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Exhibit 5
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to the Employment Agreement by and between
Xxxxxx International, Inc., an Indiana corporation (the "Company"), and Xxxxxxx
X. Xxxxxxxx (the "Executive") dated as of March 22, 1990 (the "Employment
Agreement") is made by and among the Company, Rohm and Xxxx Company, a Delaware
corporation ("Parent") and the Executive and is dated as of the 31st day of
January, 1999.
WHEREAS, the Company, Parent and Gershwin Acquisition Corp.,
an Indiana corporation and a wholly owned subsidiary of Parent ("Sub"), have
entered into an Agreement and Plan of Merger dated as of the 31st day of
January, 1999 (the "Merger Agreement"), pursuant to which Sub will merge with
and into the Company (the "Merger"), following which the Company will be a
wholly owned subsidiary of Parent; and
WHEREAS, it is acknowledged by the parties hereto that upon
consummation of the Merger, the Executive will have "Good Reason" to terminate
his employment pursuant to the Employment Agreement; and
WHEREAS, the Company and Parent have determined that it is in
the best interests of their respective shareholders, and the Executive has
agreed, to provide for the continued employment of the Executive following the
Merger and to amend and clarify the Employment Agreement in certain respects as
set forth below;
NOW, THEREFORE, it is hereby agreed as follows:
1. In General. Capitalized terms used and not defined in this Amendment
shall have the meanings assigned to them in the Employment Agreement. It is
acknowledged and agreed that the Employment Period will have begun before the
Effective Time (as defined in the Merger Agreement) as a result of prior events
contemplated by the Merger Agreement.
2. New Position. As of the Effective Time, clause (A) of Section
4(a)((i) of the Employment Agreement shall be amended to read in its entirety as
follows:
the Executive shall serve as a member of the Executive Council
of Parent, with the title of Senior Vice President, and as
principal operating officer of Parent and the Company in
Chicago, Illinois, with such duties and responsibilities
commensurate with such position as may be assigned to him from
time to time by a Vice Chairman or the Chief Operating Officer
of Parent (it being understood that he will not have reporting
obligations to more than one of such persons at any one time),
and
3. Severance. At the Effective Time, the Executive shall be paid in a
lump sum in cash the amount described in Section 6(d)(i) of the Employment
Agreement, calculated if he had exercised his right to terminate his employment
for Good Reason at the Effective Time. In consideration of the foregoing
payment, the Executive shall cease to be entitled to receive the
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payment described in Section 6(d)(i) of the Employment Agreement upon the
subsequent termination of his employment for any reason. However, in the event
of the termination of the Executive's employment during the period of one year
following the Effective Time by Parent other than for Cause or Disability, or by
the Executive for Good Reason, the Executive shall be entitled to receive a lump
sum in cash within 30 days after the Date of Termination equal to the aggregate
of the following amounts: (a) the product of (i) the Multiplier (as defined
below) and (ii) the sum of (A) the Annual Base Salary, (B) the Highest Annual
Bonus and (C) the Greater Long-Term Bonus; and (b) all Accrued Obligations
(except to the extent previously paid); and (c) a lump-sum retirement benefit
equal to the difference between (I) the actuarial equivalent of the benefits
under the Retirement Plans which the Executive would receive if the Executive's
employment continued at the compensation level provided for in Sections 4(b)(i)
and 4(b)(ii) of the Employment Agreement for a period equal to one year times
the Multiplier, assuming for this purpose that all accrued benefits are fully
vested, and (II) the actuarial equivalent of the Executive's actual benefit
(paid or payable), if any, under the Retirement Plans; provided, that for
purposes of this sentence the term "Good Reason" shall only relate to events
occurring after the Effective Time and shall mean "Good Reason" as defined in
Section 5(c) of the Employment Agreement except that the reference in clause (i)
to Section 4(a) of the Employment Agreement shall be deemed to refer to said
Section 4(a) as amended by Section 2 of this Amendment, and the last two
sentences of said Section 5(c) shall be disregarded. The Executive shall also
remain entitled to receive the other payments and benefits provided for in the
Employment Agreement (other than Section 6(d)(i) thereof) in the event of a
termination of his employment during the Employment Period (it being
acknowledged that any such termination by the Executive will be for Good Reason
for such purposes). For purposes of this Section 3, the "Multiplier" shall mean
a fraction, the numerator of which is the number of days from the Date of
Termination through the first anniversary of the Effective Time, and the
denominator of which is 365.
4. Assumption by Parent. As of the Effective Time, Parent shall be
considered to have assumed the Employment Agreement and expressly agreed to
perform the Employment Agreement in the same manner and to the same extent as
the Company, as required by Section 11(c) of the Employment Agreement. To
effectuate the foregoing, as of the Effective Time: (a) all references to "the
Company" in Sections 3, 5, 9(b), 9(c) and 9(d) of the Employment Agreement shall
be deemed to refer to Parent instead of the Company; (b) all references to "the
Company" in Sections 6, 8, 9(a), 10, and 12(d) of the Employment Agreement shall
be deemed to refer to Parent as well as the Company; (c) all references to "the
Board" in Section 5(b) of the Employment Agreement shall be deemed to refer to
the Board of Directors of Parent; (d) the reference in Section 10(a) to "the
Chief Executive Officer" shall be deemed to refer to the Chief Executive Officer
of Parent; and (e) notices to Parent under the Employment Agreement shall be
given in accordance with Section 12(b) to Parent at the address provided for in
the Merger Agreement. It is acknowledged that from and after the Effective Time,
Parent shall be considered an "affiliated company" of the Company as that term
is used in the Employment Agreement.
5. Supplemental Executive Retirement Program. It is acknowledged and
agreed that in addition to his rights and entitlements pursuant to the
Employment Agreement, as amended hereby, the Executive is entitled to certain
supplemental retirement benefits (the "SERP
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Benefits") from the Company pursuant to the Supplemental Executive Retirement
Program (the "SERP") set forth in the letter agreement dated February 16, 1982,
between P. Xxxxxxx Xxxxxx, on behalf of MortonNorwich, and the Executive, the
letter agreement dated April 26, 1984 between P. Xxxxxxx Xxxxxx, on behalf of
Xxxxxx Thiokol, Inc., and the Executive (the "1984 Letter") (which incorporates
by reference certain definitions set forth in the Executive Employment Contract
dated November 20, 1981 between Xxxxxx-Norwich Products, Inc. and the Executive
(the "Prior Employment Agreement")), and the memorandum entitled "SERP
Clarifications" dated March 7, 1989 from Xxxxxx Thiokol, Inc. to "Participants
in The Supplemental Executive Retirement Program ("SERP")." Without limiting any
of the Executive's rights under the SERP, it is acknowledged and agreed that
notwithstanding any provision of the Employment Agreement or the SERP, (i) the
Executive is not entitled to receive any benefits pursuant to the Prior
Employment Agreement (which remains in effect only to the extent that certain
provisions thereof are incorporated by reference to the 1984 Letter), (ii) the
Retirement Plans referred to in Section 6(d)(i)(C) of the Employment Agreement
shall not be considered to include the SERP, (iii) the consummation of the
transactions contemplated by the Merger Agreement will constitute a "change of
control" for purposes of the SERP, and (iv) upon a termination of the
Executive's employment following the Merger by the Executive for "Good Reason"
or by Parent without "Cause," or as a result of the Executive's Disability, in
each case as defined in the Employment Agreement, or upon the Executive's death
at any time after the beginning of the Employment Period (as defined in the
Employment Agreement) (whether or not during employment), the Executive (or in
the event of his death at a time when he is married, his surviving spouse) shall
have a vested, nonterminable right to the SERP Benefits provided for in Section
2 of the 1984 Letter.
6. Miscellaneous. (a) Except as specifically set forth in this
Amendment, the Employment Agreement and the SERP are hereby ratified and
confirmed without amendment.
(b) This Amendment may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
(c) This Amendment shall be null and void, ab initio, and of no further
effect if the Merger Agreement is terminated before the consummation of the
Offer (as defined in the Merger Agreement).
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IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from their respective Boards
of Directors, Parent and the Company have each caused these presents to be
executed in its name on its behalf, all as of the day and year first above
written.
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
XXXXXX INTERNATIONAL, INC.
By /s/ Xxxxxxxxxxx X. Xxxxxxx
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ROHM AND XXXX COMPANY
By /s/ J. Xxxxxxxx Xxxxxx
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