Exhibit 10(i)
A G R E E M E N T
between
THE XXXXXX CORPORATION
and
DATED: NOVEMBER 25, 1997
AGREEMENT between THE XXXXXX CORPORATION (the "Company") and
(the "Executive"), dated November 25, 1997.
W I T N E S S E T H:
WHEREAS, the Executive is a principal officer of the Company
or a subsidiary;
WHEREAS, the Company wishes to encourage continuity of
management in the event of any actual or threatened change of control of
the Company; and
WHEREAS, the Executive wishes to be assured of adequate
compensation if the Executive's employment by the Company or a
subsidiary terminates because of a change of control of the Company;
NOW, THEREFORE, the Company and the Executive agree as
follows:
1. Operation of Agreement
1.01 This Agreement will be effective immediately but will
be operative only upon the occurrence of a Change of Control, as defined
in Section 1.02, which takes place during the Protected Period (as
defined in Section 1.04 below) and while the Executive is employed by
the Company or a subsidiary.
1.02 A "Change of Control" will be deemed to occur when:
(i) the Company ceases to be required to file reports under Section 13
of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or any
successor to that Section; or
(ii) any "person" (as defined in Sections 13(d) and 14(d) of the Exchange
Act) becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of either (a) 35% or more of the
outstanding common stock of the Company, or (b) 35% of the outstanding
securities of any other class or classes which individually or together have
the power (other than upon a failure to pay dividends, unless that failure
has occurred) to elect a majority of the members of the Board of Directors
of the Company, except that an acquisition of securities by an employee
benefit plan of the Company or a subsidiary will never be a Change of
Control; or
(iii) the Board of Directors
of the Company determines that a tender offer statement filed by any person
with the Securities and Exchange Commission indicates an intention on the
part of that person to acquire control of the Company;
or
(iv) there is a change in the membership of the Board of Directors of
the Company and immediately following the change a majority of the members
of the Board of Directors of the Company are not persons who (a) had been
directors of the Company for at least the preceding 24 consecutive months or
(b) when they initially were elected to the Board, (x) were nominated
(if they were elected by the stockholders) or elected (if they were
elected by the directors) with the affirmative vote of two-thirds of the
directors who were Continuing Directors at the time of the nomination or
election by the Board and (y) were not elected as a result of an actual or
threatened solicitation of proxies or consents by a person other than the
Board of Directors
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of the Company or an agreement intended to avoid or settle such a proxy
solicitation (the directors described in clauses (a) and (b) being
"Continuing Directors").
1.03 If there is a Change of Control of the type described
in Section 1.02 (iii), but the tender offer or exchange offer which is
the subject of the tender offer statement does not take place or is
withdrawn without the tendered shares being purchased, upon a
determination by the Board of Directors of the Company that this has
occurred, the Change of Control described in Section 1.02(iii) (but not
any Change of Control of the type described in any other subsection of
Section 1.02), and all rights of the Executive to receive payments under
Section 2.01 or benefits under Section 2.02 upon a subsequent
Termination because of that Change of Control, will be rescinded.
However, rescission of a Change of Control of the type described in
Section 1.02(iii) will not affect the right of the Executive to receive
the payments described in Section 2.01 and the benefits described in
Section 2.02 as a result of a Termination which occurs between the time
the Change of Control takes place and the time it is rescinded.
1.04 For purposes of this Agreement, the "Protected Period"
shall be the three year period commencing November 25, 1997; provided,
however, that the Protected Period shall be automatically extended for
one (1) year on November 25, 2000 and on each November 25 thereafter
unless the Company shall have given written notice to the Executive at
least ninety (90) days prior thereto that the Protected Period shall not
be so extended; and provided further,
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however, that notwithstanding any such notice by the Company not to
extend, the Protected Period shall not end if prior to the expiration
thereof any person (as that term is defined below) has indicated an
intention or taken steps reasonably calculated to effect a Change in
Control, in which event the Protected Period shall end only after such
person publicly announces that it has abandoned all efforts to effect a
Change in Control.
2. Payments
2.01 If there is a Termination, as defined in Section 2.04,
with regard to the Executive, the Company will pay to the Executive
within 20 days after the day on which the Termination occurs, in lieu of
any salary (other than salary for the pay period in which the
Termination occurs and any unpaid salary
for prior pay periods), bonus, severance or similar payments, or
damages, to which the Executive might otherwise be entitled because of
the Termination under any agreement with the Company or a subsidiary or
any plan or program of the Company or any subsidiary:
(i) A lump sum equal to (a) the higher of the Executive's
annual salary immediately before the Change of Control and the
Executive's annual salary immediately before the Termination, plus (b)
the average of the bonus and similar payments made to the Executive
during each of the three full fiscal years of the Company immediately
before the fiscal year during which the Termination occurs.
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(ii) A lump sum equal to (and in full satisfaction of the
obligations of the Company with regard to) any unpaid compensation which
had been deferred under any plan or program of the Company or a
subsidiary or any agreement between the Executive and the Company or a
subsidiary, including all accrued but unpaid interest or sums in lieu of
interest as provided in the plan, program or agreement to the date the
lump sum is paid.
(iii) If, notwithstanding Section 2.03 of this Agreement,
any stock options or stock appreciation rights held by the Executive
expire as a result of the Termination without becoming exercisable, a
lump sum equal to (x) the number of shares as to which the stock options
or stock appreciation rights expired without becoming exercisable, times
(y) (I) the last reported sale price on the date of the Termination of a
share of the Company's common stock (or the other class of securities to
which the stock options or stock appreciation rights relate) in the
principal market in which the common stock (or other class of
securities) is traded (which on the date of this agreement is the
American Stock Exchange with regard to the common stock), or if the
common stock (or other class of securities) is not publicly traded on
the date of the Termination, the fair market value of a share of common
stock (or of the other class of securities) of the Company on that date
(which, if the Change of Control involved a tender offer or other
payment for shares of common stock (or securities of the other class),
will not be less than the tender offer price or other per share
payment),
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minus (II) the per share exercise price of the stock option or stock
appreciation right.
2.02 After a Termination occurs, until the earlier of one
year after the date of the Termination and the Executive's 65th
birthday, the Executive will continue to be entitled to all employee
welfare benefits (including death benefits, disability benefits, and
medical and dental benefits) and indemnification rights, to which the
Executive would have been entitled if the Executive had continued to be
employed by the Company or a subsidiary in the position held by the
Executive immediately before the Termination (but not less than the
employee welfare benefits to which the Executive would have been
entitled if the Executive had continued to be employed by the Company or
a subsidiary in the position held by the Executive immediately before
the Change of Control which resulted in the Termination).
2.03 At the time of a Change of Control, any stock options
and stock appreciation rights held by the Executive will immediately
become exercisable in full, notwithstanding any provisions of the stock
options to the contrary (except that no stock options or stock
appreciation rights will become exercisable earlier than the earliest
date on which they could have been made exercisable in accordance with
the plan under which they were issued). This provision will be deemed
incorporated in all stock options and stock appreciation rights held by
the Executive, whether granted before or after the date of this
Agreement
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2.04 There will be a "Termination" with regard to the
Executive if and when:
(a) the Company and its subsidiaries terminate the
Executive's employment within 18 months after a Change of Control other
than because of (i) the Executive's death or "total disability," as
defined in the then most current Xxxxxx Staff Handbook, or (ii) the
Executive's conviction of, or plea of no contest to, a felony or a crime
involving moral turpitude or intended to result in gain to or personal
enrichment of the Executive at the Company's expense; or
(b) the Executive terminates the Executive's
employment by the Company and its subsidiaries within 18 months after a
Change of Control for Good Reason. "Good Reason" means the occurrence
of any of the following events without the prior express written consent
of the Executive:
(i) A transfer of the Executive to a position which has a lesser title or
lesser responsibilities than those of the position in which the Executive
was employed immediately before the Change of Control;
(ii) The assignment to the Executive of duties materially less significant
than those normally associated with the position held by the Executive;
(iii) A material adverse change in (A) the Executive's base salary from
that in effect immediately prior to the Change of Control or (B) what the
Executive must achieve to qualify for annual bonuses at least as great as the
average annual bonus the Executive received
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during the three full fiscal years of the Company prior to the fiscal year
in which the Change of Control occurs;
(iv) The failure by the Company to provide to the Executive (A) material
perquisites, (B) vacation rights, (C) benefits (including without limitation
service credit for benefits) under employee benefit and retirement plans,
(D) indemnification for all matters relating to his or her employment by the
Company or any of its affiliates, or (E) reimbursement for reasonable
expenses incurred by the Executive in the course of his or her duties; in
each case on a basis at least as favorable to the Executive as those to which
he or she was entitled immediately before the Change of Control;
(v) The Company's requiring the Executive to locate his or her office more
than 100 miles distant from the location of his or her office immediately
prior to the Change of Control or requiring the Executive to be absent from
his or her office more than 100 working days in any year, except in either
case, to the extent consistent with the Executive's office location changes
and travel before the Change of Control;
(vi) A breach by the Company of any employment agreement between the Executive
and the Company;
(vii) The liquidation or dissolution of the Company or the transfer of a
majority of its assets to a transferee which does not become bound by this
Agreement as contemplated by Section 5.04.
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Notwithstanding the foregoing, no occurrence will constitute Good Reason
unless (a) at least 30 days before the termination of employment, the
Executive notifies the Company's Board of Directors of the conditions
which the Executive believes constitute Good Reason and states in the
notice that unless those conditions are cured the Executive will
terminate his or her employment with the Company or a subsidiary, but
those conditions are not cured prior to the termination of employment,
and (b) the termination of employment occurs within 60 days after the
Executive learns of the conditions which constitute Good Reason. An
election by the Executive to terminate the Executive's employment under
this Section 2.04(b) will not be deemed a voluntary termination by the
Executive for any purpose.
3. Certain Tax-Related Payments
3.01 If the Executive becomes subject to excise tax under
Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), because any payment made or other thing done under this
Agreement constitutes an "excess parachute payment," as that term is
defined in Section 4999 of the Code, the Company will pay the Executive
not later than 20 days after a demand made
by the Executive, cash equal to the amount necessary to reimburse the
Executive for the excise tax and for all additional Federal, state and
local excise, income or other taxes which become due, or will become
due, because of the payments under this Section, assuming the Executive
pays Federal, state and local income taxes at the highest marginal rate
applicable to individuals living and working
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where the Executive lives and works. If there is a dispute between the
Executive and the Company regarding the amount the Company is required
to pay under this Section 3, that dispute will be resolved by the
accounting firm which audited the Company's financial statements
immediately before the Change of Control or another nationally
recognized accounting firm mutually acceptable to the Company and the
Executive.
4. Letter of Credit
4.01 As promptly as practicable after (a) a Change of
Control occurs or (b) someone commences a solicitation of proxies or a
tender offer which, if successful, would result in a Change of Control,
the Company will obtain a letter of credit from a major national or New
York State chartered bank which will expire not earlier than 24 months
after the Change of Control occurs and which provides that the Executive
may, by certifying (i) that a Termination with respect to the Executive
has occurred, and (ii) the amount due to the Executive under Section 2,
draw against the letter of credit the amount stated in the certificate
to be due to the Executive under Section 2. The agreement between the
Company and the bank which issues the letter of credit may specifically
state that the bank will have no responsibility for determining whether
the statements in the certificate from the Executive are correct. If
the Executive draws under the letter of credit any sum which is not due
to the Executive under Section 2, promptly on demand from the Company,
the Executive will pay to the Company the sum which is not due to the
Executive
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plus interest on that sum at 10% per annum from the date the Executive
draws the sum under the letter of credit to the date the Executive pays
the sum over to the Company.
5. General Provisions
5.01 This Agreement will not limit the right of the Company
or the Executive to terminate or alter the terms of the Executive's
employment prior to a Change of Control.
5.02 If the Executive brings suit to enforce any payment
obligation of the Company under this Agreement and a judgment is entered
against the Company, the Executive will be entitled to recover from the
Company, (i) all legal expenses incurred by the Executive in connection
with the suit and (ii) an amount equal to twice the amount which the
Company would otherwise have been required to pay to the Executive
pursuant to Section 2. 5.03 If any provisions of this Agreement are
determined to be invalid, the remaining provisions will remain in full
force and effect to the fullest extent permitted by law.
5.04 This Agreement will be binding upon and inure to
the benefit of the Company and any successor of the Company, including
any corporation which acquires (by merger, consolidation or otherwise)
all or substantially all the assets of the Company (which successor,
after it acquires all or substantially all the assets of the Company,
will be the "Company" for the purposes of this Agreement). This
Agreement will be binding upon and inure to
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the benefit of (and be enforceable by) the Executive and, after the
Executive dies or is determined not to be competent, the Executive's
executors or other legal representatives.
5.05 The Executive will be entitled to the payments
specified in Section 2 without regard to whether the Executive seeks or
obtains other employment after a Termination and without reduction for
any compensation received from other employment after the Termination.
5.06 Any notice or other communication under or relating to
this Agreement must be in writing and will be deemed given on the day on
which it is delivered in person or by overnight courier service or sent
by facsimile transmission to the Company at the general facsimile number
at its principal office or to the Executive at a facsimile number
specified by the Executive (with acknowledgment of receipt at the number
to which sent), or on the third business day after the day on which it
is sent from within the United States of America by first class mail,
addressed (i) if to the Company or its Board of Directors, at the
principal offices of the Company, attention General Counsel and
(ii) if to the Executive, to the Executive's office or to the
Executive's home address as shown on the personnel records of the
Company, or at such other address as is specified by the Executive to
the Company after the date of this Agreement in the manner provided in
this Section.
5.07 This Agreement contains the entire agreement of the
parties with respect to the subject matter of this Agreement and
supersedes all prior
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agreements and understandings with respect to that subject matter,
whether oral or written. This Agreement may be amended only by a
writing signed by the Company, with approval of its Board of Directors,
and the Executive.
5.08 The Company may withhold from payments it is required
to make under this Agreement and from other payments of compensation to
the Executive all sums, including taxes, which the Company determines it
is required by law to withhold because of payments made under this
Agreement.
5.09 This Agreement will be governed by, and construed
under, the laws of the State of New York applicable to contracts made
and to be performed in that state.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year shown on the first page.
THE XXXXXX CORPORATION
By___________________________
Chairman of the Board
______________________________
