Plan" shall mean each welfare benefit plan
maintained or contributed to by the Company, including but not
limited to a plan that provides health (including medical and
dental), life, accident or disability benefits or insurance, or
similar coverage, in which Executive was participating at the time
of the Change in Control.
(g) "Period Pending a Change in Control" shall mean the period between
the time an agreement is entered into by the Company with respect
to a merger or other business combination of the Company which
would constitute a Change in Control, and the effective time of
such merger or other business combination of the Company.
3. SALARY TO DATE OF EMPLOYMENT TERMINATION. The Company shall pay to
Executive any unpaid salary or other compensation of any kind earned with
respect to any period prior to Executive's Employment Termination,
including but not limited to a lump sum cash payment for accumulated but
unused vacation earned through such Employment Termination.
4. OTHER INCENTIVE PLANS. Nothing in this Agreement shall impair or impact the
vesting of any restricted stock, stock options, cash incentives or other
form of compensation or benefits provided under any other plan, program or
arrangement.
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5. LIMITATION ON PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding, it is
the intention of the Company and Executive that no portion of any
payment under this Agreement, or payments to or for the benefit of
Executive under any other agreement or plan, be deemed to be an
"Excess Parachute Payment" as defined in Section 280G of the Code,
or its successors. It is agreed that the present value of and
payments to or for the benefit of Executive in the nature of
compensation under this Agreement or any other agreement or plan,
the receipt of which is contingent on occurrence of a Change in
Control, and to which Section 280G of the Code applies (in the
aggregate "Total Payments") shall not exceed an amount equal to one
dollar less than the maximum amount that the Company may pay without
loss of deduction under Section 280G(a) of the Code. Present value
for purposes of this Agreement shall be calculated in accordance
with Section 280G(d)(4) of the Code. Within sixty (60) days
following the earlier of (i) Executive's Employment Termination or
(ii) the giving of notice by the Company to Executive of its belief
that there is a payment or benefit due Executive that will result in
an Excess Parachute Payment, the Company, at the Company's expense,
shall obtain the opinion of the public accounting firm that serves
as the Company's auditors (the "Accounting Firm"), which opinion
need not be unqualified, which sets forth: (A) the amount of the
Base Period Income of the Executive (as defined in Code Section
280G), (B) the present value of Total Payments and (C) the amount
and present value of any Excess Parachute Payments. In the event
that such opinion determines that there would be an Excess Parachute
Payment, Executive shall specify in writing delivered to the Company
within thirty (30) days of his receipt of such opinion, the form of
payment from among the Total Payments (which may, but need not be a
payment under this Agreement) that is to be modified, reduced or
eliminated. If Executive fails to specify the form of payment from
among the Total Payments that is to be modified, reduced or
eliminated, then the Company shall make such decision, so that
under the bases of calculation set forth in the Accounting Firm's
opinion there will be no Excess Parachute Payment. In the event that
the provisions of Sections 280G and 4999 of the Code are repealed
without succession, this Section shall be of no further force or
effect. All fees and expenses of the Accounting Firm shall be borne
solely by the Company.
(b) In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting or
participating in the Change in Control, Executive shall designate
another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then
be referred to as the Accounting Firm hereunder).
6. MITIGATION AND SET-OFF. Executive shall not be required to mitigate
Executive's damages by seeking other employment or otherwise. The Company's
obligations under this Agreement shall not be reduced in any way by reason
of any compensation or benefits received (or foregone) by Executive from
sources other than the Company after Executive's Employment Termination, or
any amounts that might have been received by Executive in other employment
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had Executive sought such other employment. Except as expressly provided in
section 1(c) of this Agreement, Executive's entitlement to benefits and
coverage under this Agreement shall continue after, and shall not be
affected by, Executive's obtaining other employment after his Employment
Termination, provided that any such benefit or coverage shall not be
furnished if Executive expressly waives the specific benefit or coverage by
giving written notice of waiver to the Company.
7. LITIGATION EXPENSES. The Company shall pay to Executive all out-of-pocket
expenses, including attorneys' fees, incurred by Executive in the event
Executive successfully enforces any provision of this Agreement in any
action, arbitration or lawsuit.
8. ASSIGNMENT SUCCESSORS. This Agreement may not be assigned by the Company
without the written consent of Executive but the obligations of the
Company under this Agreement shall be the binding legal obligations of any
successor to the Company by merger or other business combination, and in
the event of any business combination or transaction that results in the
transfer of substantially all of the assets or business of the Company,
the Company will cause the transferee to assume the obligations of the
Company under this Agreement. This Agreement may not be assigned by
Executive during Executive's life, and upon Executive's death will inure
to the benefit of Executive's heirs, legatees and legal representatives of
Executive's estate.
9. INTERPRETATION. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of Illinois,
without regard to the conflict of law principles thereof. The invalidity
or unenforceability of any provision of this Agreement shall not affect
the validity or enforceability of any other provision of this Agreement.
10. WITHHOLDING. The Company may withhold from any payment that it is required
to make under this Agreement amounts sufficient to satisfy applicable
withholding requirements under any federal, state or local law.
11. AMENDMENT OR TERMINATION. This Agreement may be amended at any time by
written agreement between the Company and Executive. The Company may
terminate this Agreement by written notice given to Executive at least two
years prior to the effective date of such termination, provided that, if a
Change in Control occurs prior to the effective date of such termination,
the termination of this Agreement shall not be effective and Executive
shall be entitled to the full benefits of this Agreement. Any such
amendment or termination shall be made pursuant to a resolution of the
Company's Board of Directors.
12. FINANCING. Cash and benefit payments under this Agreement shall constitute
general obligations of the Company. Executive shall have only an unsecured
right to payment thereof out of the general assets of the Company.
Notwithstanding the foregoing, the Company may, by agreement with one or
more trustees to be selected by the Company, create a trust on such terms
as the Company shall determine to make payments to Executive in accordance
with the terms of this Agreement.
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13. SEVERABILITY. In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect.
14. ARBITRATION. The parties initially shall attempt to resolve by direct
negotiation any dispute, controversy or claim arising out of or relating
to this Agreement or its branch or interpretation (each, a "Dispute"). If
the parties are unable to resolve the Dispute by direct negotiation
within 30 days after written notice by one party to the other of the
Dispute, either party may initiate a confidential, binding arbitration to
resolve the Dispute. All such Disputes shall be arbitrated in Chicago,
Illinois pursuant to the arbitration rules of J.A.M.S. Endispute before a
single arbitrator. (If, at the time of any Dispute, J.A.M.S. Endispute
has caused to exist, all such Disputes shall be arbitrated in Chicago,
Illinois pursuant to the arbitration rules of the American Arbitration
Association before a single arbitrator.) Judgment upon any award rendered
by the arbitrator may be entered in any court having jurisdiction, and
both parties consent and submit to the jurisdiction of such court for
purposes of such action. Nothing in this Agreement shall preclude either
party from seeking equitable relief from a court of competent
jurisdiction. The statute of limitations, estoppel, waiver, laches and
similar doctrines, which would otherwise be applicable in any action
brought by a party shall be applicable in any arbitration proceeding, and
the commencement of an arbitration proceeding shall be deemed the
commencement of an action for those purposes. The Federal Arbitration Act
shall apply to the construction, interpretation and enforcement of this
arbitration provision.
15. OTHER AGREEMENTS. This Agreement provides and cancels all prior written or
oral agreements and understandings relating to the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first written above.
ILLINOIS CENTRAL CORPORATION
By: ____________________________ ______________________________
Its: ____________________________ ______________________________
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