Exhibit 10.23
CHANGE OF CONTROL AGREEMENT
This Agreement is made this 30th day of March, 1995, by and
between Elco Industries, Inc., a Delaware corporation ("Elco") and
Xxxxxxx X. Heal ("Executive").
RECITALS:
Executive is a skilled and dedicated employee who has
important management responsibilities and talents. Elco believes
that its best interests will be served if Executive is encouraged to
remain with Elco. Elco has determined that Executive's ability to
perform his responsibilities and utilize his talents for the benefit of
Elco, as well as Elco's ability to retain Executive as an employee,
will be significantly enhanced if Executive is provided with fair and
reasonable protection from the risks of a change in ownership or
control of Elco. Accordingly, Elco and Executive agree as follows:
1. Definitions.
When the following terms appear in this Agreement they shall
have the respective meanings set forth below, unless the context
clearly indicates to the contrary:
(a) "Base Salary" means the highest annual rate of
Executive's base salary in effect on either the date of the
Change of Control or the Termination Date, including any
amounts by which the base salary was reduced prior to the
Change of Control at the request of the person or entity
acquiring control of Elco or reasonably shown to be related to
the Change of Control.
(b) "Bonus" means the highest amount payable to
Executive under Elco's annual bonus plan in effect on either
the date of the Change of Control or the Termination Date,
assuming the highest performance targets are met for such
bonus plan, including any amounts by which the Executive's
annual bonus was reduced prior to the Change of Control at
the request of the person or entity acquiring control of Elco
or reasonably shown to be related to the Change of Control.
(c) "Cause" means either of the following:
(i) Executive's willful malfeasance having a
material adverse effect on Elco; or
(ii) Executive's conviction of a felony;
provided, that any action or refusal by Executive shall not
constitute "Cause" if, in good faith, Executive believed such
action or refusal to be in, or not opposed to, the best
interests of Elco, or if Executive shall be entitled, under
applicable law or under an applicable Certificate of
Incorporation or By-Laws, as they may be amended or
restated from time to time, to be indemnified with respect to
such action or refusal.
(d) "Change of Control" means the first to occur of
any of the following dates:
(i) the date the Elco Board of Directors votes
to approve:
(A) any consolidation or merger of Elco;
(B) any sale, lease, exchange or other
transfer (in one transaction or a series of
related transactions) of all, or substantially all,
of the assets of Elco other than any sale, lease,
exchange or other transfer to any corporation
where Elco owns, directly or indirectly, at least
seventy percent (70%) of the outstanding voting
securities of such corporation after any such
transfer; or
(C) any plan or proposal for the
liquidation or dissolution of Elco;
(ii) the date any person (as such term is used
in Section 13(d) of the Securities Exchange Act of
1934, hereinafter the "1934 Act"), other than one or
more trusts established by Elco for the benefit of
employees of Elco or its subsidiaries, shall become the
beneficial owner (within the meaning of Rule 13d-3
under the 0000 Xxx) of thirty percent (30%) or more of
outstanding Common Stock;
(iii) the date the Board of Directors of Elco
authorizes and approves any transaction which has
either a reasonable likelihood or a purpose of causing,
whether directly or indirectly:
(A) Common Stock to be held of record
by less than [300] persons; or
(B) Common Stock to be neither listed
on any national securities exchange nor
authorized to be quoted on an inter-dealer
quotation system of any registered national
securities association;
(iv) the date, during any period of twenty-
four (24) consecutive months, on which individuals
who at the beginning of such period constitute the
entire Board of Directors of Elco shall cease for any
reason to constitute a majority thereof unless the
election, or the nomination for election by Elco
stockholders, of each new director comprising the
majority was approved by a vote of at least a majority
of the Continuing Directors as hereinafter defined, in
office on the date of such election or nomination for
election of the new director. For purposes hereof, a
"Continuing Director" shall mean:
(A) any member of the Board of
Directors of Elco at the close of business on
March 30, 1995.
(B) any member of the Board of
Directors of Elco who succeeds any Continuing
Director described in subparagraph (A) above
if such successor was elected, or nominated for
election by Elco stockholders, by a majority of
the Continuing Directors then still in office; or
(C) any director elected, or nominated
for election by Elco stockholders, to fill any
vacancy or newly created directorship on the
Board of Directors of Elco by a majority of the
Continuing Directors then still in office; or
(v) the date of commencement by any entity,
person, or group (including any affiliate thereof,
other than Elco) of a tender offer or exchange offer
for more than twenty percent (20%) of the outstanding
Common Stock.
(e) "Code" means the Internal Revenue Code of
1986, as amended.
(f) "Common Stock" means the $5 par value common
stock of Elco.
(g) "Confidential Information" means nonpublic
information relating to the business plans, marketing plans,
customers or employees of Elco other than information the
disclosure of which cannot reasonably be expected to
adversely affect the business of Elco.
(h) "Elco" means Elco Industries, Inc., a Delaware
corporation, and any successor or successors thereto.
(i) "Fringe Benefits" means the fair market value of
the highest level of fringe benefits payable to Executive by
Elco on either the date of the Change of Control or the
Termination Date, including any amounts by which the
Executive's fringe benefits were reduced prior to the Change
of Control at the request of the person or entity acquiring
control of Elco or reasonably shown to be related to the
Change of Control. For these purposes, "Fringe Benefits"
do not include welfare benefits, such as medical coverage
(including prescription drug coverage), dental coverage, life
insurance, disability insurance and accidental death and
dismemberment benefits.
(j) "Good Reason" means any of the following
actions,without Executive's express prior written approval,
other than due to Executive's Permanent Disability or death:
(i) any diminution in Executive's titles,
duties, responsibilities, status or reporting
relationship from the positions, duties,
responsibilities, status or reporting relationship
existing immediately prior to a Change of Control;
(ii) the removal of Executive from, or any
failure to re-elect Executive to, any of the positions
Executive holds immediately prior to a Change of
Control;
(iii) the failure of Elco to pay Executive's Base
Salary when due;
(iv) any reduction of Executive's Base Salary,
or Bonus, or any reduction in the aggregate amount of
Fringe Benefits provided to Executive;
(v) the change of Executive's principal place
of employment to a location more than 50 miles from
Executive's principal place of employment immediately
prior to the Change of Control; or
(vi) any breach by Elco of any provision of
this Agreement;
(vii) the failure of Elco to obtain a satisfactory
agreement from any successor to assume and agree to
perform this Agreement, as contemplated by Section 12
hereof; or
(viii) any purported termination of Executive's
employment which is not effected pursuant to a Notice
of Termination satisfying the requirements of Section
2(i) hereof (and, if applicable, the requirements of
Section 13 hereof); for purposes of this Agreement, no
such purported termination shall be effective.
provided, however, that if any of the actions described in
subparagraphs (i) - (viii) above occur prior to a Change of
Control at the request of any individual or entity acquiring
ownership or control of Elco, or is reasonably shown to be
related to a prospective Change of Control, and if such
actions occur without Executive's express prior written
approval, other than due to Executive's Permanent Disability
or death, then the existence of such actions shall also
constitute "Good Reason."
(k) "Permanent Disability" means Executive's
inability, by reason of any physical or mental impairment, to
substantially perform the significant aspects of his regular
duties which inability is reasonably contemplated to continue
for at least one (1) year from its inception.
2. Change of Control Benefits.
If Executive's employment with Elco is terminated at any time
within the two (2) years following a Change of Control of Elco
without Cause, or by Executive for Good Reason (the effective date
of either such termination hereafter referred to as the "Termination
Date"), Executive shall be entitled to the benefits provided
hereafter in this Section 2 and as set forth in this Agreement. If
Executive's employment with Elco is terminated by Elco without
Cause prior to a Change of Control at the request of any individual
or entity acquiring ownership or control of Elco, or is reasonably
shown to be related to a prospective Change of Control, or by
Executive for Good Reason, or if the person or entity acquiring
control fails to assume Elco's liabilities to Executive under this
Agreement, the Executive's Termination Date shall be deemed to
have occurred immediately upon the Executive's effective date of
termination (in the case of a termination of employment at the
request of the acquirer), or immediately following the Change of
Control (in the case of the acquirer's failure to assume Elco's
liabilities under this Agreement), and therefore Executive shall be
entitled to the benefits provided hereafter in this Section 2 and as
set forth in this Agreement.
(a) Severance Benefits. Within five (5) business
days after the Termination Date, Elco shall pay Executive a
lump sum amount, in cash, equal to two (2) times the sum of:
(i) Executive's Base Salary;
(ii) Executive's Bonus; and
(iii) Executive's Fringe Benefits.
(b) Performance Award. Any unpaid Target Award
previously granted to an Executive under the Elco
Industries, Inc. 1988 Performance Share Plan (the "Share
Plan") shall be paid to the Executive within five (5) days of
the Termination Date as if such Target Award was 100 earned
during the relevant Performance Period (as such term is
defined in the Share Plan), irrespective of Elco's actual
performance during the relevant Performance Period.
(c) Welfare Benefits. Elco shall, until the second
anniversary of the Termination Date, and at its expense,
provide Executive with medical (including prescription drug
coverage), dental, life insurance and accidental death and
dismemberment benefits at the highest level provided to
Executive, his dependents and beneficiaries, either on the
date of a Change of Control or the Termination Date,
including any coverage or benefits that were reduced prior
to the Change of Control at the request of the person or
entity acquiring control of Elco or reasonably shown to be
related to the Change of Control. During the period that
Elco is providing Executive, his dependents and
beneficiaries, with these benefits, Executive shall be entitled
to elect such changes and take such actions the same as a
similarly situated active employee.
(d) Payment of Accrued But Unpaid
Amounts. Within five (5) business days after the
Termination Date, Elco shall pay Executive (i) any unpaid
portion of Executive's Bonus accrued with respect to the full
fiscal year ended prior to the Termination Date; and (ii) all
compensation previously deferred by Executive but not yet
paid.
(e) Post-Retirement Welfare Benefits. On the
Termination Date, for purposes of determining Executive's
eligibility for post-retirement benefits under any welfare
benefit plan (as defined in section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended)
maintained by Elco immediately prior to the Change of Control
and in which Executive participated, immediately prior to the
Change of Control (or, with respect to an Executive who is
terminated prior to a Change of Control, the Termination
Date), Executive shall be credited with the excess of two
years of participation in the applicable medical plan and two
years of age over the actual years and fractional years of
participation and age credited to Executive as of the Change
of Control (or Termination Date, as the case may be). If,
after taking into account such participation and age,
Executive would have been eligible to receive such post-
retirement benefits had Executive retired immediately prior
to the Change of Control (or Termination Date, as the case
may be), Executive shall receive, commencing on the
Termination Date, post-retirement benefits based on the
terms and conditions of the applicable plans in effect
immediately prior to the Change of Control (or Termination
Date, as the case may be).
(f) Retirement Benefits. For purposes of
determining the Executive's retirement benefits under the
various Elco retirement benefit plans, Executive shall be
deemed to be an active employee receiving his Base Salary
and shall accordingly continue to earn service and accrue
benefits under such plans for an additional period of two
years following the Termination Date.
(g) Effect on Existing Plans. All Change of Control
provisions applicable to Executive and contained in any plan,
program, agreement or arrangement maintained on the
Effective Date (or thereafter) by Elco (including, but not
limited to, any stock option, restricted stock or pension
plan) shall remain in effect through the date of a Change of
Control, and for such period thereafter as is necessary to
carry out such provisions and provide the benefits payable
thereunder, and may not be altered in a manner which
adversely affects Executive without Executive's prior written
approval.
(h) Cessation of Benefits. Notwithstanding the
foregoing, no service of the Executive for Elco after age 65
shall be taken into account for purposes of determining the
Executive's benefits under this Agreement.
(i) Notice of Termination. Any purported
termination of Executive's employment by Elco or by
Executive shall be communicated by written Notice of
Termination to the other party hereto in accordance with
Section 13 hereof. For purposes of this Agreement, a "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
Executive's employment under the provision so indicated.
3. Gross-Up Payment.
(a) In the event it shall be determined that any
payment, benefit or distribution (or combination thereof) by
Elco or one or more trusts established by Elco for the benefit
of its employees, to or for the benefit of Executive (whether
paid or payable or distributed or distributable pursuant to
the terms of this Agreement, or otherwise) (a "Payment")
would be subject to the excise tax imposed by Section 4999 of
the Code, or any interest or penalties are incurred by
Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, hereinafter
collectively referred to as the "Excise Tax"), Executive shall
be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that, after payment by
Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without
limitation, any income taxes and excise taxes (and any
interest and penalties imposed with respect thereto) imposed
upon the Gross-Up Payment itself, Executive retains an
amount of such additional payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 3(c), all
determinations required to be made under this Section 3,
including whether and when a Gross-Up Payment is required
and the amount of such Gross-up Payment and the
assumptions to be utilized in arriving at such determination,
shall be made by Coopers & Xxxxxxx or such other nationally
recognized certified public accounting firm as may be
designated by Executive (the "Accounting Firm") which shall
provide detailed supporting calculations both to Elco and
Executive within fifteen (15) business days of the receipt of
notice from Executive that there has been a Payment, or such
earlier time as it requested by Elco. In the event that the
Accounting Firm is serving as accountant or auditor for an
individual, entity or group effecting the change in ownership
or effective control (within the meaning of Section 280G of the
Code), Executive shall appoint another nationally recognized
accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to
as the "Accounting Firm" hereunder). All fees and expenses
of the Accounting Firm shall be borne solely by Elco. Any
Gross-Up Payment, as determined pursuant to this Section 3,
shall be paid by Elco to Executive within five (5) days after
the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by
Executive, it shall so indicate to Executive in writing. Any
determination by the Accounting Firm shall be binding upon
Elco and Executive.
(c) For purposes of determining whether any of the
Payments will be subject to the Excise Tax and the amount of
such Excise Tax: (i) any payments or benefits received or
to be received by Executive pursuant to the terms of this
Agreement shall be treated as "parachute payments" within
the meaning of Section 280G(b)(2) of the Code, and all
"excess parachute payments" within the meaning of Section
280G(b)(1) shall be treated as subject to the Excise Tax,
unless in the opinion of tax counsel selected by Elco's
independent auditors and acceptable to Executive such other
payments or benefits (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in
whole or in part) represent reasonable compensation for
services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the base amount within
the meaning of Section 280G(b)(3) of the Code, or are
otherwise not subject to the Excise Tax; (ii) the amount of
the Payments which shall be treated as subject to the Excise
Tax shall be equal to the lesser of: (1) the total amount of
the Payments; or (2) the amount of excess parachute
payments within the meaning of Section 280G(b)(1) (after
applying clause (i), above); and (iii) the value of any non-
cash benefits or any deferred payment or benefit shall be
determined by Elco's independent auditors in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up
Payment, Executive shall be deemed to pay Federal income
taxes at the highest marginal rate of Federal income taxation
in the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of Executive's
residence on the Termination Date, net of the maximum
reduction in Federal income taxes which could be obtained
from deduction of such state and local taxes. In the event
that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the time of
termination of Executive's employment, Executive shall repay
to Elco at the time that the amount of such reduction in Excise
Tax is finally determined the portion of the Gross-Up
Payment attributable to such reduction (plus the portion of
the Gross-Up Payment attributable to the Excise Tax and
Federal and state and local income tax imposed on the Gross-
Up Payment being repaid by Executive if such repayment
results in a reduction in Excise Tax and/or a Federal and
state and local income tax deduction) plus interest on the
amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. In the event that the Excise Tax
is determined to exceed the amount taken into account
hereunder at the time of the termination of Executive's
employment (including by reason of any payment the
existence or amount of which cannot be determined at the time
of the Gross-Up Payment), Elco shall make an additional
gross-up payment in respect of such excess (plus any
interest payable with respect to such excess) at the time that
the amount of such excess is finally determined.
(d) Executive shall notify Elco in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by Elco of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no
later than ten (10) business days after Executive is informed
in writing of such claim and shall apprise Elco of the nature
of such claim and the date on which such claim is requested
to be paid. Executive shall not pay such claim prior to the
expiration of the thirty (30) day period following the date on
which it gives such notice to Elco (or such shorter period
ending on the date that any payment of taxes with respect to
such claim is due). If Elco notifies Executive in writing prior
to the expiration of such period that it desires to contest
such claim, Executive shall:
(i) give Elco any information reasonably
requested by Elco relating to such claim;
(ii) take such action in connection with
contesting such claim as Elco shall reasonably request
in writing from time to time, including, without
limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by
Elco;
(iii) cooperate with Elco in good faith in order
to effectively contest such claim; and
(iv) permit Elco to participate in any
proceedings relating to such claim; provided,
however, that Elco shall bear and pay directly all costs
and expenses (including additional interest and
penalties) incurred in connection with such contest
and shall indemnify and hold Executive harmless, on
an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and
payment of costs and expenses. Without limitation on
the foregoing provisions of this Section 3(d), Elco
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole
option, either direct Executive to pay the tax claimed
and xxx for a refund or contest the claim in any
permissible manner, and Executive agrees to prosecute
such contest to a determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as
Elco shall determine; provided, however, that if Elco
directs Executive to pay such claim and xxx for a
refund, Elco shall advance the amount of such payment
to Executive, on an interest-free basis, and shall
indemnify and hold Executive harmless, on an after-
tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto)
imposed with respect to such advance or with respect
to any imputed income with respect to such advance;
and provided further, that if Executive is required to
extend the statute of limitations to enable Elco to
contest such claim, Executive may limit this extension
solely to such contested amount. Elco's control of the
contest shall be limited to issues with respect to which
a Gross-Up Payment would be payable hereunder and
Executive shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(e) If, after the receipt by Executive of an amount
advanced by Elco pursuant to Section 3(d), Executive
becomes entitled to receive any refund with respect to such
claim, Executive shall (subject to Elco complying with the
requirements of Section 3(d)) promptly pay to Elco the
amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after
the receipt by Executive of an amount advanced by Elco
pursuant to Section 3(d), a determination is made that
Executive shall not be entitled to any refund with respect to
such claim and Elco does not notify Executive in writing of its
intent to contest such denial of refund prior to the expiration
of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be
repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to
be paid.
4. Indemnification; Director's and Officer's Liability
Insurance.
Executive shall, after the Termination Date, retain all rights
to indemnification under applicable law or under Elco's Certificate
of Incorporation or By-Laws, as they may be amended or restated
from time to time, to the extent any such amendment or restatement
expands the Executive's rights to indemnification. In addition, Elco
shall maintain Director's and Officer's liability insurance on behalf
of Executive, provided Executive is eligible to be covered and has
in fact been covered by such insurance, at the highest level in
effect immediately prior to either the Date of a Change of Control or
the Termination Date, including any such insurance that was
reduced prior to a Change of Control at the request of the person
or entity acquiring control of Elco or reasonably shown to the
related to the Change of Control, for the seven (7) year period
following the Termination Date.
5. Termination for Cause.
Nothing in this Agreement shall be construed to prevent Elco
from terminating Executive's employment for Cause. If Executive
is terminated for Cause, Elco shall have no obligation to make any
payments under this Agreement, except for payments that may
otherwise be payable under then existing employee benefit plans,
programs and arrangements of Elco.
6. Mitigation.
Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by
seeking other employment or otherwise, and compensation earned
from such employment or otherwise shall not reduce the amounts
otherwise payable under this Agreement. Except as provided in
Section 10, no amounts payable under this Agreement shall be
subject to reduction or offset in respect of any claims which Elco (or
any other person or entity) may have against Executive.
7. Restrictive Covenants.
(a) Confidential Information. During the two (2)
year period following the Termination Date, Executive shall
not disclose to any person, or use to the significant
disadvantage of Elco any Confidential Information; provided
that nothing contained in this Section 7 shall prevent
Executive from being employed by a competitor of Elco or
utilizing Executive's general skills, experience, and
knowledge, including those developed while employed by
Elco.
(b) Release. In consideration for the protection and
benefits provided for under this Agreement, Executive
hereby agrees to execute a release substantially in the form
of Schedule A.
8. Disputes.
Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in
Chicago, Illinois, or, at the option of Executive, in the county
where Executive then resides, in accordance with the Rules of the
American Arbitration Association then in effect, except that if
Executive institutes an action relating to this Agreement, Executive
may, at Executive's option, bring that action in a court of
competent jurisdiction. Judgment may be entered on an arbitrator's
award relating to this Agreement in any court having jurisdiction.
Notwithstanding the pendency of any dispute in connection with
this Agreement, Elco will continue to pay Executive his full
compensation in effect when the notice giving rise to the dispute
was given and continue Executive as a participant in all
compensation, benefit and insurance plans in which Executive was
participating when the notice giving rise to the dispute was given,
until the dispute is finally resolved in accordance with this Section
8. Amounts paid under this Section 8 are in addition to all other
amounts due under this Agreement and shall not be offset against
or reduce any other amounts due under this Agreement.
9. Costs of Proceedings.
Elco shall pay all costs and expenses, including attorneys'
fees and disbursements, at least monthly, of Executive in
connection with any legal proceeding (including arbitration),
whether or not instituted by Elco or Executive, relating to the
interpretation or enforcement of any provision of this Agreement,
except that if Executive instituted the proceeding and the judge,
arbitrator or other individual presiding over the proceeding
affirmatively finds the Executive instituted the proceeding in bad
faith, Executive shall pay all costs and expenses, including
attorney's fees and disbursements, of Elco. Elco shall pay
prejudgment interest on any money judgment obtained by Executive
as a result of such a proceeding, calculated at the rate which Bank
of America announces from time to time as its prime lending rate as
in effect from time to time, from the date that payment should have
been made to Executive under this Agreement.
10. Withholding.
Notwithstanding the provisions of Sections 3 and 6 hereof,
Elco may, to the extent required by law, withhold applicable
federal, state and local income and other taxes from any payments
due to Executive hereunder.
11. Beneficiary Designation.
In the event of the Executive's death prior to his receipt of
all payments and benefits due to him under this Agreement, all such
amounts shall be paid to his designated beneficiary, as set forth on
the form attached hereto as Schedule B.
12. Assignment; Successors.
Except as otherwise provided herein, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by Elco
and Executive and their respective heirs, personal or legal
representatives, executors, administrators, successors, assigns,
distributees, divisees and legatees. If Executive should die while
any amount would still be payable to Executive hereunder had
Executive continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee or other designee or, if
there is no such designee, to Executive's estate. If Elco shall be
merged into or consolidated with another entity, the provisions of
this Agreement shall be binding upon and inure to the benefit of the
entity surviving such merger or resulting from such consolidation.
Elco will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of Elco by agreement in
form and substance satisfactory to Executive, to expressly assume
and agree to perform this Agreement in the same manner and to the
same extent that Elco would be required to perform it if no such
succession had taken place. The provisions of this Section 12 shall
continue to apply to each subsequent employer of Executive
hereunder in the event of any subsequent merger, consolidation or
transfer of assets of such subsequent employer.
13. Notices.
Any notice to be provided under the terms of this Agreement
shall be in writing and shall be sufficient if delivered in person or
sent by registered or certified mail, return receipt requested,
addressed as follows:
If to the Executive:
Xxxxxxx X. Heal
0000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
If to the Company:
Elco Industries, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attn: Secretary
or to such other place as either party may specify in writing,
delivered in accordance with the provisions of this Section.
14. Applicable Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to
contracts made and to be performed therein.
15. Effective Date; Term.
This Agreement shall be effective as of March 30, 1995 (the
"Effective Date"") and shall remain in effect thereafter until March
30, 1998, unless Elco and Executive agree in writing to continue
this Agreement for such additional period of time as the parties
shall specify. Notwithstanding the foregoing, this Agreement
shall, if in effect on the date of a Change of Control, remain in
effect for at least two (2) years following such Change of Control,
and such additional time as may be necessary to give effect to the
terms of the Agreement.
16. Amendment.
This Agreement may be changed only by a written agreement
executed by Elco and Executive.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
ELCO INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxx
Its President
/s/ Xxxxxxx X. Heal
Executive
/s/ Xxxxx Xxxxxxxx
Chairman,
Compensation Committee
Schedule A
CHANGE OF CONTROL AGREEMENT
RELEASE
For and in consideration of the payment of such
amounts and benefits as are set forth in the Change of Control
Agreement dated March 30, 1995 by and between Xxxxxxx X. Heal
and Elco Industries, Inc. ("Elco"), Executive, together with his
heirs, beneficiaries, personal or legal representatives, executors,
administrators, successors, assigns, distributees, devisees and
legatees, hereby waives, releases, and discharges Elco and the
present, future, or former employees, agents, officers, directors,
successors, assigns and affiliated entities of Elco, (herein referred
to collectively as the "Released Parties"), with respect to any and
all causes of action, potential causes of action, suits, disputes,
liabilities, claims in law and equity, rights, damages, demands,
personal injuries, and attorney's fees and costs by reason of any
matter, cost, or thing whatsoever against and as to Elco, which in
any way results from, arises out of, or pertains to Executive's
employment, termination of employment, benefits, awards,
insurance coverage, hiring, wages, or any other terms and
conditions of employment at Elco, or any other events which are
unknown, fixed or contingent, and by reason of any matter, cause,
thing, charge, claim, right or action whatsoever, against and as to
Elco and/or any of the other Released Parties, and which are in any
way related to any violation of any provision of federal and state
statutory or common law or regulation, including claims arising
under any federal, state, or local laws prohibiting employment
discrimination on any basis or claims arising out of any legal
restrictions on Elco's rights to terminate its employees, any
contract claim for the alleged breach of any implied, express, or
other type of employment contract, wrongful, abusive or retaliatory
discharge, and any tort claim, including, but not limited to, fraud,
misrepresentation, deceit, defamation, slander, libel, interference
with employment relations, intentional or negligent infliction of
emotional distress, breach of any fiduciary duties, or any other
tort-type causes of action.
This Release applies to any relief or benefit sought by
the Executive, no matter how denominated, including, but not
limited to, claims for compensation for any physical or mental
injury, pain and suffering, reinstatement, back pay, front pay,
prejudgment interest, compensatory damages, punitive damages,
insurance coverage, benefits, premiums, medical expenses, or
attorneys' fees and costs.
In addition, Executive together with his heirs,
beneficiaries, personal or legal representatives, executors,
administrators, successors, distributees, devisees and legatees,
agrees and covenants not to file a lawsuit or administrative
complaint to assert any claim with respect to his employment with
Elco, the payment of wages to him by Elco, or the cessation of his
employment with Elco which occurred prior to the execution of this
Release. Any such lawsuit or administrative complaint filed in
violation of this Release shall automatically constitute a breach of
this Release. If any government agency or court assumes
jurisdiction of any charge, complaint, cause of action or claim
covered by this Release against Elco or any of the Released Parties,
on behalf of or related to Executive, Executive agrees and
covenants he will withdraw from and/or dismiss the matter with
prejudice. Executive agrees he will not participate or cooperate in
such matter(s) except as required by law.
Executive understands and acknowledges that he has
expressly waived all his rights under this Release. Executive
further acknowledges that he understands the legal effect of this
Release, and that, to the extent he has deemed necessary, he has
consulted with his attorney or other counsel regarding the legal
effect of this Release.
Executive represents and warrants to Elco that he has
the full power, capacity, and authority to enter into this Release,
and that no portion of any claim, right, demand, action, or cause
of action that Executive has, or might have had arising out of the
acts, events, transactions, and occurrences referred to herein has
been assigned, transferred, or conveyed to any person not a party
to this Release, by way of subrogation, operation of law, or
otherwise, and that no releases or settlement agreements are
necessary or need to be obtained from any other person or entity to
release and discharge completely any of the claims of Executive
released in this Release.
IN WITNESS WHEREOF, Executive has signed this
instrument this 30th day of March, 1995.
/s/ Xxxxxxx X. Heal
Executive
Schedule B
CHANGE OF CONTROL AGREEMENT
BENEFICIARY DESIGNATION FORM
TO: Elco Industries, Inc.
FROM: Xxxxxxx X. Heal
DATE: March 30, 1995
In the event of my death prior to my receipt of all payments
and benefits due me under the Change of Control Agreement dated
March 30, 1995, I hereby designate the person or persons named
below who are living at the time of my death to receive all amounts
and benefits due me under the terms of such Agreement as follows:
Name and Address: Xxxxxxx X. Heal
0000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
S.S. Number: ###-##-####
Relationship: Spouse
Percent of Total: 100%
Total: 100%
I hereby revoke all prior Beneficiary Designations made
previously and expressly reserve the right to change or revoke this
Beneficiary Designation, but understand that no such change or
revocation shall be effective unless it is signed by me and filed with
Elco Industries, Inc.
/s/ Xxxxxxx X. Heal
Signature
Accepted by Elco Industries, Inc.
By: /s/ X. X. Xxxxx, V.P. 04/13/95
Date
