AMENDED AND RESTATED
AGREEMENT
WHEREAS, Handy & Xxxxxx ("H&H") and Xxxx X. Xxxxx ("Executive") are parties to
an agreement dated May 14, 1997 providing for certain payments and benefits to
Executive in the event of a Change of Control of H&H;
WHEREAS, Executive is employed by H&H;
WHEREAS, H&H desires to retain Executive's services in the event of a Change of
Control (as defined below) of H&H; and
WHEREAS, the parties desire to amend and restate the Agreement to reflect
certain changes which have been agreed between them;
NOW THEREFORE, in consideration of the agreements and provisions set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Term of Agreement. This Agreement shall commence on the date hereof and shall
continue in effect thereafter, unless, not later than any September 30, H&H
shall have given notice that it will not extend this Agreement beyond the
ensuing December 31; provided, however, that no such notice to terminate may be
given by H&H after such Change of Control, and any such notice given by H&H
before such Change of Control, but which would cause this Agreement to terminate
on a December 31 following the Change of Control, shall have no effect. If a
Change of Control shall have occurred during the term of this Agreement, this
Agreement shall continue in effect until all of H&H's obligations hereunder have
been discharged.
2. Change of Control of H&H. No benefits shall be payable unless there is a
change of control ("Change of Control") of H&H. A Change of Control shall be
deemed to have occurred if:
(a) any "person", as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than H&H, any trustee or other fiduciary
holding securities under an employee benefit plan of H&H or any
corporation owned, directly or indirectly, by the stockholders of H&H
in substantially the same proportions as their ownership of stock of
H&H), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or
indirectly, of securities of H&H representing 25% or more of the
combined voting power of H&H's then outstanding securities;
(b) during any period of not more than two (2) consecutive years (not
including any period prior to May 14, 1997), individuals who at the
beginning of such period constitute the Board of Directors and any
new director (other than a director designated by a person who has
entered into an agreement with H&H to effect a transaction described
in clause (a), (c) or (d) of this Section) whose election by the Board
of Directors or nomination for election by H&H's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority
thereof;
(c) the stockholders of H&H approve a merger or consolidation of H&H
with any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of H&H outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) more than 70% of the combined voting power of the
voting securities of H&H or such surviving entity outstanding
immediately after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of H&H (or
similar transaction) in which no "person" (as herein above defined)
acquires more than 50% of the combined voting power of H&H's then
outstanding securities; or
(d) the stockholders of H&H approve a plan of complete liquidation of
H&H or an agreement for the sale or disposition by H&H of all or
substantially all of H&H's assets.
3. Change of Control Bonus. At the effective time of a merger or consolidation
constituting a Change of Control described in Section 2(c), or within three (3)
business days following the occurrence of any other event constituting a Change
of Control, H&H shall pay Executive the sum of $250,000.
4. Termination Following Change of Control. If any of the events described in
Section 2 above constituting a Change of Control shall have occurred, Executive
shall be entitled to the benefits provided in Section 5 hereof upon termination
of Executive's employment with H&H during the two (2) year period following the
Change of Control unless such termination is (A) a result of Executive's death
or
retirement, or (B) Executive's resignation for other than Good Reason, or (C)
Executive's being terminated by H&H for Disability or for Cause.
(a) Cause. For purposes of this Agreement, "Cause" shall mean Execu-
tive's willful breach of duty in the course of Executive's employment,
or Executive's habitual neglect of his employment duties.
(b) Disability. For purposes of this Agreement, "Disability" shall
mean Executive's absence from his duties with H&H for three hundred
sixty-five (365) consecutive days as a result of his physical or
mental illness.
(c) Good Reason. Executive shall be entitled to terminate his
employment for Good Reason. For the purposes of this Agreement, "Good
Reason" shall mean the occurrence of any of the following
circumstances:
(i) the assignment to Executive of any duties inconsistent
with his status as a Vice President, General Counsel and
Secretary (or any higher position to which Executive has been
promoted at the time) or a substantial diminution in the nature
or status of his responsibilities from those in effect
immediately prior to the Change of Control;
(ii) a reduction in Executive's annual base salary as in
effect on the date the Change of Control;
(iii) the relocation of the office in which Executive is
located prior to the Change of Control to a location more than
sixty (60) miles from New York City;
(iv) Executive's selective exclusion, pursuant to an action
taken by H&H, from a compensation, bonus, stock option or stock
ownership plan either in existence at the time of the Change of
Control or thereafter put into effect for the benefit of others
in a similar situation;
(v) except as required by law, the failure by H&H to
continue to provide Executive with benefits at least as favorable
as those enjoyed by Executive under the employee benefit and
welfare plans of H&H in which he was participating at the time of
the Change of Control;
(vi) the failure of H&H to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement,
as contemplated in Section 6 hereof; or
(vii) any purported termination of Executive's employment
not effected pursuant to a Notice of Termination satisfying the
requirements of Section 4(d) below; for purposes of this
Agreement, no such purported termination shall be effective.
Executive's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason hereunder.
(d) Notice of Termination. Any termination of Executive's employment
by H&H or by Executive shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 9
hereof. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice indicating the specific termination provision in
this Agreement relied upon and setting forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated.
(e) Date of Termination. Etc. "Date of Termination" shall mean thirty
(30) days after the date specified in the Notice of Termination.
5. Compensation Upon Termination. Following a Change of Control of H&H, as
defined herein, upon termination of Executive's employment by (a) H&H other than
for Cause or for Disability or (b) by Executive for Good Reason, Executive shall
be entitled to the following benefits:
(a) H&H shall pay Executive a severance payment (the "Severance
Payment") equal to one year's full base salary at Executive's highest
rate in effect during the period beginning twelve (12) months before
the date on which the Change of Control occurs and ending on the date
on which the Notice of Termination is given;
(b) For a twelve (12) month period after termination of Executive's
employment, H&H shall arrange to provide Executive with life, medical
and dental insurance benefits substantially similar to those which
Executive is receiving or entitled to receive immediately prior to the
Notice of Termina-
tion, unless Executive is eligible to receive such benefits from a
subsequent employer or a spouse's employer; and
(c) H&H shall pay Executive the Severance Payment no later than the
fifth (5th) day following the Date of Termination.
6. Successors; Binding Agreement.
(a) H&H will require any successor to all or substantially all of the
business and/or assets of H&H to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that H&H is
required to perform it. Failure of H&H to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle Executive to an immediate
lump sum payment equal to the sum of (i) the payment provided for in
Section 3 hereof, (ii) the Severance Payment to which Executive would
be entitled under Section 5(a) hereof if Executive had terminated
Executive's employment for Good Reason following a Change of Control
of H&H and (iii) the present value of the continuing benefits to which
Executive would have been entitled under Section 5(b) hereof if
Executive had terminated his employment for Good Reason following a
Change of Control of H&H. All references to H&H shall be deemed to
include its successors.
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If Executive dies while any amount is payable to him
hereunder, all such amounts 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.
7. Section 280G Limitation. Notwithstanding any other provision of this
Agreement, the payments and benefits to which Executive is otherwise entitled
under Sections 3 and 5 hereof will be reduced to the extent necessary so that no
portion thereof is nondeductible under Section 280G of the Internal Revenue Code
of 1986, as amended, (the "Code"). Within five (5) days of the Date of
Termination, H&H shall provide Executive with the calculations undertaken by H&H
for the purposes of applying the previous sentence (the "Calculations"). If
Executive does not agree with the Calculations, Executive may object within
fourteen (14) days of receipt of the Calculations by giving written notice to
H&H, setting forth in reasonable detail the basis of Executive's objection to
the Calculations which shall include a set of
calculations which Executive believes is correct (the "Recalculations"). If H&H
does not accept Executive's Recalculations, it shall notify Executive of such
disagreement within seven (7) days. The parties shall then attempt to resolve
their disagreement within seven (7) days. If the parties are unable to resolve
their disagreement within such period, the dispute shall be submitted to
arbitration in accordance with Section 8.
8. Arbitration; Certain Costs. Any dispute or controversy between H&H and
Executive, whether arising out of or relating to this Agreement, the breach of
this Agreement, or otherwise, shall be settled by arbitration administered by
the American Arbitration Association in accordance with its Commercial Rules
then in effect and judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Such arbitration shall take
place in the New York City metropolitan area. The arbitrator shall have the
authority to award any remedy or relief that a court of competent jurisdiction
could order or grant, including, without limitation, the issuance of an
injunction. However, either party may, without inconsistency with this
arbitration provision, apply to any court having jurisdiction over such dispute
or controversy and seek interim provisional, injunctive or other equitable
relief until the arbitration award is rendered or the controversy is otherwise
resolved. H&H shall reimburse Executive, upon demand, for all costs and expenses
(including without limitation attorneys' fees) reasonably incurred by Executive
in good faith in connection with this arbitration provision, including without
limitation in connection with any such application undertaken by Executive in
good faith, as well as for all such costs and expenses reasonably incurred by
Executive in connection with entering and/or enforcing the award rendered by
the arbitrator. Except as necessary in court proceedings to enforce this
arbitration provision or an award rendered hereunder, or to obtain interim
relief, neither a party nor an arbitrator may disclose the existence, content or
results of any arbitration hereunder without the prior written consent of H&H.
9. Notice. For the purposes of this Agreement, notices and all other communica-
tions provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth on the first page of this Agreement, provided that all notices to H&H
shall be directed to the attention of the Chief Executive Officer, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
10. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by both parties. No waiver by either party at any time of any breach
by the other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or any prior or subsequent time. No agreements or
representations, oral or written, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York. All references to sections of the Code shall be deemed also to refer to
any successor provisions to such sections. Any payments provided for hereunder
shall be paid net of any applicable withholding required under federal, state or
local law.
11. Validity. The invalidity or unenforceability of any provision of this Agree-
ment shall not affect the validity or enforceability of any other provision of
this Agreement, which shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Agreement on the 26th day of February, 1998.
Handy & Xxxxxx
/s/Xxxx X. Xxxxx /s/Xxxxx X. Xxxxxxxxx
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by: Xxxx X. Xxxxx by: Xxxxx X. Xxxxxxxxx
Vice Chairman
